[Congressional Record Volume 140, Number 24 (Tuesday, March 8, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. RIEGLE:
  S. 1898. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the section 170(e)(5) rules pertaining to gifts of publicly 
traded stock to certain private foundations, and for other purposes; to 
the Committee on Finance.


      permanent extension of deductions for gifts of certain stock

 Mr. RIEGLE. Mr. President, I introduce today legislation to 
permanently extend the tax deduction allowed for the full value of 
gifts of publicly traded stock to private foundations. Maintaining this 
strong incentive for gifts of such stock to private foundations will 
continue to encourage investment in the public interest. Many private 
foundations, which make grants to public-minded charities, rely on such 
gifts. Indeed, several foundations were created as a result of gifts 
made because of this deduction provision. Deductions for the full 
market value of stock contributed to private foundations have been in 
the Tax Code since 1984, but this deduction is due to expire at the end 
of this year. I ask my fellow colleagues to join me in making this 
useful tax provision a permanent fixture in the code.
  Also included in this bill are two technical corrections to the tax 
law dealing with private foundations. The first will ease the 
restrictions on foundation grants to foreign charities. The second will 
align the timing of tax payments with the forms that track them.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1898

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

     SECTION 1. GIFTS OF QUALIFIED APPRECIATED STOCK TO PRIVATE 
                   FOUNDATIONS.

       (a) In General.--Paragraph (5) of section 170(e) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraph (D).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contributions made after December 31, 1994.

     SEC. 2. PRIVATE FOUNDATION GRANTS TO FOREIGN ORGANIZATIONS 
                   TREATED AS PRIVATE FOUNDATIONS.

       (a) In General.--Paragraph (3) of section 4942(g) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(3) Certain contributions to section 501(c)(3) 
     organizations.--For purposes of this section, the term 
     `qualifying distribution' includes a contribution to a 
     section 501(c)(3) organization described in paragraph 
     (1)(A)(i) or (ii) if--
       ``(A) not later than the close of the first taxable year 
     after its taxable year in which such contribution is 
     received--
       ``(i) such organization makes a distribution equal to the 
     amount of such contribution and such distribution is a 
     qualifying distribution (within the meaning of paragraph (1) 
     or (2), without regard to this paragraph) which is treated 
     under subsection (h) as a distribution out of corpus (or 
     would be so treated if such section 501(c)(3) organization 
     were a private foundation which is not an operating 
     foundation), or
       ``(ii) in the case of a grant to a foreign organization 
     that is not controlled (directly or indirectly) by the 
     foundation or 1 or more disqualified persons (as defined in 
     section 4946) with respect to the foundation, such 
     organization makes expenditures equal to the amount of such 
     contribution to accomplish 1 or more purposes described in 
     section 170(c)(2)(B) and the grantor foundation exercises 
     expenditure responsibility with respect to the grant (as 
     defined in section 4945(h)), and
       ``(B) the private foundation making the contribution 
     obtains adequate records or other sufficient evidence from 
     such organization showing that the requirements of 
     subparagraph (A) satisfied.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1992.

     SEC. 3. CHANGING DUE DATE FOR FIRST QUARTER ESTIMATED TAX 
                   PAYMENTS BY PRIVATE FOUNDATIONS.

       (a) In General.--Paragraph (3) of section 6655(g) of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     subparagraph (C) the following new subparagraph:
       ``(D) In the case of any private foundation, subsection 
     (c)(2) shall be applied by substituting `May 15' for `April 
     15'''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1993.
                                 ______

      By Mr. McCAIN:
  S. 1900. A bill to provide for the protection of books and materials 
from the Library of Congress, and for other purposes; to the Committee 
on Rules and Administration.


            library of congress book protection act of 1994

 Mr. McCAIN. Mr. President, I rise today to introduce 
legislation to help protect the valuable book resources of the Library 
of Congress. This bill, ``The Library of Congress Book Protection 
Act,'' will help the Library of Congress stop abuses of its free book 
loan program by authorizing the Library to impose fines for books that 
are long overdue.
  I am introducing this legislation to empower Library of Congress 
officials to crack down on individuals who seriously abuse their 
Library privileges, by keeping books too long or failing to return 
them. Library of Congress officials should not have to tolerate the 
fact that many individuals are apparently unconcerned about returning 
the books that taxpayers provide for them. Congress should not prevent 
the Library of Congress from instituting strengthened policies to hold 
severely delinquent borrowers responsible for their tardiness.
  This legislation will enable the Library of Congress to implement a 
reasonable overdue book charge policy similar to those of most public 
libraries across America. By doing so, the many Members of Congress, 
congressional staffers, and executive branch employees who benefit from 
this magnificent institution will have an added incentive to comply 
with the generous loan policies of the Library of Congress.
  The legislation I am proposing is very basic, but it will afford 
Library officials the leverage and flexibility they need to address 
this problem. This bill will help Library of Congress officials keep 
better track of their resources, and will spur many delinquent 
borrowers to return the books that taxpayers graciously provide for 
them.
  ``The Library of Congress Book Protection Act'' would direct the 
Library to implement an overdue book charge policy for borrowers who 
have improperly held a book for over 70 days. These individuals or 
offices will have their privileges suspended until their fines are paid 
in full. Library of Congress officials will, however, be able to waive 
such penalties when appropriate. The Library will be authorized to 
retain the funds received from late book fines, as well. Finally, the 
offices of severely delinquent borrowers and the fines they owe will be 
published in the annual report submitted by the Library of Congress to 
its oversight committees.
  Mr. President, like many of my colleagues, I was troubled by news 
reports of several weeks ago which stated that over 300,000 books are 
missing from the Library of Congress going back to 1978. Library 
officials say they don't know who took them. The estimated cost of 
these thefts from the Library to the taxpayers is $12 million. While 
certain allegations made about the theft of books from the Library by 
Members of Congress and congressional staff have been greatly 
exaggerated, a review of the facts about overdue books at the Library 
of Congress do give rise to legitimate concerns about their loan 
policies.

  According to the latest figures available from Library officials, of 
the 20,000 books that are out on loan from the Library of Congress, 
over one-third are currently listed as overdue. Approximately one-half 
of the 4,200 books on loan to congressional staff and the media are 
listed as overdue, and one-in-five books out on loan to Members, 
committees, and congressional support agencies have been overdue for 
more than 2 months.
  Library of Congress officials note that most of the books that are 
considered overdue are expected to be returned and can be recalled if 
necessary. I commend the efforts of Library officials over the past 5 
years to implement a system of security procedures to stem the problem 
of stolen books. I firmly believe, however, that the legislation I am 
introducing is a reasonable and practical proposal that will assist the 
Library in protecting the books they provide for the Congress and 
numerous other entities.
  I am concerned about the fact that it is all too easy for individuals 
to disregard their responsibility to return books to the Library of 
Congress in a timely manner. This negligence is not only unfair to the 
other users of the Library, but it also drains the Library's resources 
in chasing down overdue or missing books.
  Indeed, the word privilege is right on the mark in any discussion of 
how congressional offices are served by this world-renowned 
institution. Members of the Senate and House of Representatives and our 
staffs are truly privileged to be able to borrow books and utilize the 
many other informational sources at the Library completely free of 
charge, and with few strings attached.
  Regrettably, history tells us that no-cost privileges are quickly 
taken for granted, however. Therefore, it was not surprising for me to 
learn, Mr. President, that no matter when they were taken out, books 
loaned to Members of Congress are never considered overdue. Apparently, 
a loan to a Senator, Congressmen, or committee has become a virtual 
gift in perpetuity,
  I fully recognize that Members and staffs may need to borrow books 
for extended periods of time, but this is a policy ripe for abuse. It 
also conjures up negative images in the public eye of yet another 
exclusive privilege we have awarded ourselves. This policy of 
interminable forbearance for Members only is similar to too many other 
dubious perks, and it should be ended.
  In introducing this bill, Mr. President, I in no way mean 
to represent that I have not contributed to the problem myself. I have 
held on to books I have borrowed from the Library of Congress for too 
long, as has my staff. There is plenty of blame to go around. 
Nevertheless, we need to focus on practical remedies, and I feel this 
proposal will be a sound and productive first step. My legislation will 
encourage all of the 8,800 congressional offices with borrowing 
privileges at the Library of Congress to fulfill their responsibilities 
in an appropriate manner.

  In additional to Members of Congress and congressional staff, the 
Library of Congress also makes loans to executive departments and 
agencies, the judiciary and diplomatic corps, the press, and other 
institutions. As I have mentioned, Mr. President, the Library of 
Congress is barred from charging late fees for overdue books, in 
contrast to virtually every other publicly funded library in America. 
In addition, the Library cannot retain any funds that might be 
collected due to the loss or damage of loaned books. It's clearly time 
to change these unwise restrictions and strengthen the Library's 
ability to protect its resources, and I hope Members of the Senate will 
support this legislation to do do.
  Surely, it's not asking too much of the individuals and offices 
fortunate enough to use the Library of Congress to do so in a 
responsible manner. Even under the new borrowing guidelines that would 
be instituted by this legislation, there really is no reason for any 
well-intentioned borrower ever to have to pay late fines or have their 
privileges suspended. I'm optimistic that the mere specter of having to 
pay overdue book fines will coax delinquent borrowers into responsibly 
renewing their book loans or returning the books.
  I hope that the Senate will adopt this legislation to implement 
prudent new guidelines in the book loan policies of the Library of 
Congress.
                                 ______

      By Mr. HELMS (for himself, Mr. Harkin, Mr. Faircloth, and Mr. 
        Grassley):
  S. 1901. A bill to require the Secretary of Agriculture to issue 
regulations authorizing the purchase and eradication of swine infected 
with or exposed to brucellosis, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


       legislation for the eradication of swine with brucellosis

  Mr. HELMS. Mr. President, legislation that I'm offering today--on 
behalf of Senator Harkin, Senator Faircloth, Senator Grassley, and 
myself--will help stem the spread of brucellosis, a disease carried by 
livestock which can be spread to humans who come in contact with 
infected blood in packing houses and elsewhere.
  The bill (S. 1901) requires the Secretary of Agriculture, within 30 
days of enactment, to purchase and eradicate all swine in the United 
States known to be infected with brucellosis.
  The bottom line, Mr. President, is that this legislation will: First 
prevent more workers in meat-packing plants from contracting this 
disease from slaughtered swine; second, offer meat-packing plants the 
assurance of operating without the fear of their employees contracting 
this disease; and third, bolster the pork industry, which, as Senators 
know, is a vital component of this country's economy.
  Some may ask: Precisely what is brucellosis? It's a good question. I 
first became aware of this disease while I was chairman of the Senate 
Agriculture Committee. This disease, if not checked, can--indeed, 
already has--caused illness in workers in meat-packing plants. It has 
afflicted a number of workers in my State and, unless the Secretary of 
Agriculture undertakes the action called for in this bill, could very 
well spread from State to State.
  This disease is of particular interest to Senator Faircloth and me 
because of a recent outbreak of the disease at a packing house in North 
Carolina and because pork production is a large and important industry 
in my State. In fact, Mr. President, North Carolina is now the second 
highest pork producing State in the country, right behind No. 1 Iowa.
  Part of the problem, Mr. President, is that under current USDA 
policy, the Government can purchase and destroy only the adult breeding 
stock--and not the piglets--USDA has identified as being infected with 
this disease. Since USDA officials cannot purchase and destroy infected 
piglets, eventually those animals make their way to packing houses 
where the disease can be passed on to humans.
  A sensible solution to this problem, Mr. President--as North 
Carolina's Labor Commissioner, Harry Payne, wrote to Secretary Espy--
and as the Sampson Independent of Clinton, NC, called for in its 
February 25, 1994, editorial, is for USDA to purchase and destroy 
entire herds, both young and old, which are known to be infected with 
brucellosis.
  Mr. President, I ask unanimous consent that Commissioner Payne's 
letter to Secretary Espy, the editorial from the Sampson Independent, 
my letter to Secretary Espy of February 18, 1994, and the text of this 
bill be printed in the Record at the conclusion of my remarks.
  Mr. President, I might add that the solution proposed by Commissioner 
Payne and the editors of the Sampson Independent is the solution 
contained in this legislation and is supported by the American Meat 
Institute, the National Pork Producers, and the U.S. Animal Health 
Association.
  The USDA has already taken some preliminary steps in this direction. 
Its Animal and Plant Health Inspection Service [APHIS] has proposed an 
interim rule allowing Federal funding to be used for the purchase and 
destruction of both adult pigs and piglets. To ensure that the intent 
of this rule is implemented without the usual bureaucratic delay, and 
to minimize the number of humans who will be infected with this 
disease, my legislation allows Federal funds to be used to buy and 
destroy every animal in an infected heard of swine within 30 days of 
the bill's enactment.
  This proposal requires no new appropriation inasmuch as the necessary 
funding will come out of the USDA's existing budget for the eradication 
of brucellosis in swine. Indeed, according to the experts at USDA, the 
cost of the approach in this legislation will be less than $350,000 of 
the $600,000 allocated in this budget.
  Mr. President, this legislation is simple. It is sensible. It will 
change the Government's policy to allow all infected swine to be 
killed--and in doing so, it will limit the number of workers exposed to 
this disease. This bill will make for healthier workers in a vital 
American industry.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                                S. 1901

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

     SECTION 1. PURCHASE AND ERADICATION OF SWINE INFECTED WITH 
                   BRUCELLOSIS.

       (a) In General.--Not later than 30 days after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     issue regulations that authorize the Secretary to purchase 
     and eradicate swine infected with or exposed to brucellosis 
     in accordance with section 11 of the Act of May 29, 1884 (21 
     U.S.C. 114a).
       (b) Implementation.--Section 102 of Public Law 99-198 shall 
     apply to the issuance of regulations under subsection (a).
                                  ____

                                          State of North Carolina,


                                          Department of Labor,

                                   Raleigh, NC, February 10, 1994.
     Hon. Mike Espy,
     U.S. Department of Agriculture, Washington, DC.
       Dear Secretary Espy: Congratulations and thank you for 
     signing the Memorandum of Agreement with U.S. OSHA regarding 
     the use of USDA inspectors to serve as a sharper set of eyes 
     in finding and reporting unsafe workplaces. Please know that 
     those inspectors who are in North Carolina are welcome to 
     participate in any training activity that we have.
       I am writing to ask you to refocus your efforts on the 
     eradication of brucellosis to include consideration of the 
     consequences of human exposure to this disease during the 
     slaughtering and packaging process. During our OSHA 
     investigation of Lundy Packing Company, where there have been 
     more than 53 reported cases of brucellosis in the last four 
     years, we discovered that the transmission of this disease to 
     humans poses a significant health risk that could lead to 
     fatal heart disease if untreated. We were also unable to 
     confirm that Lundy had ever knowingly purchased brucellosis 
     contaminated hogs.
       It is true that we are requiring of them significant and 
     costly steps which we believe will lower substantially the 
     probability that their employees will be exposed. Our belief 
     is, however, that the only way to truly eliminate exposure is 
     to eradicate the disease. This will inure to the benefit of 
     the employees and employer from the point of view of health, 
     and in the specific case of Lundy Packing, allow them to 
     purchase hogs at the best price without worry of violation.
       It is my understanding that your current eradication 
     program is limited to the destruction of breeding stock and 
     that contaminated piglets, which are supposed to be tagged, 
     are allowed to be marketed and eventually slaughtered for 
     processing. There does not appear to be an effective ``cradle 
     to grave'' tracking system to insure that physically 
     promising piglets are not diverted to breeding as they mature 
     and possibly pass through numerous hands across state lines. 
     It appears that the only truly effective means of eliminating 
     brucellosis in domestic breeding stock is to destroy all 
     members of identified contaminated herds. Since, as I 
     understand, there are currently only 37 identified 
     contaminated herds in the United States, it would not appear 
     to be an overly burdensome task to make a Department priority 
     the destruction of these herds.
       I encourage you to take whatever steps are necessary to see 
     that these entire herds are destroyed as quickly as possible. 
     I realize that contaminated feral pigs may continue to pose a 
     risk to domestic herds; however, a more aggressive posture of 
     destroying an entire contaminated herd upon identification 
     would appear to significantly reduce the potential risk of 
     spreading this disease. I understand that this approach is 
     supported by the American Meat Institute, the National Pork 
     Producers, and the U.S. Animal Health Association.
       I would be happy to talk with you about our concerns or 
     make the information we found during our investigation 
     available to you or your staff. In all of this, please know 
     that we recognize you share our concern about the people of 
     the pork industry as well as the industry in which they work.
           Most sincerely,
                                               Harry E. Payne, Jr.
                                  ____


             [From the Sampson Independent, Feb. 25, 1994]

  State, Feds Had a Role--Others Share Responsibility for Brucellosis

       The truth us beginning to come out about this brucellosis 
     business at Lundy's, and if the company bears any blame for 
     the outbreak, then state and federal bureaucracies must share 
     equally in the blame.
       First, the federal bureaucracy, which has identified as 
     many as 37 brucellosis-infected herds, but perhaps as few as 
     17, according to Dr. Michael Staton of the Federal Veterinary 
     Service.
       The problems is, nobody has shared the identities of those 
     herds with meat packers, be it Lundy's, Smithfield or any of 
     them.
       Oh, there's a process by which a paper trail is built from 
     the herds to market, but Staton said that because of the 
     marketing process that paper trail breaks down, either 
     through deceit on the part those selling the infected hogs, 
     or just because the process doesn't work very well.
       That broken-down paper trail may seem like a cavalier way 
     to address brucellosis but according to state veterinarian 
     Dr. George Edwards, the reason is that the U.S. Department of 
     Agriculture and others in the federal agriculture bureaucracy 
     have just regarded brucellosis as a risk inherent to the 
     livestock industry.
       After all, there aren't that many brucellosis-infected 
     herds left, it doesn't affect the edibility of the livestock, 
     and, until the outbreak at Lundy's, there haven't been many, 
     if any, reported cases among meat packing industry workers.
       Just recently, attitudes at the federal level toward 
     brucellosis have begun to change, primarily at the urging of 
     the pork producing industry, but that's come a day late and a 
     dollar short for Lundy's.
       And then there's the state Labor Department. State Labor 
     Department. State Labor Commissioner Harry Paine has 
     communicated with Agriculture Secretary Mike Espy, suggesting 
     that the USDA buy and kill brucellosis-infected livestock.
       Good idea, and one that has already been applied in all but 
     five states, but in this instance its a case of closing the 
     barn door after the horse is already gone, because it comes 
     after Lundy's has been fined, basically for allowing an 
     outbreak of brucellosis at it's plant, ordered to implement 
     safety and educational procedures to prevent new outbreaks, 
     and to test, on site, any hogs that don't come from 
     brucellosis-free states.
       Maybe Lundy's should have had the education and safety 
     procedures in from the start, but remember, the brucellosis 
     outbreak has attracted such attention only because it is so 
     rare, and it seems a lot to ask a business to anticipate 
     every remote eventuality.
       But that's what Staton suggested when he pointed out that 
     the penalties imposed against Lundy's by the Labor Department 
     were not so much for buying infected hogs as they were for 
     failing to implement adequate safety procedures.
       How about this, though. Had somebody at the USDA written a 
     letter, sent a fax or made a phone call and simply told 
     Lundy's and other meat packing company officials, ``Look 
     here. These are the 37 herds we know are brucellosis-
     infected, so ya'll don't need to be buying any hogs from 
     them,'' the issue of Lundy's safety precautions never would 
     have come up.
       Annabelle Fetterman, Lundy's CEO, has said that when herd's 
     were identified as brucellosis infected, the company didn't 
     buy the hogs.
       Of course they didn't. No business wants it's employees to 
     be sick. Any altruistic motivation aside, it's bad for 
     business.
       Why nobody wrote, faxed or called, Staton couldn't say, but 
     don't taxpayer-funded state and federal bureaucracies have at 
     least as much responsibility for health and well-being of the 
     people they're designated to serve, as a private business 
     that must rely on keeping overhead down and production up to 
     turn a profit and continue to provide employment for its 
     workers?
       Think about who has the greatest responsibility and who has 
     assumed the greatest portion of their responsibility, then 
     look at who has been penalized in the whole brucellosis 
     business.
       It's not supposed to work that way.
                                  ____



                                                  U.S. Senate,

                                Washington, DC, February 18, 1994.
     Hon. Mike Espy,
     Secretary of Agriculture, U.S. Department of Agriculture, 
         Washington, DC.
       Dear Secretary Espy: The Animal Plant Health Inspection 
     Service has wisely proposed an interim rule authorizing the 
     USDA to destroy all herds of hogs found to be infected with 
     brucellosis. I urge that you implement this rule promptly to 
     eradicate this disease in a cost-effective manner, and 
     protect the health of slaughterhouse employees and the 
     public.
       This proposed rule was brought to my attention by Mrs. 
     Annabelle L. Fetterman, Chairman and CEO of The Lundy Packing 
     Company in Clinton, N.C., who had contacted me about recent 
     citations issued to The Lundy Packing Company by the N.C. 
     Occupational Safety and Health Administration. The citations 
     were related to Lundy employees who had contracted 
     brucellosis.
       Rapid implementation of the proposed interim rule will (1) 
     allow the Lundy Packing Company to continue to operate its 
     business, (2) eliminate the brucellosis disease from every 
     state, and (3) bolster the pork industry, which, as you know, 
     is so vital to the economy of this country.
       You will be expressing good stewardship, Mr. Secretary, if 
     you move quickly to implement this proposed interim road. The 
     American people should applaud you for doing so.
       Kindest regards.
           Sincerely,
                                                      Jesse Helms.
                                 ______

      By Mr. RIEGLE (for himself and Mr. Sasser) (by request):
  S. 1902. A bill to improve the administration of export controls, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.


                   export administration act of 1994

 Mr. RIEGLE. Mr. President, I rise today to introduce on behalf 
of the administration a bill titled the Export Administration Act of 
1994. This bill is the administration's proposal to rewrite the current 
statutory authority governing exports of dual-use items and technology 
to reflect post-cold war realities.
  Recently the Subcommittee on International Finance and Monetary 
Policy of the Senate Committee on Banking, Housing, and Urban Affairs 
held a hearing at which representatives of the Departments of Commerce, 
State, Defense, Energy, and the Arms Control and Disarmament Agency 
testified on this proposal. In contrast to past years the 
administration presented a unified position and I am hopeful that we 
will have a new Export Administration Act on the books before the old 
act expires on June 30 of this year.
  One issue that must be reviewed carefully in our rewrite of the 
Export Administration Act is the issue of proliferation of chemical, 
biological, and nuclear weapons and the means to deliver them. We no 
longer have a monopoly on the manufacturing of key technologies that 
are useful in proliferation activities, and such technologies are 
falling into hands of rogue regimes, such as Iran, Iraq, Libya, and 
North Korea. We have made several amendments to the Export 
Administration Act in recent years to try to stem this growing problem, 
but more must be done on a multilateral basis to ensure that 
technologies useful in making weapons of mass destruction and the means 
to deliver them do not fall into the wrong hands.
  In addition to rewriting the Export Administration Act in this 
Congress, we must also undertake an examination of how we can make our 
licensing system operate more efficiently and effectively. This is 
particularly important to our competitiveness. United States sales 
should not be lost simply because of interagency disputes that cause 
needless delays on licensing decisions. A more streamlined licensing 
system can help our firms become more competitive in export markets.
  I very much look forward to working with the Clinton administration 
in this year's rewrite of the Export Administration Act.
  I ask that a letter from Secretary Brown asking me to introduce the 
Export Administration Act of 1994 on behalf of the administration, a 
copy of the bill and a section by section of it be reprinted in the 
Record following my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1902

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

     Section 1. TITLE.

       This Act may be cited as the ``Export Administration Act of 
     1994'' and shall hereafter be referred to as the Act.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) Export controls shall be a part of a comprehensive 
     response to national security threats. United States exports 
     should be restricted only for significant national security.
       (2) The proliferation of weapons of mass destruction, their 
     delivery systems, and other significant military capabilities 
     has become one of the most serious threats to world peace and 
     to our national security.
       (3) Since growing exports are essential to future economic 
     growth, restrictions on exports must be evaluated in terms of 
     their effects on the United States economy. Economic 
     interests must play a key role in decisions on export 
     controls and the rigor of economic analysis and data 
     available in the decision-making process must be enhanced.
       (4) Exports of certain commodities, technology, and 
     software may adversely affect the national security and 
     foreign policy of the United States, by making a significant 
     contribution to the military potential of individual 
     countries or by disseminating the capability to design, 
     develop, test, produce, stockpile, or use weapons of mass 
     destruction, missile delivery systems, and other significant 
     military capabilities. The administration of export controls 
     should emphasize the control of exports that could make a 
     significant contribution to the military potential of any 
     country which would be detrimental to the national security 
     and foreign policy of the United States and the control of 
     items that could disseminate the capability to produce and 
     use weapons of mass destruction, missile delivery systems, 
     and other significant military capabilities.
       (5) The acquisition of sensitive commodities, technology, 
     and software by those countries and end users whose actions 
     or policies run counter to United States national security or 
     foreign policy interests may enhance the military-industrial 
     capabilities of those countries, particularly their ability 
     to design, develop, test, produce, stockpile, use, and 
     deliver nuclear, chemical, and biological weapons, missile 
     delivery systems, and other significant military 
     capabilities. This enhancement threatens the security of the 
     United States, its allies, and other friendly nations, and 
     places additional demands on the defense budget of the United 
     States. Availability to certain countries and end users of 
     items that contribute to military capabilities or the 
     proliferation of weapons of mass destruction is a fundamental 
     concern of the United States and should be eliminated through 
     negotiations and other appropriate means whenever possible.
       (6) The national security of the United States depends not 
     only on wise foreign policies and a strong defense, but also 
     a vibrant national economy. To be truly effective, export 
     controls should be applied uniformly by all suppliers.
       (7) The United States export control system must not be 
     overly restrictive or bureaucratic, or undermine the 
     competitive position of American industry. The export control 
     system must be efficient, responsive, transparent, and 
     effective.
       (8) Export controls should be focused on those items that 
     materially contribute to a country's or end user's military 
     or proliferation potential. The United States must pursue the 
     maximum effectiveness of multilateral export control regimes, 
     including comprehensive enforcement measures. The United 
     States recognizes the importance of comprehensive enforcement 
     measures to maximize the effectiveness of multilateral 
     controls. Therefore, the United State must level the playing 
     field for U.S. trade and enhance the effectiveness of 
     controls by pursuing multilateral controls and harmonizing 
     their implementation.
       (9) Except in the event the United States is the sole 
     source of critical supplies, unilateral export controls may 
     not be truly effective in influencing the behavior of other 
     governments and impeding access by target countries to 
     controlled items. Unilateral controls may therefore impede 
     access to United States sources of supply without affecting 
     the ability of target countries to obtain controlled items 
     elsewhere. Unilateral controls may therefore permit foreign 
     competitors to serve markets the U.S. Government denies to 
     American firms and workers and impair the reliability of 
     United States suppliers in comparison with their foreign 
     competitors.
       (10) While the United States may at times have to act 
     unilaterally, we should strive to avoid unilateral action if 
     it damages U.S. commercial interests without effectively 
     promoting our nonproliferation and other national security 
     and foreign policy objectives. At the same time, the need to 
     lead the international community or overriding national 
     security or foreign policy interests may justify unilateral 
     controls in specific cases.
      (11) the multilateral export control system, which helped 
     contain military threats posed by the former Soviet Bloc 
     countries, should be replaced by an effective and efficient 
     multilateral export control program furthering vital 
     interests of the United States in the post-Cold War era.
      (12) International treaties, such as the Chemical Weapons 
     Convention, and international agreements and arrangements 
     intended to control, lessen or eliminate weapons of mass 
     destruction should be fully implemented by, inter alia, 
     imposing restrictions on imports and exports of designated 
     items, establishing, monitoring and transmitting reports on 
     the production, processing, consumption, export and import of 
     designated items, and complying with verification regimes 
     mandated by such treaties, agreements, and arrangements.
      (13) Restrictions that negatively affect the U.S. industrial 
     base may ultimately weaken U.S. military capabilities and 
     lead to dependencies on foreign sources for key components. 
     The availability of certain items in the United States and 
     from abroad may affect the welfare of the domestic economy.
      (14) It is important that the administration of export 
     controls imposed for foreign policy purposes give special 
     emphasis to the need to control exports of items and 
     substances hazardous to the public health and the environment 
     which are banned or severely restricted for use in the United 
     States, and which, if exported, could affect the 
     international reputation of the United States as a 
     responsible trading partner.

     SEC. 3. POLICY STATEMENT.

       It is the policy of the United States:
       (1) To minimize uncertainties in export control policy and 
     to encourage trade with all countries with which the United 
     States has diplomatic or trading relations, except those 
     countries with which such trade has been determined by the 
     President to be against the national interest.
       (2) That the United States should not restrict export trade 
     by its citizens except when necessary for significant 
     national security, non-proliferation, foreign policy, or 
     short supply objectives and such restrictions are 
     administered consistent with basic standards of fairness, and 
     are implemented only after full consideration of the impact 
     on the economy of the United States and only to the extent 
     necessary--
       (A) to stem the proliferation of weapons of mass 
     destruction and the means to deliver them by--
       (i) leading international efforts to control the 
     proliferation of chemical and biological weapons, nuclear 
     explosive devices, missile delivery systems, and other 
     significant military capabilities;
       (ii) controlling involvement and contributions by U.S. 
     persons to foreign programs intended to design, develop, 
     test, produce, stockpile, or use chemical and biological 
     weapons, nuclear explosive devices, missile delivery systems, 
     and other significant military capabilities and the means to 
     design, develop, test, produce, stockpile, or use them; and
       (iii) implementing international agreements and 
     arrangements that provide for controls on imports and exports 
     of designated items, reports on the production, processing, 
     consumption, exports and imports of such items, and 
     compliance with verification programs.
       (B) to restrict the export of items that would make a 
     significant contribution to the military potential of 
     countries that would prove detrimental to the national 
     security and foreign policy of the United States;
       (C) to restrict the export of items where necessary to 
     significantly further the foreign policy of the United States 
     or to fulfill its declared international commitments;
       (D) to restrict the export of items where necessary to 
     protect the domestic economy from the excessive drain of 
     scarce materials or to secure the removal by foreign 
     countries of restrictions on access to supplies where such 
     restrictions have or may have a serious inflationary impact, 
     have caused or may cause a serious domestic shortage, or have 
     been imposed for purposes of influencing the foreign policy 
     of the United States.
       (3) To further increase the reliance of the United States 
     upon multilateral coordination of controls through effective 
     control regimes that maintain lists of controlled items that 
     are truly critical to the control objectives, strive to 
     increase membership to include all relevant countries, 
     maintain common criteria and procedures for licensing, and 
     harmonize member criteria and procedures for licensing, and 
     harmonize member countries' licensing practices. It is the 
     policy of the United States that multilateral controls are 
     the best means of achieving the objectives of the United 
     States.
       (4) To encourage all countries that produce items that are 
     controlled by multilateral regimes to adhere to the 
     guidelines and controls of the regimes and to join the regime 
     if they meet the relevant criteria for membership.
       (5) To make every effort to achieve effective multilateral 
     export controls in all cases where the United States imposes 
     export controls.
       (6) To avoid unilateral export controls and policies except 
     when dictated by overriding national interests, to continue 
     to work with other supplier nations to make export controls 
     multilateral and to harmonize their implementation, and to 
     avoid unilateral action if it damages U.S. commercial 
     interests without effectively promoting our nonproliferation 
     and other national security and foreign policy objectives. 
     The United States will therefore impose unilateral export 
     controls only when the following conditions are met:
       (A) Diplomatic efforts have failed or clearly would be 
     unsuccessful in establishing a multilateral regime; and
       (B) The national security, nonproliferation, or foreign 
     policy objectives expected to be achieved by the unilateral 
     control justify any expected loss of sales, jobs, and 
     reliability on the part of United States exporters.
       (7) To eliminate unilateral dual-use export controls and 
     policies unless their continuation in force is essential to 
     U.S. national security, nonproliferation, or foreign policy 
     interests.
       (8) To eliminate unnecessary and ineffective export 
     controls.
      (9) To make all licensing decisions in a timely manner so 
     undue delays in the licensing process will not cause a U.S. 
     firm to lose an export sale.
      (10) To ensure that control lists are periodically updated 
     to reflect the changing proliferation threat, advances in 
     technology, and a realistic appraisal of what is beyond the 
     reach of effective control.
      (11) To maintain a presumption of approval of applications 
     for authority to export dual-use goods to civil end uses and 
     end users under this Act, absent sound reasons for denial 
     based on national security, nonproliferation and foreign 
     policy grounds, based upon the commitment of the United 
     States to an open international trading system and the need 
     to ensure American competitiveness.
      (12) To use export controls to encourage other countries to 
     take immediate steps to prevent the use of their territories 
     or resources to aid, encourage or give sanctuary to those 
     persons directing, supporting or participating in acts of 
     international terrorism. To achieve this objective, the 
     President shall make reasonable and prompt efforts to secure 
     the removal or reduction of such assistance to international 
     terrorists through international cooperation and agreement 
     before imposing export controls.
      (13) To sustain vigorous scientific enterprise. To do so 
     involves sustaining the ability of scientists and other 
     scholars freely to communicate research findings, in 
     accordance with the applicable provisions of law, by means of 
     publication, teaching, conferences, and other forms of 
     scholarly exchange.
      (14) (A) To oppose restrictive trade practices or boycotts 
     fostered or imposed by foreign countries against other 
     countries friendly to the United States or against any United 
     States person; and
      (B) To encourage and, in specified cases, require United 
     States persons engaged in the export of commodities, 
     software, technology and 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 against a country 
     friendly to the United States or against any United States 
     person.
      (15) To ensure that U.S. economic interests play a key role 
     in decisions on export controls and to take immediate action 
     to increase the rigor of economic analysis and data available 
     in the decision-making process.
       (16) To streamline export licensing functions and thereby 
     better serve the exporting public by reducing and eliminating 
     overlapping, conflicting, and inconsistent regulatory 
     burdens; and further, to create a more efficient, responsive, 
     transparent, and effective export control process.
       (17) To cooperate with other countries with which the 
     United States has defense treaty commitments or common 
     strategic objectives in restricting the export of goods and 
     technology which would make a significant contribution to the 
     military potential of any country or combination of countries 
     which would prove detrimental to the national security of the 
     United States and of those countries with which the United 
     States has defense treaty commitments or common strategic 
     objectives, and to encourage other friendly countries to 
     cooperate in restricting the sale of goods and technology 
     that can harm our mutual security.
       (18) To promote the national security of the United States 
     which requires that the nation's economy shall flourish, its 
     geographic integrity is maintained, its political and foreign 
     policy views are respected, the freedom and well being of its 
     citizens are assured, and that American values are preserved. 
     The United States as a world power must protect its national 
     security against direct and indirect threats through the 
     promotion of nonproliferation policies in all areas of the 
     world.
       (19) To implement export controls and diplomatic activity 
     needed to sustain multilateral and bilateral activities and 
     thereby complement and reinforce each other.
       (20) To enhance the national security and nonproliferation 
     interests of the United States. To this end and consistent 
     with the other policies of this section and the criteria of 
     section 5(b) of this Act, the United States will use 
     multilateral and unilateral controls when necessary to ensure 
     that access to weapons of mass destruction, missile delivery 
     systems, and other significant military capabilities is 
     restricted. While the multilateral nonproliferation regimes 
     will be the primary instruments through which the United 
     States will pursue its nonproliferation goals, it will also 
     engage in bilateral agreements and, when consistent with the 
     policies of this section and the criteria of section 5(b), 
     take unilateral action.
       (21) To defer and punish acts of international terrorism 
     and to encourage other countries to take immediate steps to 
     do so, or to terminate their support for, encouragement of, 
     or use of their territories to aid or give sanctuary to, 
     persons and groups involved in international terrorism. To 
     this end and consistent with the policies of this section and 
     the criteria of section 5(b) of this Act, the United Stats 
     should distance itself from countries that have violated 
     international norms of behavior by repeatedly supporting acts 
     of international terrorism by restricting exports to those 
     countries. The United States may establish such controls on 
     exports as may be appropriate to induce such countries to 
     change their unacceptable policies.
       (22) To promote international peace, stability, and respect 
     of fundamental human rights. The United States may establish 
     controls on exports to countries that threaten regional 
     stability, abuse of fundamental rights of their citizens, or 
     to promote other important foreign policy objectives of the 
     United States consistent with the policies of this section 
     and the criteria of section 5(b) of this Act.
       (23) In developing changes to multilateral control lists, 
     to seek to focus controls on only that set of items that, if 
     taken together and if denied to target countries, would carry 
     out the policy of the United States to deny such countries 
     the ability to design, develop, test, produce, stockpile, or 
     use relevant conventional military capability, weapons of 
     mass destruction, their delivery systems, or other 
     capabilities the denial of which are the goals of United 
     States export control policy.

     SEC. 4. GENERAL PROVISIONS.

       (a) Types of Licenses.--The Secretary may require any type 
     of validated or general license under such terms and 
     conditions as may be imposed by the Secretary for the 
     effective and efficient implementation of this Act.
       (b) Control List.--In accordance with the procedures 
     specified in sections 5 and 11 of this Act, the Secretary 
     shall establish and maintain a list (hereinafter in this Act 
     referred to as the ``Commerce Control List'' or ``Control 
     List'') stating license requirements for exports of items 
     under this Act.
       (c) Militarily Critical Technologies List.--The Secretary 
     of Defense shall bear primary responsibility for establishing 
     and maintaining the Militarily Critical Technologies List 
     (hereinafter in the Act referred to as the MCTL) identifying 
     equipment and technologies critical to the design, 
     development, test, production, stockpiling, or use of weapons 
     of mass destruction and other significant military 
     capabilities, including nuclear, biological and chemical 
     weapons, and manned and unmanned vehicles capable of 
     delivering such weapons.
       (d) Right of Export.--No authority or permission to export 
     may be required under this Act, or under regulations issued 
     under this Act, except to carry out the policies set forth in 
     section 3 of this Act.
       (e) Delegation of Authority.--The President may delegate 
     the power, authority, and discretion conferred upon him by 
     this Act to such departments, agencies, or officials of the 
     Government as he may consider appropriate, except that no 
     authority under this Act may be delegated to, or exercised 
     by, any official of any department or agency the head of 
     which is not appointed by the President, by and with the 
     advice and consent of the Senate.
       (f) Notification of the Public; Consultation With 
     Business.--The Secretary shall keep the public fully apprised 
     of changes in export control policy and procedures instituted 
     in conformity with this Act with a view to encouraging trade. 
     The Secretary shall meet regularly with representatives of a 
     broad spectrum of enterprises, labor organizations, and 
     citizens interested in or affected by export controls, in 
     order to obtain their views on United States export control 
     policy and the foreign availability of items subject to 
     controls.
       (g) Technical Advisory Committees.--
       (1) Upon his or her own initiative or upon written request 
     by representatives of a substantial segment of any industry 
     which produces any items subject to export controls under 
     this Act or being considered for such controls, the Secretary 
     shall appoint technical advisory committees. Such technical 
     advisory committees shall advise the United States on all 
     aspects of controls imposed or proposed under this Act. Each 
     such committee shall consist of representatives of United 
     States industry and Government, including the Department of 
     Commerce and such other departments and agencies as 
     appropriate. The Secretary shall permit the widest possible 
     participation by the business community on the technical 
     advisory committees.
       (2) Technical advisory committees established under 
     paragraph (1) shall advise and assist the Secretary and any 
     other department, agency, or official of the Government of 
     the United States to which the President delegates authority 
     under this Act, on actions designed to carry out the policies 
     of this Act. Such committees, where they have expertise in 
     such matters, shall be consulted on questions involving (A) 
     technical matters, (B) worldwide availability and actual 
     utilization of production technology, (C) licensing 
     procedures which affect the level of export controls 
     applicable to any items, (D) revisions of the Control List 
     (as provided in subsection (b), including proposed revisions 
     of multilateral controls in which the United States 
     participates), (E) the issuance of regulations, (F) the 
     impact and interpretation of existing regulations, (G) 
     processes and procedures for review of licenses and policy, 
     and (H) any other questions relating to actions designed to 
     carry out this Act. Nothing in this subsection shall prevent 
     the United States Government from consulting, at any time, 
     with any person representing industry or the general public, 
     regardless of whether such person is a member of a technical 
     advisory committee. Members of the public shall be given a 
     reasonable opportunity, pursuant to regulations prescribed by 
     the Secretary, to present evidence to such committees.
       (3) Upon request of any member of any such committee, the 
     Secretary may, if the Secretary determines it appropriate, 
     reimburse such member for travel, subsistence, and other 
     necessary expenses incurred by such member in connection with 
     the duties of such member.
       (4) Each such committee shall elect a chairman, and shall 
     meet at least every three months at the call of the chairman, 
     unless the chairman determines, in consultation with the 
     other members of the committee, that such a meeting is not 
     necessary to achieve the purposes of this subsection. Each 
     such committee shall be terminated after a period of 2 years, 
     unless extended by the Secretary for additional periods of 2 
     years. The Secretary shall consult each such committee on 
     such termination or extension of that committee.
       (5) To facilitate the work of the technical advisory 
     committees, the Secretary, in conjunction with other 
     departments and agencies participating in the administration 
     of this Act, shall disclose to each such committee adequate 
     information, consistent with national security, pertaining to 
     the reasons for the export controls which are in effect or 
     contemplated for the items or policies for which that 
     committee furnishes advice. Information provided by the 
     technical advisory committees shall not be subject to 
     disclosure under section 552 of title 5, United States Code, 
     and such information shall not be published or disclosed 
     unless the Secretary determines that the withholding thereof 
     is contrary to the national interest.
       (h) Fees.--No fee may be charged in connection with the 
     submission or processing of an export license application.

     SEC. 5. NONPROLIFERATION, NATIONAL SECURITY, AND FOREIGN 
                   POLICY CONTROL AUTHORITIES.

       (a) Authority.--
       (1) In order to carry out the policies enumerated in 
     section 3 of this Act, the President may, in accordance with 
     the provisions of this section and section 15(e), prohibit or 
     curtail the export of any item subject to the jurisdiction of 
     the United States or exported by any person subject to the 
     jurisdiction of the United States. The President may regulate 
     domestic and foreign conduct, consistent with the policies of 
     this Act. Such authority shall include, but not be limited 
     to, the authority to prohibit activity such as financing, 
     contracting, servicing or employment, to deny access to items 
     in the United States and abroad, to conduct audits of records 
     and inspections of facilities, to compel reports, and to 
     implement international commitments of the United States with 
     respect to the control of exports.
       (2) Except as otherwise specified in this Act, the 
     authority contained in this Act shall be exercised by the 
     Secretary, in consultation with appropriate departments and 
     agencies.
       (3) As directed by the President, annual policy guidance 
     shall be issued to provide detailed implementing guidance to 
     licensing officials in all appropriate departments and 
     agencies.
       (4) To develop the annual policy guidance, export controls 
     and other regulations to implement policies contained in 
     section 3 shall be reviewed annually. This annual policy 
     review shall include an evaluation of benefits and costs, 
     including economic impact, of export controls. The review 
     should include:
       (A) An assessment by the Secretary of Commerce at least 30 
     days in advance of determinations to extend controls 
     describing the economic consequences of the controls during 
     the preceding 12 months, including estimates of any lost 
     United States exports and jobs;
       (B) An assessment by the Secretary of State at least 30 
     days in advance of determinations to extend controls 
     describing the objectives of the controls and the extent to 
     which the controls have attained those objectives over the 
     preceding 12 months;
       (C) An assessment by the Secretary of Defense at least 30 
     days in advance of determinations to extend controls 
     describing the impact export controls have had in the 
     preceding 12 months on the national security of the United 
     States;
       (D) Solicitation of public comments for submission of such 
     comments at least 60 days in advance of determinations to 
     extend controls; and
       (E) A systematic review by the Secretary of the above in 
     consultation with appropriate departments and agencies.
       (5) Based upon the review required by paragraph (4) above, 
     the Secretary, in consultation with appropriate departments 
     and agencies, shall determine at least annually whether the 
     national interest requires that he or she terminate 
     unilateral controls and regulations or maintain them for an 
     additional 12 months. Unilateral controls imposed under 
     (b)(1)(B) of this section shall expire by operation of law 
     after one year from the most recent imposition or renewal of 
     such controls unless extended by the Secretary based upon his 
     or her findings consistent with the criteria and other 
     requirements of this Act. Such findings shall be provided to 
     the Congress pursuant to subsection (e)(2) of this section.
       (b) Criteria.--
       (1) Controls may be imposed, expanded or extended under 
     this section only if the President determines that:
       (A) The control is essential to advancing the 
     nonproliferation, national security, or foreign policies of 
     the United States provided in section 3 above; and like-
     minded states have agreed with the United States on the 
     utility of such controls in obtaining a shared objective and 
     procedures for implementing that objective; or
       (B) The control is essential to advancing the 
     nonproliferation, national security, or foreign policies of 
     the United States provided in section 3 above; and the 
     objective of the control is in the overall national interest 
     of the United States and cannot be attained by means other 
     than the control.
       (2) The President should make the determination described 
     in subparagraph (1)(B) above for the purpose of imposing or 
     expanding a unilateral control, only if:
       (A) Such controls are likely to have substantial progress 
     toward achieving the intended purpose of:
       (i) Changing, modifying or constraining the undesirable 
     conduct or policies of the target country or countries;
       (ii) Denying access by the target country to controlled 
     items from all sources;
       (iii) Establishing multilateral cooperation to deny the 
     target country access to controlled items from all sources; 
     or
       (iv) Denying exports or assistance that significantly and 
     directly contribute to the proliferation of weapons of mass 
     destruction, terrorism, human rights abuses, or regional 
     instability.
       (B) The proposed controls are compatible with the foreign 
     policy objectives of the United States and with overall 
     United States policy toward the target country;
       (C) The reaction of other countries to the imposition or 
     expansion of such export controls by the United States is not 
     likely to render the controls ineffective in achieving the 
     intended purpose or to be counter-productive to United States 
     policy interests;
       (D) The effect of the proposed controls on the export 
     performance of the United States, the competitive position of 
     the United States as a supplier of items, or on the economic 
     well-being of individual United States companies and their 
     employees and communities does not exceed the benefit to the 
     United States foreign policy, nonproliferation, or national 
     security interests; and
       (E) The United States has the ability to enforce the 
     proposed controls effectively.
       (3) The President should make the determination described 
     in subparagraph (1)(B) above for the purpose of extending a 
     control, only if:
       (A) Such controls are likely to continue to make 
     substantial progress toward achieving the intended purpose 
     of:
       (i) Changing, modifying or constraining the undesirable 
     conduct or policies of the target country or countries;
       (ii) Denying access by the target country to controlled 
     items from all sources;
       (iii) Establishing multilateral cooperation to deny the 
     target country access to controlled items from all sources; 
     or
       (iv) Denying exports or assistance that significantly and 
     directly contribute to the proliferation of weapons of mass 
     destruction, terrorism, human rights abuses, or regional 
     instability.
       (B) The impact of the controls has been compatible with the 
     foreign policy objectives of the United States and with 
     overall United States policy toward the target country;
       (C) The reaction of other countries to the imposition or 
     expansion of such export controls by the United States has 
     not rendered the controls ineffective in achieving the 
     intended purpose and have not been counter-productive to 
     United States policy interests;
       (D) The effect of the proposed controls on the export 
     performance of the United States, the competitive position of 
     the United States as a supplier of items, and the economic 
     well-being of individual United States companies and their 
     employees and communities has not exceeded the benefit to the 
     United States foreign policy, nonproliferation, or national 
     security interests; and
       (E) The United States has enforced the controls 
     effectively.
       (c) Consultation With Industry.--The Secretary, in every 
     possible instance, shall consult with and seek advice from 
     affected United States public, industries, and technical 
     advisory committees and seek public comment before the 
     imposition, expansion, or extensions of any export control 
     under this section. Such consultation shall include advice on 
     the criteria set forth in subsection (b) and such other 
     matters as the Secretary considers appropriate.
       (d) Consultation With Other Countries.--When imposing, 
     expanding, or extending export controls under this section, 
     the Secretary of State shall, in consultation with 
     appropriate departments and agencies and at the earliest 
     appropriate opportunity, consult with the countries with 
     which the United States maintains export controls 
     cooperatively and with such other countries as appropriate to 
     advise them of the reasons for the action and to urge them to 
     adopt similar controls'
       (e) Consultations With the Congress.--
       (1) The Secretary, in consultation with appropriate 
     departments and agencies, shall keep the Congress fully 
     apprised of changes in export control policy and procedures 
     pursuant to this Act. The Secretary or his designates, in 
     consultation with representatives of other appropriate 
     departments and agencies, shall consult with the Committee on 
     Foreign Affairs of the House of Representatives and the 
     Committee on Banking, Housing and Urban Affairs of the Senate 
     on changes in export control policy, procedures, and other 
     developments related to this Act.
       (2) The Secretary may not impose, expand, or extend 
     unilateral export controls under this section until the 
     Secretary has submitted to the Congress a report--
       (A) specifying the purpose of the controls;
       (B) specifying the determination of the Secretary described 
     in subsection (b), the bases for such determinations (or 
     considerations), and any possible adverse foreign policy 
     consequences of the controls;
       (C) describing the nature, the subjects, and the results 
     of, or the plans for, the consultation with industry and the 
     interested public pursuant to subsection (c) and with other 
     countries pursuant to subsection (d);
       (D) specifying the nature and results of any alternative 
     means attempted to achieve the objective of the control, or 
     the reasons for imposing, expanding, or extending the 
     controls without attempting any such alternative means; and
       (E) describing the availability from other countries of 
     items comparable to the items subject to the proposed export 
     controls, and describing the nature and results of the 
     efforts made to secure the cooperation of foreign governments 
     in controlling the foreign availability of such comparable 
     goods or technology.

     Such report shall also indicate how such controls will 
     further significantly the policies of the United States as 
     set forth in section 3 or will further its declared 
     international obligations.
       (3) To the extent necessary to further the effectiveness of 
     the export controls, portions of a report required by 
     paragraph (2) may be submitted to the Congress on a 
     classified basis, and shall be subject to the provisions of 
     section 11(c) of this Act. Each such report shall, at the 
     same time it is submitted to the Congress, also be submitted 
     to the General Accounting Office for the purpose of assessing 
     the report's full compliance with the intent of this 
     subsection.
       (f) Multilateral Control Regimes.--
       (1) Policy.--In order to carry out the policies of section 
     3 and the criteria of section 5(b), the Secretary of State, 
     in consultation with appropriate departments and agencies, 
     should seek multilateral arrangements that are intended to 
     secure effective achievement of these policies and criteria 
     and in so doing also establish fairer and more predictable 
     competitive opportunities for U.S. exporters.
       (2) Standards for national systems.--In the establishment 
     and maintenance of multilateral regimes, the Secretary of 
     State, in consultation with appropriate departments and 
     agencies, shall take steps to attain the cooperation of 
     members in the effective implementation of export control 
     systems. Such systems should contain the following elements:
       (A) National laws providing sufficient enforcement 
     authorities, civil and criminal penalties, and statutes of 
     limitations sufficient to deter potential violations and 
     punish violators;
       (B) A program to evaluate export license applications that 
     includes sufficient technical expertise to assess the 
     licensing status of exports and ensure the reliability of end 
     users;
       (C) An enforcement mechanism that provides authority for 
     trained enforcement officers to investigate and prevent 
     illegal exports;
       (D) A system of export control documentation to verify the 
     movement of items;
       (E) Procedures for the coordination and exchange of 
     information concerning licensing, end users, and enforcement; 
     and
       (F) Adequate national resources devoted to subparagraphs 
     (A) through (E) of this subsection.
       (3) Standards for multilateral regimes.--In the 
     establishment and maintenance of multilateral regimes, the 
     Secretary of State, in consultation with appropriate 
     departments and agencies, shall seek, consistent with the 
     policies of section 3 and the criteria of section 5(b), the 
     following features for the multilateral control regimes in 
     which the United States participates:
       (A) Full membership.--Achieve membership of all supplier 
     countries whose policies and activities are consistent with 
     the objectives and membership criteria of the multilateral 
     arrangement.
       (B) Effective enforcement and compliance.--Promote 
     enforcement and compliance with the rules and guidelines of 
     the members of the regime through maintenance of an effective 
     control list.
       (C) Public understanding.--Enhance public understanding of 
     each regime's purpose and procedures.
       (D) Effective implementation procedures.--Achieve 
     procedures for effective implementation of the regime rules 
     and guidelines through uniform and consistent interpretations 
     of export controls agreed to by the governments participating 
     in the regime.
       (E) Enhanced cooperation among regime members.--Reach 
     agreement to enhance cooperation among members of the regime 
     in obtaining the agreement of governments outside the regime 
     to restrict the export of items controlled by the regime, to 
     establish an ongoing mechanism in the regime to coordinate 
     planning and implementation of export control measures 
     related to such agreements, and to remove items from the list 
     if the control of such items no longer serves the objectives 
     of the members of the regime.
       (F) Periodic high-level meetings.--Conduct periodic 
     meetings of high-level representatives of participating 
     governments for the purpose of coordinating export control 
     policies and issuing policy guidance to the regime members.
       (G) Common list of controlled items.--Reach agreement on a 
     common list of items controlled by the regime.
       (4) Incentives for partnership.--Consistent with the 
     policies of this Act and consistent with the objectives, 
     rules and guidelines of the individual regime:
       (A) The Secretary, in consultation with appropriate 
     departments and agencies, may provide for exports free of 
     validated license requirements to and among members of a 
     multilateral regime for items subject to controls under such 
     a multilateral regime; and
       (B) The Secretary, in consultation with appropriate 
     departments and agencies, may adjust licensing policies for 
     access to items controlled pursuant to this Act depending on 
     a country or other entity's degree of adherence to the export 
     control policies of section 5.
       (g) Publication of Elements of Multilateral Control 
     Regimes.--Consistent with arrangements in multilateral 
     regimes, the United States shall publish the following 
     information:
       (1) Purpose(s) of the control regime;
       (2) Member countries;
       (3) Licensing policy;
       (4) Items subject to controls together with all public 
     notes, understandings, and other aspects of such agreement 
     and all changes thereto;
       (5) Target countries or regions (if any), target and uses, 
     and target end users (including projects of concern);
       (6) Rules of interpretation;
       (7) Major policy actions; and
       (8) The rules and procedures of the regime for establishing 
     and modifying the above elements of the regime and for 
     reviewing export license applications as provided for by the 
     regime.

     Subject to commitments required by multilateral regimes, 
     within 6 months after the date of the enactment of this Act 
     or thereafter within 2 months of joining or organizing a new 
     multilateral regime, the Secretary, in consultation with 
     appropriate departments and agencies, shall publish the above 
     information. In addition, the Secretary shall publish changes 
     in the above information within 2 months of adoption of such 
     changes by a regime.
       (h) Seeking Multilateral Support for Unilateral Controls.--
     For all unilateral controls, the Secretary of State, in 
     consultation with appropriate departments and agencies, shall 
     have a continuing duty to seek support for such controls by 
     other countries and by effective multilateral control 
     regimes.
       (i) Regulation Indicating Nature of Unilateral Controls.--
     Regardless of the reason for control, all unilateral controls 
     shall be indicated as such by regulation.
       (j) Implementation.--
       (1) Nonproliferation.--
       (A) Countries participating in certain agreements.--The 
     Secretary of State, in consultation with appropriate 
     departments and agencies, shall be responsible for conducting 
     negotiations with those countries participating in the groups 
     known as the Coordinating Committee, the Missile Technology 
     Control Regime (``MTCR''), the Australia Group, the Nuclear 
     Suppliers' Group, and other regimes that may be established, 
     regarding their cooperation in restricting the export of 
     items in order to carry out the policies set forth in section 
     3.

     Such negotiations shall cover, among other issues, which 
     items should be subject to multilaterally agreed export 
     restrictions, and the implementation of the restrictions 
     consistent with the principles in this Act.
       (B) Other countries.--The Secretary of State, in 
     consultation with appropriate departments and agencies, shall 
     be responsible for conducting negotiations with countries and 
     groups of countries not referred to in subparagraph (A) 
     regarding their cooperation in restricting the export of 
     items consistent with purposes set forth in this Act.
       (2) Missile technology.--The Secretary, consistent with 
     section 3, section 5(b), section 5(f), and in consultation 
     with appropriate departments and agencies--
       (A) shall, consistent with section 11(e), establish and 
     maintain, as part of the Control List, dual-use items on the 
     MTCR Annex;
       (B) may include, as part of the Control List, items that 
     would provide a material contribution to the design, 
     development, test, production, stockpiling, or use of missile 
     delivery systems, which items are not included in the MTCR 
     Annex but which the United States proposes to the other MTCR 
     adherents for inclusion in the MTCR Annex; and
       (C) shall require an individual validated license, 
     consistent with MTCR arrangements, for--
       (i) any export of items on the list referred to under 
     paragraph 92) to any country, except as provided for in 
     subsection (f)(4) of this section; and
       (ii) any export of items that the exporter knows is 
     destined for a project or facility for the design, 
     development, or manufacture of a missile in a country that is 
     not an MTCR adherent.
       (3) Chemical and Biological Weapons.--The Secretary, 
     consistent with section 3, section 5(b), section 5(f), and in 
     consultation with appropriate departments and agencies--
       (A) shall, consistent with section 11(e), establish and 
     maintain, as part of the Control List, dual-use items listed 
     by the Australia Group or by the Chemical Weapons Convention;
       (B) may include, as part of the Control List, items that 
     would provide a material contribution to the design, 
     development, test, production, stockpiling, or use of 
     chemical or biological weapons, which items are not listed by 
     the Australia Group but which the United States proposes to 
     the other Australia Group adherents for inclusion in its list 
     of controlled items; and
       (C) shall require an individual validated license, 
     consistent with the arrangements in the Australia Group and 
     the Chemical Weapons Convention, for--
       (i) any export of items on the list referred to under 
     paragraph (3) to any country, except as provided for in 
     subsection (f)(4) of this section; and
       (ii) any export of items that the exporter knows is 
     destined for a project or facility for the design, 
     development, or manufacture of a chemical or biological 
     weapon.
       (4) International terrorism.--
       (A) A validated license shall be required for the export 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; and
       (ii) The export 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) The Secretary and the Secretary of State 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 validated license 
     required by paragraph (A).
       (C) Each determination of the Secretary of State under 
     paragraph (A)(i), including each determination in effect on 
     the date of the enactment of the Antiterrorism and Arms 
     Export Amendments Act of 1989 [December 12, 1989], shall be 
     published in the Federal Register.
       (D) A determination made by the Secretary of State under 
     paragraph (A)(i) may not be rescinded unless the President 
     submits to the Speaker of the House of Representatives and 
     the chairman of the Committee on Banking, Housing, and Urban 
     Affairs and the chairman of the Committee on Foreign 
     Relations of the Senate--
       (i) before the proposed rescission would take effect, a 
     report certifying that--

       (a) there has been a fundamental change in the leadership 
     and policies of the government of the country concerned;
       (b) that government is not supporting acts of international 
     terrorism; and
       (c) that government has provided assurances that it will 
     not support acts of international terrorism in the future; or

       (ii) at least 45 days before the proposed rescission would 
     take effect, a report justifying the rescission and 
     certifying that--

       (a) the government concerned has not provided any support 
     for international terrorism during the preceding 6-month 
     period; and
       (b) the government concerned has provided assurances that 
     it will not support acts of international terrorism in the 
     future.

       (5) Human rights and crime control.--
       (A) Crime control and detection instruments and equipment 
     shall be approved for export by the Secretary only pursuant 
     to a validated export license. Notwithstanding any other 
     provision of the Act--
       (i) any determination of the Secretary of what items shall 
     be included on the Control List established pursuant to 
     section 11(e) as a result of the export restriction imposed 
     under this subsection shall be made with the concurrence of 
     the Secretary of State; and
         (ii) any determination of the Secretary to approve or 
     deny an export license application to export crime control 
     and detection instruments or equipment shall be made with the 
     concurrence of the Secretary of State, except that, if the 
     Secretary does not agree with the Secretary of State with 
     respect to any determination under subparagraph (i) or (ii), 
     the matter shall be referred to the President for resolution.
         (B) The provisions of this subsection shall not apply to 
     exports to Canada, countries which are members of the 
     European Union, Norway, Iceland, Japan, Australia, or New 
     Zealand, or to such countries as the President shall 
     designate consistent with the purposes of this subsection and 
     section 502B of the Foreign Assistance Act of 1961 [22 U.S.C. 
     Sec. 2304].
       (k) Unfair Impact on U.S. Exporter.--
       (1) Policy.--It is the policy of the United States that no 
     United States exporter should be placed at a competitive 
     disadvantage vis-a-vis its commercial competitors because of 
     export control policies or practices unless relief from such 
     controls would create a significant risk to the foreign 
     policy, nonproliferation, or national security interests of 
     the United States.
       (2) Relief from export controls.--A person may petition the 
     Secretary for relief from current export control requirements 
     on any one or more of the following grounds and the Secretary 
     may conduct evaluations for relief on his or her own 
     initiative based upon any one or more of the following 
     grounds:
       (A) Foreign availability.--The controlled item is available 
     in fact in sufficient quantity and comparable quality to the 
     proposed countries of export or end users from sources 
     outside the United States so that the requirement for a 
     validated license is or would be ineffective in achieving the 
     purpose of the control.
       (C) Competitive disadvantage.--
       (i) Differences between the export control policies or 
     procedures of the United States and that of governments of 
     foreign suppliers effectively has placed or will place the 
     United States exporter at a near-term commercial disadvantage 
     vis-a-vis its competitors abroad; or
       (ii) Changes to the domestic control lists of the United 
     States and foreign governments result in similar items being 
     controlled differently thus resulting in a competitive 
     disadvantage.
       (3) Provisions for relief.--Consistent with multilateral 
     arrangements, the Secretary, in consultation with appropriate 
     departments and agencies, shall make determinations of facts 
     under paragraph (2) and, subject to paragraph 4, provide the 
     following relief to firms that meet the criteria in paragraph 
     (2):
       (A) Change the control status of all or some of the items 
     in question so as to eliminate any significant competitive 
     disadvantage;
       (B) Selectively approve the sale of controlled goods so as 
     to eliminate any significant competitive disadvantage; or
       (C) Seek multilateral support to eliminate the source of 
     foreign availability or to enhance a control to make it 
     effective. If this relief is chosen and if such efforts fail 
     to achieve multilateral support to eliminate the source of 
     foreign availability or to make the control effective, then 
     not later than 330 days from the date of the Secretary's 
     initiation of an assessment, the Secretary shall provide 
     other relief pursuant to (A) or (B) above or conclude 
     pursuant to paragraph (4) that the granting of such relief 
     would create a significant risk to U.S. nonproliferation, 
     foreign policy or national security interests. Provided, 
     however, if the Secretary of State, in consultation with 
     appropriate departments and agencies, finds that substantial 
     progress is being made to achieve multilateral support to 
     eliminate the source of foreign availability or to make the 
     control effective, then the Secretary shall provide other 
     relief pursuant to (A) or (B) above or conclude pursuant to 
     paragraph (4) that the granting of such relief would create a 
     significant risk to U.S. nonproliferation, foreign policy or 
     national security interests, and shall do so within an 
     additional 180 days.

     Except as provided in paragraph (5), a determination that a 
     petitioner qualifies for relief under paragraph (2) above 
     shall not compel the United States to decontrol an item taht 
     remains subject to control by a multilateral regime in which 
     the United States is a member or adherent.
       (4) Exceptions from relief.--The Secretary shall provide 
     relief to a petitioner who qualifies for relief under 
     paragraph (2) unless the Secretary concludes that the 
     granting of such relief would create a significant risk to 
     U.S. nonproliferation, foreign policy, or national security 
     interests. In the event the Secretary determines to grant 
     such relief, he or she may do so unless the President 
     determines that such relief would create a significant risk 
     to the foreign policy, nonproliferation, or national security 
     interests of the United States.
       (5) Relief from traditional east west cocom controls.--
     Relief under paragraph (2) shall compel either the 
     elimination of the foreign availability or decontrol as 
     provided in this paragraph for an item controlled by the 
     united States based solely on its undertakings in the 
     Coordinating Committee prior to October of 1993 so long as 
     the Coordinating Committee shall continue in existence. For 
     such an item, the Secretary may not, after the determination 
     is made under paragraph (2), require a validated license for 
     the export of such items during the period that such 
     determination remains in effect, unless the President 
     determines that the absence of export controls under this 
     section on the items would prove detrimental to the national 
     security of the United States.
       (6) Procedures.--In any case in which the President or the 
     Secretary determines that export controls under this section 
     must be maintained notwithstanding the existence of facts 
     that constitute a basis for granting relief, the Secretary 
     shall publish that determination, together with a concise 
     statement of its basis and the estimated economic impact of 
     the decision.
       (A) Notice of assessments.--Whenever the Secretary 
     undertakes an assessment under paragraph (2), the Secretary 
     shall publish notice of initiation of such assessment in the 
     Federal Register.
       (B) Procedures for making determinations.--During the 
     conduct of an assessment under this subsection, the Secretary 
     shall consult with other appropriate departments and agencies 
     concerning the conduct of the assessment. The Secretary shall 
     make a determination as to whether relief is required under 
     paragraph (2) within 120 days of the date of the Secretary's 
     initiation of an assessment and shall so notify the 
     applicant. If the Secretary has determined that relief is 
     appropriate, the Secretary shall, upon making such a 
     determination, submit the determination for review to 
     appropriate departments and agencies for consultations 
     regarding the findings and selected relief. The Secretary's 
     determination as to eligibility for relief and the nature of 
     the relief to be granted does not require the concurrence or 
     approval of any official, department, or agency to which such 
     a determination is submitted. Not later than 150 days from 
     the date of the Secretary's initiation of an assessment, the 
     Secretary shall respond in writing to the petitioner and 
     submit for publication in the Federal Register, that--
       (i) relief is required and--

       (a) the requirement of a validated license has been 
     removed;
       (b) the control status of all or some of the items in 
     question has been changed so as to eliminate any significant 
     competitive disadvantage;
       (c) the sale of controlled items have been approved so as 
     to eliminate any significant competitive disadvantage;
       (d) pursuant to paragraph (5), export controls under this 
     section must be maintained notwithstanding the finding under 
     paragraph (2) and the applicable steps are being taken under 
     subparagraph (C) this paragraph; or
       (e) the United States recommendation to remove the 
     validated license requirement or change the control status 
     will be submitted to a relevant multilateral regime for 
     consideration for a period not of not more than 180 days 
     beginning on the date of the publication; or

       (ii) a right to relief under paragraph (2) does not exist.

     In any case in which the submission for publication is not 
     made within 150 days of the date of the Secretary's 
     initiation of an assessment, the Secretary may not thereafter 
     require a license for the export of items that are the 
     subject of the allegation under paragraph (2). In the case of 
     a determination made under subsection (k)(6)(B)(1)(e) to 
     refer a proposed relief to the relevant multilateral regime, 
     no license for such export may be required after 330 days 
     from the date of the Secretary's initiation of an assessment 
     unless the Secretary shall make a finding under paragraph (4) 
     or grant other relief under paragraph (3).
       (c) Negotiations to eliminate foreign availability.--
       (i) In any case in which export controls are maintained 
     under this section pursuant to paragraph (4), the Secretary 
     of State shall actively pursue negotiations with the 
     governments of the appropriate foreign countries for the 
     purpose of eliminating such foreign availability or 
     competitive disadvantage. No later than the commencement of 
     such negotiations, the Secretary of State shall notify in 
     writing the Committee on Banking, Housing, and Urban Affairs 
     of the Senate and the Committee on Foreign Affairs of the 
     House of Representatives that he has begun such negotiations 
     and why he believes it is important that export controls on 
     the items involved be maintained to avoid a significant risk 
     to the foreign policy, nonproliferation, or national security 
     interests of the United States.
       (ii) Whenever the Secretary of State has reason to believe 
     that items subject to export controls by the United States 
     may become available from other countries to target countries 
     and that such availability can be prevented or eliminated by 
     means of negotiations with such other countries, the 
     Secretary of State shall promptly initiate negotiations with 
     the governments of such other countries to prevent such 
     foreign availability.
       (7) Sharing of information.--Each department or agency of 
     the United States, including any intelligence agency, and all 
     contractors with any such department or agency, shall, upon 
     the request of the Secretary and consistent with the 
     protection of intelligence sources and methods, furnish 
     information to the Commerce Department concerning foreign 
     availability of items subject to export controls under this 
     section. Consistent with the protection of intelligence 
     sources and methods and classification restrictions, each 
     such department or agency shall allow the Commerce Department 
     access to such information from a laboratory or other 
     facility within such department or agency.
       (8) Availability defined.--For the purposes of this 
     subsection, the term ``available in fact to target 
     countries'' includes production or availability of any item 
     from any country--
       (A) where the item is not restricted for export to any 
     target country; or
       (B) where the export restrictions are determined by the 
     Secretary to be ineffective.

     For purposes of subparagraph (B), the mere inclusion of items 
     on a list of items subject to multilateral export controls 
     shall not alone constitute credible evidence that a 
     government of a country provides an effective means of 
     controlling the export of such items to target countries.
       (9) Congressional notification and reporting 
     requirements.--The Secretary shall each year notify the 
     Committee on Foreign Relations of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate of all petitions for relief and 
     the status of all such petitions.
       (l) Unilateral Controls Prohibited.--
       (1) Any export controls imposed unilaterally by the United 
     States for purposes adopted by the group known as the 
     Coordinating Committee shall expire six months after the date 
     of enactment of this paragraph, or six months after the 
     export control is imposed, whichever date is later, except 
     that--
       (A) any such export controls on those items for which a 
     determination of the Secretary that there is no foreign 
     availability has been made under this section before the end 
     of the applicable six-month period and is in effect may be 
     renewed for periods of not more than six months each; and
       (B) any such export controls on those items with respect to 
     which the President, by the end of the applicable six-month 
     period, is actively pursuing negotiations with other 
     countries to achieve multilateral export controls on those 
     items may be renewed for two periods of not more than six 
     months each.
       (2) Export controls on items described in subparagraph (A) 
     or (B) of paragraph (1) above may be renewed only if, before 
     each renewal, the Secretary submits to the Congress a report 
     setting forth all the controls being renewed and stating the 
     specific reasons for such renewal.
       (m) International Obligations.--Notwithstanding other 
     provisions of this Act containing limitations on authority to 
     control imports and exports, pursuant to this paragraph and 
     in order to fulfill obligations of the United States pursuant 
     to resolutions of the United Nations, treaties, or other 
     international agreements to which the United States is a 
     party, the Secretary, in consultation with appropriate 
     departments and agencies, may impose controls on exports and 
     imports to and from a target country or region. The Secretary 
     may regulate domestic and foreign conduct consistent with the 
     policies of such United Nations resolutions, treaties, and 
     international agreements. Such authority shall include, but 
     not be limited to, the authority to prohibit activity such as 
     financing, contracting, servicing or employment, to deny 
     access to items in the U.S. and abroad, to conduct audits of 
     records and inspections of facilities, to compel reports, and 
     to curtail travel.
       (n) Information Sharing.--The Secretary and appropriate 
     officials of the intelligence community, as determined by the 
     Director of Central Intelligence, and other appropriate 
     Government agencies shall establish a procedure for 
     information sharing.
       (o) Denied Parties, Sanctioned Parties, Specially 
     Designated National, and Other Parties Presenting 
     Unacceptable Risks of Diversion.--
       (1) Denied Parties, Sanctioned Parties, Specially 
     Designated Nationals.--The Secretary shall publish parties 
     denied export privileges under this Act, parties sanctioned 
     for prohibited proliferation activity under this act or other 
     statutes, and specially designated nationals named under the 
     International Emergency Economic Powers Act, as amended, 50 
     U.C.S. 1701, et seq. (1988).
       (2) Other Parties.--The Secretary shall maintain a list of 
     parties for whom licenses will be presumptively denied.
       (p) Freedom of Information Act Exemption.--The identity of 
     parties maintained or disclosed pursuant to subsection (o)(2) 
     is not subject to disclosure under section 552 of Title 5, 
     United States Code.

     SEC. 6. SHORT SUPPLY CONTROLS.

       (a) Authority.--
       (1) In order to carry out the policy set forth in section 
     3(2) (D) of this Act, the President may prohibit or curtail 
     the export of any items subject to the jurisdiction of the 
     United States or exported by any person subject to the 
     jurisdiction of the United States. In curtailing exports to 
     carry out the policy set forth in section 3(2)(D) of this 
     Act, the President shall allocate a portion of export 
     licenses on the basis of factors other than a prior history 
     of exportation. Such factors shall include the extent to 
     which a country engages in equitable trade practices for 
     United States items and treats the United States equitably in 
     times of short supply.
       (2) Upon imposing quantitative restrictions on exports of 
     any items to carry out the policy set forth in section 3(2) 
     (D) of this Act, the Secretary shall include in a notice 
     published in the Federal Register regarding such restrictions 
     an invitation to all interested parties to submit written 
     comments within 15 days from the date of publication on the 
     impact of such restrictions and the method of licensing used 
     to implement them.
       (3) Notwithstanding subsection 4(h) of this Act, in 
     imposing export controls under this section, the President's 
     authority shall include, but not be limited to, the 
     imposition of export license fees.
       (b) Monitoring.--
       (1) In order to carry out the policy set forth in section 
     3(2) (D) of this Act, the Secretary shall monitor exports, 
     and contracts for exports, of any good (other than a 
     commodity which is subject to the reporting requirements of 
     section 182 of the Agricultural Act of 1970 [7 U.S.C. 612c-3] 
     when the volume of such exports in relation to domestic 
     supply contributes, or may contribute, to an increase in 
     domestic prices or a domestic shortage, and such price 
     increase or shortage has, or may have serious adverse impact 
     on the economy or any sector thereof. Any such monitoring 
     shall commence at a time adequate to assure that the 
     monitoring will result in a data base sufficient to enable 
     polices to be developed, in accordance with section 3(2) (D) 
     of this Act, to mitigate a short supply situation or serious 
     inflationary price rise or, if export controls are needed, to 
     permit imposition of such controls in a timely manner. 
     Information which the Secretary requires to be furnished in 
     effecting such monitoring shall be confidential, except as 
     provided in paragraph (2) of this subsection.
         (2) The results of such monitoring shall, to the extent 
     practicable, be aggregated and included in weekly reports 
     setting forth, as to each item monitored, actual and 
     anticipated exports, the destination by country, and the 
     domestic and worldwide price, supply, and demand. Such 
     reports may be made monthly if the Secretary determines that 
     there is insufficient information to justify weekly reports.
       (c) Domestically-Produced Crude Oil.--
       (1) Notwithstanding any other provision of this Act and 
     notwithstanding subsection (u) of section 28 of the Mineral 
     Leasing Act of 1920 (30 U.S.C. 185), no domestically-produced 
     crude oil transported by pipeline over right-of-way granted 
     pursuant to section 203 of the TransAlaska Pipeline 
     Authorization Act (43 U.S.C. 1652) (except any such crude oil 
     which: (A) is exported to an adjacent foreign country to be 
     refined and consumed therein in exchange for the same 
     quantity of crude oil being exported from that country to the 
     United States, which exchange must result, through 
     convenience or increased efficiency of transportation, in 
     lower prices for consumers of petroleum products in the 
     United States as described in paragraph (2)(A)(ii) of this 
     subsection; (B) is temporarily exported for convenience or 
     increased efficiency of transportation across parts of an 
     adjacent foreign country and reenters the United States; or 
     (C) is transported to Canada, to be consumed therein, in 
     amounts not to exceed an annual average of 50,000 barrels per 
     day, in addition to exports under subparagraphs (2)(A) and 
     (2)(B), except that any ocean transportation of such oil 
     shall be by vessels documented under section 12106 of title 
     46, United States Code) may be exported from the United 
     States, or any of its territories and possessions, subject to 
     paragraph (2) of this subsection.
       (2) Crude oil subject to the prohibition contained in 
     paragraph (1) may be exported only if--
       (A) the President so recommends to the Congress after 
     making and publishing express findings that exports of such 
     crude oil, including exchanges--
       (i) will not diminish the total quantity or quality of 
     petroleum refined within, stored within, or legally committed 
     to be transported to and sold within the United States;
       (ii) will, within 3 months following the initiation of such 
     exports or changes, result in (I) acquisition costs to the 
     refiners which purchase the imported crude oil being lower 
     than the acquisition costs such refiners would have to pay 
     for the domestically-produced oil in the absence of such an 
     export or exchange, and (II) not less than 75 percent of such 
     savings in costs being reflected in wholesale and retail 
     prices of products refined from such imported crude oil;
       (iii) will be made only pursuant to contracts which may be 
     terminated if the crude oil supplies of the United States are 
     interrupted, threatened, or diminished;
       (iv) are clearly necessary to protect the national 
     interest; and
       (v) are in accordance with the provisions of this Act; and
       (B) the President includes such findings in his or her 
     recommendation to the Congress and the Congress, within 60 
     days after receiving that recommendation, agrees to a joint 
     resolution which approves such exports on the basis of those 
     findings, and which is thereafter enacted into law.
       (3) Notwithstanding any other provision of this section or 
     any other provision of law, including subsection (u) of 
     section 28 of the Mineral Leasing Act of 1920 [30 U.S.C. 
     Sec. 185(u)], the President may export oil to any country 
     pursuant to a bilateral international oil supply agreement 
     entered into by the United States with such nation before 
     June 25, 1979, or to any country pursuant to the 
     International Emergency Oil Sharing Plan of the International 
     Energy Agency.
       (d) Agriculture Commodities.--
       (1) The Authority conferred by this section shall not be 
     exercised for any agricultural commodity, including fats and 
     oils or animal hides or skins, without the approval of the 
     Secretary of Agriculture. The Secretary of Agriculture shall 
     not approve the exercise of such authority for any such 
     commodity during any period for which the supply of such 
     commodity is determined by the Secretary of Agriculture to be 
     in excess of the requirements of the domestic economy except 
     to the extent the President determines that such exercise of 
     authority is required to carry out the policies set forth 
     subparagraph (B) or (C) of paragraph (2) of section 3 of this 
     Act. The Secretary of Agriculture shall, by exercising the 
     authority which the Secretary of Agriculture has under other 
     applicable provisions of law, collect data on export sales of 
     animal hides and skins.
       (2) Upon approval of the Secretary, in consultation with 
     the Secretary of Agriculture, agricultural commodities 
     purchased by or for use in a foreign country may remain in 
     the United States for export at a later date free from any 
     quantitative limitations on export which may be imposed to 
     carry out the policy set forth in section 3(2)(D) of this Act 
     subsequent to such approval. The Secretary may not grant such 
     approval unless the Secretary receives adequate assurance 
     and, in conjunction with the Secretary of Agriculture, finds 
     (A) that such commodities will eventually be exported, (B) 
     that neither the sale nor export thereof will result in an 
     excessive drain of scarce materials and have a serious 
     domestic inflationary impact, (C) that storage of such 
     commodities in the United States will not unduly limit the 
     space available for storage of domestically-owned 
     commodities, and (D) that the purpose of such storage is to 
     establish a reserve of such commodities for later use, not 
     including resale to or use by another country. The Secretary 
     may issue such regulations as may be necessary to implement 
     this paragraph.
       (3)(A) If the President imposes export controls on any 
     agricultural commodity in order to carry out the policy set 
     forth in paragraph (2)(B), (2)(C), 2(D), or (12) of section 3 
     of this Act, the President shall immediately transmit a 
     report on such action to the Congress, setting forth the 
     reasons for the controls in detail and specifying the periods 
     of time, which may not exceed 1 year, that the controls are 
     proposed to be in effect. If the Congress, within 60 days 
     after the date of its receipt of the report, adopts a joint 
     resolution pursuant to paragraph (4) approving the imposition 
     of the export controls, then such controls shall remain in 
     effect for the period specified in the report, or until 
     terminated by the President, whichever occurs first. If the 
     Congress, within 60 days after the date of its receipt of 
     such report, fails to adopt a joint resolution approving such 
     controls, then such controls shall cease to be effective upon 
     the expiration of that 60-day period.
       (B) The provisions of subparagraph (A) and paragraph (4) 
     shall not apply to export controls--
       (i) which are extended under this Act if the controls, when 
     imposed, were approved by the Congress under subparagraph (A) 
     and paragraph (4); or
       (ii) which are imposed on exports to a country as part of 
     the prohibition or curtailment of all exports to that 
     country.
       (4)(A) For purposes of this paragraph, the term ``joint 
     resolution'' means only a joint resolution the matter after 
     the resolving clause of which is as follows: ``That pursuant 
     to section 6(d)(3) of the Export Administration Act of 1979, 
     the President may impose export controls as specified in the 
     report submitted to the Congress on           .'', with the 
     blank space being filled with the appropriate date.
       (B) On the day on which a report is submitted to the House 
     of Representatives and the Senate under paragraph (3), a 
     joint resolution on the export controls specified in such 
     report shall be introduced (by request) in the House by the 
     chairman of the Committee on Foreign Affairs, for himself and 
     the ranking minority member of the Committee, or by Members 
     of the House designated by the chairman and ranking minority 
     member; and shall be introduced (by request) in the Senate by 
     the majority leader of the Senate, for himself and the 
     minority leader of the Senate, or by Members of the Senate 
     designated by the majority leader and minority leader of the 
     Senate. If either House is not in session on the day on which 
     such a report is submitted, the joint resolution shall be 
     introduced in that House, as provided in the preceding 
     sentence, on the first day thereafter on which that House is 
     in session.
       (C) All joint resolutions introduced in the House of 
     Representatives shall be referred to the appropriate 
     committee and all joint resolutions introduced in the Senate 
     shall be referred to the Committee on Banking, Housing, and 
     Urban Affairs.
       (D) If the committee of either House to which a joint 
     resolution has been referred has not reported the joint 
     resolution at the end of 30 days after its referral, the 
     committee shall be discharged from further consideration of 
     the resolution or of any other joint resolution introduced on 
     the same matter.
       (E) A joint resolution under this paragraph shall be 
     considered in the Senate in accordance with the provisions of 
     section 601(b)(4) of the International Security Assistance 
     and Arms Export Control Act of 1976 (22 U.S.C. Sec. Sec. 2151 
     et seq., Pub. L. 94-329, June 30, 1976). For the purpose of 
     expediting the consideration and passage of joint resolutions 
     reported or discharged pursuant to the provisions of this 
     paragraph, it shall be in order for the Committee on Rules of 
     the House of Representatives to present for consideration a 
     resolution of the House of Representatives providing 
     procedures for the immediate consideration of a joint 
     resolution under this paragraph which may be similar, if 
     applicable, to the procedures set forth in section 601(b)(4) 
     of the International Security Assistance and Arms Export 
     Control Act of 1976.
       (F) In the case of a joint resolution described in 
     subparagraph (A), if, before the passage by one House of a 
     joint resolution of that House, that House receives a 
     resolution on the same matter from the other House, then--
       (i) the procedure in the House shall be the same as if no 
     joint resolution has been received from the other House; but
       (ii) the vote on final passage shall be on the joint 
     resolution of the other House.
       (5) In the computation of the period of 60 days referred to 
     in paragraph (3) and the period of 30 days referred to in 
     subparagraph (D) of paragraph (4), there shall be excluded 
     the days on which either House of Congress is not in session 
     because of an adjournment of more than 3 days to a day 
     certain or because of an adjournment of the Congress sine 
     die.
       (e) Barter Agreements.--
       (1) The exportation pursuant to a barter agreement of any 
     items which may lawfully be exported from the United States, 
     for any items which may lawfully be imported into the United 
     States, may be exempted, in accordance with paragraph (2) of 
     this subsection, from any quantitative limitation on exports 
     (other than any reporting requirement) imposed to carry out 
     the policy set forth in section 3(2)(D) of this Act.
       (2) The Secretary shall grant an exemption under paragraph 
     (1) if the Secretary finds, after consultation with the 
     appropriate department or agency of the United States, that--
       (A) for the period during which the barter agreement is to 
     be performed--
       (i) the average annual quantity of the items to be exported 
     pursuant to the barter agreement will not be required to 
     satisfy the average amount of such items estimated to be 
     required annually by the domestic economy and will be surplus 
     thereto;
       (ii) the average annual quantity of the items to be 
     imported will be less than the average amount of such items 
     estimated to be required annually to supplement domestic 
     production; and
       (B) the parties to such barter agreement have demonstrated 
     adequately that they intend, and have the capacity, to 
     perform such barter agreement.
       (3) For purposes of this subsection, the term ``barter 
     agreement'' means any agreement which is made for the 
     exchange, without monetary consideration, of any items 
     produced in the United States for any items produced outside 
     of the United States.
       (4) This subsection shall apply only to barter agreements 
     entered into after September 30, 1979.
       (f) Unprocessed Red Cedar.--No unprocessed western red 
     cedar logs (Thuja plicata) harvested from State or Federal 
     lands may be exported from the United States.
       (1) Unprocessed western red cedar logs shall not be 
     considered to be an agricultural commodity for purposes of 
     subsection (d) of this section.
       (2) As used in this subsection, the term ``unprocessed 
     western red cedar'' means red cedar timber which has not been 
     processed into--
       (A) lumber of American Lumber Standards Grades of Number 3 
     dimension or better, or Pacific Lumber Inspection Bureau 
     Export R-List Grades of Number 3 common or better;
       (B) chips, pulp, and pulp products;
       (C) veneer and plywood;
       (D) poles, posts, or pilings cut or treated with 
     preservative for use as such and not intended to be further 
     processed; or
       (E) shakes and shingles.
       (3) The State of Alaska is exempt from the provisions of 
     this subsection (Pub. L. No. 96-126, 93 Stat. 954, section 
     308 (1979)).
       (g) Effect of Controls on Existing Contracts.--The export 
     restrictions contained in subsection (f) of this section and 
     any export controls imposed under this section shall not 
     affect any contract to harvest unprocessed western red cedar 
     from State lands which was entered into before October 1, 
     1979, and the performance of which would make the red cedar 
     available for export. Any export controls imposed under this 
     section on any agricultural commodity (including fats, oils, 
     and animal hides and skins) or on any forest product or 
     fishery product, shall not affect any contract to export 
     entered into before the date on which such controls are 
     imposed. For purposes of this subsection, the term ``contract 
     to export'' includes, but is not limited to, an export sales 
     agreement and an agreement to invest in an enterprise which 
     involves the export of goods or technology.
       (h) Oil Exports for Use by United States Military 
     Facilities.--For purposes of subsection (c) of this section, 
     and for purposes of any export controls imposed under this 
     Act, shipments of crude oil, refined petroleum products, or 
     partially refined petroleum products from the United States 
     for use by the Department of Defense or United States-
     supported installations or facilities shall not be considered 
     to be exports.

     SEC. 7. FOREIGN BOYCOTTS.

       (a) Prohibitions and Exceptions.--
       (1) For the purpose of implementing the policies set forth 
     in subparagraph (A) and (B) of paragraph (14) of section 3 of 
     this Act, the President shall issue regulations prohibiting 
     any United States person, with respect to his or her 
     activities in the interstate or foreign commerce of the 
     United States, from taking or knowingly agreeing to take any 
     of the following actions with the intent to comply with, 
     further, or support any boycott fostered or imposed by a 
     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 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 known or 
     believed to be restricted from having any business 
     relationship with or in the boycotted country. Nothing in 
     this paragraph 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 contribution 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) Regulations issued pursuant to paragraph (1) shall 
     provide exceptions for--
       (A) complying or agreeing to comply with requirements (i) 
     prohibiting the import of items or services from the 
     boycotted country or items 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 items 
     to the boycotted 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 items 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 transshipment 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 the country with respect to his or her activities 
     exclusively therein, and such regulations may contain 
     exceptions for such resident complying with the laws or 
     regulations of the foreign country governing imports into 
     such country of trademarked, trade named, or similarly 
     specifically identifiable products, or components of products 
     for his or her own use, including the performance of 
     contractual services within that country, as may be defined 
     by such regulations.
       (3) Regulations issued pursuant to paragraphs (2)(C) and 
     (2)(F) shall not provide exceptions from paragraphs (1)(B) 
     and (1)(C).
       (4) 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) 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) Regulations.--
       (1) In addition to the regulations issued pursuant to 
     subsection (a) of this section, regulations issued under this 
     subsection of this Act shall implement the policies set forth 
     in section 3(14).
       (2) 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 section 3(14) 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 items 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 3(14) of this 
     Act.
       (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 against other countries.

     SEC. 8. PROCEDURES FOR PROCESSING EXPORT LICENSE 
                   APPLICATIONS; OTHER INQUIRES.

       (a) Primary Responsibility of the Secretary.--
       (1) All export license applications required under this Act 
     shall be submitted by the applicant to the Secretary. All 
     determinations on any such applications shall be made by the 
     Secretary, subject to the procedures provided in this 
     section.
       (2) To the extent necessary, the Secretary shall seek 
     information and recommendations from the Government 
     departments and agencies concerned with factors having an 
     important bearing on exports administered under this Act. 
     Such departments and agencies shall cooperate fully and 
     promptly in rendering information and recommendations.
       (3) In regulations that implement this section, the 
     Secretary shall describe the procedures required by this 
     section, the responsibilities of the Secretary and of other 
     departments and agencies in reviewing applications, the 
     rights of the applicant, and the extent of any multilateral 
     review of a given license application.
       (4) In calculating the processing times set forth in this 
     section, the Secretary shall use calendar days; provided that 
     if the final day for a required action falls on a weekend or 
     holiday, that action shall be taken no later than the 
     following business day.
       (5) In reviewing applications for validated export 
     licenses, the Secretary may in each case consider the 
     reliability of the parties to the proposed export. In making 
     such an evaluation, the Secretary may consider all sources of 
     information, including intelligence information. However, the 
     consideration of intelligence information in connection with 
     the evaluation of the reliability of parties shall not 
     authorize the direct or indirect disclosure of classified 
     information or sources and methods of gathering classified 
     information.
       (b) Initial Screening.--
       (1) Upon receipt of any export license application, the 
     Secretary shall include receipt and status information 
     regarding the application in the records of the Department.
       (2) Within nine days of receipt of any license application, 
     the Secretary shall--
       (A) Contact the applicant if the application is improperly 
     completed or if additional information is required, and hold 
     the application for a reasonable time while the applicant 
     provides the necessary corrections or information. Such time 
     shall not be counted in calculating the time periods 
     prescribed in this section.
       (B) Refer the application and all necessary recommendations 
     and analyses by the Secretary to all other agencies, when 
     such referral is requested, and forward to the agencies any 
     relevant information submitted by the applicant that could 
     not be reduced to electronic form.
       (C) Assure the stated classification on the application is 
     correct; return the application if a validated license is not 
     required; and, if referral to other agencies is not 
     requested, grant the application or notify the applicant of 
     the Secretary's intent to deny the application.
       (c) Action by Other Departments and Agencies.--
       (1) At the direction of the President, the Secretary shall 
     refer license applications to appropriate departments and 
     agencies to make recommendations and provide information to 
     the Secretary.
       (2) Reviewing agencies shall organize their resources and 
     units to plan for the prompt and expeditious internal 
     dissemination of export license applications, if necessary, 
     so as to avoid delays in responding to the Secretary's 
     request for information and recommendations.
       (3) Each referral agency or department shall specify to the 
     Secretary any information that is not in the application that 
     would be required to make a determination, and the Secretary 
     shall promptly request such information from the applicant. 
     The time that may elapse between the date the information is 
     requested from the applicant and the date the information is 
     received by the Secretary shall not be counted in calculating 
     the time periods prescribed in this section.
       (4) Within thirty days of receipt of a referral, the agency 
     or department shall provide the Secretary with a 
     recommendation either to approve the license or to deny the 
     license. As appropriate, such recommendation shall be with 
     the benefit of consultation and discussions in interagency 
     groups established to provide expertise and coordinate 
     interagency consultation. A recommendation that the Secretary 
     deny a validated license shall include a statement of reasons 
     that are consistent with the provisions of this Act, and 
     shall cite both the statutory and the regulatory basis for 
     the recommendation to deny. A department or agency that fails 
     to provide a recommendation to deny. A department or agency 
     that fails to provide a recommendation within thirty days 
     with a statement of reasons and the statutory and regulatory 
     basis shall be deemed to have no objection to the decision of 
     the Secretary.
       (5) An interagency committee shall be established by and 
     the chairman selected by the Secretary to review initially 
     all license applications on which the reviewing agencies are 
     not in agreement. The chairman of such committee shall 
     consider the recommendations of the reviewing agencies and 
     inform them of his or her decision. Appeals from such 
     decisions may be made in writing by an official of such 
     department or agency who is appointed by the President by and 
     with the advice and consent of the Senate, or an officer 
     properly acting in such capacity, consistent with procedures 
     established by the President in accordance with subsection 
     (d).
       (6) Upon receiving all comments from other departments and 
     agencies regarding an application upon which there is no 
     disagreement, or forty-nine days following receipt of a 
     license application upon which there has been disagreement, 
     whichever comes first, the Secretary shall either--
       (A) Approve the application and issue the license; or
       (B) Notify the applicant of the intent to deny the license; 
     or
       (C) Notify the applicant the application has been referred 
     to a process established by the President to resolve matters 
     in dispute.
       (d) Interagency Resolution.--The President may establish a 
     process for the review and determination of export license 
     applications as to which a reviewing agency has objected 
     pursuant to subsection (c). Any such process shall: (1) be 
     chaired by the Secretary or his designee; (2) insure that 
     license applications are resolved or referred to the 
     President no later than 90 days from the date of filing of 
     the license application; and (3) provide that a department or 
     agency that fails to take a timely position shall be deemed 
     to have no objection to the pending decision.
       (e) Actions by the Secretary.--
       (1) When no referral to other departments or agencies is 
     required, the Secretary shall issue a license or notify the 
     applicant of the intent to deny within nine days of receipt 
     of the application.
       (2) In cases where the Secretary has determined that an 
     application should be denied, the applicant shall be informed 
     in writing of--
       (A) the determination to deny;
       (B) the statutory and regulatory basis for the proposed 
     denial;
       (C) what, if any, modifications in or restrictions on the 
     items for which the license was sought would allow such 
     export to be compatible with export controls imposed under 
     this Act, and which officer or employee of the Department of 
     Commerce would be in a position to discuss modifications or 
     restrictions with the applicant;
       (D) to the extent consistent with the national security and 
     foreign policy of the United States, the specific 
     considerations that led to the determination to deny the 
     application; and
       (E) the availability of appeal procedures.

     The Secretary shall allow the applicant 20 days to respond to 
     the determination before the license application is denied.
       (3) The Secretary and the applicant may, at any time, agree 
     mutually to suspend the time periods prescribed by this 
     section in order to negotiate modifications to the 
     application and obtain agreement to such modifications from 
     the foreign parties to the transaction.
       (f) Multilateral Controls.--When an application recommended 
     for approval must be submitted to a multilateral review 
     process, pursuant to a multilateral regime, formal or 
     informal, to which the United States is a party, the 
     application shall be referred to the multilateral regime 
     within five days of the decision to approve. Any such 
     application shall be considered in accordance with the review 
     procedures established by the relevant multilateral export 
     control regime, and the license shall be issued or a notice 
     of intent to deny issued within five days of receipt of a 
     decision by the multilateral regime.
       (g) Exceptions From Required Time Periods.--All license 
     applications shall be resolved or referred to the President 
     no later than 90 days from the date of filing of the license 
     application. The following actions related to processing an 
     application shall not be counted in calculating the time 
     periods prescribed in this section:
       (1) Agreement of the applicant.--Delays in processing 
     required by unusually complex technical review or by need to 
     complete a high-level policy review, when the Secretary and 
     the applicant mutually agree to the delay.
       (2) Prelicense checks.--Prelicense checks through 
     government channels that may be required to establish the 
     identity and reliability of the recipient of items controlled 
     under this Act, provided--
       (A) The need for such prelicense check is established by 
     the Secretary, or by another department or agency, if the 
     request for prelicense check is made by such department or 
     agency;
       (B) The request for such prelicense check is sent by the 
     Secretary within five days for the determination that the 
     prelicense check is required; and
       (C) The analysis of the response to the request for 
     prelicense check is completed by the Secretary within five 
     days.
       (3) Requests for government-to-government assurances.--
     Requests for government-to-government assurances of suitable 
     end use of items approved for export, when failure to obtain 
     such assurances would result in rejection of the application, 
     provided that the request for such assurances is sent to the 
     Secretary of State within five days of the determination that 
     the assurances are required, provided the Secretary of State 
     initiates the request of the relevant government within 10 
     days thereafter, and provided the license is issued within 
     five days of receipt by the Secretary of the requested 
     assurances.

     Whenever such prelicense checks and assurances are not 
     requested within the time periods set forth above, they must 
     be accomplished within the time periods established by this 
     section.
       (4) Multilateral review.--Multilateral review of a license 
     application as provided for in subsection (f) so long as such 
     multilateral review is required by the relevant multilateral 
     regime.
       (5) Congressional notification.--Such time as required for 
     mandatory Congressional notifications under this Act.
       (h) Appeals.--
       (1) The Secretary shall establish appropriate procedures 
     for any applicant to appeal to the Secretary the denial of an 
     export license application or other administrative action.
       (2) In any case in which any action prescribed in this 
     section is not taken on the license application within the 
     time periods established by this section (except in the case 
     of a time period extended under subsection (g)(4) of which 
     the applicant is notified), the applicant may file a petition 
     with the Secretary requesting compliance with the 
     requirements of this section. When such petition is filed, 
     the Secretary shall take immediate steps to correct the 
     situation giving rise to the petition and shall immediately 
     notify the applicant of such steps.
       (3) If, within twenty days after a petition is filed under 
     paragraph (2), the processing of the application has not been 
     brought into conformity with the requirements of this 
     section, or the application has been brought into conformity 
     with such requirements but the Secretary has not so notified 
     the applicant, the applicant may bring an action in an 
     appropriate United States district court for an order 
     requiring compliance with the temporal requirements of this 
     section. The United States district courts shall have 
     jurisdiction to provide such relief, as appropriate.
       (i) Classification Requests and Other Inquiries.--
       (1) In any case in which the Secretary receives a written 
     request asking for the proper classification of an item on 
     the Control List, the Secretary shall, within 14 days after 
     receipt of the request, inform the person making the request 
     of the proper classification.
       (2) In any case in which the Secretary receives a written 
     request for information about the applicability of export 
     license requirements under this Act to a proposed export 
     transaction or series of transactions, the Secretary shall, 
     within 30 days after the receipt of the request, reply with 
     that information to the person making the request.

     SEC. 9. VIOLATIONS.

       (a) Criminal Penalties.--
       (1) Violations by an individual.--Except as provided in 
     paragraph (3) below, any individual who knowingly violates or 
     conspires to or attempts to violate any provision of this Act 
     or any regulation, license, or order issued thereunder shall 
     be fined not more than five times the value of the exports 
     involved or $500,000 per violation, whichever is greater, or 
     imprisoned not more than 10 years, or both.
       (2) Violations by a person other than an individual.--
     Except as provided in paragraph (3) below, any person other 
     than an individual who knowingly violates or conspires to or 
     attempts to violate any provision of this Act or any 
     regulation, license or order issued thereunder shall be fined 
     not more than 10 times the value of the exports involved or 
     $1,000,000 per violation, whichever is greater.
       (3) Antiboycott violations.--Any individual who knowingly 
     violates or conspires to or attempts to violate any provision 
     of section 7 of this Act concerning foreign boycotts or any 
     regulation or order issued thereunder shall be fined not more 
     than five times the value of the exports involved or $250,000 
     per violation, whichever is greater, or imprisoned not more 
     than 10 years, or both. Any person other than an individual 
     who knowingly violates or conspires to or attempts to violate 
     any provision of section 7 of this Act or any regulation or 
     order issued thereunder shall be fined not more than five 
     times the value of the exports involved or $500,000 per 
     violation, whichever is greater.
       (b) Forfeiture of Property Interest and Proceeds.--
       (1) Any person who is convicted under subsection (a)(1) or 
     (2) 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 
     goods or 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 export or attempt to 
     export that was the subject of 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) 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 chapter 46 
     of title 18, United States Code.
       (c) Civil Penalties; Administrative Sanctions.--
       (1) The Secretary may impose a civil penalty not to exceed 
     $250,000 for each violation of this Act or any regulation, 
     license or order issued under this Act, either in addition to 
     or in lieu of any other liability or penalty which may be 
     imposed, except that the civil penalty for each such 
     violation involving section 7 of this Act concerning foreign 
     boycotts may not exceed $50,000.
       (2) The Secretary may deny the export privileges of any 
     person, including suspending or revoking the authority of any 
     person to export or receive any item subject to this Act, for 
     any violation of the provisions of this Act or any 
     regulation, license or order issued under this Act.
       (d) Procedures Relating to Civil Penalties and Sanctions.--
       (1) Any administrative sanction imposed under subsection 
     (c) above 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. The 
     imposition of any such administrative sanction shall be 
     subject to judicial review in accordance with sections 701 
     through 706 of title 5, United States Code.
       (2) Any charging letter or other document initiating 
     administrative proceedings for the imposition of sanctions 
     for violations of the regulations issued pursuant to section 
     7(a) of this Act shall be made available for public 
     inspection and copying.
       (e) Payment of Civil Penalties.--The payment of any civil 
     penalty imposed pursuant to subsection (c) may be made a 
     condition, for a period not exceeding one year after the 
     penalty has become due but has not been paid, to the 
     granting, restoration, or continuing validity of any export 
     license, permission, or privilege granted or to be granted to 
     the person upon whom such penalty is imposed. In addition, 
     the payment of any civil penalty imposed under subsection (c) 
     may be deferred or suspended in whole or in part for a period 
     of time no longer than any probation period (which may exceed 
     one year) that may be imposed upon such person. Such deferral 
     or suspension shall not operate as a bar to the collection of 
     the penalty in the event that the conditions of the 
     suspension, deferral, or probation are not fulfilled.
       (f) Refunds.--Any amount paid in satisfaction of any civil 
     penalty imposed pursuant to subsection (c) shall be covered 
     into the Treasury as a miscellaneous receipt. The head of the 
     department or agency concerned may, in his discretion, refund 
     any such civil penalty imposed pursuant to subsection (c), 
     within two years after payment, on the ground of a material 
     error of fact or law in the imposition of the penalty. 
     Notwithstanding section 1346(a) of title 28, United States 
     Code, no action for the refund of any such penalty may be 
     maintained in any court.
       (g) Collection.--If any person fails to pay a civil penalty 
     imposed pursuant to subsection (c) of this Act, the Secretary 
     may ask the Attorney General to bring a civil action in an 
     appropriate district court to recover the amount imposed 
     (plus interest at currently prevailing rates from the date of 
     the final order). Any such action must be commenced within 
     five years after the order imposing the civil penalty becomes 
     final. In such an action, the validity, amount, and 
     appropriateness of such penalty shall not be subject to 
     review.
       (h) Prior Convictions.--
       (1) At the discretion of the Secretary, export privileges 
     under this Act may be denied for a period of up to ten years 
     from the date of conviction to any person convicted of a 
     violation of: this Act or its predecessor statute, the Export 
     Administration Act of 1979; the International Emergency 
     Economic Powers Act, title 50, United States Code, sections 
     1701-1706; section 793, 794, 798, of Title 18, United States 
     Code; section 4(b) of the Internal Security Act of 1950, 
     title 50, United States Code, section 783(b); section 16 of 
     the Trading with the Enemy Act, title 50, United States Code 
     appendix, section 16; section 38 of the Arms Export Control 
     Act, title 22, United States Code, section 2778; any 
     regulation, license, or order issued under any of the above 
     statutes; or sections 371 or 1001 of title 18, United States 
     Code, if the conviction arises out of an activity subject to 
     one or more of the statutes enumerated above. The Secretary 
     may also revoke any export license under this Act in which 
     such person had an interest at the time of the conviction.
       (2) The Secretary 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 a 
     law set forth in paragraph (1), upon a showing of such 
     relationship with the convicted person, after providing 
     notice and opportunity for hearing.
       (i) Statute of Limitations.--Any case in which a civil 
     penalty or other administrative sanction (other than a 
     temporary denial order) is sought under section 9(c) of this 
     Act must be instituted within five years of the date from the 
     alleged violation, except that, in any case in which a 
     criminal indictment alleging a violation of this Act is 
     returned within the time limits prescribed by law for the 
     institution of such action, the statue of limitations for 
     bringing a proceeding to impose a civil penalty or other 
     administrative sanction under this Act shall, upon the return 
     of the criminal indictment, be tolled against all persons 
     named as a defendant. The tolling of the statute of 
     limitations shall continue for a period of not more than six 
     months from the date a conviction is entered or the 
     indictment is dismissed.
       (j) Imposition of Temporary Denial Orders.--
       (1) In any case in which there is reasonable cause to 
     believe that a person is engaged in or is about to engage in 
     any act or practice which constitutes or would constitute a 
     violation of the Act, or any regulation, order, or license 
     issued under the Act, or in any case in which a criminal 
     indictment has been returned against a person alleging a 
     violation of the Act or any of the statutes listed in section 
     9(h) of the Act, the Secretary may, without a hearing, issue 
     an order temporarily denying that person's United States 
     export privileges (hereinafter in this subsection referred to 
     as a ``temporary denial order''). A temporary denial order 
     may be effective for no longer than 180 days, but may be 
     renewed by the Secretary, following notice and an opportunity 
     for a hearing, for additional 180-day periods.
       (2) The person or persons subject to the issuance or 
     renewal of a temporary denial order may appeal the issuance 
     or renewal of the temporary denial order, supported by briefs 
     and other material, to an administrative law judge who shall, 
     within 15 working days after the appeal is filed, issue a 
     decision affirming, modifying, or vacating the temporary 
     denial order. The temporary denial order shall be affirmed if 
     it is shown that there is reasonable cause to believe that 
     the person subject to the order is engaged in or is about to 
     engage in any act or practice which constitutes or would 
     constitute a violation of the Act, or any regulation, order, 
     or license issued under the Act, or if it is shown that a 
     criminal indictment has been returned against the person 
     subject to the order alleging a violation of the Act or any 
     of the statutes listed in section 9(h) of the Act. The 
     decision of the administrative law judge shall be final 
     unless, within 10 working days from the date of the 
     administrative law judge's decision, an appeal is filed with 
     the Secretary. On appeal, the Secretary shall either affirm, 
     modify, reverse, or vacate the decision of the administrative 
     law judge by written order within 10 working days after 
     receiving the appeal. The written order of the Secretary 
     shall be final and is not subject to judicial review except 
     as provided in paragraph (3). The materials submitted to the 
     administrative law judge and the Secretary shall constitute 
     the administrative record for purposes of review by the 
     court.
       (3) An order of the Secretary affirming, in whole or in 
     part, the issuance or renewal of a temporary denial order 
     may, within 15 days after the order is issued, be appealed by 
     a person subject to the order to the United States Court of 
     Appeals for the District of Columbia Circuit, which shall 
     have jurisdiction of the appeal. The court may review only 
     those issues necessary to determine whether the issuance of 
     the temporary denial order was based on reasonable cause to 
     believe that the person subject to the order was engaged in 
     or was about to engage in any act or practice which 
     constitutes or would constitute a violation of the Act, or 
     any regulation, order or license issued under the Act, or if 
     a criminal indictment has been returned against the person 
     subject to the order alleging a violation of the Act or any 
     of the statutes listed in section 9(h) of the Act. The court 
     shall vacate the Secretary's order if the court finds that 
     the Secretary's order is arbitrary, capricious, an abuse of 
     discretion, or otherwise not in accordance with law.
       (k) Violations Defined by Regulation.--Nothing in this 
     section shall limit the power of the Secretary to define by 
     regulation violations under this Act.
       (l) Other Authorities.--Nothing in subsection (c), (e), 
     (f), (g), (h), or (i) limits--
       (1) the availability of other administrative or judicial 
     remedies with respect to violations of this Act, or any 
     regulation, order, or license issued under this Act;
       (2) the authority to compromise and settle administrative 
     proceedings brought with respect to violations of this Act, 
     or any regulation, order, or license issued under this Act; 
     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, title 22, United States Code, 
     section 401(b).

     SEC. 10. ENFORCEMENT.

       (a) General Authority and Designation.--
       (1) The Secretary, in consultation with the Secretary of 
     Treasury and the heads of other appropriate departments and 
     agencies, shall be responsible for providing policy guidance 
     on the enforcement of this Act.
       (2) To the extent necessary or appropriate to the 
     enforcement of this Act or to the imposition of any penalty, 
     forfeiture, or liability arising under the Export 
     Administration Act of 1979, as amended, officers or employees 
     of the Department of Commerce designated by the Secretary and 
     officers and employees of the United States Customs Service 
     designated by the Commissioner may exercise the enforcement 
     authorities described in paragraph (3). In carrying out these 
     enforcement authorities--
       (A) the Commissioner of Customs, and employees of the 
     United States Customs Service designated by the Commissioner, 
     may make investigations within or outside the United States 
     and at those ports of entry or exit from the United States 
     where officers of the United States Customs Service are 
     authorized by law to carry out such enforcement 
     responsibilities. Subject to paragraph (3), the United States 
     Customs Service is authorized, in the enforcement of this 
     Act, to search, detain (after search), and seize goods or 
     technology at those ports of entry or exit from the United 
     States where officers of the Customs Service are authorized 
     by law to conduct such searches, detentions, and seizures, 
     and at those places outside the United States where the 
     Customs Service, pursuant to agreements or other arrangements 
     with other countries, is authorized to perform enforcement 
     activities;
       (B) the Secretary, and officers and employees of the 
     Department of Commerce designated by the Secretary, may make 
     investigations within the United States, and shall conduct, 
     outside the United States, pre-license and post-shipment 
     verifications of items licensed for export and investigations 
     in the enforcement of section 7 of this Act. The Secretary, 
     and officers and employees of the Department of Commerce 
     designated by the Secretary, are authorized to search, detain 
     (after search), and seize items at those places within the 
     United States other than those ports and borders specified in 
     paragraph (2)(A) above. The search, detention (after search), 
     or seizure of items at those ports and borders specified in 
     paragraph (2)(A) may only be conducted by officers and 
     employees of the Department of Commerce with the concurrence 
     of the Commissioner of Customs or a person designated by the 
     Commissioner; and
       (C) The Secretary and the Commissioner of Customs may enter 
     into agreements and arrangements for the enforcement of this 
     Act, including foreign investigations and information 
     exchange.
       (3) Any officer or employee designated in accordance with 
     paragraph (2) may do the following in carrying out the 
     enforcement authority under this Act, except that the 
     authorities enumerated in subparagraphs (F) and (G) below may 
     be carried out only by officers and employees of the United 
     States Customs Service designated by the Commissioner:
       (A) Make investigations of, obtain information from, make 
     inspection of any books, records, or reports, as well as any 
     writings required to be kept by the Secretary, premises, or 
     property of, and take the sworn testimony of, any person.
       (B) 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. In the 
     case of contumacy by, or refusal to obey a subpoena issued 
     to, any such person, a district court of the United States, 
     after notice to any such person and hearing, shall have 
     jurisdiction to issue an order requiring such person to 
     appear and give testimony or to appear and produce books, 
     records, and other writings, or both, and any failure to obey 
     such order of the court may be punished by such court as a 
     contempt thereof.
       (C) Execute any warrant or other process issued by a court 
     or officer of competent jurisdiction with respect to the 
     enforcement of the provisions of this Act.
       (D) Make arrests without warrant for any violation of this 
     Act committed in his or her presence or view, or if the 
     officer or employee has probable cause to believe that the 
     person to be arrested has committed, is committing, or is 
     about to commit such a violation.
       (E) Carry firearms.
       (F) Stop, search, and examine a vehicle, vessel, aircraft, 
     or person on which or whom the officer or employee has 
     reasonable cause to suspect there is any item that has been, 
     is being, or is about to be exported from or transited 
     through the United States in violation of this Act.
       (G) Detain and search any package or container in which the 
     officer or employee has reasonable cause to suspect there is 
     any item that has been, is being, or is about to be exported 
     from or transited through the United States in violation of 
     this Act.
       (H) Detain (after search) or seize any item, for purposes 
     of securing for trial or forfeiture to the United States, on 
     or about such vehicle, vessel, aircraft, or person, or in 
     such package or container, if the officer or employee has 
     probable cause to believe the item has been, is being, or is 
     about to be exported from or transited through the United 
     States in violation of this Act.
       (I) The authorities conferred by this section are in 
     addition to any authorities conferred under other laws.
       (b) Forfeiture.--All goods or tangible items lawfully 
     seized under subsection (a) of this section by designated 
     officers or employees shall be forfeited to the United 
     States. Those provisions of law relating to--
       (1) the seizure, summary and judicial forfeiture, and 
     condemnation of property for violations of the customs laws;
       (2) the disposition of such property or the proceeds from 
     the sale thereof;
       (3) the remission or mitigation of such forfeitures; and
       (4) the compromise of claims;

     shall apply to seizures and forfeitures incurred, or alleged 
     to have been incurred, under the provisions of this 
     subsection, insofar as applicable and not inconsistent with 
     this Act, except that such duties as are imposed upon the 
     customs officer or any other person with respect to the 
     seizure and forfeiture of property under the customs laws may 
     be performed with respect to seizures and forfeitures of 
     property under this subparagraph by the Secretary or such 
     officers or employees of the Department of Commerce as may be 
     authorized or designated for that purpose by the Secretary, 
     or, upon the request of the Secretary, by any other agency 
     that has authority to manage and dispose of seized property.
       (c) Undercover Investigative Operations.--
       (1) With respect to any undercover investigative operation 
     conducted by the Office of Export Enforcement of the 
     Department of Commerce (hereinafter in this subsection 
     referred to as ``OEE'') necessary for the detection and 
     prosecution of violations of this Act--
       (A) funds made available for export enforcement under this 
     Act may be used to purchase property, buildings, and other 
     facilities, and to lease space within the United States, 
     without regard to sections 1341 and 3324 of title 31, United 
     States Code, the third undesignated paragraph under the 
     heading ``MISCELLANEOUS'' of the Act of March 3, 1877, title 
     40, United States Code, section 34, sections 3732(a) and 3741 
     of the Revised Statutes of the United States, title 41, 
     United States Code, sections 11(a) and 22, and subsections 
     (a) and (c) of section 304, and section 305, of the Federal 
     Property and Administrative Services Act of 1949 and title 
     41, United States Code, sections 254 (a) and (c) and 255;
       (B) funds made available for export enforcement under this 
     Act may be used to establish or to acquire proprietary 
     corporations or business entities as part of an OEE 
     undercover operation, and to operate such corporations or 
     business entities on a commercial basis, without regard to 
     section 9102 of title 31, United States Code;
       (C) funds made available for export enforcement under this 
     Act and the proceeds from OEE undercover operations may be 
     deposited in banks or other financial institutions without 
     regard to the provisions of section 648 of title 18, United 
     States Code, and section 3302 of title 31, United States 
     Code; and
       (D) the proceeds from OEE undercover operations may be used 
     to offset necessary and reasonable expenses incurred in such 
     operations without regard to the provisions of section 3302 
     of title 31, United States Code; if the Director of OEE (or 
     an officer or employee designated by the Director) certifies, 
     in writing, that any action authorized by clause (A), (B), 
     (C), or (D) is necessary for the conduct of the undercover 
     operation.
       (2) If a corporation or business entity established or 
     acquired as part of an OEE undercover operation with a net 
     value of more than $50,000 is to be liquidated, sold, or 
     otherwise disposed of, OEE shall report the circumstances to 
     the Secretary and the Comptroller General, as much in advance 
     of such disposition as the Director of OEE or his or her 
     designee determines is practicable. The proceeds of the 
     liquidation, sale, or other disposition, after obligations 
     incurred by the corporation or business enterprise are met, 
     shall be deposited in the Treasury of the United States as 
     miscellaneous receipts.
       (3) As soon as the proceeds from an undercover 
     investigative operation with respect to which an action is 
     authorized and carried out under this paragraph are no longer 
     necessary for the conduct of such operation, such proceeds or 
     the balance of such proceeds remaining at the time shall be 
     deposited into the Treasury of the United States as 
     miscellaneous receipts.
       (4) Audit and report.--
       (A) The Director of OEE shall conduct a detailed financial 
     audit of each undercover investigative operation which is 
     closed and shall submit the results of the audit in writing 
     to the Secretary. Not later than 180 days after an OEE 
     undercover operation is closed, the Secretary shall submit to 
     the Congress a report on the results of the audit.
       (B) The Secretary shall submit a report annually to the 
     Congress, which report may be included in the annual report 
     under section 13, specifying the following information--
       (i) the number of OEE undercover investigative operations 
     pending as of the end of the period for which such report is 
     submitted;
       (ii) the number of OEE undercover investigative operations 
     commenced in the one-year period preceding the period for 
     which such report is submitted; and
       (iii) the number of OEE undercover investigative operations 
     closed in the one-year period preceding the period for which 
     such report is submitted and, with respect to each such 
     closed undercover operation, the results obtained and any 
     civil claims made with respect thereto.
       (5) For purposes of subparagraph (4)--
       (A) the term ``closed'' refers to the earliest point in 
     time at which all criminal proceedings (other than appeals) 
     are concluded, or covert activities are concluded, whichever 
     occurs later;
       (B) the terms ``undercover investigative operation'' and 
     ``undercover operation'' mean any undercover investigative 
     operation conducted by OEE--
       (i) in which the gross receipts (excluding interest earned) 
     exceed $25,000, or expenditures (other than expenditures for 
     salaries of employees) exceed $75,000; and
       (ii) which is exempt from section 3302 or 9102 of title 31, 
     United States Code, except that clauses (i) and (ii) shall 
     not apply with respect to the report to the Congress required 
     by paragraph (B) of subparagraph (4); and
       (iii) the term ``employees'' means employees, as defined in 
     section 2105 of title 5, United States Code, of the 
     Department of Commerce.
       (d) Reference to Enforcement.--For purposes of this 
     section, a reference to the enforcement of this Act or to a 
     violation of this Act includes a reference to the enforcement 
     or a violation of any regulation, license, or order issued 
     under this Act.

     SEC. 11. AUTHORITY AND PROCEDURES.

       (a) Under Secretary of Commerce.--The President shall 
     appoint, by and with the advice and consent of the Senate, an 
     Under Secretary of Commerce for Export Administration who 
     shall carry out all functions of the Secretary under this 
     Act, under other statutes that relate to national security, 
     and under such other statutes as the Secretary may delegate. 
     The President shall appoint, by and with the advice and 
     consent of the Senate, two Assistant Secretaries of Commerce 
     to assist the Under Secretary in carrying out such functions.
       (b) Regulations.--The Secretary may issue such regulations 
     as are necessary to carry out the provisions of this Act, and 
     amend or revise them as necessary. Such regulations may apply 
     to financing, transporting, or other servicing of exports 
     subject to this Act and the participation therein by any 
     person. The Secretary shall consult with the appropriate 
     technical advisory committees authorized under this Act in 
     formulating or amending regulations issued under this Act. 
     Any regulations to carry out the provisions of section 5 may 
     be issued only after the regulations are submitted for review 
     to such departments or agencies as the Secretary considers 
     appropriate. The requirement for prior agency review does not 
     confer the right of concurrence or approval by any official, 
     department, or agency to which such regulations are 
     submitted.
       (c) Confidentiality of Information.--
       (1) Exemptions from disclosure.--
       (A) Except as otherwise provided by the third sentence of 
     section 7(b)(2) of this Act, information obtained under the 
     Export Administration Act of 1979 and its predecessor 
     statutes on or before June 30, 1980, which is deemed 
     confidential, including Shipper's Export Declarations, or 
     with reference to which a request for confidential treatment 
     is made by the person furnishing such information, shall not 
     be subject to disclosure under section 552 of title 5, United 
     States Code, and such information shall not be published or 
     disclosed unless the Secretary determines that the 
     withholding thereof is contrary to the national interest.
       (B) Except as otherwise provided by the third sentence of 
     section 7(b)(2) of this Act, information obtained under this 
     Act, under the Export Administration Act of 1979 after June 
     30, 1980, or under the Export Administration Regulations as 
     maintained and amended under the authority of the 
     International Emergency Economic Powers Act (50 U.S.C. 1706) 
     may be withheld only to the extent permitted by statute, 
     except that information submitted, obtained or considered in 
     connection with an application for an export license or other 
     export authorization, including the export license or other 
     export authorization itself, classification requests, 
     information obtained during the course of a foreign 
     availability assessment, information or evidence obtained in 
     the course of any investigation, and information obtained or 
     furnished in connection with multilateral agreements, 
     treaties, or obligations under this Act, under the Export 
     Administration Act of 1979 after June 30, 1980, or under the 
     Export Administration Regulations as maintained and amended 
     under the authority of the International Emergency Economic 
     Powers Act (50 U.S.C. 1706) shall not be subject to 
     disclosure under section 552 of title 5, United States Code, 
     and such information shall not be published or disclosed 
     unless the Secretary determines that the withholding thereof 
     is contrary to the national interest.
       (2) Information to congress and gao.--
       (A) In general.--Nothing in this Act shall be construed as 
     authorizing the withholding of information from the Congress 
     or from the General Accounting Office.
       (B) Availability to the congress.--
       (i) In general.--All information obtained at any time under 
     this Act or previous Acts regarding the control of exports, 
     including any report or license application required under 
     this Act, shall upon request be made available to the 
     Committee on Foreign Affairs and the Subcommittee on 
     International Economic Policy and Trade of the House of 
     Representatives and the Committee on Banking, Housing and 
     Urban Affairs and the Subcommittee on International Finance 
     and Monetary Policy of the Senate. Each of the above 
     designated committees and subcommittees may provide other 
     members of Congress information obtained under this authority 
     provided that such information may not be further disclosed 
     except upon a finding made under the following subparagraph.
       (ii) Prohibition on further disclosure.--No such committee 
     or subcommittee, or member thereof, and no other committee, 
     subcommittee, or member of Congress shall disclose any 
     information obtained under this Act or previous Acts 
     regarding the control of exports which is submitted pursuant 
     to this subsection unless one of the above-described full 
     committees determines that the withholding of that 
     information is contrary to the national interest.
       (c) Availability to the GAO.--
       (i) In general.--Notwithstanding paragraph (1), information 
     referred to in subparagraph (B) shall, consistent with the 
     protection of intelligence, counterintelligence, and law 
     enforcement sources, methods, and activities, as determined 
     by the agency that originally obtained the information, and 
     consistent with the provisions of section 313 of the Budget 
     and Accounting Act of 1921, be made available only by the 
     agency, upon request, to the Comptroller General of the 
     United States or to any officer or employee of the General 
     Accounting Office authorized by the Controller General to 
     have access to such information.
       (ii) Prohibition on further disclosures.--No officer or 
     employee of the General Accounting Office shall disclose, 
     except to the Congress in accordance with this paragraph, any 
     such information which is submitted on a confidential basis 
     and from which any individual can be identified.
       (3) Commerce/customs information exchange.--Notwithstanding 
     the provisions of section 11(c)(1), the Secretary and the 
     Commissioner of Customs shall exchange any licensing and 
     enforcement information with each other which is necessary to 
     facilitate enforcement efforts and effective license 
     decisions.
       (4) Penalties for disclosure of confidential information.--
     Any officer or employee of the United States, or any 
     department or agency thereof, who publishes, divulges, 
     discloses, or makes known in any manner or to any extent not 
     authorized by law any information coming to him in the course 
     of his or her employment or official duties or by reason of 
     any examination or investigation made by, report or record 
     made to or filed with, such department or agency, or officer 
     or employee thereof, which information is exempt from 
     disclosure under this subsection, shall be fined not more 
     than $1,000, or imprisoned not more than one year, or both, 
     and may be removed from office or employment and shall be 
     subject to an administrative fine of not more than $1,000 to 
     be enforced under the authorities and procedures of section 
     10 of this Act.
       (d) Public Participation.--It is the intent of the Congress 
     that, to the extent practicable, all regulations imposing 
     controls on exports under this Act be issued in proposed form 
     with meaningful opportunity for public comment before taking 
     effect. In cases where a regulation imposing controls under 
     this Act is issued with immediate effect, it is the intent of 
     the Congress that meaningful opportunity for public comment 
     also be provided and that the regulation be reissued in final 
     form after public comments have been fully considered.
       (e) Control List Development and Review.--
       (1) In general.--The Secretary shall establish and maintain 
     a Control List comprising all items requiring a validated 
     license for export to designated countries under this Act. 
     The Control List and other implementing regulations shall 
     clearly identify the specific items controlled to each 
     country. The Secretary shall establish validated license 
     requirements on the Control List.
       (2) Development and review of the control list.--The 
     Secretary shall consult with appropriate departments and 
     agencies regarding the addition, deletion, or maintenance of 
     a license requirement for a given item. The Secretary of 
     State, in consultation with appropriate departments and 
     agencies, shall be responsible for conducting negotiations 
     and developing negotiating positions with other countries 
     regarding multilateral arrangements for restricting the 
     export of items to carry out the policies of this Act. All 
     appropriate departments and agencies shall consult to develop 
     initial technical parameters and item definitions in 
     connection with the development of proposals within the 
     United States Government to be made to multilateral regimes 
     in consultation with the Technical Advisory Committees as 
     provided in paragraph (3) below.
       For items controlled by a multilateral regime, the 
     Secretary shall conduct periodic reviews scheduled 
     sufficiently in advance of regime deliberations to permit the 
     United States to present appropriate proposals after 
     consultation with U.S. industry and the technical advisory 
     committees. The Secretary shall seek the advice of U.S. 
     industry and appropriate technical advisory committees as to 
     the control of items subject to this Act. This review shall 
     serve as a basis for United States proposals for revision of 
     items subject to multilateral regimes. The Secretary of State 
     shall seek to ensure that each multilateral regime in which 
     the United States is a member shall review each item on its 
     list of controlled items at least once very 2 years. In any 
     case when such a multilateral regime fails to review an entry 
     on its list of controlled items within 2 years of the prior 
     review, the Secretary of State shall propose a review by the 
     relevant multilateral regime of such an entry. Regardless of 
     the frequency of list reviews by a given regime, the 
     Secretary shall review each item controlled in cooperation 
     with a multilateral regime at least once every two years.
       (3) Technical Advisory Committees and the Public.--The 
     appropriate technical advisory committee appointed under 
     section 4(g) shall be consulted by the Secretary with respect 
     to changes in the Control List established pursuant to this 
     subsection, and such technical advisory committee may submit 
     recommendations to the Secretary with respect to such 
     changes. The Secretary shall consider the recommendations of 
     the technical advisory committee and shall inform the 
     committee of the disposition of its recommendations. The 
     Secretary shall also seek comments and recommendations from 
     the public in connection with changes in the Control List 
     established pursuant to this subsection. To the maximum 
     extent practicable and consistent with the conduct of 
     international negotiations, in every possible instance, such 
     comments and recommendations shall be taken into 
     consideration in the development of United States Government 
     proposals for all list revisions and positions to be taken in 
     multilateral regimes.
       (f) Authority for Seminar and Publications Fund.--The 
     Secretary is authorized to cooperate with public agencies, 
     other governments, international organizations, private 
     individuals, private associations, and other groups in 
     connection with seminars, publications and related activities 
     to carry out export activities, including educating the 
     public or government officials in the application of this Act 
     and the regulations issued under this Act. The Secretary is 
     further authorized to accept contributions of funds, 
     property, or services in connection with such activities to 
     recover the cost of such programs and activities over time. 
     Contributions shall include payments for materials or 
     services provided as part of these activities. The 
     contributions collected may be retained for use in covering 
     the costs of these activities, and for supporting all 
     outreach functions of the Department in connection with this 
     Act and other export control programs of the United States 
     and other governments.
       (g) Support of Other Countries' Export Control Program.--
     The Secretary may participate in the education and training 
     of officials of other countries on the principles and 
     procedures for the implementation of effective export 
     controls.
       (h) Applicability of Administrative Procedures Act.--
       (1) Exemption.--Except as provided in subsection (d) of 
     section 9, the functions exercised under this Act are 
     excluded from the operation of sections 551, 553 through 559, 
     and 701 through 706 of title 5, United States Code.
       (2) Judicial Review.--Except as provided by subsections 
     (d), (g), and (j) of section 9, a final agency action under 
     this Act may be reviewed by appeal to the United States Court 
     of Appeals for the District of Columbia Circuit, to the 
     extent provided in this paragraph. The court's review in any 
     such appeal shall be limited to determining whether--
       (A) a regulation--
       (i) fails to take an action compelled by this Act;
       (ii) takes an action prohibited by this Act; or
       (iii) otherwise violates this Act;
       (B) an agency action violates this Act;
       (C) an agency action violates an agency regulation 
     establishing time requirements or other procedural 
     requirements of a non-discretionary nature;
       (D) the issuance of regulations compelled by this Act 
     compiles with time restrictions imposed by this Act;
       (E) license decisions are made and appeals thereof are 
     concluded in compliance with time restrictions imposed by 
     this Act;
       (F) classifications and advisory opinions are issued in 
     compliance with time restrictions imposed by this Act;
       (G) unfair impact determinations are in compliance with 
     time restrictions imposed by this Act; or
       (H) the United States has complied with the requirements of 
     section 5(k) after an unfair impact determination has been 
     rendered.
       (i) Incorporated Commodities Technology, and Software.--
       (1) Commodities containing controlled parts and 
     components.--Export licenses may not be required under this 
     Act or any other provision of law for a commodity solely 
     because the commodity contains parts or components subject to 
     export control under this Act if such parts or components--
       (A) are essential to the functioning of the good;
       (B) are customarily included in sales of the item in 
     countries other than target countries; and
       (C) comprise 25 percent or less of the total value of the 
     good, unless the good itself, if exported, would by virtue of 
     the functional characteristics of the good as a whole make a 
     significant contribution to the military or proliferation 
     potential of a target country or end user which would prove 
     detrimental to the national security of the United States.
       (2) Reexports of Foreign-Made Items Incorporating U.S. 
     Items.--Except for countries embargoed under this Act, the 
     International Emergency Economic Powers Act or the Trading 
     with the Enemy Act, and except for countries named as 
     terrorist-supporting countries under section 5(j)(4), no 
     authority or permission may be required under this Act to--
       (A) reexport a foreign-made commodity incorporating U.S. 
     origin commodities valued at 25% or less of the total value 
     of the foreign-made commodity;
       (B) reexport foreign-made software incorporating U.S. 
     origin software valued at 25% or less of the total value of 
     the foreign-made software; or
       (C) reexport foreign technology commingled with or drawn 
     from U.S. origin technology valued at 25% or less of the 
     total value of the foreign technology.

     For countries embargoed under this Act, the International 
     Emergency Economic Powers Act or the Trading with the Enemy 
     Act, and except for countries named as terrorist-supporting 
     countries under section 5(j)(4), no authority or permission 
     may be required under this Act to--
       (D) reexport a foreign-made commodity incorporating U.S. 
     origin commodities valued at 10% or less of the total value 
     of the foreign-made commodity;
       (E) reexport foreign-made software incorporating U.S. 
     origin software valued at 10% or less of the total value of 
     the foreign-made software; or
       (F) reexport foreign technology commingled with or drawn 
     from U.S. origin technology valued at 10% or less of the 
     total value of the foreign technology.

     For purposes of this subsection, technology and source code 
     used to design or produce foreign-made commodities or 
     software are not incorporated into such foreign-made 
     commodities or software. Notwithstanding the above 
     provisions, the Secretary may require firms to report to the 
     Department of Commerce their proposed calculations and 
     underlying data sufficient for the Department of Commerce to 
     evaluate the adequacy of those calculations and data related 
     to commodities, technology, and software before a reexporter 
     may rely upon this exclusion from controls.
       (j) Exceptions for Medical and Humanitarian Purposes.--This 
     Act does not authorize controls on--
       (1) medical instruments and equipment subject to the 
     provisions of subsection (j)(1) of this section;
       (2) medicine or medical supplies; or
       (3) donations of items that are intended to meet basic 
     human needs including food, educational materials, seeds, 
     hand tools, water resources equipment, clothing and shelter 
     materials, and basic household supplies.
       (k) Sanctity of Existing Contracts and Licenses.--
       (1) In general.--Under a unilateral control imposed under 
     section 5 of this Act, the President may not prohibit the 
     export or reexport of items--
       (A) in performance of a contract, agreement, or other 
     contractual commitment entered into before the effective date 
     of any export controls mandated by this law, or the date on 
     which the President reports to the Congress the President's 
     intention to impose controls on the export or reexport of 
     such items; or
       (B) under a validated license issued under this Act before 
     the effective date of any export controls mandated by this 
     law, or the date on which the President reports to the 
     Congress the President's intention to impose controls on the 
     export or reexport of such items.
       (2) Exception.--The prohibition in paragraph (1) shall not 
     apply if the President determines and certifies to the 
     Congress that--
       (A) a breach of the peace poses a serious and direct threat 
     to the strategic interest of the United States;
       (B) the prohibition or curtailment of each such contract, 
     agreement, commitment, license, or authorization to be 
     controlled will be directly instrumental in remedying the 
     situation posing the direct threat; and
       (C) the emergency controls will continue only so long as 
     the direct threat persists.
       (3) The determination authority provided to the President 
     in this subparagraph (2) may not be delegated.
       (l) Fact-Finding Authority.--
       (1) To the extent necessary or appropriate to the 
     administration of this Act or any multilateral regime in 
     which the United States participates pursuant to this Act, 
     the Secretary (and officers or employees of the Department of 
     Commerce designated by the Secretary), the Commissioner of 
     Customs, or the head of any other department or agency 
     designated by the Secretary may exercise the authorities 
     described in paragraph (2).
       (2) Any officer or employee designated by the Secretary may 
     do the following in carrying out the authority of this Act:
       (A) Make investigations of, obtain information from, 
     require reports or the keeping of such records by, make 
     inspection of the books, records, and other writings, 
     premises, or property of, and take the sworn testimony of, 
     any person.
       (B) 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. In the 
     case of contumacy by, or refusal to obey a subpoena issued 
     to, any such person, a district court of the United States, 
     after notice to any such person and hearing, shall have 
     jurisdiction to issue an order requiring such person to 
     appear and give testimony or to appear and produce books, 
     records, and other writings, or both, and any failure to obey 
     such order of the court may be punished by such court as a 
     contempt thereof.
       (m) Military Critical Technologies List Development, Review 
     and Use.--
       (1) In developing the Militarily Critical Technologies List 
     (MCTL), established pursuant to subsection 4(c) of this Act, 
     primary emphasis shall be given to--
       (A) development and production technology;
       (B) test, inspection, and production equipment;
       (C) advanced materials, chemicals, and biological agents;
       (D) unique software; and
       (E) systems, subsystems, assemblies and components.
       (2) The list referred to in paragraph (1) shall be 
     sufficiently specific to guide the determinations of any 
     official exercising export licensing responsibilities under 
     this Act. For purposes of completeness and cross-reference, 
     the MCTL shall include both dual-use items controlled by this 
     Act and other militarily critical items that may be 
     controlled under other authorities, including the Arms Export 
     Control Act (22 U.S.C. 2770 et seq.)
       (3) Consistent with the policies of section 3 and the 
     criteria of section 5, the Secretary and the Secretary of 
     Defense shall propose integration of items on the list of 
     militarily critical technologies into the Control List in 
     accordance with the requirements of paragraph (1) of this 
     subsection. Any disagreement between the Secretary and the 
     Secretary of Defense regarding the integration of an item on 
     the list of militarily critical technologies into the Control 
     List shall be resolved by the President.
       (4) The Secretary of Defense shall establish a procedure 
     for reviewing the MCTL on an ongoing basis for the purpose of 
     removing from the MCTL any items that are no longer 
     militarily critical. The Secretary of Defense may add to the 
     MCTL any item that the Secretary of Defense determines is 
     militarily critical, consistent with the provisions of 
     paragraph (1) of this subsection. If the Secretary and the 
     Secretary of Defense disagree as to whether any change in the 
     MCTL by the addition or removal of an item should also be 
     made in the Control List, the President shall resolve the 
     disagreement.
       (5) The establishment of adequate export controls for 
     militarily critical technology, equipment, and materials 
     shall be accompanied by suitable reductions in the controls 
     on the products of that technology, equipment, and materials.

     SEC. 12A. SANCTIONS FOR PROLIFERATION ACTIVITY AND THE USE OF 
                   CHEMICAL AND BIOLOGICAL WEAPONS AND MISSILES.

       (a) Determinations.--
       (1) Determination of activity supporting the proliferation 
     of chemical and biological weapons and missiles.--The 
     President shall determine whether any foreign person has, on 
     or after the date of the enactment of this section, knowingly 
     or with reason to know contributed materially to the efforts 
     of any government, group, entity, or project to use, design, 
     develop, produce, stockpile, or otherwise acquire chemical or 
     biological weapons or missiles--
       (A) through the export or transfer of--
       (i) any item on the MTCR Annex whether or not of U.S.-
     origin; or
       (ii) any chemicals, biological agents, or equipment which 
     may contribute to a chemical or biological weapons program 
     such as those listed by the Australia Group, whether or not 
     of U.S.-origin.
       (B) by participating in any financial transaction related 
     to the activity described in paragraphs (1)(A) or (1)(B); or
       (C) by facilitating the activity described in paragraphs 
     (1)(A) or (1)(B).
       (D) This subsection does not apply--
       (i) under (a)(1)(A)(i) to an export or transfer that is 
     authorized by the government of a country that is an adherent 
     to the MTCR or is to a country that is an adherent to the 
     MTCR; or
       (ii) under (a)(1)(A)(ii) for an export or transfer that is 
     to a country that is both authorized by a country that is an 
     adherent to the Australia Group or a signatory to the 
     Chemical Weapons Convention and is to a country that is an 
     adherent to the Australia Group or a signatory to the 
     Chemical Weapons Convention.
       (2) Determination of use of chemical or biological 
     weapons.--Whenever persuasive information becomes available 
     to the executive branch indicating the substantial 
     possibility that, on or after the date of enactment of this 
     Act, the government of a foreign country has made substantial 
     preparation to use chemical or biological weapons, the 
     President shall, within 60 days after the receipt of such 
     information by the executive branch, determine whether that 
     government, on or after such date of enactment, has used 
     chemical or biological weapons in violation of international 
     law or has used lethal chemical or biological weapons against 
     its own nationals.
       (b) Persons Against Which Sanctions Are to be Imposed.--In 
     the event of an affirmative determination under subsection 
     (a)(1)(A)(i) or (a)(1)(A)(ii), the President shall impose 
     sanctions described under subsection (c) on the foreign 
     person that engaged in, facilitated, or solicited the conduct 
     that is the subject of the determination, on other persons as 
     the President determines should be subject to sanctions 
     because they are related to that person, and on any successor 
     of a sanctioned person.
       (c) Sanctions.--
       (1) Mandatory sanctions.--The following sanctions shall be 
     imposed for a minimum of 2 years in the event the President 
     makes a determination under subsections (a)(1)(A)(i) or 
     (a)(1)(A)(ii):
         (A) If the determination is for activity related to 
     missile proliferation, validated licenses for items on the 
     MTCR annex shall be denied under this Act and the Arms Export 
     Control Act and imports of such items from such entities 
     shall be prohibited.
       (B) If the determination is for activity related to 
     chemical or biological weapons proliferation, validated 
     licenses for items listed by the Australia Group shall be 
     denied under this Act and the Arms Export Control Act and 
     imports of such items from such entities shall be prohibited.
       (C) The United States Government shall not procure, or 
     enter into any contract for the procurement of, any services, 
     commodities, software, and technology, or other products from 
     or produced by any entity described in subsection (a)(2).
       (2) Discretionary sanctions.--In addition to the sanctions 
     described in paragraph (1), the President may also take any 
     of the actions listed in paragraphs (3) and (5), if the 
     President determines that such additional measures would 
     further the objectives of this section. Such additional 
     sanctions shall be proportionate to the harm the sanctioned 
     behavior has caused or will cause the national security or 
     nonproliferation interests of the United States.
       (3) Mandatory sanctions for use of chemical or biological 
     weapons.--The following sanctions shall be imposed in the 
     event the President makes a determination under subsection 
     (a)(2):
       (A) Foreign assistance.--The United States Government shall 
     terminate assistance to that country under the Foreign 
     Assistance Act of 1961, except for urgent humanitarian 
     assistance and food or other agricultural commodities or 
     products.
       (B) Arms sales.--The United States Government shall 
     terminate--
       (i) Sales to that country under the Arms Export Control Act 
     of any defense articles, defense services, or design and 
     construction services; and
       (ii) licenses for the export to that country of any item on 
     the United States Munitions List.
       (C) Arms sales financing.--The United States Government 
     shall terminate all foreign military financing for that 
     country under the Arms Export Control Act.
       (D) Denial of united states government credit or other 
     financial assistance.--The United States Government shall 
     deny to that country any credit, credit guarantees, or other 
     financial assistance by any department, agency, or 
     instrumentality of the United States Government, including 
     the Export-Import Bank of the United States.
       (E) Exports of national security-sensitive items.--The 
     authorities of this Act shall be used to prohibit the export 
     to that country of any items controlled for non-
     proliferation, regional stability, or national security 
     reasons.
       (4) Additional sanctions if certain conditions not met.--
     Unless, within three (3) months after making a determination 
     pursuant to subsection (a)(2) with respect to a foreign 
     government, the President determines and certifies, in 
     writing, to the Congress that--
       (A) the government is no longer using chemicals or 
     biological weapons in violation of international law or using 
     lethal chemicals or biological weapons against its own 
     nationals;
       (B) the government has provided reliable assurances that it 
     will not, in the future, engage in any such activities; and
       (C) the government is willing to allow on-site inspections 
     by United Nations observers or other internationally-
     recognized, impartial observers, or other reliable means 
     exist, to ensure that government is not using chemical or 
     biological weapons in violation of international law and is 
     not using lethal chemical or biological weapons against its 
     own nationals, then the President, after consultation with 
     the Congress, shall impose on that country the sanctions set 
     forth in at least three (3) of subparagraphs (A) through (F) 
     of paragraph (5).
       (5) Additional sanctions for use of chemical or biological 
     weapons.--The sanctions referred to in paragraph (4) are the 
     following:
       (A) Multilateral development bank assistance.--The United 
     States Government shall oppose, in accordance with Section 
     701 of the International Financial Institutions Act (22 
     U.S.C. 262d), the extension of any loan or financial or 
     technical assistance to that country by international 
     financial institutions.
       (B) Bank loans.--The United States Government shall 
     prohibit any United States bank from making any loan or 
     providing any credit to the government of that country, 
     except for loans or credits for the purpose of purchasing 
     food or other agricultural commodities or products.
       (C) Further export restrictions.--The authorities of this 
     Act may be used to prohibit exports to the country of all 
     other items (excluding food and other agricultural 
     commodities and products).
       (D) Import restrictions.--Restriction shall be imposed on 
     the importation into the United States of articles (which may 
     include petroleum or any petroleum product) that are the 
     growth, product, or manufacture of that country.
       (E) Diplomatic relations.--The President shall use 
     constitutional authorities to downgrade or suspend diplomatic 
     relations between the United States and the government of 
     that country.
       (F) Presidential action regarding aviation.--
       (i)(a) The President is authorized to notify the government 
     of a country with respect to which the President has made a 
     determination, pursuant to subsection 12(a), regarding 
     intention to suspend the authority of foreign air carriers 
     owned or controlled by the government of that country to 
     engage in foreign air transportation to or from the United 
     States.
       (b) Within ten (10) days after the date of notification of 
     a government under subclause (I), the Secretary of 
     Transportation shall take all steps necessary to suspend at 
     the earliest possible date the authority of any foreign air 
     carrier owned or controlled, directly or indirectly, by that 
     government to engage in foreign air transportation to or from 
     the United States, notwithstanding any agreement relating to 
     air services.
       (ii) (a) The President may direct the Secretary of State to 
     terminate any air service agreement between the United States 
     and a country with respect to which the President has made a 
     determination pursuant to subsection (a), in accordance with 
     the provisions of that agreement.
       (b) Upon termination of an agreement under this clause, the 
     Secretary of Transportation shall take such steps as may be 
     necessary to revoke at the earliest possible date the right 
     of any foreign air carrier owned, or controlled, directly or 
     indirectly, by the government of that country to engage in 
     foreign air transportation to or from the United States.
       (iii) The Secretary of Transportation may provide for such 
     exceptions from clauses (i) and (ii) as the Secretary 
     considers necessary to provide for emergencies in which the 
     safety of an aircraft or its crew or passengers is 
     threatened.
       (iv) For purposes of this subparagraph, the terms ``air 
     transportation'', ``air carrier'', ``foreign air carrier'', 
     and ``foreign air transportation'' have the meanings such 
     terms have under Section 101 of the Federal Aviation Act of 
     1958 (49 U.S.C. App. 1301).
       (d) Deferral and Limitation.--
       (1) The President may delay the making of a determination 
     under subsection (a) or the imposition of sanctions in order 
     to protect--
       (A) ongoing criminal investigations; or
       (B) sensitive intelligence sources and methods which are 
     being used to acquire further information on the 
     proliferation of weapons of mass destruction, their delivery 
     systems, or advanced conventional weapons.

     The President shall exercise this authority only when the 
     President determines that nonproliferation objectives do not 
     outweigh the need to delay the imposition of sanctions to 
     avoid compromising the criminal investigation or intelligence 
     sources and methods involved. The President shall proceed 
     when the basis for the delay no longer exists.
       (2) The President may delay the imposition of sanctions for 
     up to 180 days if the United States is engaged in diplomatic 
     efforts and consultations with the objective of----
       (A) curtailing the policies and conduct of the government 
     or person in the country of weapons activity determined to 
     have engaged in the sanctioned conduct; or
       (B) obtaining, from the government with effective 
     jurisdiction over the sanctioned person appropriate sanctions 
     against such person or the initiation of legal process to 
     impose such sanctions.

     If such diplomatic efforts and consultations succeed (i) in 
     curtailing the conduct of the government or person engaged in 
     the sanctioned conduct, or (ii) in obtaining enforcement 
     action in accordance with subparagraph (B), the President 
     shall not be required to apply or maintain sanctions under 
     this section.
       (3) The President should seek multilateral support for 
     sanctions against activity covered by this section. If 
     multilateral sanctions are achieved that the President 
     determines will be more effective than unilateral sanctions 
     in furthering the national security or nonproliferation 
     objectives of the United States, the President shall not be 
     required to exercise the authority in this section in a 
     manner inconsistent with such multilateral sanctions.
       (e) Exceptions.--The President shall not be required to 
     apply or maintain sanctions under this section--
       (1) in the case of procurement of defense articles or 
     defense services--
       (A) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     United States operational military requirements;
       (B) if the President determines that the person to which 
     the sanctions would otherwise be applied is a sole source 
     supplier of the defense articles or services, that the 
     defense articles or services are essential, and that 
     alternative sources are not readily or reasonably available; 
     or
       (C) if the President determines that such articles or 
     services are essential to the national security under defense 
     co-production agreements;
       (2) to the import of--
       (A) products or services provided under contracts entered 
     into before the date on which the President publishes notice 
     of intention to impose sanctions; or
       (B) (i) spare parts;
       (ii) component parts, but not finished products, essential 
     to United States products or production;
       (iii) information and technology essential to United States 
     products or production; or
       (iv) routine servicing and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available.
       (3) to medical or other humanitarian items; or
       (4) to any transaction subject to the reporting 
     requirements of Title V of the National Security Act of 1947.
       (5) when the President determines, categorically or on a 
     case-by-case basis, that the application of sanctions to bar 
     performance of a contract or agreement entered into before 
     the date of the imposition of sanctions is not necessary to 
     achieve the national security or nonproliferation objectives 
     of the United States and would be contrary to the national 
     interest.
       (f) Termination of Sanctions for Using Chemical or 
     Biological Weapons.--During the minimum 2 years period of the 
     mandatory sanctions imposed pursuant to a determination under 
     subsection (a)(2), such sanctions may be removed if the 
     President determines and so certifies to the Congress that--
       (1) the government of that country has provided reliable 
     assurances that it will not use chemical or biological 
     weapons in violation of international law and will not use 
     lethal chemical or biological weapons against its own 
     nationals;
       (2) that government is not making preparations to use 
     chemical or biological weapons in violation of international 
     law or to use lethal chemical or biological weapons against 
     its own nationals;
       (3) that government is willing to allow on-site inspections 
     by United Nations observers or other internationally-
     recognized, impartial observers to verify that it is not 
     making preparations to use chemical or biological weapons in 
     violation of international law or to use lethal chemical or 
     biological weapons against its own nationals, or other 
     reliable means exist to verify that it is not making such 
     preparations; and
       (4) that government is making restitution to those affected 
     by any use of chemical or biological weapons in violation of 
     international law or by any use of lethal chemical or 
     biological weapons against its own nationals.
       (g) Waiver.--
       (1) Criterion for waiver.--The President may waive or 
     partially waive the application of any sanction imposed on 
     any entity pursuant to this section, if the President 
     determines and certifies to Congress that such waiver is 
     important to the national 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 Congress 
     not less than 20 days before the waiver takes effect. Such 
     notification shall include a report stating the reasons for 
     exercise of the waiver authority.
       (h) Regulatory Implementation of Sanctions.--For items 
     subject to the jurisdiction of the Secretary under this Act, 
     sanctions shall be implemented in regulations issued by the 
     Secretary and shall specify the scope of products and 
     entities. For items subject to the jurisdiction of the 
     Secretary of State under the Arms Export Control Act, 
     sanctions shall be implemented in regulations issued by the 
     Secretary State and shall specify the scope of products and 
     entities.

     SEC. 12B. SANCTIONS FOR PROLIFERATION ACTIVITY AND THE USE OF 
                   CHEMICAL AND BIOLOGICAL WEAPONS.

       Section 72 of the Arms Export Control Act is amended to 
     read as follows:

     ``SEC. 72. SANCTIONS AGAINST CERTAIN FOREIGN PERSONS AND 
                   COUNTRIES.

       ``(a) Determinations.--
       ``(1) Determination of activity supporting the 
     proliferation of chemical and biological weapons and 
     missiles.--The President shall determine whether any foreign 
     person has, on or after the date of the enactment of this 
     section, knowingly or with reason to know contributed 
     materially to the efforts of any government, group, entity, 
     or project to use, design, develop, produce, stockpile, or 
     otherwise acquire chemical or biological weapons or 
     missiles--
       ``(A) through the export or transfer of--
       ``(i) any item on the MTCR Annex whether or not of U.S.-
     origin;
       ``(ii) any chemicals, biological agents, or equipment which 
     may contribute to a chemical or biological weapons program 
     such as those listed by the Australia Group, whether or not 
     of U.S.-origin;
       ``(B) by participating in any financial transaction related 
     to the activity described in paragraphs (1)(A) or (1)(B); or
       ``(C) by facilitating or soliciting the activity described 
     in paragraphs (1)(A) or (1)(B).
       ``(D) This subsection does not apply--
       ``(i) under (a)(1)(A)(i) to an export or transfer that is 
     authorized by the government of a country that is an adherent 
     to the MTCR or is to a country that is an adherent to the 
     MTCR; or
       ``(ii) under (a)(1)(A)(ii) for an export or transfer that 
     is to a country that is both authorized by a country that is 
     an adherent to the Australia Group or a signatory to the 
     Chemical Weapons Convention and is to a country that is an 
     adherent to the Australia Group or a signatory to the 
     Chemical Weapons Convention.
       ``(2) Determination of use of chemical or biological 
     weapons.--Whenever persuasive information becomes available 
     to the executive branch indicating the substantial 
     possibility that, on or after the date of enactment of this 
     Act, the government of a foreign country has made substantial 
     preparation to use chemical or biological weapons, the 
     President shall, within 60 days after the receipt of such 
     information by the executive branch, determine whether that 
     government, on or after such date of enactment, has used 
     chemical or biological weapons in violation of international 
     law or has used lethal chemical or biological weapons against 
     its own nationals.
       ``(b) Persons Against Which Sanctions Are to be Imposed.--
     In the event of an affirmative determination under subsection 
     (a)(1)(A)(i) or (a)(1)(A)(ii), the President shall impose 
     sanctions described under subsection (c) on the foreign 
     person that engaged in, facilitated, or solicited the conduct 
     that is the subject of the determination, on other persons as 
     the President determines should be subject to sanctions 
     because they are related to that person, and on any successor 
     of a sanctioned person.
       ``(c) Sanctions.--
       ``(1) Mandatory sanctions.--The following sanctions shall 
     be imposed for a minimum of 2 years in the event the 
     President makes a determination under subsections 
     (a)(1)(A)(i) or (a)(1)(A)(ii):
       ``(A) If the determination is for activity related to 
     missile proliferation, validated licenses for items on the 
     MTCR annex shall be denied under this Act and the Export 
     Administration Act and imports of such items for such 
     entities shall be prohibited.
       ``(B) If the determination is for activity related to 
     chemical or biological weapons proliferation, validated 
     licenses for items listed by the Australia Group shall be 
     denied under this Act and the Export Administration Act and 
     imports of such items for such entities shall be prohibited.
       ``(C) The United States Government shall not procure, or 
     enter into any contract for the procurement of, any services, 
     commodities, software, and technology, or other products from 
     or produced by any entity described in subsection (a)(2).
       ``(2) Discretionary sanctions.--In addition to the 
     sanctions described in paragraph (1), the President may also 
     take any of the actions listed in paragraphs (3) and (5), if 
     the President determines that such additional measures would 
     further the objectives of this section. Such additional 
     sanctions shall be proportionate to the harm the sanctioned 
     behavior has caused or will cause the national security or 
     nonproliferation interests of the United States.
       ``(3) Mandatory sanctions for use of chemical or biological 
     weapons.--The following sanctions shall be imposed in the 
     event the President makes a determination under subsection 
     (a)(2):
       ``(A) Foreign assistance.--The United States Government 
     shall terminate assistance to that country under the Foreign 
     Assistance Act of 1961, except for urgent humanitarian 
     assistance and food or other agricultural commodities or 
     products.
       ``(B) Arms sales.--The United States Government shall 
     terminate--
       ``(i) sales to that country under this Act of any defense 
     articles, defense services, or design and construction 
     services; and
       ``(ii) licenses for the export to that country of any item 
     on the United States Munitions List.
       ``(C) Arms sales financing.--The United States Government 
     shall terminate all foreign military financing for that 
     country under this Act.
       ``(D) Denial of united states government credit or other 
     financial assistance.--The United States Government shall 
     deny to that country any credit, credit guarantees, or other 
     financial assistance by any department, agency, or 
     instrumentality of the United States Government, including 
     the Export-Import Bank of the United States.
       ``(E) Exports of national security-sensitive items.--The 
     authorities of this Act shall be used to prohibit the export 
     to that country of any items controlled for non-
     proliferation, regional stability, or national security 
     reasons.
       ``(4) Additional sanctions if certain conditions not met.--
     Unless, within three (3) months after making a determination 
     pursuant to subsection (a)(2) with respect to a foreign 
     government, the President determines and certifies, in 
     writing, to the Congress that--
       ``(A) the government is no longer using chemicals or 
     biological weapons in violation of international law or using 
     lethal chemicals or biological weapons against its own 
     nationals;
       ``(B) the government has provided reliable assurances that 
     it will not, in the future, engage in any such activities; 
     and
       ``(C) the government is willing to allow on-site 
     inspections by United Nations observers or other 
     internationally-recognized, impartial observers, or other 
     reliable means exist, to ensure that government is not using 
     chemicals or biological weapons in violation of international 
     law and is not using lethal chemical or biological weapons 
     against its own nationals, then the President, after 
     consultation with the Congress, shall impose on that country 
     the sanctions set forth in at least three (3) of 
     subparagraphs (A) through (F) of paragraph (5).
       ``(5) Additional sanctions for use of chemical or 
     biological weapons.--The sanctions referred to in paragraph 
     (4) are the following:
       ``(A) Multilateral development bank assistance.--The United 
     States Government shall oppose, in accordance with Section 
     701 of the International Financial Institutions Act (22 
     U.S.C. 262d), the extension of any loan or financial or 
     technical assistance to that country by international 
     financial institutions.
       ``(B) Bank loans.--The United States Government shall 
     prohibit any United States bank from making any loan or 
     providing any credit to the government of that country, 
     except for loans or credits for the purpose of purchasing 
     food or other agricultural commodities or products.
       ``(C) Further export restrictions.--The authorities of this 
     Act may be used to prohibit exports to the country of all 
     other items (excluding food and other agricultural 
     commodities and products).
       ``(D) Import restrictions.--Restriction shall be imposed on 
     the importation into the United States of articles (which may 
     include petroleum or any petroleum product) that are the 
     growth, product, or manufacture of that country.
       ``(E) Diplomatic relations.--The President shall use 
     constitutional authorities to downgrade or suspend diplomatic 
     relations between the United States and the government of 
     that country.
       ``(F) Presidential action regarding aviation.--
       ``(i)(a) The President is authorized to notify the 
     government of a country with respect to which the President 
     has made a determination, pursuant to subsection 12(a), 
     regarding intention to suspend the authority of foreign air 
     carriers owned or controlled by the government of that 
     country to engage in foreign air transportation to or from 
     the United States.
       ``(b) Within ten (10) days after the date of notification 
     of a government under subclause (I), the Secretary of 
     Transportation shall take all steps necessary to suspend at 
     the earliest possible date the authority of any foreign air 
     carrier owned or controlled, directly or indirectly, by that 
     government to engage in foreign air transportation to or from 
     the United States, notwithstanding any agreement relating to 
     air services.
       ``(ii)(a) The President may direct the Secretary of State 
     to terminate any air service agreement between the United 
     States and a country with respect to which the President has 
     made a determination pursuant to subsection (a), in 
     accordance with the provisions of that agreement.
       ``(b) Upon termination of an agreement under this clause, 
     the Secretary of Transportation shall take such steps as may 
     be necessary to revoke at the earliest possible date the 
     right of any foreign air carrier owned, or controlled, 
     directly or indirectly, by the government of that country to 
     engage in foreign air transportation to or from the United 
     States.
       ``(iii) The Secretary of Transportation may provide for 
     such exceptions from clauses (i) and (ii) as the Secretary 
     considers necessary to provide for emergencies in which the 
     safety of an aircraft or its crew or passengers is 
     threatened.
       ``(iv) for purposes of this subparagraph, the terms ``air 
     transportation'', ``air carrier'', ``foreign air carrier'', 
     and ``foreign air transportation'' have the meanings such 
     terms have under Section 101 of the Federal Aviation Act of 
     1958 (49 U.S.C. App. 1301).
       ``(d) Deferral and Limitation.--
       ``(1) The President may delay the making of a determination 
     under subsection (a) or the imposition of sanctions in order 
     to protect--
       ``(A) ongoing criminal investigations; or
       ``(B) sensitive intelligence sources and methods which are 
     being used to acquire further information on the 
     proliferation of weapons of mass destruction, their delivery 
     systems, or advanced conventional weapons.

     ``The President shall exercise this authority only when the 
     President determines that nonproliferation objectives do not 
     outweigh the need to delay the imposition of sanctions to 
     avoid compromising the criminal investigation or intelligence 
     sources and methods involved. The President shall proceed 
     when the basis for the delay no longer exists.
       ``(2) The President may delay the imposition of sanctions 
     for up to 180 days if the United States is engaged in 
     diplomatic efforts and consultations with the objective of--
       ``(A) curtailing the policies and conduct of the government 
     or person in the country of weapons activity determined to 
     have engaged in the sanctioned conduct; or
       ``(B) obtaining, from the government with effective 
     jurisdiction over the sanctioned person appropriate sanctions 
     against such person or the initiation of legal process to 
     impose such sanctions.
       ``If such diplomatic efforts and consultations succeed (i) 
     in curtailing the conduct of the government or person engaged 
     in the sanctioned conduct, or (ii) in obtaining enforcement 
     action in accordance with subparagraph (B), the President 
     shall not be required to apply or maintain sanctions under 
     this section.
       ``(3) The President should seek multilateral support for 
     sanctions against activity covered by this section. If 
     multilateral sanctions are achieved that the President 
     determines will be more effective than unilateral sanctions 
     in furthering the national security or nonproliferation 
     objectives of the United States, the President shall not be 
     required to exercise the authority in this section in a 
     manner inconsistent with such multilateral sanctions.
       ``(e) Exceptions.--The President shall not be required to 
     apply or maintain sanctions under this section--
         ``(1) in the case of procurement of defense articles or 
     defense services--
     ``(A) under existing contacts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     United States operational military requirements;
       ``(B) if the President determines that the person to which 
     the sanctions would otherwise be applied is a sole source 
     supplier of the defense articles or services, that the 
     defense articles or services are essential, and that 
     alternative sources are not readily or reasonably available; 
     or
       ``(C) if the President determines that such articles or 
     services are essential to the national security under defense 
     co-production agreements;
       ``(2) to the import of--
       ``(A) products or services provided under contracts entered 
     into before the date on which the President publishes notice 
     of intention to impose sanctions; or
       ``(B) (i) spare parts;
       ``(ii) component parts, but not finished products, 
     essential to United States products or production;
       ``(iii) information and technology essential to United 
     States products or production;
       ``(iv) routine servicing and maintenance of products, to 
     the extent that alternative sources are not readily or 
     reasonably available;
       ``(3) to medical or other humanitarian items; or
       ``(4) to any transaction subject to the reporting 
     requirements of Title V of the National Security Act of 1947.
       ``(5) when the President determines, categorically or on a 
     case-by-case basis, that the application of sanctions to bar 
     performance of a contract or agreement entered into before 
     the date of the imposition of sanctions is not necessary to 
     achieve the national security or nonproliferation objectives 
     of the United States and would be contrary to the national 
     interest.
       ``(f) Termination of Sanctions for Using Chemical or 
     Biological Weapons.--During the minimum 2 years period of the 
     mandatory sanctions imposed pursuant to a determination under 
     subsection (a)(2), such sanctions may be removed if the 
     President determines and so certifies to the Congress that--
       ``(1) the government of that country has provided reliable 
     assurances that it will not use chemical or biological 
     weapons in violation of international law and will not use 
     lethal chemical or biological weapons against its own 
     nationals;
       ``(2) that government is not making preparations to use 
     chemical or biological weapons in violation of international 
     law or to use lethal chemical or biological weapons against 
     its own nationals;
       ``(3) that government is willing to allow on-site 
     inspections by United Nations observers or other 
     internationally-recognized, impartial observers to verify 
     that it is not making preparations to use chemical or 
     biological weapons in violation of international law or to 
     use lethal chemical or biological weapons against its own 
     nationals, or other reliable means exist to verify that it is 
     not making such preparations; and
       ``(4) that government is making restitution to those 
     affected by any use of chemical or biological weapons in 
     violation of international law or by any use of lethal 
     chemical or biological weapons against its own nationals.
       ``(g) Waiver.--
       ``(1) Criterion for waiver.--The President may waive or 
     partially waive the application of any sanction imposed on 
     any entity pursuant to this section, if the President 
     determines and certifies to Congress that such waiver is 
     important to the national 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 Congress 
     not less than 20 days before the waiver takes effect. Such 
     notification shall include a report stating the reasons for 
     exercise of the waiver authority.
       ``(h) Regulatory Implementation of Sanctions.--For items 
     subject to the jurisdiction of the Secretary of Commerce 
     under the Export Administration Act, sanctions shall be 
     implemented in regulations issued by the Secretary and shall 
     specify the scope of products and entities. For items subject 
     to the jurisdiction of the Secretary of State under this Act, 
     sanctions shall be implemented in regulations issued by the 
     Secretary of State and shall specify the scope of products 
     and entities.''

     SEC. 13. ANNUAL REPORT.

       (a) Contents.--Not later than March 1 of each year, the 
     Secretary shall submit to the Congress a report on the 
     administration of this Act during the preceding calendar 
     year. All agencies shall cooperate fully with the Secretary 
     in providing information for such report. Such report shall 
     include detailed information on--
       (1) the implementation of the policies set forth in section 
     3, including delegations of authority by the President as 
     provided in section 4(e), consultations with the technical 
     advisory committees established pursuant to section 4(g), and 
     any changes in the exercise of the authorities contained in 
     section 5(a), 6(a), and 7(a);
       (2) adjustments to multilateral export controls; activities 
     involving the license free zones authorized by section 
     5(f)(4); and determinations under section 5(l), the criteria 
     used to make such determinations, the removal of any export 
     controls under such section, and any evidence demonstrating a 
     need to maintain export controls notwithstanding foreign 
     availability;
       (3) the effectiveness of unilateral export controls imposed 
     under section 5, and any adjustments thereto; and embargoes 
     imposed, maintained, or removed in accordance with section 5, 
     including descriptions of each embargo and the rationale for 
     imposing, maintaining, or removing such embargoes;
       (4) short supply controls and monitoring in accordance with 
     section 6;
       (5) organizational and procedural changes undertaken in 
     furtherance of the policies set forth in this Act, including 
     changes to increase the efficiency of the export licensing 
     process and to fulfill the requirements of section 8, 
     including an accounting of appeals received, and actions 
     taken pursuant thereto under section 8(h).
       (6) violations under section 9, enforcement activities 
     under section 10, and any reviews undertaken in furtherance 
     of the policies of this Act;
       (7) the issuance of regulations under the authority of this 
     Act;
       (8) the results, in as much detail as may be included 
     consistent with multilateral arrangements and the need to 
     maintain the confidentiality of proprietary information and 
     classified information, of the reviews of the Commerce 
     Control List, and any revisions to the Commerce Control List 
     resulting from such reviews, required by section 11; and
       (9) the imposition or removal of sanctions against certain 
     entities and foreign countries in accordance with section 12.
       (b) Report on Certain Export Controls.--To the extent that 
     the President determines that the policies set forth in 
     section 3 require the control of the export of items other 
     than those subject to multilateral controls, or require more 
     stringent controls than the multilateral regimes, the 
     President shall include in each annual report the reasons for 
     the need to impose, or to continue to impose, such controls 
     and the estimated domestic economic impact on the various 
     industries affected by such controls.

     SEC. 14. DEFINITIONS.

       As used in this Act--
       (1) Affiliates.--The term ``affiliates'' includes both 
     governmental entities and commercial entities that are 
     controlled in fact by target countries;
       (2) Australia group (``ag'').--The term ``Australia Group'' 
     or ``AG'' means the multilateral arrangement in which the 
     United States participates that seeks to prevent the 
     proliferation of chemical and biological weapons.
       (3) Biological weapons convention.--The term ``Biological 
     Weapons Convention'' refers to the ``Convention on the 
     Prohibition of the Development, Production and Stockpiling of 
     Bacteriological (Biological) and Toxin Weapons and on Their 
     Destruction of 1972'';
       (4) Chemical weapons convention.--The term ``Chemical 
     Weapons Convention'' refers to the Convention on the 
     Prohibition of the Development, Production, Stockpiling and 
     Use of Chemical Weapons and on Their Destruction of 1992;
       (5) Commodity.--The term ``commodity'' means any article, 
     natural or manmade substance, material, supply or 
     manufactured product, including inspection of test equipment, 
     and excluding technical data;
       (6) Coordinating committee (``cocom'').--The term 
     ``Coordinating Committee'' or ``COCOM'' means the 
     multilateral organization in which the United States 
     participates that cooperates in restricting transfers of 
     strategic items to certain countries;
       (7) Export.--The term ``export'' means--
       (A) an actual shipment, transfer, or transmission of items 
     out of the United States; or
       (B) a transfer to any person of items either within the 
     United States or outside of the United States or to a end 
     user, end use, or destination with the knowledge or intent 
     that the items will be shipped, transferred, or transmitted 
     outside the United States;
       (C) unless otherwise clear from the context, the term 
     ``export'' includes the term ``reexport'';

     provided, the Secretary may further define the term by 
     regulation to include, among other concepts, that a transfer 
     of items in the United States to an embassy or affiliate of a 
     country is an export to the country, that disclosure of 
     technology to a foreign national is a deemed export to his or 
     her home country, and that transfer of effective control from 
     one country to another over a satellite above the earth is an 
     export from one country to another;
       (8) Facilitating the activity.--The term ``facilitating the 
     activity'' includes but is not limited to, acting as a 
     freight forwarder, shipper, designated export or import 
     agent, consignee, purchasing agent, marketing agent, 
     manufacturer, assembler, designer, financier, or end user 
     with respect to the services or items to be exported, 
     transferred, or provided;
       (9) Financial transactions.--The term ``financial 
     transactions'' means any transactions involving the exchange, 
     transfer, crediting, debiting, deposit, withdrawal, or 
     payment of currency, securities, debt, credit, checks, other 
     monetary instruments, precious metals or minerals, or other 
     items of value whether physically or by electronic means. The 
     term is intended to be interpreted broadly to include such 
     transactions as the opening or drawing down of letters of 
     credit, the extension of a loan, the receipt of payment, or 
     the use of credit cards;
       (10) Item.--The term ``item'' means any commodity, 
     technology, or software;
       (11) Missile.--The term ``missile'' means any missile 
     system or component listed in category I of the MTCR Annex, 
     and any other unmanned delivery system or component of 
     similar capability, as well as the specially designed 
     production facilities for these systems;
       (12) Missile technology control regime (``mtcr'').--The 
     term ``Missile Technology Control Regime'' or ``MTCR'' means 
     the policy statement and Guidelines 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-related transfers based 
     on the MTCR Annex, and any amendments to the Annex or 
     Guidelines;
       (A) MTCR adherent.--The term ``MTCR adherent'' means a 
     country that is a member of 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;
       (B) MTCR annex.--The term ``MTCR Annex'' means the 
     Equipment and Technology Annex of the MTCR and any amendments 
     thereto;
       (13) Multilateral control.--The term ``multilateral 
     control'' means a licensing requirement exercised by the 
     United States and at least one other nation;
       (14) Nuclear suppliers' group (``nsg'').--The term 
     ``Nuclear Suppliers' Group'' or ``NSG'' means the 
     multilateral arrangement in which the United States 
     participates whose purpose is to restrict the transfers of 
     items with relevance to the nuclear fuel cycle and/or nuclear 
     explosive applications;
       (15) Person.--The term ``person'' includes--
       (A) the single and plural of any individual, corporation, 
     partnership, business association, society, trust, 
     organization, or other group created or organized under the 
     laws of a country; or
       (B) any government, governmental body, corporation, trust, 
     agency, department, division, or group operating as a 
     business enterprise;
       (16) Protocol on biological warfare.--The term ``Protocol 
     on Biological Warfare'' refers to the Protocol for the 
     Prohibition of the Use in War of Asphyxiating, Poisonous or 
     Other Gases, and of Bacteriological Methods of Warfare of 
     1925;
       (17) Regime, multilateral export control regime, 
     multilateral regime.--The terms ``regime'' and ``multilateral 
     export control regime'' and ``multilateral regime'' each 
     means an arrangement of two or more countries to which the 
     United States is a party or which the United States would 
     seek to create or join and brought together for the purpose 
     of curtailing access to controlled items by target countries 
     by means of cooperative export controls;
       (18) Reexport.--The term ``reexport'' means the shipment, 
     transfer, transhipment, or diversion of items from one 
     foreign country to another;
       (19) Secretary.--The term ``Secretary'' means the Secretary 
     of Commerce;
       (20) Target country.--The term ``target country'' means a 
     country for which it is the objective under this Act to deny 
     or attempt to deny access to controlled items or a country 
     from which the United States distances itself by means of a 
     unilateral export control adopted under this Act;
       (21) Techology.--The term ``technology'' means specific 
     information required for the ``development'', ``production'', 
     or ``use'' of a product. The information takes the form of 
     ``technical data'' or ``technical assistance''. Controlled 
     ``technology'' is defined in the General Technology Note and 
     in the Commerce Control List;
       (22) Unilateral control.--The term ``unilateral control'' 
     means a license requirement that is not multilaterally agreed 
     to by two or more countries;
       (23) United states.--The term ``United States'' means the 
     States of the United States, the District of Columbia, and 
     any commonwealth, territory, dependency, or possession of the 
     United States, and includes the Outer Continental Shelf, as 
     defined in Section 2(a) of the Outer Continental Shelf Lands 
     Act (43 U.S.C. 1331(a));
       (24) United states person.--The term ``United States 
     person'' means any United States citizen, resident, national 
     (other than an individual resident outside the United States 
     and employed by other than a United States person), or person 
     within the United States, any domestic concern (including any 
     permanent domestic establishment of any foreign concern) and 
     any foreign subsidiary or affiliate (including any permanent 
     foreign establishment) of any domestic concern which is 
     controlled in fact by such domestic concern, as determined 
     under regulations of the President; and
       (25) Weapons of mass destruction.--The term ``weapons of 
     mass destruction'' means any chemical or biological weapons 
     or nuclear explosive devices.

     SEC. 15. EFFECTS ON OTHER ACTS.

       (a) Commodity Jurisdiction.--
       (1) Coordination of controls.--The authority granted under 
     this Act and under section 38 of the Arms Export Control Act 
     (22 U.S.C. 2778) shall be exercised by each licensing 
     authority in such a manner as to achieve effective 
     coordination between the dual use and munitions licensing 
     systems and share information regarding the trustworthiness 
     of parties.
       (2) Elimination of overlapping controls.--No item may be 
     included on both the Commerce Control List and the United 
     States Munitions List after the effective date of this Act.
       (3) Commodity jurisdiction dispute resolution.--Under 
     procedures to be established by the President, disputes 
     regarding conflicting claims of jurisdiction between the 
     Commerce Control List and the United States Munitions List 
     shall be resolved in a timely fashion by the Department of 
     State, in consultation with other agencies. Consultations 
     shall be carried out through committees chaired by 
     representatives of the Department of State at the Assistant 
     Secretary or Under Secretary level. The procedures of the 
     committees shall allow the initiation of matters by either 
     the State Department or other agencies including in response 
     to requests to the Departments of State and Commerce. 
     Consultation procedures within the committees shall provide 
     for interagency meetings to permit the free exchange of views 
     regarding jurisdictional issues. Disputes that cannot be 
     resolved may be referred to the President by the Secretary of 
     State, the Secretary of Defense, or the Secretary of 
     Commerce.
       (b) In General.--Except as otherwise provided in this Act, 
     nothing contained in this Act shall be construed to modify, 
     repeal, supersede, or otherwise affect the provisions of any 
     other laws authorizing control over exports of any commodity.
       (c) Amendments to the International Emergency Economic 
     Powers Act.--
       (1) The International Emergency Economic Powers Act (50 
     U.S.C. 1707) is amended by adding after the last section the 
     following section 208:
       ``Sec. 208. Confidentiality of Information.--
       ``(1) Exemptions from disclosure.--
       ``Information obtained under this Act may be withheld only 
     to the extent permitted by statute, except that information 
     submitted, obtained or considered in connection with an 
     application for an export license or other export 
     authorization under this Act, including the export license or 
     other export authorization itself, classification requests, 
     information obtained during the course of a foreign 
     availability assessment, information or evidence obtained in 
     the course of any investigation, and information obtained or 
     furnished in connection with multilateral agreements, 
     treaties, or obligations under this Act shall not be subject 
     to disclosure under section 552 of Title 5, United States 
     Code, and shall be withheld from public disclosure unless the 
     release of such information is determined by the Secretary to 
     be in the national interest.
       ``(2) Information to Congress and GAO.--
       ``(A) In general.--Nothing in this Act shall be construed 
     as authorizing the withholding of information from the 
     Congress or from the General Accounting Office.
       ``(B) Availability to the Congress.--
       ``(i) In general.--All information obtained at any time 
     under this Act regarding the control of exports, including 
     any report or license application required under this Act, 
     shall upon request be made available to the Committee on 
     Foreign Affairs and the Subcommittee on International 
     Economic Policy and Trade of the House of Representatives and 
     the Committee on Banking, Housing and Urban Affairs and the 
     Subcommittee on International Finance and Monetary Policy of 
     the Senate. Each of the above designated committees and 
     subcommittees may provide other members of Congress 
     information obtained under this authority provided that such 
     information may not be further disclosed except upon a 
     finding made under the following subparagraph.
       ``(ii) Prohibition on further disclosure.--No such 
     committee or subcommittee, or member thereof, and no other 
     committee, subcommittee, or member of Congress shall disclose 
     any information obtained under this Act or previous Acts 
     regarding the control of exports which is submitted pursuant 
     to this subsection unless one of the above described full 
     committees determines that the withholding of that 
     information is contrary to the national interest.
       ``(C) Availability to the GAO.--
       ``(i) In general.--Notwithstanding paragraph (1), 
     information referred to in subparagraph (B) shall, consistent 
     with the protection of intelligence, counterintelligence, and 
     law enforcement sources, methods, and activities, as 
     determined by the agency that originally obtained the 
     information, and consistent with the provisions of section 
     313 of the Budget and Accounting Act of 1921, be made 
     available only by the Agency, upon request, to the 
     Comptroller General of the United States or to any officer or 
     employee of the General Accounting Office authorized by the 
     Controller General to have access to such information.
       ``(ii) Prohibition on further disclosures.--No officer or 
     employee of the General Accounting Office shall disclose, 
     except to the Congress in accordance with this paragraph, any 
     such information which is submitted on a confidential basis 
     and from which any individual can be identified.
       ``(3) Penalties for disclosure of confidential 
     information.--Any officer or employee of the United States, 
     or any department or agency thereof, who publishes, divulges, 
     discloses, or makes know in any manner or to any extent not 
     authorized by law any information coming to him in the course 
     of his or her employment or official duties or by reason of 
     any examination or investigation made by, report or record 
     made to or filed with, such department or agency, or officer 
     or employee thereof, which information is exempt from 
     disclosure under this subsection, shall be fined not more 
     than $1,000, or imprisoned not more than one year, or both, 
     and may be removed from office or employment and shall be 
     subject to a civil penalty of not more than $1000.''.
       (2) Section 205 of the International Emergency Economic 
     Powers Act (50 U.S.C. 1705) is amended by inserting ``or 
     attempts to violate,'' after ``violates'' in subsection (a); 
     and by inserting ``or willfully attempts to violate,'' after 
     ``violates'' in subsection (b).
       (d) Civil Aircraft Equipment.--Except as necessary to 
     comply with international obligations under the International 
     Emergency Economic Powers Act (Pub. L. 95-223) (50 U.S.C. 
     1701 et seq.) or the United Nations Participation Act of 
     1945, as amended (Pub. L. 79-264 (22 U.S.C. 287 et. seq.), 
     notwithstanding any other provision of law, any product (1) 
     which is standard equipment, certified by the Federal 
     Aviation Administration, in civil aircraft and is an integral 
     part of such aircraft, and (2) which is to be exported to a 
     country other than a controlled country, shall be subject to 
     export controls exclusively under this Act. Any such product 
     shall not be subject to controls under section 38(b)(2) of 
     the Arms Export Control Act (22 U.S.C. 2778(b)(2)).
       (e) Nuclear Nonproliferation Controls.--
       (1) Nothing in section 5 of this Act shall be construed to 
     supersede the procedures published by the President pursuant 
     to section 309(c) of the Nuclear Non-Proliferation Act of 
     1978 (42 U.S.C. 2139a(c)).
       (2) The procedures published by the President pursuant to 
     section 309(c) of the Nuclear Non-Proliferation Act of 1978 
     (42 U.S.C. 2139a(c)) shall be superseded to the extent they 
     are inconsistent with the provisions of section 8 of this 
     Act.
       (f) Confroming Amendment to the Arms Export Control Act.--
       (1) Section 73 of the Arms Export Control Act (Pub. L. 90-
     626), as amended by section 1703 of the National Defense 
     Authorization Act of 1991 (Pub. L. 101-510) (22 U.S.C. 
     2797B), is hereby repealed.
       (2) Section 81 of the Arms Export Control Act (Pub L. 90-
     626), as amended by section 305 of the Miscellaneous Foreign 
     Affairs Act of 1991 (Pub. L. 102-182) (22 U.S.C. 2798, is 
     hereby repealed.
       (3) Sections 306, 307, 308, and 309(b) of the Chemical and 
     Biological Weapons Control and Warfare Elimination Act of 
     1991 (Pub L. 102-182) (22 U.S.C. 5604, 5605, and 5606) are 
     hereby repealed.
       (4) Section 74 of the Arms Export Control Act (Pub. L. 90-
     626), as amended by section 1703 of the National Defense 
     Authorization Act for Fiscal Year 1991 (Pub. L. 101-510) (22 
     U.S.C. 2797c) is amended by redesignating ``Section 74'' as 
     ``Section 73''. It is further amended to read as follows:

     ``SEC. 73. DEFINITIONS.

       ``For purposes of this chapter-- ``
       ``(1) Australia group (`ag').--The term `Australia Group' 
     or `AG' means the multilateral arrangement in which the 
     United States participates that seeks to prevent the 
     proliferation of chemical and biological weapons;
       ``(2) Biological weapons convention.--The term ``Biological 
     Weapons Convention'' refers to the Convention on the 
     Prohibition of the Development, Production and Stockpiling of 
     Bacteriological (Biological) and Toxin Weapons and on Their 
     Destruction of 1972'';
       ``(3) Chemical weapons convention.--The term ``Chemical 
     Weapons Convention'' refers to the Convention on the 
     Prohibition of the Development, Production, Stockpiling and 
     Use of Chemical Weapons and on Their Destruction of 1992;
       ``(4) Facilitating the activity.--The term ``facilitating 
     the activity includes but is not limited to, acting as a 
     freight forwarder, shipper, designated export or import 
     agent, consignee, purchasing agent, marketing agent, 
     manufacturer, assembler, designer, financier, or end use with 
     respect to the services or items to be exported, transferred, 
     or provided;
       ``(5) Financial transactions.--The term ``financial 
     transactions'' means any transactions involving the exchange, 
     transfer, crediting, debiting, deposit, withdrawal, or 
     payment of currency, securities, debt, credit, checks, other 
     monetary instruments, precious metals or minerals, or other 
     items of value whether physically or by electronic means. The 
     term is intended to be interpreted broadly to include such 
     transactions as the opening or drawing down of letters of 
     credit, the extension of a loan, the receipt of payment, or 
     the use of credit cards;
       ``(6) Item.--The term ``item'' means any commodity, 
     technology, or software;
       ``(7) Missile.--The term ``missile'' means any missile 
     system or component listed in category I of the MTCR Annex, 
     and any other unmanned delivery system or component of 
     similar capability, as well as the specially designed 
     production facilities for these systems;
       ``(8) Missile technology control regime (``MTCR'').--The 
     term ``Missile Technology Control Regime'' or ``MTCR'' means 
     the policy statement and Guidelines 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-related transfers based 
     on the MTCR Annex, and any amendments to the Annex or Regime;
       ``(A) MTCR adherent.--The term ``MTCR adherent'' means a 
     country that is a member of 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;
       ``(B) MTCR annex.--The term ``MTCR Annex'' means the 
     Equipment and Technology Annex of the MTCR and any amendments 
     thereto;
       ``(9) Nuclear suppliers' group (``NSG'').--The term 
     ``Nuclear Suppliers' Group'' or ``NSG'' means the 
     multilateral arrangement in which the United States 
     participates whose purpose is to restrict transfers of items 
     with sensitive nuclear applications;
       ``(10) Person.--The term ``person'' includes--
       ``(A) the single and plural of any individual, corporation, 
     partnership, business association, society, trust, 
     organization, or other group created or organized under the 
     laws of a country; or
       ``(B) any government, governmental body, corporation, 
     trust, agency, department, division, or group operating as a 
     business enterprise;
       ``(11) Protocol on biological warfare.--The term ``Protocol 
     on Biological Warfare'' refers to the Protocol for the 
     Prohibition of the Use in War of Asphyxiating, Poisonous or 
     Other Gases, and of Bacteriological Methods of Warfare of 
     1925; and
       ``(12) Weapons of mass destruction.--The term ``weapons of 
     mass destruction'' means any chemical or biological weapons 
     or nuclear explosive devices''.
       (5) Section 323 of the Foreign Relations Authorization Act 
     for Fiscal Year 1992-93 (Pub. L. 102-138) is hereby repealed.
       (g) Effect on Section 38(e) of the Arms Export Control 
     Act.--This Act modifies provisions of the Export 
     Administration Act of 1979, as amended, which are 
     incorporated by reference in section 38(e) of the Arms Export 
     Control Act (22 U.S.C. 2778(e)). The changes made to such 
     provisions shall have no effect on the administration and 
     enforcement of section 38(e) of the Arms Export Control Act. 
     The relevant provisions of the Export Administration Act of 
     1979, as amended, shall continue to have full force and 
     effect for purposes of that Act.
      [Add conforming amendments for the approximately 60 
     statutory references to the EAA in other Federal statutes.]

     SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

       Authorization.--There are authorized to be appropriated to 
     the Department of Commerce to carry out the purposes of this 
     Act--
       (a) $43,372,000 for fiscal year 1995, and such amounts as 
     may be necessary for fiscal year 1996; and
       (b) such additional amounts for each of the fiscal years 
     1995 and 1996 as may be necessary for increases in salary, 
     pay, retirement, other employee benefits authorized by law, 
     and other non-discretionary costs.

     SEC. 17. EFFECTIVE DATE.

       Effective date.--This Act shall take effect upon the 
     expiration of the Export Administration Act of 1979.

     SEC. 18. SAVINGS PROVISION.

       (A) In General.--All delegations, rules, regulations, 
     orders, determinations, licenses, sanctions, or other forms 
     of administrative action which have been made, issued, 
     conducted, or allowed to become effective under the Export 
     Control Act of 1949, the Export Administration Act of 1969, 
     the Export Administration Act of 1979, or the Arms Export 
     Control Act and which are in effect at the time this Act or 
     the Arms Export Control Act takes effect, shall continue in 
     effect according to their terms until modified, superseded, 
     set aside, or revoked under this Act or the Arms Export 
     Control Act.
       (b) Repeal.--Title XVII of the National Defense 
     Authorization Act for Fiscal Year 1991 (Public Law 101-510) 
     and sections 301-308 and 309(b) of the Chemical and 
     Biological Weapons Control and Warfare Elimination Act of 
     1991 (Public Law 102-182) and amendments to these acts are 
     hereby repealed.
       (c) Administrative Proceedings.--This Act shall not apply 
     to any administrative proceedings commenced or any 
     application for a license made, under the Export 
     Administration Act of 1979, which is pending at the time this 
     Act takes effect.
                                  ____


   The Export Administration Act of 1994--Section-by-Section Analysis


                            Section 1. title

       Export Administration Act of 1994 (``the Act'').


                          Section 2. findings

       The findings acknowledge the value of exports and the need 
     to control exports for significant national security, 
     nonproliferation, and foreign policy reasons. The findings 
     conclude that to be truly effective, export controls should 
     be applied uniformly by all suppliers, yet we recognize that 
     at times the United States may have to act unilaterally.


                      Section 3. Policy statement

       Export trade should not be restricted except to the extent 
     necessary to further significant national security, 
     nonproliferation, foreign policy, or short supply objectives. 
     There is a strong preference for multilateral control regimes 
     that include all sources of supply. Unilateral controls 
     should be avoided except when dictated by overriding national 
     interests. There is a presumption of approval of export 
     license applications and opposition to boycotts imposed upon 
     friendly countries by third countries. Economic interests 
     should play a key role in export control decisions.


                     Section 4. General provisions

       The Secretary of Commerce (``Secretary'') may require an 
     export license under any terms and conditions and shall 
     establish a control list. No authority or permission to 
     export may be required except to carry out the policies of 
     the Act. Technical advisory committees are established and 
     license fees are prohibited.


  Section 5. Nonproliferation, national security, and foreign policy 
                          control authorities

       (a) Authority.--The President has authority to impose 
     controls on exports and to regulate domestic and foreign 
     conduct consistent with the policies of the Act. This 
     authority is to be exercised by the Secretary, except as 
     otherwise specified in this Act, in consultation with 
     appropriate departments and agencies. There must be an annual 
     review of all export controls based upon reports by: the 
     Secretary, the Secretary of State, and the Secretary of 
     Defense on the consequences of the controls. It shall also be 
     based on public comments solicited by the Secretary. 
     Following this annual review, the Secretary, in consultation 
     with appropriate departments and agencies, shall determine 
     whether unilateral controls should be terminated or extended 
     for another year. Such controls shall expire unless extended.
       (b) Criteria.--Export controls may be imposed or extended 
     only if the President determines that: (a) they are essential 
     to advancing the nonproliferation, national security, or 
     foreign policies of the United States; and (b) they are 
     multilateral or, if unilateral, the control objectives cannot 
     be attained by any other means.
       For unilateral control, this determination shall be made 
     only if: (a) the controls are likely to achieve their 
     intended purpose of changing, modifying, or constraining the 
     undesirable conduct of the target countries, denying access 
     by the target country to controlled goods from all sources, 
     establishing multilateral cooperation to deny the target 
     country access to controlled items from all sources, and 
     denying exports or assistance that significantly and directly 
     contribute to the proliferation of weapons of mass 
     destruction, terrorism, human rights abuses, or regional 
     instability; (b) the controls are compatible with U.S. 
     foreign policy; (c) the reaction of other countries is not 
     likely to render the controls ineffective; (d) the economic 
     cost to the United States of the controls will not exceed 
     their benefits; and (e) the controls are enforceable. To 
     extend controls, the President must make similar 
     determinations about how the controls have worked in 
     practice.
       (c) Consultation with Industry.--The Secretary shall, 
     whenever possible, consult with industry before controls are 
     imposed, expanded, or extended.
       (d) Consultation with Other Countries.--The Secretary of 
     State shall consult with cooperating countries regarding the 
     imposition, expansion, or extension of controls.
       (e) Consultation with the Congress.--The Secretary must 
     apprise Congress on changes in export control policy and must 
     submit a detailed report to Congress before imposing, 
     expanding, or extending a unilateral control.
       (f) Multilateral Control Regimes.--The Secretary of State, 
     in consultation with appropriate departments and agencies, 
     should seek to ensure that the export control systems of 
     multilateral regime members meet certain standards. The 
     Secretary of State shall also seek to ensure that all 
     multilateral regimes have certain features including a common 
     list of controlled items and uniform interpretations of 
     agreed controls. Consistent with the rules and objectives of 
     a multilateral regime, the Secretary, in consultation with 
     appropriate departments and agencies, may provide for exports 
     free of validated license requirements to and among members 
     of the regime or otherwise adjust licensing policies.
       (g) Publication of Elements of Multilateral Control 
     Regimes.--Consistent with multilateral regime obligations, 
     the United States shall publish for such regimes their: 
     control purposes; member countries; licensing policies; 
     control lists; target destinations, if any; rules of 
     interpretation; major policy actions; and rules and 
     procedures.
       (h) Seeking Multilateral Support for Unilateral Controls.--
     The Secretary of State, in consultation with appropriate 
     departments and agencies, shall have a duty to seek 
     multilateral support for unilateral controls.
       (i) Regulation Indicating Nature of Unilateral Controls.--
     All unilateral controls shall be so designated by regulation.
       (j) Implementation.--
       (1) Nonproliferation.--The Secretary of State shall be 
     responsible for conducting negotiations with regime members 
     and with other countries on export control cooperation.
       (2) Missile Technology.--The Secretary, in consultation 
     with appropriate departments and agencies, shall include on 
     the Control List dual-use items on the Missile Technology 
     Control Regime (``MTCR'') Annex and may include items that 
     the United States proposes for inclusion on the MTCR Annex. 
     Consistent with the MTCR, the Secretary shall require a 
     validated license for exports of items on the Control List 
     pursuant to this subsection, and for any item when the 
     exporter knows it is for the design, development or 
     manufacture of missiles in countries that are not MTCR 
     adherents.
       (3) Chemical and Biological Weapons.--The Secretary, in 
     consultation with appropriate departments and agencies, shall 
     include on the Control List dual-use items listed by the 
     Australia Group or the Chemical Weapons Convention, and may 
     include items the United States proposes for inclusion on the 
     Australia Group control list. Consistent with the Australia 
     Group and the Chemical Weapons Convention, the Secretary 
     shall require a validated license for any items on the 
     Control List pursuant to this subsection, and for any item 
     when the exporter knows it is for the design, development or 
     manufacture of a chemical or biological weapon.
       (4) International Terrorism.--Thirty (30) days prior notice 
     must be provided to Congress before a validated license is 
     issued for the export to a terrorist-supporting state of any 
     item which the Secretary of State has determined could make a 
     significant contribution to the military potential of such a 
     country, including the military logistics capability or 
     terrorist-supporting ability of that state.
       (5) Human Rights and Crime Control.--A validated license 
     shall be required for the export of crime control and 
     detection equipment except to designated nations.
       (k) Unfair Impact on U.S. Exporter.--
       (1) Policy.--No U.S. exporter should be placed at a 
     competitive disadvantage because of export control policies 
     unless relief from such controls would create a significant 
     risk to the foreign policy, nonproliferation, or national 
     security interests of the U.S.
       (2) Relief from Export Controls.--An exporter may petition, 
     or the Secretary may conduct an evaluation on his or her own 
     initiative, for relief from export controls on the grounds 
     that: (A) the controlled item is available from foreign 
     sources in ``sufficient quantity'' and ``comparable quality'' 
     to render the controls ineffective; (B) the controlled item 
     is so widely available in the United States that controls 
     cannot be enforced effectively, unless the Secretary has 
     reliable evidence that the controls have been effective in 
     denying such target destination access to the controlled 
     items originating in the United States; (C) differences 
     between the export control policies of the U.S. and foreign 
     supplier countries create a competitive disadvantage for U.S. 
     exporters.
       (3) Provisions for Relief.--Consistent with multilateral 
     arrangements, the Secretary, in consultation with appropriate 
     departments and agencies, shall determine whether the grounds 
     for relief (set forth above) exist and, if so: change the 
     control status of the items in question; selectively 
     approve exports; or seek multilateral support to eliminate 
     the foreign availability or to make the control effective. 
     This provision shall not require the decontrol of an item 
     that remains subject to control by a multilateral regime 
     to which the U.S. belongs.
       (4) Exceptions from Relief.--The Secretary need not provide 
     relief under this section if he or she concludes that such 
     relief would create a significant risk to U.S. 
     nonproliferation, foreign policy, or national security 
     interests. The Secretary shall not grant such relief if the 
     President concludes that such relief would create a 
     significant risk to U.S. nonproliferation, foreign policy, or 
     national security interests.
       (5) Relief from Traditional East West CoCom Controls.--
     After a determination of unfair impact, items may not be 
     controlled unilaterally under this section for control 
     purposes adopted by the Coordinating Committee unless the 
     President determines that lack of controls on the items would 
     be detrimental to U.S. national security.
       (6) Procedures.--The Secretary, in consultation with 
     appropriate departments and agencies, shall make a 
     determination about whether relief is required within 120 
     days. No later than 30 thereafter, the Secretary shall decide 
     whether to grant relief and notify the petitioner. The 
     determinations made by the Secretary shall be published in 
     the Federal Register. If a determination is not submitted for 
     publication within 150 days, no validated license may 
     thereafter be required for the items in question. Where 
     controls are maintained to permit multilateral negotiations, 
     the Secretary of State shall notify the Congress why the 
     negotiations are necessary and when they have begun.
       (7) Sharing of Information.--Consistent with protecting 
     intelligence sources and methods, all departments or agencies 
     and their contractors shall provide the Department of 
     Commerce available information needed for determinations 
     under this section.
       (8) Availability Defined.--Available in fact means the item 
     is available to a target country from a country where the 
     item is not restricted for export of where the export 
     controls are ineffective.
       (9) Congressional Notification and Reporting 
     Requirements.--The Secretary shall notify Congress annually 
     on the status of all petitions.
       (l) Unilateral Controls Prohibited.--Except for items for 
     which there is no foreign availability or for which the 
     President is actively seeking multilateral controls, any 
     unilateral U.S. export controls for purposes adopted by CoCom 
     shall expire the later of within six months of the Act or 
     six months after the control is imposed.
       (m) International Obligations.--This authorizes the 
     implementation of U.N. resolutions and international 
     agreements without regard to other limitations in the Act.
       (n) Information Sharing.--The Secretary and other 
     appropriate officials shall establish a procedure for 
     information sharing.
       (o) Denied Parties, sanctions parties, specially designated 
     nationals, and other parties presenting unacceptable risks of 
     diversion.--The Secretary shall publish the identities of 
     those denied export privileges or sanctioned under the Act, 
     and those who are specially designated nationals. The 
     Secretary shall maintain a list of parties for whom licenses 
     will presumptively be denied.
       (p) FOIA Exemption.--The identity of parties for whom 
     licenses will presumptively be denied shall not be subject to 
     the Freedom of Information Act (``FOIA'').


                    section 6. short supply controls

       (a) Authority.--This provision authorizes the President to 
     impose short supply controls.
       (b) Monitoring.--This provision authorizes the Secretary to 
     monitor exports for short supply reasons.
       (c) Domestically Produced Crude Oil.--Subject to certain 
     exceptions, this provision prohibits the export of specified 
     domestic crude oil. The Administration has this provision 
     under review and may propose changes in it later this year.
       (d) Agricultural commodities.--This provision prohibits 
     imposing short supply controls on agricultural commodities 
     without the Secretary of Agriculture's approval.
       (e) Barter Agreements.--This provision provides that 
     exports bartered for items imported into the United States 
     may be exempt from quantitative short supply limits.
       (f) Unprocessed Red Cedar.--This provision prohibits the 
     export of unprocessed western red cedar logs harvested from 
     State or Federal lands everywhere but Alaska.
       (g) Effect of Controls on Existing Contracts.--This 
     provision allows the export of western red cedar subject to 
     export contracts entered into before October 1, 1979. Any 
     short supply controls imposed on agricultural commodities or 
     forest or fishery products will not affect any contract 
     entered into before the date the controls are imposed.
       (h) Oil Exports for Use by United States Military 
     Facilities.--Under this provision, shipments of crude oil, 
     refined petroleum products, or partially refined petroleum 
     products from the United States for use by the Department of 
     Defense or U.S.-supported installations or facilities are not 
     considered exports.


                      section 7. foreign boycotts

       (a) Prohibitions and Exceptions.--This provision prohibits 
     United States persons, acting in interstate or U.S. foreign 
     commerce, from taking specified actions, in support of a 
     foreign boycott of a country that is friendly to the U.S. and 
     not subject to a U.S. boycott. There are certain exceptions 
     to this prohibition.
       (b) Regulations.--This provision requires U.S. persons to 
     report receipt of boycott requests to the Secretary.
       (c) Preemption.--This provision preempts non-Federal laws 
     relating to foreign boycotts.


section 8. procedures for processing export license applications; other 
                               inquiries

       (a) Primary Responsibility of the Secretary.--This 
     provision gives the Secretary the primary responsibility to 
     make export license application determinations subject to the 
     procedures provided in this section. The Secretary shall, to 
     the extent necessary, request information and recommendations 
     from other agencies. The implementing regulations shall 
     describe the required procedures, the responsibilities of 
     Commerce and other agencies in reviewing applications, the 
     rights of the applicant, and the extent of any multilateral 
     review of an application.
       (b) Initial screening.--This provision requires the 
     Secretary to refer, issue, or deny a license application 
     within nine days of receipt.
       (c) Action by other Departments and Agencies.--This 
     provision requires the Secretary, at the President's 
     direction, to refer license applications to other agencies 
     for review. Reviewing agencies must promptly request 
     additional information, if needed, and provide a 
     recommendation, either to approve or deny, within 30 days 
     of receipt of a referral. Such recommendations shall be 
     with the benefit of consultation and discussions in 
     interagency groups established to provide expertise and 
     coordinate interagency consultation. Denial 
     recommendations must include a statement of reasons 
     consistent with the Act and cite the statutory and 
     regulatory basis for the recommendation. Failure to 
     provide a timely and reasoned recommendation is deemed 
     ``no objection'' to the application.
       The Secretary shall establish an interagency committee, and 
     select its chairman, to review and decide initially all 
     applications on which the reviewing agencies disagree. 
     Agencies that disagree with the chairman's decision must 
     appeal in writing by an appropriate level official. Upon 
     receiving all comments from other agencies on an application 
     on which there is no disagreement or 49 days after receiving 
     an application on which there is interagency disagreement, 
     the Secretary shall: (A) approve the application and issue 
     the license; (B) notify the applicant of the application's 
     referral to the interagency resolution process.
       (d) Interagency Resolution.--The President is authorized to 
     establish a process for resolving disagreements among the 
     reviewing agencies on the disposition of applications subject 
     to interagency review under paragraph (c). Any such process 
     shall: (1) be chaired by Commerce; (2) resolve the 
     disagreement or refer the application to the President within 
     90 days of the application's filing; and (3) deem failure to 
     take a timely position to be no objection.
       (e) Actions by the Secretary.--Under this provision, the 
     Secretary shall issue a license or notify the applicant of 
     the intent to deny within nine days of receipt of an 
     application not requiring referral to other agencies. For 
     denials, the Secretary must inform the applicant of: (A) the 
     determination; (B) the statutory and regulatory basis; (C) 
     possible modifications to allow approval; (D) specific 
     considerations, as permitted by national security and foreign 
     policy, that led to denial; and (E) appeal procedures. 
     Applicants have 20 days to respond to an intent to deny 
     notification although the Secretary and the applicant may 
     mutually agree to suspend the time periods to obtain 
     modifications.
       (f) Multilateral Control Regimes.--This provision provides 
     for referral of applications to the appropriate multilateral 
     regime according to the terms of that regime. Applications 
     submitted for multilateral review must be referred to the 
     appropriate regime within five days of a decision to approve. 
     Subsequent approval or notice of intent to deny must be made 
     within five days of receipt of a decision by the reviewing 
     regime.
       (g) Exceptions from Required Time Periods.--This provision 
     requires all applications to be resolved or referred to the 
     President within 90 days of receipt. This time period does 
     not include delays agreed to by the applicant, the time for 
     pre-license checks (if requested within five days), the time 
     to obtain government-to-government assurances, the time for 
     required multilateral review, or the time required for 
     mandatory Congressional notifications.
       (h) Appeals.--This provision requires the Secretary to 
     establish procedures for appeals of license denials and other 
     administrative action. If action on an application is not 
     taken within the specified times, the applicant may petition 
     the Secretary for compliance with the time requirements. The 
     Secretary shall immediately take action to correct the 
     situation and notify the applicant. If the processing of the 
     application does not conform to the time requirements within 
     20 days of the petition or it has but the applicant has not 
     been notified, the applicant may seek judicial relief.
       (i) Classification Requests and Other Inquiries.--This 
     provision requires the Secretary to provide commodity 
     classifications within 14 days, and advisory opinions within 
     30 days, of receipt of such requests.


                         section 9. violations

       (a) Criminal Penalties.--This provision establishes a 
     maximum penalty for individuals of the greater of five times 
     the value of the exports involved or $500,000 per violation 
     and/or imprisonment for up to 10 years. The maximum penalty 
     for persons other than individuals is the greater of 10 times 
     the value of the export involved or $1,000,000 per violation. 
     These penalties do not apply to antiboycott violations.
       The maximum criminal penalty for antiboycott violations by 
     individuals is the greater of five times the value of the 
     exports or $250,000 per violation and/or imprisonment for up 
     to 10 years. The maximum criminal penalty for antiboycott 
     violations by entities is the greater of five times the value 
     of the exports or $500,000 per violation.
       (b) Forfeiture of Property Interest and Proceeds.--Persons 
     convicted of violations other than antiboycott violations 
     also forfeit to the U.S. any interest in: (A) the items that 
     were the subject of the violation; (B) property used in the 
     export that was the subject of the violations; and (C) 
     property derived from proceeds obtained from the 
     violation. Forfeiture proceedings shall be governed by 18 
     U.S.C. Chapter 46.
       (c) Civil Penalties; Administrative Sanctions.--Under this 
     provision, the maximum civil penalty for export control 
     violations is $250,000 per violation and $50,000 per 
     violation for antiboycott violations. In addition, the 
     Secretary may deny the export privileges of any person for 
     any violation of the Act or any regulation, license or order 
     issued under the Act.
       (d) Procedures Relating to Civil Penalties and Sanctions.--
     Under this provision, administrative sanctions can be imposed 
     only after notice and an opportunity for a hearing on the 
     record in accordance with the Administrative Procedure Act 
     (``APA''). Any administrative sanction shall be subject to 
     judicial review in accordance with the APA.
       (e) Payment of Civil Penalties.--When a civil penalty 
     imposed under the Act is due but unpaid, its payment may be 
     made a condition of use or receipt of an export license. In 
     addition, payments of civil penalties under the Act may be 
     deferred or suspended for a probation period.
       (f) Refunds.--Civil penalties shall be paid into the 
     Treasury as miscellaneous receipts. Civil penalties may be 
     refunded, within two years of payment, based on a material 
     error of fact or law in the imposition of the penalty. No 
     actions for refunds of penalties, however, may be maintained 
     in any court.
       (g) Collection.--This provision authorizes the Secretary to 
     ask the Attorney General to bring civil actions in district 
     courts to collect unpaid civil penalties. Any such collection 
     must be initiated within five years of the date the order 
     imposing the civil penalty becomes final. In such an action, 
     the validity, amount, and appropriateness of the penalty are 
     exempt from judicial review.
       (h) Prior Convictions.--This provision authorizes the 
     Secretary to deny export privileges to persons convicted of 
     violating specified statutes.
       (i) Statute of Limitations.--This provision provides that, 
     generally, the statute of limitations for the initiation of 
     administrative enforcement proceedings is five years from the 
     date of the unlawful activity. The statute of limitations is 
     tolled against all persons named in a criminal indictment 
     alleging violations of the Act.
       (j) Imposition of Temporary Denial Order.--This provision 
     authorizes the Secretary to issue a temporary denial order 
     when there is reasonable cause to believe that a person is 
     engaging in or is about to engage in activities that 
     constitute or may constitute a violation of the Act or 
     other statutes enumerated in subsection 9(h). The subject 
     of a temporary denial order may appeal to an 
     administrative law judge. The Secretary shall review any 
     appeal of the administrative law judge's decision. Any 
     affirmation by the Secretary of the administrative law 
     judge's decision may be appealed by the U.S. Court of 
     Appeals for the District of Columbia.
       (k) Violations Defined by Regulation.--This provision 
     authorizes the Secretary to define violations of the Act by 
     regulation.
       (l) Other Authorities.--Under this provision, subsections 
     (c), (e), (f), (g), (h), or (i) do not limit the availability 
     of: (1) other administrative or judicial remedies for 
     violations under the Act; (2) the authority to settle 
     administrative proceedings for violations under the Act; or 
     (3) the authority to adjust seizures and forfeitures under 
     section 1(b) of title VI of the Act of June 15, 1917 (22 
     U.S.C. Sec. 401(b)).


                        section 10. enforcement

       (a) General Authority and Designation.--This provision 
     makes the Secretary, in consultation with the Secretary of 
     Treasury and other agency heads as appropriate, responsible 
     for providing guidance on enforcement issues under the Act. 
     To enforce the Act, the Commissioner of Customs may: (1) make 
     investigations in and outside the U.S., including specified 
     U.S. ports of entry and exit; and (2) search, detail, and 
     seize goods at certain U.S. ports of entry and exit and 
     certain places outside the United States. The Secretary: (1) 
     may make investigations in the U.S.; (2) shall conduct pre-
     license and post-shipment verifications and antiboycott 
     investigations outside the U.S.; (3) search, detain, and 
     seize goods at U.S. places other than the specified U.S. 
     ports of entry and exit; and (4) search, detain, and seize 
     goods at specified U.S. ports of entry and exit with the 
     concurrence of Customs.
       This subsection also allows the Secretary and the 
     Commissioner of Customs to enter into agreements and 
     arrangements for the enforcement of the Act. In addition, 
     Commerce and Customs can take specified action to carry out 
     the enforcement authority under the Act.
       Forfeiture.--This provision requires goods seized under 
     subsection 9(a) to be forfeited to the United States.
       (c) Undercover investigative operations.--This provision 
     exempts certain export enforcement funds from specified 
     provisions of law. Proceeds from the liquidation of entities 
     established as part of an undercover operation and the 
     remaining balance of funds for closed undercover operations 
     shall be deposited into the Treasury as miscellaneous 
     receipts. Commerce shall audit closed undercover 
     investigative operations. The Secretary shall provide annual 
     reports to Congress on such operations.
       (d) Reference to Enforcement.--This provision provides that 
     a reference to enforcement or violation of the Act includes 
     references to the enforcement or violation of any regulation, 
     license, or order issued under the Act.


                  section 11. authority and procedures

       (a) Under Secretary of Commerce.--Under this provision, the 
     President shall appoint, with the advice and consent of the 
     Senate, an Under Secretary and two Assistant Secretaries.
       (b) Regulations.--This provision authorizes the Secretary 
     to issue implementing regulations. The Secretary shall 
     consult with the technical advisory committees. Regulations 
     issued to implement section 5 must be reviewed by the 
     appropriate agencies. This required review does not, however, 
     confer the right of concurrence or approval.
       (c) Confidentiality of Information.--This provision 
     provides that information obtained under the Export 
     Administration Act of 1979, as amended and its predecessor 
     statutes prior to 1980 shall not be subject to disclosure 
     under the FOIA nor is it to be disclosed unless the Secretary 
     determines that withholding it is contrary to the national 
     interest. Information obtained under the Act, the Export 
     Administration Act of 1979 after 1980, or the Export 
     Administration Regulations, as maintained and amended by the 
     International Emergency Economic Powers Act (``IEEPA''), may 
     be withheld only as permitted by statute, except that 
     information connected to an export license application under 
     the Act, the Export Administration Act of 1979 after 1980, or 
     the Export Administration Regulations, as maintained and 
     amended by the International Emergency Economic Powers Act, 
     including classification requests, information from foreign 
     availability assessments, investigations, and information 
     related to multilateral agreements, treaties, or obligations 
     is not subject to disclosure under FOIA and may not be 
     released unless the Secretary determines that its withholding 
     is contrary to the national interest.
       Commerce may not withhold information from the 
     Congressional oversight committees or the General Accounting 
     Office (``GAO''). Those specified committees and 
     subcommittees may provide other members of Congress with 
     information obtained under the Act. Such information may not 
     be further disclosed unless one of the oversight committees 
     determines that witholding the information is contrary to the 
     national interest.
       Information requested by GAO shall only be provided by the 
     originating agency consistent with the protection of 
     intelligence, counterintelligence, and law enforcement 
     sources, methods, and activities. Information may be 
     disclosed to Customs to facilitate licensing and enforcement 
     efforts. Unauthorized disclosure of information covered by 
     subsection 11(c) by U.S. employees is subject to a criminal 
     fine of up to $1,000, imprisonment, removal from office, and 
     an administrative penalty of up to $1,000.
       (d) Public Participation.--This provision notes the intent 
     of Congress to allow for public comment on regulations 
     implementing the Act.
       (e) Control List Development and Review.--This provision 
     requires the Secretary, in consultation with appropriate 
     departments and agencies, to establish and maintain a control 
     list which specifies controlled items, destinations, and 
     validated license requirements. The Secretary of State, in 
     consultation with appropriate departments and agencies, shall 
     be responsible for conducting negotiations and developing 
     negotiating positions with other countries regarding 
     multilateral regime control lists. It also requires periodic 
     review of items controlled by multilateral regimes and 
     consultation with the appropriate technical advisory 
     committees regarding changes in the control list.
       (f) Authority for Seminar and Publications Fund.--This 
     provision authorizes the Secretary to cooperate with other 
     entities in connection with seminars, publications, and 
     related activities to carry out functions such as educating 
     the public on the Act. The Secretary is also authorized to 
     accept contributions to recover the costs of such activities.
       (g) Support of Other Countries' Export Control Program.--
     This provision authorizes the Secretary to participate in the 
     education and training of officials of other countries on 
     export controls.
       (h) Applicability of Administrative Procedure Act.--This 
     provision exempts implementation of the Act from the APA 
     except as specified in subsection 9(d). Final agency action 
     under the Act may be appealed to the U.S. Court of Appeals 
     for the District of Columbia, except as provided by 
     subsections 9(d), 9(g), and 9(j). The scope of the court's 
     review is limited as specified in this subsection.
       (i) Incorporated Commodities, Technology, and Software.--
     This provision prohibits requiring a license for a commodity 
     solely because the commodity contains parts or components 
     subject to control if those parts or components: (A) are 
     essential to the commodity's function; (B) are customarily 
     included in sales of the commodity to non-target countries; 
     and (C) comprise 25% or less of the total value of the 
     commodity, unless the commodity itself would significantly 
     contribute to the military or proliferation potential of a 
     target country or end user to the detriment of U.S. national 
     security.
       It also prohibits imposing reexport controls on foreign-
     made items incorporating 25% or less U.S. content by value 
     except for boycotted or terrorist-supporting countries. For 
     those countries, a 10% standard applies.
       (j) Exceptions for Medical and Humanitarian Purposes.--This 
     provision prohibits imposing controls on medical equipment 
     and for specified humanitarian purposes.
       (k) Sanctity of Existing Contracts and Licenses.--This 
     provision provides for contract and license sanctity for 
     unilateral controls. It allows the President, however, to 
     prohibit exports or reexports otherwise allowed under 
     contract or license sanctity by certifying to Congress that: 
     (i) a breach of the peace poses a threat to U.S. strategic 
     interests; (ii) the prohibition will directly help remedy the 
     threat; and (iii) the emergency controls will continue only 
     while the threat persists.
       (l) Fact Finding Authority.--This provision provides 
     authority to compel testimony and document production in 
     connection with the administration of the Act.
       (m) Militarily Critical Technologies List Development, 
     Review and Use.--This provision specifies the development and 
     use of the Militarily Critical Technologies List to be 
     established and maintained by the Secretary of Defense in 
     accordance with subsection 4(c) of the Act.


   section 12a. sanctions for proliferation activity and the use of 
             chemical and biological weapons and missiles.

       This section combines and harmonizes the existing missile 
     and chemical and biological warfare sanction provisions. It 
     also provides for sanctions against a country that uses such 
     weapons.
       (a) Determinations.--This provision requires the President 
     to determine whether any foreign person knowingly and 
     materially contributed to efforts to use, design, develop, 
     produce, stockpile, or otherwise acquire chemical or 
     biological weapons or missiles through exports of Missile 
     Technology Control Regime (MTCR) Annex items or items which 
     may contribute to a chemical or biological weapons program 
     such as those listed by the Australia Group (AG). It also 
     requires the President to determine whether a foreign 
     government has used chemical or biological weapons in 
     violation of international law or against its own nationals. 
     These determinations apply to activities taken on or after 
     the enactment of this section.
       (b) Entities Against Which Sanctions Are to be Imposed.--
     Following an affirmative determination, this provision 
     requires sanctions against the foreign person who engaged in, 
     facilitated, or solicited the conduct determined to fall 
     within subsection 12(a). The President has the discretion to 
     sanction other parties based upon control relationships.
       (c) Sanctions.--For nonproliferation violations, this 
     provision provides a two-year ban on the export and import of 
     items listed by the relevant regime and a ban on government 
     procurement. Use of chemical or biological weapons draws a 
     mandatory two-year denial of foreign assistance, arms sales, 
     arms financing, government credit, and export of items 
     controlled for national security reasons. If a country fails 
     to stop the use of such weapons, additional mandatory 
     sanctions include denial of multilateral bank support and 
     commercial bank loans, restrictions on virtually all exports 
     and imports, suspension of landing rights, and changes in 
     diplomatic relations.
       (d) Deferral and Limitation.--This provision allows the 
     President to delay the imposition of sanctions to protect 
     ongoing criminal investigations or intelligence sources and 
     methods. It also authorizes delay for up to 180 days for 
     negotiations with the country in question and allows 
     multilateral sanctions instead of unilateral ones.
       (e) Exceptions.--This provision provides certain exceptions 
     to sanctions, including certain defense articles and medical 
     or other humanitarian items.
       (f) Termination of Sanctions for Using Chemical or 
     Biological Weapons.--This provision authorizes removal of 
     sanctions provided the sanctioned government takes several 
     steps, including allowing on-site inspections and 
     restitution.
       (g) Waiver.--This provision authorizes the President to 
     waive sanctions if he or she certifies to Congress that a 
     waiver is important to the national interests of the 
     United States.
       (h) Regulatory Implementation of Sanctions.--This provision 
     provides for implementing regulations specifying the scope of 
     products and entities subject to the sanctions. The Secretary 
     will issue regulations for items covered by the Act and the 
     Secretary of State will issue regulations for items subject 
     to the Arms Export Control Act.


   section 12b. sanctions for proliferation activity and the use of 
                    chemical and biological weapons

       This section amends Section 72 of the Arms Export Control 
     Act (Sanctions Against Certain Foreign Persons and Countries) 
     to conform to section 12 of the Act.


                       section 13. annual report

       The section combines the current annual report and the 
     annual foreign policy report (to be a report on unilateral 
     controls). In addition, it puts reporting requirements into 
     the annual report to the maximum extent possible.


                        section 14. definitions

       This section provides definitions.


                   section 15. effects on other acts

       (a) Commodity Jurisdiction.--This provision prohibits 
     overlapping control. Resolution of disputes regarding 
     conflicting claims of jurisdiction between the Commerce 
     Control List and the U.S. Munitions List shall be resolved by 
     the Department of State in a timely fashion and in 
     consultation with other agencies.
       (b) In General.--This provision states that except as 
     otherwise provided in the Act, nothing in it will affect 
     other laws authorizing control over exports.
       (c) Amendments to the International Emergency Economic 
     Powers Act.--This provision provides for confidentiality 
     consistent with subsection 11(c) of the Act. It also 
     authorizes penalties for attempted violations, as well as 
     violations, of IEEPA.
       (d) Civil Aircraft Equipment.--With certain exceptions, 
     this provision makes specified aircraft equipment exclusively 
     subject to the Act.
       (e) Nuclear Nonproliferation Controls.--This provision 
     provides that nothing in section 5 of the Act supersedes 
     procedures imposed under the Nuclear Non-Proliferation Act of 
     1978. It also provides that the procedures published pursuant 
     to the Nuclear Non-Proliferation Act shall be superseded if 
     they are inconsistent with the provisions of section 8 of the 
     Act.
       (f) Conforming Amendment to the Arms Export Control Act.--
     This provision repeals the Arms Export Control Act (``AECA'') 
     sections regarding sanctions.
       (g) Effect on Section 38(e) of the Arms Export Control 
     Act.--This provision modifies provisions of the Export 
     Administration Act of 1979 which are incorporated by 
     reference in section 38(e) of the AECA. The changes made to 
     such provisions shall have no effect on the administration 
     and enforcement of section 38(e). This provision will also 
     contain conforming amendments for the approximately 60 
     statutory references to the Export Administration Act of 1979 
     in other Federal statutes.


              section 16. authorization of appropriations

       This section authorizes appropriations for fiscal years 
     1995 and 1996 to carry out the Act. This authorization 
     includes additional amounts, if necessary, for non-
     discretionary costs.


                       section 17. effective date

       This section makes the Act effective upon expiration of the 
     Export Administration Act of 1979.


                     section 18. savings provision

       (a) In General.--This provision continues in effect all 
     currently effective administrative actions taken under the 
     Export Control Act of 1949, the Export Administration Act of 
     1969, the Export Administration Act of 1979, or the AECA 
     except as affected by the Act or the AECA.
       (b) Repeal.--This provision repeals title XVII of the 
     National Defense Authorization Act for Fiscal Year 1991 (Pub. 
     L. No. 101-510) and the Chemical and Biological Weapons 
     Control and Warfare Elimination Act of 1991 (Pub. L. No. 102-
     182) and amendments to those statutes.
       (c) Administrative Proceedings.--Under this provision, the 
     Act does not apply to administrative proceedings commenced or 
     license applications made, under the Export Administration 
     Act of 1979, pending when the Act takes effect.
                                  ____



                                        Secretary of Commerce,

                                    Washington, DC, March 2, 1994.
     Hon. Donald W. Riegle, Jr.,
     Chairman, Committee on Banking, Housing, and Urban Affairs, 
         U.S. Senate, Washington, DC.
       Dear Don: The existing Export Administration Act (EAA) is a 
     relic of the Cold War. The EAA which is needed for today and 
     for the foreseeable future must address a complex and 
     evolving mix of proliferation, security and foreign policy 
     concerns. The legislation must take meaningful account of the 
     legitimate need of American business to be free from 
     unnecessary export controls, while assuring that legitimate 
     nonproliferation and other concerns are met.
       President Clinton has stated on many occasions that 
     effective export controls are essential to preserving United 
     States nonproliferation, national security and foreign policy 
     interests, but that the current system is in dire need of 
     reform. The bill I am sending to the Congress substantially 
     rewrites the EAA. This bill strikes a proper balance between 
     export promotion and effective implementation of export 
     controls, it helps fulfill President Clinton's commitment to 
     improve the export control system, and it reflects the 
     realities of a changing world.
       Of perhaps greatest significance, the new export control 
     system that we are proposing no longer asks the business 
     community to shoulder a disproportionate burden in responding 
     to world conflicts. This bill recognizes that the most 
     effective control regimes are multilateral, and that 
     unilateral controls are appropriate only in very limited 
     circumstances. This bill, therefore, emphasizes reliance on 
     multilateral regimes in controlling exports rather than 
     unilateral action by the United States
       We also recognize that export controls must not undermine 
     the competitive position of American business in the 
     international marketplace, and that our licensing system must 
     be more streamlined and timely for its users. This bill 
     strips away many of the overly restrictive and bureaucratic 
     provisions in existing law and provides for a more efficient, 
     responsive and transparent export licensing system. An export 
     control system reformed in this manner allows us to fix our 
     attention on those truly sensitive items that must be the 
     focus of export controls.
       We recognize the importance of strong enforcement action 
     against export control violations. This bill increases 
     penalties substantially. It also provides important new tools 
     to ensure that we are well-equipped to investigate and 
     enforce the Act.
       The bill I send to you is a continuation of the commitment 
     to revamp and liberalize export controls as evidenced by the 
     Administration's announcement in September 1993 reducing our 
     barriers to exporting, consistent with national security and 
     foreign policy interests. It is our belief that a reformed 
     export control system will help American business become more 
     competitive.
       I have been advised by the Office of Management and Budget 
     that enactment of this legislative proposal would be in 
     accord with the President's program.
       I would appreciate it if you would introduce this proposal 
     on behalf of the Administration. I look forward to working 
     with all Members of the Congress in enacting an export 
     control law that meets the needs of our changing world.
           Sincerely,
                                                  Ronald H. Brown.

 Mr. SASSER. Mr. President, I rise this morning, as chairman of 
the Subcommittee on International Finance and Monetary Policy, along 
with the chairman of the full Banking Committee, to introduce at the 
request of the administration its proposal to reauthorize the Export 
Administration Act [EAA]. The bill is being introduced as a courtesy to 
the administration.
  I want to commend the administration for coming up with a unified 
position. Such unity within the executive branch has not been achieved 
in over a decade. This is a difficult issue, one that must be viewed 
from several critical perspectives. It involves several executive 
branch agencies. But in the end, a balance must be struck. The 
administration is to be commended for reaching an internal consensus.
  This EAA proposal is yet another example of the ability of different 
parts of this administration to work together. We saw this cooperative 
approach on the export promotion side last year with the work of Trade 
Promotion Coordinating Committee. Now we see this same approach on the 
export control side.
  Following last year's simple extension, the Export Administration Act 
expires on June 30, 1994. The subcommittee is working in its 
traditional bipartisan manner to put a new EAA on the books.
  The EAA has not been significantly changed since it was amended by 
the Omnibus Trade and Competitiveness Act of 1988. In both 1990 and 
1992, the Senate passed on a bipartisan basis bills to amend the EAA. 
Neither, however, became law.
  The administration recognizes that the EAA must be changed to reflect 
the changed world circumstance.
  The Soviet Union has collapsed and the strategic military threat 
facing the United States has been dramatically reduced. Throughout the 
post World War II era, the Soviet Union had been the primary target of 
United States export control policy.
  Another threat has not decreased, but increased. And that is the 
threat by the proliferation of weapons of mass destruction and their 
means of delivery. Several events have alerted the world to this 
growing danger. Two of the most troubling have been evidence of Iraq's 
program to build nuclear weapons and the recent controversy surrounding 
North Korea's nuclear program.
  A new act must reflect these post cold war realities.
  A new EAA must also fit today's technological context. That context 
is quite different from when this law's predecessor was originally put 
on the books back in 1949.
  The United States then had a monopoly on many critical technologies. 
Today the production of sophisticated technology is diffuse; it has 
become globalized.
  Product life cycles that once were measured in years, are now 
measured in months.
  In this changed environment, unnecessary export controls and delays 
in license processing can unfairly hamstring American companies and put 
them at a competitive disadvantage.
  The committee is working on coming up with a bipartisan bill that 
fits today's realities. The administration's proposal is an important 
step in this process. Again I commend the administration for coming up 
with a unified position.
                                 ______

      By Mr. BAUCUS (for himself, Mr. Burns, and Mr. Inouye):
  S. 1903. A bill to ratify a compact between the Assiniboine and Sioux 
Indian Tribes of the Fort Peck Reservation and the State of Montana; to 
the Committee on Indian Affairs.


   fort peck indian tribes-montana reserved water rights legislation

 Mr. BAUCUS. Mr. President, on behalf of myself and Senators 
Burns and Inouye I am introducing legislation to ratify the Fort Peck 
Indian Tribes-Montana Reserved Water Rights compact.
  Identical legislation was reported out of the then-Select Committee 
on Indian Affairs in 1992, but proceeded no further because of concerns 
raised regarding certain provisions of this compact with respect to the 
impact it could have on water flows in the Missouri River. Let me 
clearly state that it is my intent to move this legislation forward.
  Let me also clearly state that it is my intent to work closely with 
the Fort Peck Tribes, the distinguished chairman of the Indian Affairs 
Committee, the State of Montana and my distinguished colleagues from 
downstream States to address those concerns in a manner that is 
mutually satisfactory. I do not anticipate that this will be easy, but 
it is essential.
  We have delayed the implementation of the Fort Peck Indian Tribe-
Montana Compact for far too long. Although difficult issues remain, we 
cannot allow them to stand in the way of resolution. We must sit at the 
table together until we reach an accord. I am committed to that effort 
and look forward to the work that lies ahead.
      By Mr. ROCKEFELLER (for himself, Mr. Murkowski, Mr. DeConcini, 
        Mr. Graham, Mr. Akaka, Mr. Daschle, and Mr. Campbell):
  S. 1904. A bill to amend title 38, United States Code, to improve the 
organization and procedures of the Board of Veterans' Appeals; to the 
Committee on Veterans' Affairs.
      By Mr. ROCKEFELLER (for himself, Mr. DeConcini, Mr. Graham, Mr. 
        Akaka, Mr. Daschle, and Mr. Campbell):
  S. 1905. A bill to improve the processing of benefits claims by the 
Department of Veterans Affairs; to the Committee on Veterans' Affairs.
      By Mr. ROCKEFELLER (for himself, Mr. DeConcini, Mr. Graham, Mr. 
        Akaka, and Mr. Daschle):
  S. 1906. A bill to provide that service connection for disabilities 
arising from exposure to ionizing radiation or dioxin may be 
established by direct evidence; to the Committee on Veterans' Affairs.
      By Mr. ROCKEFELLER (for himself, Mr. Graham, and Mr. Daschle):
  S. 1907. A bill to require that the Department of Veterans Affairs 
adjudicate and resolve certain claims relating to medical malpractice 
in the health care services provided by the Department; to the 
Committee on Veterans' Affairs.
      By Mr. ROCKEFELLER (for himself, Mr. DeConcini, Mr. Graham, Mr. 
        Akaka, and Mr. Daschle):
  S. 1908. A bill to provide for a study of the processes and 
procedures of the Department of Veterans Affairs for the disposition of 
claims for veterans' benefits; to the Committee on Veterans' Affairs.


               va claims adjudication systems adjustments

  Mr. ROCKEFELLER. Mr. President, I am introducing today five bills, 
all of which--directly or indirectly--relate to the Department of 
Veterans Affairs [VA] system for adjudicating claims for benefits. As 
everyone familiar with VA knows, VA currently faces a tremendous, 
rapidly growing backlog of cases, both at the regional office level, 
where initial claims are made and considered, and at the Board of 
Veterans' Appeals level, where veterans take their appeals of regional 
office decisions. A number of factors have caused the present problems, 
and the system, which will only deteriorate further if the problems are 
not addressed, is in dire need of fundamental change. For those who 
look for guidance to the old adage--``Don't fix it if it ain't 
broke''--it is entirely accurate to say at this point that VA's 
adjudication system is completely broken and in clear need of repair.
  Mr. President, more than 5 years ago, after a long difficult fight 
that spanned a decade, the 100th Congress finally provided veterans 
with the fundamental, due process, right to appeal decisions by VA on 
claims for benefits to an entity outside of and independent of VA. With 
the Veterans' Judicial Review Act of 1988 [VJRA], Public Law 100-687, 
Congress created the U.S. Court of Veterans Appeals, for the express 
purpose of reviewing the decisions of the Board of Veterans' Appeals 
[BVA]. Until 1988, the Board was the ``court of last resort'' for 
veterans.
  Mr. President, judicial review of VA benefit decisions is a right 
veterans long deserved, and the VJRA is true landmark legislation. 
However, the enactment of judicial review was actually much more of a 
beginning than an ending. The decisions of the court have time and 
again clearly illustrated the necessity for judicial review by bringing 
to light the many deficiencies of the VA adjudication system--a unique 
system that had grown up and developed over the years and was not 
subject to court review. These decsions of the court also have made it 
evident that some changes will have to be made in order to achieve 
long-term improvements in the system. Judicial review was just one step 
in what is, in my view, an evolution of the VA system.
  Before judicial review, VA created and developed a claims 
adjudication system that was designed to be informal and 
nonadversarial. Many aspects of this system were intended to be 
beneficial to veterans, such as procedures related to the development 
of claims and assistance to the claimant. However, as the court has 
recognized in numerous decisions, many of the elements were not being 
delivered as promised. For example, the court has repeatedly held that 
VA has not fulfilled its duty to assist the claimant in the development 
of the claim, has often failed to give the claimant the benefit of the 
doubt, and has failed to provide claimants with an adequate explanation 
for its denials.

  ``User-friendliness'' has always been, and still is, a goal of this 
nonadversarial system. However, a user-friendly system must provide 
timely and efficient resolution of benefit claims. No matter how 
nonadversarial the process, if it takes months or years to resolve a 
claim, the individual claimant is not being treated properly.
  Mr. President, my fundamental goal as chairman of the Committee on 
Veterans' Affairs is to ensure that any veteran or other beneficiary 
who seeks any VA benefit--compensation, pension, education benefits, 
health care or whatever--receives the quality services from VA that he 
or she deserves. VA's mission is to serve this Nation's veterans and 
their families. We must see to it that the Department can and will do 
just that.
  A critical part of that mission--and one that is not being entirely 
fulfilled today--is to make sure veterans and their families receive 
fair, efficient, and timely adjudication of their benefit claims. 
Timeliness is simply vital. The benefits that veterans receive can make 
a profound difference in their lives. In the 9 years that I have served 
on the committee, I have heard repeatedly from angry veterans in my own 
State of West Virginia--and now from around the country--who are 
completely frustrated in dealing with VA. On the other side, I have 
heard from VA of its institutional frustration at having too many 
claims to adjudicate with an insufficient number of employees.
  Mr. President, some within VA argue that the court is the sole source 
of the backlog problem. I wholeheartedly reject this argument. This 
point of view reflects a complete failure to accept responsibility for 
living up to existing statutory mandates--while simultaneously arguing 
that VA was fulfilling the requirements of governing law.
  I have often heard it said that the court's decisions obligate VA to 
provide more detailed explanations for decisions than before. While 
this certainly is true, the obligation to inform claimants of the 
reason underlying a decision is not a new requirement. VA has always 
had that obligation and routinely asserted that it met this 
responsibility in the years leading up to judicial review. The court 
has merely enforced VA's responsibilities under the law. The court's 
decisions have forced VA to be accountable for its decisions.
  VA must fulfill its obligation to assist the veteran in the 
development of the claim, must provide the veteran with the benefit of 
the doubt, and can no longer simply deny a case without an adequate 
explanation. The court's decision Gilbert v. Derwinski, 1 Vet. App. 49 
(1990) provides one of the best illustrations of VA's failure to 
fulfill these mandates.
  Gilbert was one of the earliest decisions of the court that addressed 
all of these basic obligations on the part of VA. For example, this 
case was the touchstone concerning the ``duty to assist.'' The court 
stated in Gilbert, ``Once a veteran's initial burden [of submitting a 
facially valid claim] is met, the Secretary is then obligated under 
[section 5107 of title 38] to `assist such a claimant in developing the 
facts pertinent to the claim''' (1 Vet. App. at 55). Numerous 
subsequent cases have reiterated this fundamental responsibility.
  It was Gilbert that also clearly defined the benefit of the doubt 
doctrine. In that case, the court noted the unique nature of the 
standard of proof applying to veterans' benefit claims. The court 
stated: ``Unlike other claimants and litigants * * * a veteran is 
entitled to the `benefit of the doubt' when there is an `approximate 
balance of positive and negative evidence''' (1 Vet. App. at 53).
  Finally, the Court set out in Gilbert VA's obligation to provide the 
claimant with an explanation for the decision. The Court said:

       [T]he Board must identify those findings it deems crucial 
     to its decision and account for the evidence which it finds 
     to be persuasive or unpersuasive. These decisions must 
     contain clear analysis and succinct but complete 
     explanations. A bare conclusory statement, without both 
     supporting analysis and explanation, is neither helpful to 
     the veteran, nor ``clear enough to permit effective judicial 
     review'', nor in compliance with statutory requirements (1 
     Vet. App. at 57).

  Naturally, meeting these obligations has resulted in more work for VA 
as it has realized that it cannot fulfill its obligations by proceeding 
in the way that it has for decades.
  Mr. President, while the court's actions may have contributed to the 
backlog, it is only because the court has forced VA to examine the way 
it has operated for so long. That is precisely one of the reasons the 
court was created.
  Despite the backlog, judicial review has brought about some extremely 
positive changes. VA has undertaken an effort to provide more detailed 
explanations for its denials, to assist veterans in developing claims, 
and to provide veterans the benefit of the doubt.
  Mr. President, our present task is to take our collective experience 
with judicial review and determine how we might adjust VA's entire 
claims system to better achieve the full intent of judicial review.
  If we fail to act, not only will the current backlog go unresolved, 
other factors will increase the pressure on the system. Our committee 
and the House Committee on Veterans' Affairs have been actively 
considering how it might be reformed. We all know the problems VA 
faces--large numbers of remands to the BVA and from the BVA to the 
regional offices, an enormous and growing backlog of pending claims, 
insufficient adjudication personnel, and inadequate funding, to name 
just the most apparent ones. While there are certain short-term actions 
we can take to facilitate a decrease in the claims backlog, a permanent 
solution to these problems requires more than stopgap measures. There 
must be fundamental change.
  However, as I studied the situation in an effort to determine the 
best way to proceed with reform of the VA adjudication system, I 
realized that it is too early to propose dramatic changes to the status 
quo. We simply do not have enough hard data about how the system has 
operated over the past several years and how it currently operates, nor 
is there any consensus concerning what changes should be made. I have 
arrived at the conclusion that the system must be objectively evaluated 
by an outside, independent entity.
  Mr. President, recognizing that some immediate changes are 
desperately needed, and acknowledging that it is too soon to pursue any 
comprehensive reform based on insufficient information, I am 
introducing today a number of legislative measures.
  Mr. President, the first of these bills would institute some changes 
in the procedures of the BVA in an effort to begin reducing immediately 
the case backlog that exists at the Board. The second would make some 
fairly minor, but significant, changes in the procedures for developing 
the evidence in certain types of claims at the regional office level.
  Two of the bills I am introducing respond to decisions of the Court 
of Veterans Appeals. One addresses the adjudication of claims filed for 
compensation based on injuries in VA facilities. This measure would 
ensure that VA is fulfilling its responsibility with respect to such 
claims. The other bill would overrule a decision of the court with 
respect to the meaning of Public Law 98-542, the Veterans' Dioxin and 
Radiation Exposure Compensation Standards Act.
  The final bill I am introducing would mandate a comprehensive study 
of the VA adjudication system by the Administrative Conference of the 
United States.
  Mr. President, I look forward to working with my colleagues on the 
committee, in the full Senate, and on the House committee, as well as 
the veterans service organizations, on this legislation specifically, 
and more generally, on reform of the VA adjudication system.
  Mr. President, I will now describe each of the bills I am 
introducing.


s. 1904--amendments to the procedures of the board of veterans' appeals

  Mr. ROCKEFELLER. Mr. President, as chairman of the Committee on 
Veterans' Affairs, I am introducing today S. 1904, a bill to improve 
the organization and procedures of the Board of Veterans' Appeals 
[BVA]. I am enormously pleased that several of my colleagues on the 
committee have joined me as original cosponsors of this important 
measure, including ranking minority member Frank Murkowski and Senators 
Dennis DeConcini, Bob Graham, Daniel Akaka, Tom Daschle, and Ben 
Nighthorse Campbell. This bill would amend certain provisions of title 
38, United States Code, affecting the operation and procedures of the 
Board of Veterans' Appeals.
  Mr. President, as I indicated earlier today, VA's claims adjudication 
system, including its appellate system at the Board of Veterans' 
Appeals, is in dire need of change. BVA's current problems will require 
long-term, fundamental changes, but there are certain immediate changes 
Congress could institute that would allow the Board to begin to reduce 
its present backlog of about 40,000 appeals. In fiscal year 1993, the 
average time it took BVA to render a decision on appeal was 466 days. 
Based on information in the first quarter of fiscal year 1994, the BVA 
currently estimates that by the end of this fiscal year, that time will 
increase to 1,843 days--5 years. This is completely unacceptable.
  Mr. President, while we work on permanent solutions to the problems 
faced by BVA, I am proposing the measures in this bill, some of which 
have been requested by the Secretary of Veterans Affairs and the 
Chairman of BVA. VA indicated that these provisions will allow BVA to 
become more productive and thereby immediately assist in the reduction 
of the backlog at the Board.
  Mr. President, section 1 of this bill would amend section 7101 of 
title 38, relating to the composition of the Board. This section would 
remove the 65-member limitation on the number of members that may be 
appointed to the Board; remove the current provision giving the 
Chairman of BVA authority to appoint temporary Board members; and move 
the authority to appoint acting members from current section 7102 to 
section 7101, while keeping intact the present limitation on the amount 
of time an individual can serve as an acting member. However, the 
provision would specifically allow acting members of the Board to 
complete work on any pending cases, notwithstanding that time 
limitation.
  Section 2 of this legislation would amend section 7102 of title 38 to 
allow the Chairman of BVA to assign an appeal to a single member or to 
a panel of members consisting of at least three members. Under current 
law, appeals have to be assigned to a panel of at least three members. 
According to VA, this authorization of single-member decisions would 
significantly reduce the backlog at BVA. Amended section 7102 also 
would provide that reconsideration of a case must be assigned to a 
panel of members if the original appeal was decided by a single member, 
and to an enlarged panel of members if the original appeal was decided 
by a panel. In either case, the panel carrying out the reconsideration 
could not include any Board member who was involved in deciding the 
original appeal.

  Section 3 would amend the provisions governing BVA hearings to allow 
the Board to conduct hearings through the use of voice, or voice and 
picture transmission, by electronic or other means. The measure also 
would require that before BVA conducts the hearing through use of 
voice, or voice and picture transmission, the appellant must be given 
the opportunity to appear at a personal hearing before a Board member, 
either in a regional office or in Washington, DC, if the appellant so 
desires. Section 3 also would provide that if an appellant is seriously 
ill or is under severe financial hardship, the hearing may be held 
earlier than it otherwise would be.
  Mr. President, as I mentioned a moment ago, certain provisions in 
this bill would directly respond to a request I received from the 
Secretary of Veterans Affairs, Jesse Brown, dated February 10, 1994. 
Secretary Brown asked for my assistance in the enactment of legislation 
that would first, remove the limit on the number of Board members, 
second, allow the Chairman of BVA to assign appeals to one member of 
the Board for disposition, and third, remove the limitation on the time 
an acting member may serve. This bill includes the first two of the 
statutory provisions requested by the Secretary.
  With reference to the acting member issue, Secretary Brown apparently 
seeks that provision in an effort to avoid a problem that may arise 
when the BVA Chairman appoints acting members, of the statutory time 
limitation expiring while appeals which the acting member considered 
are still pending. This bill addresses that concern by allowing acting 
members to complete all work on any pending cases, even if that would 
require them to work beyond the time limit.
  Mr. President, these changes are important. My hope is that we can 
enact these measures quickly so that veterans may begin to feel the 
effects of an improved appeals system as soon as possible. Veterans 
deserve no less. They have a right to the efficient processing of their 
claims for the benefits they earned through their military service. We 
are working to ensure that they receive just that over the long term, 
but in the meantime, I strongly believe these provisions are a step in 
the right direction.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1904

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

     SECTION 1. ORGANIZATION AND PROCEDURES OF BOARD OF VETERANS' 
                   APPEALS.

       (a) Number of Members.--Subsection (a) of section 7101 of 
     title 38, United States Code, is amended by striking out 
     ``(not more than 65)''.
       (b) Acting and Temporary Members.--(1) Such section is 
     further amended--
       (1) in subsection (c)--
       (A) by striking out paragraph (1) and inserting in lieu 
     thereof the following new paragraph (1):
       ``(1)(A) The Chairman may from time to time designate one 
     or more employees of the Department to serve as acting 
     members of the Board. Except as provided in subparagraph (B), 
     any such designation shall be for a period not to exceed 90 
     days, as determined by the Chairman.
       ``(B) An individual designated as an acting member of the 
     Board may continue to serve as an acting member of the Board 
     in the making of any determination on a proceeding for which 
     the individual was designated as an acting member of the 
     Board, notwithstanding the termination of the period of 
     designation of the individual as an acting member of the 
     Board under subparagraph (A) or (C).
       ``(C) An individual may not serve as an acting member of 
     the Board for more than 270 days during any 1-year period.'';
       (B) by striking out paragraph (2);
       (C) by redesignating paragraph (3) as paragraph (2); and
       (D) in paragraph (2), as so redesignated, by striking out 
     ``the number of temporary Board members'' and all that 
     follows though the period at the end and inserting in lieu 
     thereof ``the number of acting members of the Board 
     designated under such paragraph (1) during the year for which 
     the report is made.''; and
       (2) in subsection (e), by striking out ``a temporary or'' 
     and inserting in lieu thereof ``an''.
       (c) Report on Board Activities.--Subsection (d) of such 
     section is amended--
       (1) in paragraph (2)--
       (A) by striking out ``and'' at the end of subparagraph (D);
       (B) by striking out the period at the end of subparagraph 
     (e) and inserting in lieu thereof ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(F) the number of employees of the Department designated 
     under subsection (c)(1) of this section to serve as acting 
     members of the Board during that year and the number of cases 
     in which each such member participated during that year.''; 
     and
       (2) in paragraph (3)(B), by striking out ``as required by 
     section 7103(d) of this title''.
       (d) Appeals Decisions.--(1) Chapter 71 of such title is 
     amended by striking out sections 7102 and 7103 and inserting 
     in lieu thereof the following new sections 7102 and 7103:

     Sec. 7102. Decisions by the Board

       ``A proceeding instituted before the Board may be assigned 
     to one or more members of the Board. A proceeding assigned to 
     more than one member shall be assigned to a panel of not less 
     than three members of the Board. A member or panel assigned a 
     proceeding shall make a determination thereon, including any 
     motion filed in connection therewith. The member or panel, as 
     the case may be, shall make a report under section 7104(d) of 
     this title on any such determination, which report shall 
     constitute the final disposition of the proceeding by the 
     member or panel.

     Sec. 7103. Reconsideration; correction of obvious errors

       ``(a) Subject to subsections (b) and (c) of this section, 
     the decision of the Board determining a matter under section 
     7102 of this title is final.
       ``(b) The Chairman may order reconsideration of the 
     decision in a case in accordance with subsection (c) of this 
     section. Such an order may be made on the Chairman's 
     initiative or upon motion of the claimant.
       ``(c)(1) Upon the order of the Chairman for reconsideration 
     of a decision in a case, the case shall be referred--
       ``(A) in the case of a matter originally heard by a single 
     member of the Board, to a panel of not less than three 
     members of the Board.
       ``(B) in the case of a matter originally heard by a panel 
     of members of the Board, to an enlarged panel of the Board.
       ``(2) A panel referred to in paragraph (1) of this 
     subsection may not include the member or members who made the 
     original decision subject to reconsideration.
       ``(3) A panel reconsidering a matter under this subsection 
     shall render its decision after reviewing the entire record 
     before the Board. The decision of a majority of the members 
     of the panel shall be final.
       ``(d) The Board on its own motion may correct an obvious 
     error in the record, without regard to whether there has been 
     a motion or order for reconsideration.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by striking out the items relating to sections 
     7102 and 7103 and inserting in lieu thereof the following:

``7102. Decisions by the Board.
``7103. Reconsideration; correction of obvious errors.''.

       (e) Procedures Relating to Appeals.--(1)(A) Section 7107 of 
     such title is amended to read as follows:

     ``Sec. 7107. Appeals: dockets; hearings

       ``(a)(1) All cases received pursuant to application for 
     review on appeal shall be considered and decided in regular 
     order according to their places upon the docket.
       ``(2) A case referred to in paragraph (1) of this 
     subsection may, for cause shown, be advanced on motion for 
     earlier consideration and determination. Any such motion 
     shall set forth succinctly the grounds upon which it is based 
     and may not be granted unless the case involves 
     interpretation of law of general application affecting other 
     claims, or for other sufficient cause shown.
       ``(b) The Board shall decide any appeal only after 
     affording the appellant an opportunity for a hearing.
       ``(c) A hearing docket shall be maintained and formal 
     recorded hearings shall be held by such member or members of 
     the Board as the Chairman may designate. Such member or 
     members designated by the Chairman to conduct the hearing 
     shall participate in making the final determination of the 
     claim.
       ``(d)(1) An appellant may request a hearing before the 
     Board at its principal location or at a regional office of 
     the Department.
       ``(2)(A) Except as provided in subparagraph (B) of this 
     paragraph, hearings shall be scheduled in the order in which 
     requests for such hearings are received by the Department.
       ``(B) In a case in the which the Secretary is aware that 
     the appellant is seriously ill or is under severe financial 
     hardship, a hearing may be scheduled at a time earlier than 
     would be provided for under subparagraph (A) of this 
     paragraph.
       ``(e)(1) At the request of the Chairman, the Secretary may 
     provide suitable facilities and equipment to the Board or 
     other components of the Department to enable an appellant 
     located at a facility within the area served by a regional 
     office to participate, through voice transmission or through 
     picture and voice transmission, by electronic or other means, 
     in a hearing with a Board member or members sitting at the 
     Board's principal location.
       ``(2) When such facilities and equipment are available, the 
     Chairman may afford the appellant an opportunity to 
     participate in a hearing before the Board through the use of 
     such facilities and equipment in lieu of a hearing held by 
     personally appearing before a Board member or panel as 
     provided in subsection (d) of this section. Any such hearing 
     shall be conducted in the same manner as, and shall be 
     considered the equivalent of, a personal hearing. If the 
     appellant declines to participate in a hearing through the 
     use of such facilities and equipment, the opportunity of the 
     appellant to a hearing as provided in such subsection (d) 
     shall not be affected.''.
       (B) The item relating to section 7107 in the table of 
     sections at the beginning of chapter 71 of such title is 
     amended to read as follows:

``7107. Appeals: dockets; hearings.''.

       (2)(A) Section 7110 of such title is repealed.
       (B) The table of sections at the beginning of chapter 71 of 
     such title is amended by striking out the item relating to 
     section 7110.
       (f) Technical Correction.--Section 7104(a) of such title is 
     amended by striking out ``211(a)'' and inserting in lieu 
     thereof ``511(a)''.


                     s. 1905: va claims procedures

  Mr. ROCKEFELLER. Mr. President, as chairman of the Committee on 
Veterans' Affairs, I am introducing S. 1905, a bill to improve the 
processing of benefits claims by the Department of Veterans Affairs 
[VA]. I am enormously pleased that several of my colleagues on the 
committee have joined me as original cosponsors of this important 
measure, including Senators Dennis DeConcini, Bob Graham, Daniel Akaka, 
Tom Daschle, and Ben Nighthorse Campbell. This bill would amend title 
38 to make some miscellaneous changes concerning claims development.
  Mr. President, as I discussed more extensively earlier today, the VA 
system for claims adjudication is fraught with problems. Some short-
term measures to change the way that VA processes claims are 
desperately needed, as are more long-term solutions. In an effort to 
achieve some immediate improvement in the system, I am introducing this 
bill today, with the hope that these various changes relating to the 
development of certain types of evidence will help streamline the 
process and thereby contribute to a decrease in the VA claims backlog.
  Mr. President, this bill includes four provisions that would make 
specific changes in the procedures for development of evidence for 
purposes of VA claims. First, this measure would eliminate the 
statutory mandate under current section 1506 of title 38, United States 
code, that VA require pension recipients to file annual eligibility 
verification reports [EVR's]. This measure would instead give VA 
discretionary authority to require the submission of the 
questionnaires. The requirement in current law means that VA must 
devote significant personnel to the task of processing and handling the 
submitted forms. Because VA now has computer matching programs with the 
Internal Revenue Service and the Social Security Administration for 
income verification purposes, the EVR is no longer necessary in every 
case. As VA indicated in prepared testimony for the Subcommittee on 
Compensation, Pension, and Insurance of the House Committee on 
Veterans' Affairs:

       A large proportion of our [pension] beneficiaries * * * 
     have either no income or only Social Security benefits as 
     income. * * * We believe that much of the information 
     gathered by these annual reports can be verified through 
     other means, * * *

  Mr. President, this measure would amend current law to allow VA to 
accept written statements or photocopies of documents as proof of 
relationships for purposes of VA benefits. Under current law, whenever 
a document is required to prove a relationship to a veteran, such as a 
birth of marriage certificate, the claimant must submit a certified 
copy of the document. This requirement arises primarily in connection 
with claims for benefits for or on behalf of dependents of veterans. If 
there is a question with respect to the validity of the statement or 
photocopy, the bill would allow VA to require the claimant to submit 
supporting documentation. My hope in introducing this measure is to 
relieve claimants of an unnecessary burden and expedite the 
decisionmaking process where evidence of this type is involved.
  Mr. President, the third provision in this bill would allow VA to 
accept the medical examination report of a private physician as support 
of a diagnosis of a disability for purposes of either a compensation or 
pension claim. This would eliminate the current requirement that a 
veteran undergo an examination by a VA physician to confirm the 
diagnosis made by a veteran's private physician. Under this new 
authority, a private physician's report would be required to contain 
sufficient clinical data to support the diagnosis or provide a reliable 
basis for a disability rating.
  Finally, this bill includes a provision that would require VA to 
report to the House and Senate Committees on Veterans' Affairs on the 
status of an agreement between the Department of Defense [DOD] and VA 
to provide for the immediate transfer of a servicemember's medical 
records upon discharge from the service. The report would be due to the 
committees within 90 days after enactment of the statute. This 
provision is intended to improve the transfer of military medical 
records from all branches of the military to VA through an agreement 
between the two Departments. Such an agreement currently exists between 
VA and the Army and according to reports, is working well. An agreement 
between DOD and VA covering all branches of the service would improve 
the amount of time it takes to process a VA claim because a significant 
amount of time is spent waiting for the transfer of medical records. VA 
stated in prepared testimony for the House Subcommittee on 
Compensation, Pension, and Insurance on draft legislation that 
contained a comparable provision: ``We hope to be able to report 
complete success on this agreement because it is one of the ways VA can 
expedite claims adjudication.''

  Mr. President, all of the provisions in this bill would relieve VA of 
certain evidentiary requirements in the development of certain claims. 
These provisions are intended to assist in streamlining the claims 
process, at least with respect to these particular aspects of 
developing claims. In effect, these measures might even allow VA to 
devote personnel currently tasked with the processing and handling of 
these aspects of claims development to other, more crucial elements 
involved in the disposition of claims.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1905

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

     SECTION 1. ELIMINATION OF REQUIREMENT FOR ANNUAL INCOME 
                   QUESTIONNAIRES.

       Section 1506 of title 38, United States Code, is amended--
       (1) in paragraph (2), by striking out ``shall'' and 
     inserting in lieu thereof ``may''; and
       (2) in paragraph (3), by striking out ``file a revised 
     report'' and inserting in lieu thereof ``notify the 
     Secretary''.

     SEC. 2. STATEMENTS TO BE ACCEPTED AS PROOF OF RELATIONSHIPS.

       Notwithstanding any other provision of law, the Secretary 
     of Veterans Affairs shall accept the written statement of a 
     claimant as proof of the existence of a marriage, the 
     dissolution of a marriage, the birth of a child, or the death 
     of any family member for the purpose of acting on such 
     individual's claim for benefits under any law administered by 
     the Secretary. The Secretary may require the submission of 
     documentation in support of such statement if the statement 
     on its face raises a question as to its validity.

     SEC. 3. ACCEPTANCE OF PRIVATE PHYSICIAN EXAMINATIONS.

       Notwithstanding any other provision of law, for purposes of 
     establishing a claim for disability compensation under 
     chapter 11 of title 38, United States Code, or a claim for 
     pension under chapter 15 of such title, a medical examination 
     report of a private physician provided by a claimant in 
     support of a claim for benefits shall be accepted without 
     confirmation by an examination by a physician employed by the 
     Veterans Health Administration if such report contains 
     sufficient clinical data to support the diagnosis of a 
     disability or to provide a reliable basis for an evaluation 
     of the degree of any such disability.

     SEC. 4. TRANSFER OF MILITARY SERVICE MEDICAL RECORDS.

       Not later than 90 days after the date of the enactment of 
     this Act, the Secretary of Veterans Affairs shall submit to 
     the Committees on Veterans' Affairs of the Senate and House 
     of Representatives a report setting forth the status of an 
     agreement between the Secretary and the Secretary of Defense 
     to provide for the immediate transfer from the Department of 
     Defense to the Department of Veterans Affairs of the medical 
     records of members of the Armed Forces upon the separation of 
     such members from active duty.


   S. 1906: ADJUDICATION OF VA CLAIMS BASED ON EXPOSURE TO RADIATION

  Mr. ROCKEFELLER. Mr. President, as Chairman of the Committee on 
Veterans' Affairs, I am introducing today S. 1906, a bill to provide 
that service connection for disabilities arising from exposure to 
ionizing radiation or dioxin may be established by direct evidence. I 
am enormously pleased that four of my colleagues on the Committee have 
joined me as original cosponsors of this important measure, including 
Senators Dennis DeConcini, Bob Graham, Daniel Akaka, and Tom Daschle. 
This bill would amend Public Law 98-542 so as to overrule the decision 
of the U.S. Court of Veterans Appeals in Combee v. Principi, 4 Vet.App. 
78 (1993).
  Mr. President, the Court held in Combee that a veteran may not 
establish direct service connection for a condition based on radiation 
exposure unless the condition is on VA's regulatory list of radiogenic 
diseases. The essence of the Court's decision is that, by establishing 
a process in Public Law 98-542 relating to claims involving radiation 
exposure, Congress repealed the general compensation law as to such 
claims. Stated another way, the Court's decision stands for the 
proposition that the Congress, while providing an avenue by which 
veterans exposed to radiation might gain VA benefits, foreclosed these 
veterans from utilizing the route available to all other veterans 
seeking to establish service connection. This simply is not what 
happened and it must be reversed.
  In Combee, there was no dispute that the veteran had taken part in a 
radiation-risk activity, as required under both section 1112 of title 
38, United States Code, for purposes of presumptive service connection 
of the disease, and section 3.311b of title 38, Code of Federal 
Regulations, for purposes of proving direct service connection of the 
disease. However, he sought disability compensation for a condition 
that was neither on the list of conditions presumptively service-
connected based on radiation exposure under section 1112 of title 38, 
nor on the list of diseases considered to be radiogenic by VA for 
purposes of direct service connection under 38 CFR 3.311b, implementing 
Public Law 98-542. Because the veteran's claim involved a condition 
that did not appear on either list, the Court held that he could not 
show direct service connection under general authorities available to 
all other veterans.
  Mr. President, there is absolutely nothing in the legislative history 
of Public Law 98-542 that indicates that Congress intended that law to 
preclude veterans from using the usual means of proving direct service 
connection, if the veteran is able to do so, by submitting sufficient 
supporting evidence. Although I was not yet a Member of Congress at the 
time Public Law 98-542 was enacted, I am certain that the Court's 
decision does not accurately reflect the underlying congressional 
intent of this statute.

  The basic theory of service connection, as set forth in sections 1110 
and 1131 of title 38, United States Code, requires that a veteran be 
given an opportunity to submit evidence in support of his or her claim 
for service connection. This involves a fundamental principle that the 
veteran must not be summarily prohibited from attempting to prove that 
the condition is directly related to service. That principle must apply 
even if the veteran's condition is not a condition Congress or VA 
automatically recognizes as associated with exposure to an 
environmental hazard.
  In the Combee case, the veteran had submitted evidence from two 
physicians who both stated that a reasonable relationship existed 
between the veteran's exposure to radiation in service and his 
disabilities. Yet he was foreclosed from even attempting to prove 
service connection under section 1110 because his disease was not on a 
list deemed exclusive by VA. The Court, incorrectly in my view, 
affirmed that result.
  Mr. President, although Combee involved a radiation claim, it has 
serious, negative implications because it undermines the theory of 
direct service connection in other instances, for example, in cases 
involving conditions that can be presumptively service connected based 
on other factors, such as Agent Orange exposure or as a result of 
having been a prisoner of war.
  Mr. President, this bill we are introducing would clarify Congress' 
intent in enacting Public Law 98-542 and ensure that the general 
provisions governing disability compensation with respect to claims 
based on exposure to Agent Orange or radiation remain intact and 
available to all veterans.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point.
       There being no objection, the bill was ordered to be 
     printed in the Record, as follows:

                                S. 1906

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

     SECTION 1. SERVICE CONNECTION FOR CERTAIN DISABILITIES 
                   RELATING TO EXPOSURE TO IONIZING RADIATION OR 
                   DIOXIN.

       Section 5 of the Veterans' Dioxin and Radiation Exposure 
     Compensation Standards Act (Public Law 98-542; 98 Stat. 2725; 
     38 U.S.C. 1154 note) is amended by adding at the end the 
     following new subsection:
       ``(d) The regulations prescribed under this section may not 
     prohibit, or be construed to prohibit, a veteran from 
     establishing pursuant to section 1110 of title 38, United 
     States Code, service connection for a disease or disability 
     that the veteran claims to be the result of the veteran's 
     exposure to ionizing radiation or dioxin during a period of 
     service referred to in subsection (a)(1), notwithstanding 
     that such regulations do not specify that the disease or 
     disability is a radiogenic disease or a disease or disability 
     associated with dioxin.''.


  s.1907: claims for va compensation under section 1151 of title 38, 
                           united states code

  Mr. ROCKEFELLER. Mr. President, as chairman of the Committee on 
Veterans' Affairs, I am introducing today S. 1907, a bill to require 
that the Department of Veterans Affairs [VA] adjudicate and resolve 
certain claims relating to medical malpractice in the health care 
services provided by the Department. I am enormously pleased that two 
of my colleagues on the committee, Senators Bob Graham and Tom Daschle, 
have joined me as original cosponsors of this important measure. This 
bill would require VA to immediately adjudicate all claims that may be 
on hold pending final resolution of the issue decided by the United 
States Court of Veterans Appeals in Gardner v. Derwinski, 1 Vet.App. 
584 (1991), aff'd, sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 
1993), and to grant those claims that could have been granted under the 
standard used by VA prior to the Gardner decision.
  Mr. President, section 1151 of title 38, U.S. Code, governs claims 
for disability compensation or dependency and indemnity compensation 
[DIC] based on injury while receiving care in a VA medical facility or 
while pursuing a course of vocational rehabilitation. Under this 
provision, a veteran injured in a VA facility or in vocational 
rehabilitation can receive monthly disability compensation in the same 
manner as if he or she were injured during military service. A survivor 
of a veteran who dies as the result of such an injury can receive 
monthly DIC payments.
  In Gardner, the Court of Veterans Appeals found that VA's regulations 
interpreting this provision were too restrictive and invalidated those 
regulations. Following the decision of the Court, VA placed a 
moratorium on all denials of claims filed under section 1151. VA 
appealed the decision to the U.S. Court of Appeals for the Federal 
Circuit, which affirmed the lower court's decision. VA then filed a 
petition for certiorari with the U.S. Supreme Court which is now 
pending.
  Mr. President, because the moratorium was placed only on denials, VA 
should continue to allow those claims that would have been granted 
under the restrictive, invalidated standard. However, the committee has 
received information from veterans indicating that VA has suspended all 
action on section 1151 claims. Therefore, claims that could be granted 
under the invalidated standard are not being granted.
  Mr. President, this bill would require VA to adjudicate all claims 
filed under section 1151, using the standard under the law existing 
prior to the decision of the Court of Veterans Appeals in Gardner, and 
grant those claims that could have been allowed under the former VA 
standard. Those claims that would not have been granted under the prior 
regulation would continue to be held in abeyance.
  Mr. President, I am introducing this bill in an effort to ensure that 
VA is fulfilling its responsibility to those veterans who have claims 
based on clear VA negligence, notwithstanding the Federal court 
decisions on this issue.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1907

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

     SECTION 1. ADJUDICATION AND RESOLUTION OF CERTAIN CLAIMS 
                   RELATING TO MEDICAL MALPRACTICE.

       (a) Adjudication and Resolution of Claims.--The Secretary 
     of Veterans Affairs shall--
       (1) take appropriate actions to determine whether the 
     injury (or aggravation of an injury) of any veteran as the 
     result of the treatment of the veteran was the result of 
     medical malpractice on the part of the Department of Veterans 
     Affairs (and not of the veteran's own willful misconduct); 
     and
       (2) in the case of any injury so determined, provide 
     appropriate compensation to the veteran in accordance with 
     section 1151 of title 38, United States Code.
       (b) Statement of Intent and Construction.--Congress enacts 
     the requirement set forth in subsection (a) in order to 
     ensure the adjudication and resolution of certain claims 
     following the decision in Gardner v. Derwinski, 1 Vet. App. 
     584 (1991), aff'd, sub nom. Gardner v. Brown, 5 F.3d 1456 
     (Fed. Cir. 1993). The requirement may not be construed as an 
     expression of Congressional intent to limit the claims 
     subject to adjudication under section 1151 of title 38, 
     United States Code, to claims related to injuries resulting 
     from medical malpractice.
       (c) Definitions.--In this section--
       (1) The term ``treatment'', in the case of a veteran, means 
     any examination, hospitalization, medical or surgical 
     treatment, or course of vocational rehabilitation under 
     chapter 31 of title 38, United States Code, that is provided 
     to the veteran by the Department of Veterans Affairs.
       (2) The term ``medical malpractice'' means any 
     carelessness, negligence, error in judgment, lack of proper 
     medical skill, or similar instance of indicated fault in the 
     treatment of a veteran.


                 s. 1908: study of va claims procedures

  Mr. ROCKEFELLER. Mr. President, as chairman of the Committee on 
Veterans' Affairs, I am introducing today S. 1908, a bill to provide 
for a study of the processes and procedures of the Department of 
Veterans Affairs for the disposition of claims for veterans benefits. I 
am enormously pleased that four of my colleagues on the committee have 
joined me as original cosponsors of this important measure, including 
Senators Dennis DeConcini, Bob Graham, Daniel Akaka, and Tom Daschle.
  Mr. President, this legislation would mandate a comprehensive, 18-
month study of the VA adjudication and appeal systems by the 
Administrative Conference of the United States [ACUS].
  As I discussed in more detail earlier today, veterans were finally 
provided judicial review in 1988, a change that inevitably has had a 
tremendous impact on the VA adjudication system. Certain aspects of 
that impact were anticipated. For example, the court's decisions have 
significantly improved the way VA makes decisions. Other aspects of the 
impact of judicial review never could have been precisely predicted. 
The collective effects of the court have been felt acutely in the past 
couple of years and it is now time to begin to define exactly where VA 
should go from here.
  Mr. President, this bill would require a study and evaluation of the 
current VA adjudication and appeal system at all levels, from the 
initial claim at the VA regional office through the final decision by 
the Board of Veterans' Appeals. The study would involve review of how 
the system developed over the years, from the pre-judicial review era, 
and include consideration and evaluation of certain issues specified in 
the legislation.
  The bill would require the involvement of and consultation with 
veterans service organizations and others who represent veterans before 
VA. For purposes of the study, the legislation would require VA to 
provide to ACUS and the Senate and House Committees on Veterans' 
Affairs within 90 days following enactment extensive information on 
claims processing for fiscal years 1989 through 1993.
  Under this measure, ACUS would be required to submit the results of 
the study to VA and the two Committees on Veterans' Affairs within 1 
year of the date of enactment. Within 18 months of the date of 
enactment, ACUS would be required to submit to VA and the committees a 
complete report on the study. The report would be required to include 
its findings and conclusions, as well as recommendations on how the 
system might be improved.
  Finally, the bill would authorize an appropriation of $150,000 to the 
Department of Veterans Affairs, to be transferred to ACUS for the costs 
related to carrying out the study.
  Mr. President, I believe that a comprehensive study as outlined in 
this measure is imperative to obtain an accurate and objective 
evaluation of the VA adjudication process, which is, without a doubt, 
broken. Before we can begin to determine the appropriate means for 
repairing the system, we must have sufficient information upon which we 
can base the fundamental changes that are inevitably necessary.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record at this point.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1908

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

     SECTION 1. STUDY OF SYSTEM OF DEPARTMENT OF VETERANS AFFAIRS 
                   FOR DISPOSITION OF CLAIMS FOR VETERANS 
                   BENEFITS.

       (a) In General.--The Administrative Conference of the 
     United States shall carry out a study of the Department of 
     Veterans Affairs system for the disposition of claims for 
     veterans benefits. The Administrative Conference shall carry 
     out the study in accordance with this Act.
       (b) Purpose of Study.--The purpose of the study required 
     under this Act shall be to evaluate the Department of 
     Veterans Affairs system for the disposition of claims for 
     veterans benefits in order to determine--
       (1) the efficiency of processes and procedures under the 
     system for the adjudication, resolution, review, and final 
     disposition of claims for veterans benefits and means of 
     increasing such efficiency, including the effect of judicial 
     review on such system;
       (2) means of reducing the number of claims under the system 
     for which final disposition is pending; and
       (3) means of enhancing the ability of the Department of 
     Veterans Affairs to dispose of claims under the system in a 
     prompt and appropriate manner.
       (c) Contents of Study.--The study of the Department of 
     Veterans Affairs system for the disposition of claims for 
     veterans benefits under this Act shall include an evaluation 
     and assessment of the following:
       (1) The historical development of the system, including the 
     effect on such development of the provision under the 
     Veterans' Judicial Review Act (division A of Pulbic Law 100-
     687; 102 Stat. 4105) of authority for judicial review of 
     claims disposed of under the system.
       (2) The preparation and submittal of claims by veterans 
     under the system.
       (3) The processes and procedures under the system for the 
     disposition of claims, including--
       (A) the scope and nature of the responsibility of the 
     Secretary to assist veterans in the development of claims;
       (B) the scope and nature of the hearings provided for at 
     each stage in the claims disposition process under the system 
     (including hearings de novo, hearings before travelling 
     members of the Board of Veterans' Appeals, hearings that are 
     expedited for reason of illness or financial need, and 
     hearings that permit the transmission of evidence or 
     testimony by electronic means);
       (C) the scope and nature of the review undertaken with 
     respect to a claim at each stage in the claims disposition 
     process;
       (D) the number, Federal employment grade, and experience 
     and qualifications required of the persons undertaking such 
     review at each such stage;
       (E) the effect on such review of the obligation of the 
     Secretary to afford claimants with the benefit of the doubt 
     when there is an approximate balance of positive and negative 
     evidence with respect to a claim;
       (F) opportunities for the submittal of new evidence; and
       (G) the availability of alternative means of disposing of 
     claims.
       (4) The effect on the system of the participation of 
     attorneys, members of veterans service organizations, and 
     other advocates on behalf of veterans.
       (5) The effect on the system of actions taken by the 
     Secretary to modernize the information management system of 
     the Department, including the utilization of electronic data 
     management systems.
       (6) The effect on the system of any work performance 
     standards utilized by the Secretary at regional offices of 
     the Department and at the Board of Veterans' Appeals.
       (7) The extent of the implementation in the system of the 
     recommendations of the Blue Ribbon Panel on Claims Processing 
     submitted to the Committees on Veterans' Affairs of the 
     Senate and House of Representatives on December 2, 1993, and 
     the effect of such implementation on the system.
       (8) The effectiveness in improving the system of any pilot 
     programs carried out by the Secretary at regional offices of 
     the Department and of efforts by the Secretary to implement 
     such programs throughout the system.
       (9) The effectiveness of the quality control practices and 
     quality assurance practices under the system in achieving the 
     goals of such practices.
       (d) Consultation with Non-Department Entities.--
     Notwithstanding any other provision of law, the 
     Administrative Conference of the United States shall, upon 
     request, provide opportunities in the conduct of the study 
     under this Act for consultation with appropriate 
     representatives of veterans service organizations and of 
     other organizations and entities that represent veterans 
     before the Department of Veterans Affairs.
       (e) Cooperation of Secretary.--(1) Not later than 90 days 
     after the date of the enactment of this Act, the Secretary 
     shall submit to the Administrative Conference of the United 
     States, and to the Committees on Veterans' Affairs of the 
     Senate and House of Representatives, such information as the 
     Chairman of the Administrative Conference shall determine 
     necessary to carry out the study required under this Act.
       (2) The information referred to in paragraph (1) shall 
     include information on the claims disposed of by the 
     Department of Veterans Affairs during the 5-year period 
     ending on September 30, 1993, including the following:
       (A) The total number of claims finally disposed of during 
     that period.
       (B) The number of claims finally disposed of during each 
     fiscal year of that period.
       (C) The number of claims referred to in subparagraph (A) 
     that were allowed by the Secretary solely on the basis of 
     information contained in the initial claim for benefits.
       (D) The number of claims referred to in subparagraph (A) 
     that were allowed by a regional office of the Department at 
     each of the various stages in the claims disposition process.
       (E) The number of claims referred to in subparagraph (A) 
     that were allowed by the Board of Veterans' Appeals.
       (F) The number of claims referred to in subparagraph (E) 
     that were reopened after a final decision by the Board of 
     Veterans' Appeals.
       (f) Reports on Study.--(1) Not later than 1 year after the 
     date of the enactment of this Act, the Administrative 
     Conference of the United States shall submit to the Secretary 
     and to the Committees on Veterans' Affairs of the Senate and 
     House of Representatives a preliminary report on the study 
     required under subsection (c). The report shall contain the 
     preliminary findings and conclusions of the Administrative 
     Conference with respect to the evaluation and assessment 
     required under the study.
       (2) Not later than 18 months after such date, the 
     Administrative Conference shall submit to the Secretary and 
     to such committees a report on such study. The report shall 
     include the following:
       (A) The findings and conclusions of the Administrative 
     Conference, including its findings and conclusions with 
     respect to the matters referred to in subsection (c).
       (B) The recommendations of the Administrative Conference 
     for means of improving of the Department of Veterans Affairs 
     system for the disposition of claims for veterans benefits.
       (C) Such other information and recommendations with respect 
     to the system as the Administrative Conference considers 
     appropriate.
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated $150,000 to the Department of Veterans 
     Affairs for payment to the Administrative Conference of the 
     United States under section 1535 of title 31, United States 
     Code, of the cost of carrying out the study and report 
     required under this Act.
       (h) Definitions.--For the purposes of this Act--
       (1) The term ``Administrative Conference of the United 
     States'' means the Administrative Conference provided for 
     under subchapter V of chapter 5 of title 5, United States 
     Code.
       (2) The term ``Department of Veterans Affairs system for 
     the disposition of claims for veterans benefits'' means the 
     processes and procedures of the Department of Veterans 
     Affairs for the adjudication, resolution, review, and final 
     disposition of claims for benefits under the laws 
     administered by the Secretary.
       (3) The term ``Secretary'' means the Secretary of Veterans 
     Affairs.
       (4) The term ``veterans service organizations'' means any 
     organization approved by the Secretary under section 5902(a) 
     of title 38, united States Code.
                                 ______

      By Mr. BRYAN:
  S. 1909. A bill to improve the interstate enforcement of child 
support and parentage court orders, and for other purposes; to the 
Committee on Finance.


                 child support enforcement act of 1994

  Mr. BRYAN. Mr. President, today I am introducing the Interstate Child 
Support Act of 1994. This legislation will strengthen our efforts to 
get ``dead beat'' parents to provide for their children.
  There has been such discussion of late on the issue of family values. 
A child growing up in poverty and a mother put through needless 
financial stress by a father not living up to his responsibilities is 
without a doubt an issue worthy of much consideration.
  The facts are that 1-in-4 children live in a single-parent household. 
Most of us know how difficult it is to make ends meet with a two-income 
family. It does not take much imagination to envision how hard it must 
be for a single parent trying to juggle a job and family.
  One of the most startling statistics is that only half the single 
parents have sought out and obtained child support orders. That means 
that 50 percent of the single mothers either have been unable to track 
down the father or have not pursued or are unaware of their legal 
rights.
  Of the parents who have sought out and obtained child support, only 
half receive the full amount they are entitled to. In other words, 50 
percent of the mothers don't even have child support orders and of the 
50 percent that do, only half of them are getting what their children 
are entitled to.
  Approximately 25 percent of the single parents who have child support 
orders actually receive nothing at all. These are the worst offenders--
the so-called dead beat dads. It is all too true that many single 
parents must seek public support. As the public is asked to lend a 
helping hand, we must ensure that the absent father is doing the best 
he can. Public assistance should not become an escape valve for those 
who want to evade their responsibility.
  These facts should concern us all. When it comes to giving children 
of single parents a decent chance to make something of their lives, we 
should make every effort to see that they are not handicapped by 
delinquent parents.
  Over the past several years, significant progress has been made to 
improve the collection of child support payments. In fact, starting the 
first of this year, employers are required to automatically withhold 
child support payments from paychecks.
  We were also successful in enacting legislation, which I sponsored in 
the Senate, which requires credit bureaus to report on an individual's 
credit file when he or she is delinquent on their child support 
payments. This provides one more incentive for parents to stay current 
in their payments.

  But more needs to be done. The legislation I am introducing today 
adds to the arsenal available to those trying to enforce child support 
orders and makes it more difficult for parents to hide assets in order 
to avoid making the appropriate child support payments.
  First, this legislation authorizes the State and Federal Government 
to deny delinquent parents an array of benefits. A delinquent parent 
could be denied an occupational, professional, or business license, a 
Federal loan or guarantee, and could even have his or her passport 
revoked if the threat of fleeing the country was likely. The goal is 
not to drive those who want to meet their responsibilities away, but 
rather to make sure that those who are ignoring their children 
understand that society will not tolerate that behavior.
  These provisions should be particularly effective in dealing with 
delinquent parents who are self-employed and, thereby, not effected by 
the mandatory employer withholding that went into effect earlier this 
year.
  The bill also builds on our past efforts of using the credit 
reporting system. It permits State agencies to obtain credit files in 
order to track down delinquent parents, or to help determine the 
appropriate amount of child support.
  Second, the bill improves the interstate enforcement process by 
establishing a jurisdictional basis for State courts recognition of 
child support orders of other States. The problems associated with 
collecting child support are magnified when parents live in different 
States. Part of the difficulty stems from differences in State laws, 
policies, and procedures.
  I have heard numerous cases of frustrating experiences in attempts to 
serve process on out-of-State delinquent parents and to have certain 
evidence obtained in one State admitted at a hearing in another State. 
One in three child support orders involve parents in different States. 
On average, it takes 1 year to locate an absent parent, and 2 years to 
establish a court order if a parent has deserted a family.
  Finally, the bill makes it more difficult for parents to hide assets 
in an attempt to avoid paying their fair share of child support. A 
difficult problem to resolve is when a delinquent parent transfers 
property to a friend or relative for little compensation to avoid child 
support payments.
  I believe we must give our courts and law enforcement agencies the 
tools that they need to crack down on delinquent parents. The goal of 
this legislation is to help children receive adequate and consistent 
child support.

                          ____________________