[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.
____________________