[Congressional Record Volume 147, Number 8 (Tuesday, January 23, 2001)]
[Senate]
[Pages S459-S479]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ENZI (for himself, Mr. Gramm, Mr. Sarbanes, Mr. Johnson, 
        Mr. Hagel, Mr. Roberts, and Ms. Stabenow):
  S. 149. A bill to provide authority to control exports, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. ENZI. Mr. President, I rise today to introduce the Export 
Administration Act of 2001. I am joined by my distinguished colleague, 
Senator Gramm

[[Page S461]]

of Texas, Senator Sarbanes of Maryland, Senator Johnson of South 
Dakota, Senator Hagel of Nebraska, and Senator Roberts of Kansas. I 
thank each of them for their help in drafting and supporting this 
bipartisan bill. I believe it can be one of the first bipartisan 
accomplishments of the 107th Congress and President Bush. The EAA of 
2001 would eliminate trade barriers while focusing control on those 
items most sensitive to our national security.
  Let me begin by emphasizing the need to reauthorize and reform the 
EAA of 1979.
  The EAA provides export control authority for commercial or dual-use 
items--things that can be used in more than one way. For 6 years the 
Congress has failed to update and reauthorize this important act, with 
the exception of a 1-year reauthorization of the outdated Export 
Administration Act of 1979. As a result, our export control laws have 
been inadequately governed by either the EAA of 1979 or, more often 
than not, by emergency Presidential authority under the International 
Emergency Economic Powers Act. This situation has effectively allowed 
the administration, instead of Congress, to set the export control 
policies of the United States.
  The bill introduced today would place our export control system on 
firm statutory grounds and establish a modernized framework to 
recognize the rapid pace of economic innovation and the realities of 
globalization.
  The Export Administration Act of 2001 is a reasonable and balanced 
bill that will put up higher fences around the most sensitive areas and 
focus our enforcement efforts on restricting all technology exports to 
all the true bad actors. At the same time, it takes into account the 
realities of today's economy, incorporating the concept that items such 
as computers are very difficult to control.
  The bill recognizes that items available from foreign sources or 
available in mass market quantities cannot be effectively controlled. 
At the same time, we recognize that the President may, in exceptional 
cases, want to control a very sensitive item even when that item is 
available from the foreign source or in mass marketed quantities. 
Therefore, we include a provision to provide the President with this 
authority.
  The Export Administration Act of 2001 also strengthens national 
security in other areas. It enhances the role of the Department of 
Defense and other agencies by requiring the concurrence of the 
Secretary of Defense for items included on the control list as well as 
allowing licensing decisions to be appealed to the next level of review 
at the request of any participating agency representative. Licensing 
decisions would be made in part through the use of ``country-tiering'', 
grouping countries and items according to their assessed risk. The bill 
would also target end-use checks on those items that pose the greatest 
risk to national security.

  The EAA of 2001 provides tough new criminal and civil penalties for 
export control violations. For example, criminal penalties for 
individuals could be up to $1 million, or ten times the value of the 
export per violation. Criminal penalties for corporations could be up 
to $10 million or ten times the export value of the export per 
violation. It also authorizes a wording of up to 25 percent of the 
penalties imposed to a person providing information concerning an 
export control violation. The increase in penalties, which also include 
potential jail time and enhancement of enforcement provisions, will 
provide an effective deterrent to the violations of the act.
  A number of reviews of technology transfer and export controls were 
unanimous in their statements that an important requirement for an 
effective export control program is appropriate authorizing 
legislation.
  The Cox committee on technology transfer to China, the joint 
Inspector General's interagency review of the export licensing 
processes for dual-use commodities and munitions, and the Commission to 
Assess the Organization of the Federal Government to Combat the 
Proliferation of Weapons of Mass Destruction, have all strongly 
recommended the authorization of the EAA. The bipartisan Export 
Administration Act of 2001 would accomplish this while balancing the 
national security and economic interests of the United States.
  S. 1712, which was the EAA reauthorization bill of last session that 
unanimously passed the Senate Banking Committee last year, was strongly 
supported by Republicans and Democrats, as well as both large and small 
exporters.
  The Clinton administration supported the bill. Even President Bush 
endorsed the bill in campaign statements that he made. It was prevented 
from coming up last year because of a crowded floor agenda, but now is 
the time to replace the current outdated export control system and pass 
the Export Administration Act of 2001. We have an opportunity. We have 
an obligation to make sure that we increase exports while we protect 
national security.
  The bill was expired for six years. There have been 12 attempts to 
reauthorize the bill. The biggest reason that it has not been 
reauthorized is the complexity of detail of the licensing and appeal 
process. Fortunately, the Cox commission brought to light the need to 
reauthorize this important piece of legislation.
  Last year, we passed it through committee by a 20-0 vote. After 12 
failures, that is fairly significant. In fact, it is always significant 
around here when you have something Bipartisan enough that it passes on 
a unanimous vote.
  We have worked hard on the bill. We have listened to industry. We 
have listened to our colleagues. We have listened to the 
administration. We have listened to those people over past 
administrations who have worked on the same issue. We have a bill that 
updates the process for the post-cold war so that the provisions in 
this will work today and into the future. This is the new version that 
needs to be passed in this session of Congress. It needs to be passed 
early.
  The current extension we got on the bill only extended it until 
August 20. That is coming up soon, particularly with our legislative 
calendar needs. I ask my colleagues to work promptly on this bill. We 
will be talking to everyone who has an interest in it, and coming back 
to the floor with debate and discussion and a vote that will put this 
in front of the President for signature so we can have the proper 
national security and increase in national exports.
  I thank my colleagues for their support of this most important piece 
of legislation and look forward to working with my colleagues to 
reauthorize the EAA during the coming months.
  I ask unanimous consent that the bill be printed.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 149

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Export 
     Administration Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                       TITLE I--GENERAL AUTHORITY

Sec. 101. Commerce Control List.
Sec. 102. Delegation of authority.
Sec. 103. Public information; consultation requirements.
Sec. 104. Right of export.
Sec. 105. Export control advisory committees.
Sec. 106. President's Technology Export Council.
Sec. 107. Prohibition on charging fees.

              TITLE II--NATIONAL SECURITY EXPORT CONTROLS

                  Subtitle A--Authority and Procedures

Sec. 201. Authority for national security export controls.
Sec. 202. National Security Control List.
Sec. 203. Country tiers.
Sec. 204. Incorporated parts and components.
Sec. 205. Petition process for modifying export status.

        Subtitle B--Foreign Availability and Mass-Market Status

Sec. 211. Determination of foreign availability and mass-market status.
Sec. 212. Presidential set-aside of foreign availability determination.
Sec. 213. Presidential set-aside of mass-market status determination.
Sec. 214. Office of Technology Evaluation.

               TITLE III--FOREIGN POLICY EXPORT CONTROLS

Sec. 301. Authority for foreign policy export controls.

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Sec. 302. Procedures for imposing controls.
Sec. 303. Criteria for foreign policy export controls.
Sec. 304. Presidential report before imposition of control.
Sec. 305. Imposition of controls.
Sec. 306. Deferral authority.
Sec. 307. Review, renewal, and termination.
Sec. 308. Termination of controls under this title.
Sec. 309. Compliance with international obligations.
Sec. 310. Designation of countries supporting international terrorism.

TITLE IV--EXEMPTION FOR AGRICULTURAL COMMODITIES, MEDICINE, AND MEDICAL 
                                SUPPLIES

Sec. 401. Exemption for agricultural commodities, medicine, and medical 
              supplies.
Sec. 402. Termination of export controls required by law.
Sec. 403. Exclusions.

    TITLE V--PROCEDURES FOR EXPORT LICENSES AND INTERAGENCY DISPUTE 
                               RESOLUTION

Sec. 501. Export license procedures.
Sec. 502. Interagency dispute resolution process.

TITLE VI--INTERNATIONAL ARRANGEMENTS; FOREIGN BOYCOTTS; SANCTIONS; AND 
                              ENFORCEMENT

Sec. 601. International arrangements.
Sec. 602. Foreign boycotts.
Sec. 603. Penalties.
Sec. 604. Multilateral export control regime violation sanctions.
Sec. 605. Missile proliferation control violations.
Sec. 606. Chemical and biological weapons proliferation sanctions.
Sec. 607. Enforcement.
Sec. 608. Administrative procedure.

          TITLE VII--EXPORT CONTROL AUTHORITY AND REGULATIONS

Sec. 701. Export control authority and regulations.
Sec. 702. Confidentiality of information.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

Sec. 801. Annual and periodic reports.
Sec. 802. Technical and conforming amendments.
Sec. 803. Savings provisions.

     SEC. 2. DEFINITIONS.

        In this Act:
       (1) Affiliate.--The term ``affiliate'' includes both 
     governmental entities and commercial entities that are 
     controlled in fact by the government of a country.
       (2) Agriculture commodity.--The term ``agriculture 
     commodity'' means any agricultural commodity, food, fiber, or 
     livestock (including livestock, as defined in section 602(2) 
     of the Emergency Livestock Feed Assistance Act of 1988 (title 
     VI of the Agricultural Act of 1949 (7 U.S.C. 1471(2))), and 
     including insects), and any product thereof.
       (3) Control or controlled.--The terms ``control'' and 
     ``controlled'' mean any requirement, condition, 
     authorization, or prohibition on the export or reexport of an 
     item.
       (4) Control list.--The term ``Control List'' means the 
     Commerce Control List established under section 101.
       (5) Controlled country.--The term ``controlled country'' 
     means a country with respect to which exports are controlled 
     under section 201 or 301.
       (6) Controlled item.--The term ``controlled item'' means an 
     item the export of which is controlled under this Act.
       (7) Country.--The term ``country'' means a sovereign 
     country or an autonomous customs territory.
       (8) Country supporting international terrorism.--The term 
     ``country supporting international terrorism'' means a 
     country designated by the Secretary of State pursuant to 
     section 310.
       (9) Department.--The term ``Department'' means the 
     Department of Commerce.
       (10) Export.--
       (A) The term ``export'' means--
       (i) an actual shipment, transfer, or transmission of an 
     item out of the United States;
       (ii) a transfer to any person of an item either within the 
     United States or outside of the United States with the 
     knowledge or intent that the item will be shipped, 
     transferred, or transmitted to an unauthorized recipient 
     outside the United States; or
       (iii) a transfer of an item in the United States to an 
     embassy or affiliate of a country, which shall be considered 
     an export to that country.
       (B) The term includes a reexport.
       (11) Foreign availability status.--The term ``foreign 
     availability status'' means the status described in section 
     211(d)(1).
       (12) Foreign person.--The term ``foreign person'' means--
       (A) an individual who is not--
       (i) a United States citizen;
       (ii) an alien lawfully admitted for permanent residence to 
     the United States; or
       (iii) a protected individual as defined in section 
     274B(a)(3) of the Immigration and Nationality Act. (8 U.S.C. 
     1324b(a)(3));
       (B) any corporation, partnership, business association, 
     society, trust, organization, or other nongovernmental entity 
     created or organized under the laws of a foreign country or 
     that has its principal place of business outside the United 
     States; and
       (C) any governmental entity of a foreign country.
       (13) Item.--
       (A) In general.--The term ``item'' means any good, 
     technology, or service.
       (B) Other definitions.--In this paragraph:
       (i) Good.--The term ``good'' means any article, natural or 
     manmade substance, material, supply or manufactured product, 
     including inspection and test equipment, including source 
     code, and excluding technical data.
       (ii) Technology.--The term ``technology'' means specific 
     information that is necessary for the development, 
     production, or use of an item, and takes the form of 
     technical data or technical assistance.
       (iii) Service.--The term ``service'' means any act of 
     assistance, help or aid.
       (14) Mass-market status.--The term ``mass-market status'' 
     means the status described in section 211(d)(2).
       (15) Multilateral export control regime.--The term 
     ``multilateral export control regime'' means an international 
     agreement or arrangement among two or more countries, 
     including the United States, a purpose of which is to 
     coordinate national export control policies of its members 
     regarding certain items. The term includes regimes such as 
     the Australia Group, the Wassenaar Arrangement, the Missile 
     Technology Control Regime (MTCR), and the Nuclear Suppliers' 
     Group Dual Use Arrangement.
       (16) National security control list.--The term ``National 
     Security Control List'' means the list established under 
     section 202(a).
       (17) Person.--The term ``person'' includes--
       (A) any individual, or partnership, corporation, business 
     association, society, trust, organization, or any other group 
     created or organized under the laws of a country; and
       (B) any government, or any governmental entity, including 
     any governmental entity operating as a business enterprise.
       (18) Reexport.--The term ``reexport'' means the shipment, 
     transfer, transshipment, or diversion of items from one 
     foreign country to another.
       (19) Secretary.--The term ``Secretary'' means the Secretary 
     of Commerce.
       (20) 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 (42 U.S.C. 1331(a)).
       (21) United states person.--The term ``United States 
     person'' means--
       (A) any United States citizen, resident, or national (other 
     than an individual resident outside the United States who is 
     employed by a person other than a United States person);
       (B) any domestic concern (including any permanent domestic 
     establishment of any foreign concern); and
       (C) 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 prescribed by the President.

                       TITLE I--GENERAL AUTHORITY

     SEC. 101. COMMERCE CONTROL LIST.

       (a) In General.--Under such conditions as the Secretary may 
     impose, consistent with the provisions of this Act, the 
     Secretary--
       (1) shall establish and maintain a Commerce Control List 
     (in this Act referred to as the ``Control List'') consisting 
     of items the export of which are subject to licensing or 
     other authorization or requirement; and
       (2) may require any type of license, or other 
     authorization, including recordkeeping and reporting, 
     appropriate to the effective and efficient implementation of 
     this Act with respect to the export of an item on the Control 
     List or otherwise subject to control under title II or III of 
     this Act.
       (b) Types of License or Other Authorization.--The types of 
     license or other authorization referred to in subsection 
     (a)(2) include the following:
       (1) Specific exports.--A license that authorizes a specific 
     export.
       (2) Multiple exports.--A license that authorizes multiple 
     exports in lieu of a license for each such export.
       (3) Notification in lieu of license.-- A notification in 
     lieu of a license that authorizes a specific export or 
     multiple exports subject to the condition that the exporter 
     file with the Department advance notification of the intent 
     to export in accordance with regulations prescribed by the 
     Secretary.
       (4) License exception.--Authority to export an item on the 
     Control List without prior license or notification in lieu of 
     a license.
       (c) After-Market Service and Replacement Parts.--A license 
     to export an item under this Act shall not be required for an 
     exporter to provide after-market service or replacement 
     parts, to replace on a one-for-one basis parts that were in 
     an item that was lawfully exported from the United States, 
     unless--
       (1) the Secretary determines that such license is required 
     to export such parts; or
       (2) the after-market service or replacement parts would 
     materially enhance the capability of an item which was the 
     basis for the item being controlled.
       (d) Incidental Technology.--A license or other 
     authorization to export an item under this Act includes 
     authorization to export technology related to the item, if 
     the level of the technology does not exceed the minimum 
     necessary to install, repair, maintain, inspect, operate, or 
     use the item.

[[Page S463]]

       (e) Regulations.--The Secretary may prescribe such 
     regulations as are necessary to carry out the provisions of 
     this Act.

     SEC. 102. DELEGATION OF AUTHORITY.

       (a) In General.--Except as provided in subsection (b) and 
     subject to the provisions of this Act, the President may 
     delegate the power, authority, and discretion conferred upon 
     the President by this Act to such departments, agencies, and 
     officials of the Government as the President considers 
     appropriate.
       (b) Exceptions.--
       (1) Delegation to appointees confirmed by senate.--No 
     authority delegated to the President under this Act may be 
     delegated by the President 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.
       (2) Other limitations.--The President may not delegate or 
     transfer the President's power, authority, or discretion to 
     overrule or modify any recommendation or decision made by the 
     Secretary, the Secretary of Defense, or the Secretary of 
     State under this Act.

     SEC. 103. PUBLIC INFORMATION; CONSULTATION REQUIREMENTS.

       (a) Public Information.--The Secretary shall keep the 
     public fully informed of changes in export control policy and 
     procedures instituted in conformity with this Act.
       (b) Consultation With Persons Affected.--The Secretary 
     shall consult 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 or mass-market status of controlled 
     items.

     SEC. 104. RIGHT OF EXPORT.

       No license or other authorization to export may be required 
     under this Act, or under regulations issued under this Act, 
     except to carry out the provisions of this Act.

     SEC. 105. EXPORT CONTROL ADVISORY COMMITTEES.

       (a) Appointment.--Upon the Secretary's own initiative or 
     upon the written request of representatives of a substantial 
     segment of any industry which produces any items subject to 
     export controls under this Act or under the International 
     Emergency Economic Powers Act, or being considered for such 
     controls, the Secretary may appoint export control advisory 
     committees with respect to any such items. Each such 
     committee shall consist of representatives of United States 
     industry and Government officials, including officials from 
     the Departments of Commerce, Defense, and State, and other 
     appropriate departments and agencies of the Government. The 
     Secretary shall permit the widest possible participation by 
     the business community on the export control advisory 
     committees.
       (b) Functions.--
       (1) In general.--Export control advisory committees 
     appointed under subsection (a) shall advise and assist the 
     Secretary, and any other department, agency, or official of 
     the Government carrying out functions under this Act, on 
     actions (including all aspects of controls imposed or 
     proposed) designed to carry out the provisions of this Act 
     concerning the items with respect to which such export 
     control advisory committees were appointed.
       (2) Other consultations.--Nothing in paragraph (1) shall 
     prevent the United States Government from consulting, at any 
     time, with any person representing an industry or the general 
     public, regardless of whether such person is a member of an 
     export control advisory committee. Members of the public 
     shall be given a reasonable opportunity, pursuant to 
     regulations prescribed by the Secretary, to present 
     information to such committees.
       (c) Reimbursement of Expenses.--Upon the request of any 
     member of any export control advisory committee appointed 
     under subsection (a), the Secretary may, if the Secretary 
     determines it to be appropriate, reimburse such member for 
     travel, subsistence, and other necessary expenses incurred by 
     such member in connection with the duties of such member.
       (d) Chairperson.--Each export control advisory committee 
     appointed under subsection (a) shall elect a chairperson, and 
     shall meet at least every 3 months at the call of the 
     chairperson, unless the chairperson determines, in 
     consultation with the other members of the committee, that 
     such a meeting is not necessary to achieve the purposes of 
     this section. Each such committee shall be terminated after a 
     period of 2 years, unless extended by the Secretary for 
     additional periods of 2 years each. The Secretary shall 
     consult with each such committee on such termination or 
     extension of that committee.
       (e) Access to Information.--To facilitate the work of the 
     export control advisory committees appointed under subsection 
     (a), 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 export control 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.

     SEC. 106. PRESIDENT'S TECHNOLOGY EXPORT COUNCIL.

       The President may establish a President's Technology Export 
     Council to advise the President on the implementation, 
     operation, and effectiveness of this Act.

     SEC. 107. PROHIBITION ON CHARGING FEES.

       No fee may be charged in connection with the submission or 
     processing of an application for an export license under this 
     Act.

              TITLE II--NATIONAL SECURITY EXPORT CONTROLS

                  Subtitle A--Authority and Procedures

     SEC. 201. AUTHORITY FOR NATIONAL SECURITY EXPORT CONTROLS.

       (a) Authority.--
       (1) In general.--In order to carry out the purposes set 
     forth in subsection (b), the President may, in accordance 
     with the provisions of this Act, prohibit, curtail, or 
     require a license, or other authorization for 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 also require recordkeeping 
     and reporting with respect to the export of such item.
       (2) Exercise of authority.--The authority contained in this 
     subsection shall be exercised by the Secretary, in 
     consultation with the Secretary of Defense, the intelligence 
     agencies, and such other departments and agencies as the 
     Secretary considers appropriate.
       (b) Purposes.--The purposes of national security export 
     controls are the following:
       (1) To restrict the export of items that would contribute 
     to the military potential of countries so as to prove 
     detrimental to the national security of the United States, 
     its allies or countries sharing common strategic objectives 
     with the United States.
       (2) To stem the proliferation of weapons of mass 
     destruction, and the means to deliver them, and other 
     significant military capabilities by--
       (A) leading international efforts to control the 
     proliferation of chemical and biological weapons, nuclear 
     explosive devices, missile delivery systems, key-enabling 
     technologies, and other significant military capabilities;
       (B) controlling involvement of United States persons in, 
     and contributions by United States persons to, foreign 
     programs intended to develop weapons of mass destruction, 
     missiles, and other significant military capabilities, and 
     the means to design, test, develop, produce, stockpile, or 
     use them; and
       (C) implementing international treaties or other agreements 
     or arrangements concerning controls on exports of designated 
     items, reports on the production, processing, consumption, 
     and exports and imports of such items, and compliance with 
     verification programs.
       (3) To deter acts of international terrorism.
       (c) End Use and End User Controls.--Notwithstanding any 
     other provision of this title, controls may be imposed, based 
     on the end use or end user, on the export of any item, that 
     could materially contribute to the proliferation of weapons 
     of mass destruction or the means to deliver them.
       (d) Enhanced Controls.--Notwithstanding any other 
     provisions of this title, the President may determine that 
     applying the provisions of section 204(b) or section 211 with 
     respect to an item on the National Security Control List 
     would constitute a significant threat to the national 
     security of the United States and that such item requires 
     enhanced control. If the President determines that enhanced 
     control should apply to such item, it shall be excluded from 
     the provisions of section 204(b), section 211, or both, until 
     such time as the President shall determine that such enhanced 
     control should no longer apply to such item. The President 
     may not delegate the authority provided for in this 
     subsection.

     SEC. 202. NATIONAL SECURITY CONTROL LIST.

       (a) Establishment of List.--
       (1) Establishment.--The Secretary shall establish and 
     maintain a National Security Control List as part of the 
     Control List.
       (2) Contents.--The National Security Control List shall be 
     composed of a list of items the export of which is controlled 
     for national security purposes under this title.
       (3) Identification of items for national security control 
     list.--The Secretary, with the concurrence of the Secretary 
     of Defense and in consultation with the head of any other 
     department or agency of the United States that the Secretary 
     considers appropriate, shall identify the items to be 
     included on the National Security Control List provided that 
     the National Security Control List shall, on the date of 
     enactment of this Act, include all of the items on the 
     Commerce Control List controlled on the day before the date 
     of enactment of this Act to protect the national security of 
     the United States, to prevent the proliferation of weapons of 
     mass destruction and the means to deliver them, and to deter 
     acts of international terrorism. The Secretary shall 
     periodically review and, with the concurrence of the 
     Secretary of Defense and in consultation with the head of any 
     other department or agency of the United States that the 
     Secretary considers appropriate, adjust the National Security 
     Control List to add items that require control under this 
     section and to remove items that no longer warrant control 
     under this section.

[[Page S464]]

       (b) Risk Assessment.--
       (1) Requirement.--In establishing and maintaining the 
     National Security Control List, the risk factors set forth in 
     paragraph (2) shall be considered, weighing national security 
     concerns and economic costs.
       (2) Risk factors.--The risk factors referred to in 
     paragraph (1), with respect to each item, are as follows:
       (A) The characteristics of the item.
       (B) The threat, if any, to the United States or the 
     national security interest of the United States from the 
     misuse or diversion of such item.
       (C) The effectiveness of controlling the item for national 
     security purposes of the United States, taking into account 
     mass-market status, foreign availability, and other relevant 
     factors.
       (D) The threat to the national security interests of the 
     United States if the item is not controlled.
       (E) Any other appropriate risk factors.
       (c) Report on Control List.--Not later than 90 days after 
     the date of enactment of this Act, the Secretary shall submit 
     a report to Congress which lists all items on the Commerce 
     Control List controlled on the day before the date of 
     enactment of this Act to protect the national security of the 
     United States, to prevent the proliferation of weapons of 
     mass destruction and the means to deliver them, and to deter 
     acts of international terrorism, not included on the National 
     Security Control List pursuant to the provisions of this Act.

     SEC. 203. COUNTRY TIERS.

       (a) In General.--
       (1) Establishment and assignment.--In administering export 
     controls for national security purposes under this title, the 
     President shall, not later than 120 days after the date of 
     enactment of this Act--
       (A) establish and maintain a country tiering system in 
     accordance with subsection (b); and
       (B) based on the assessments required under subsection (c), 
     assign each country to an appropriate tier for each item or 
     group of items the export of which is controlled for national 
     security purposes under this title.
       (2) Consultation.--The establishment and assignment of 
     country tiers under this section shall be made after 
     consultation with the Secretary, the Secretary of Defense, 
     the Secretary of State, the intelligence agencies, and such 
     other departments and agencies as the President considers 
     appropriate.
       (3) Redetermination and review of assignments.--The 
     President may redetermine the assignment of a country to a 
     particular tier at any time and shall review and, as the 
     President considers appropriate, reassign country tiers on an 
     on-going basis. The Secretary shall provide notice of any 
     such reassignment to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on 
     International Relations of the House of Representatives.
       (4) Effective date of tier assignment.-- An assignment of a 
     country to a particular tier shall take effect on the date on 
     which notice of the assignment is published in the Federal 
     Register.
       (b) Tiers.--
       (1) In general.--The President shall establish a country 
     tiering system consisting of 5 tiers for purposes of this 
     section, ranging from tier 1 through tier 5.
       (2) Range.--Countries that represent the lowest risk of 
     diversion or misuse of an item on the National Security 
     Control List shall be assigned to tier 1. Countries that 
     represent the highest risk of diversion or misuse of an item 
     on the National Security Control List shall be assigned to 
     tier 5.
       (3) Other countries.--Countries that fall between the 
     lowest and highest risk to the national security interest of 
     the United States with respect to the risk of diversion or 
     misuse of an item on the National Security Control List shall 
     be assigned to tier 2, 3, or 4, respectively, based on the 
     assessments required under subsection (c).
       (c) Assessments.--The President shall make an assessment of 
     each country in assigning a country tier taking into 
     consideration risk factors including the following:
       (1) The present and potential relationship of the country 
     with the United States.
       (2) The present and potential relationship of the country 
     with countries friendly to the United States and with 
     countries hostile to the United States.
       (3) The country's capabilities regarding chemical, 
     biological, and nuclear weapons and the country's membership 
     in, and level of compliance with, relevant multilateral 
     export control regimes.
       (4) The country's capabilities regarding missile systems 
     and the country's membership in, and level of compliance 
     with, relevant multilateral export control regimes.
       (5) Whether the country, if a NATO or major non-NATO ally 
     with whom the United States has entered into a free trade 
     agreement as of January 1, 1986, controls exports in 
     accordance with the criteria and standards of a multilateral 
     export control regime as defined in section 2(15) pursuant to 
     an international agreement to which the United States is a 
     party.
       (6) The country's other military capabilities and the 
     potential threat posed by the country to the United States or 
     its allies.
       (7) The effectiveness of the country's export control 
     system.
       (8) The level of the country's cooperation with United 
     States export control enforcement and other efforts.
       (9) The risk of export diversion by the country to a higher 
     tier country.
       (10) The designation of the country as a country supporting 
     international terrorism under section 310.
       (d) Tier Application.--The country tiering system shall be 
     used in the determination of license requirements pursuant to 
     section 201(a)(1).

     SEC. 204. INCORPORATED PARTS AND COMPONENTS.

       (a) Export of Items Containing Controlled Parts and 
     Components.--Controls may not be imposed under this title or 
     any other provision of law on an item solely because the item 
     contains parts or components subject to export controls under 
     this title, if the parts or components--
       (1) are essential to the functioning of the item,
       (2) are customarily included in sales of the item in 
     countries other than controlled countries, and
       (3) comprise 25 percent or less of the total value of the 
     item,
     unless the item itself, if exported, would by virtue of the 
     functional characteristics of the item as a whole make a 
     significant contribution to the military or proliferation 
     potential of a controlled country or end user which would 
     prove detrimental to the national security of the United 
     States, or unless failure to control the item would be 
     contrary to the provisions of section 201(c), section 201(d), 
     or section 309 of this Act.
       (b) Reexports of Foreign-Made Items Incorporating United 
     States Controlled Content.--
       (1) In general.--No authority or permission may be required 
     under this title to reexport to a country (other than a 
     country designated as a country supporting international 
     terrorism pursuant to section 310) an item that is produced 
     in a country other than the United States and incorporates 
     parts or components that are subject to the jurisdiction of 
     the United States, if the value of the controlled United 
     States content of the item produced in such other country is 
     25 percent or less of the total value of the item.
       (2) Definition of controlled united states content.--For 
     purposes of this paragraph, the term ``controlled United 
     States content'' of an item means those parts or components 
     that--
       (A) are subject to the jurisdiction of the United States;
       (B) are incorporated into the item; and
       (C) would, at the time of the reexport, require a license 
     under this title if exported from the United States to a 
     country to which the item is to be reexported.

     SEC. 205. PETITION PROCESS FOR MODIFYING EXPORT STATUS.

       (a) Establishment.--The Secretary shall establish a process 
     for interested persons to petition the Secretary to change 
     the status of an item on the National Security Control List.
       (b) Evaluations and Determinations.--Evaluations and 
     determinations with respect to a petition filed pursuant to 
     this section shall be made in accordance with section 202.

        Subtitle B--Foreign Availability and Mass-Market Status

     SEC. 211. DETERMINATION OF FOREIGN AVAILABILITY AND MASS-
                   MARKET STATUS.

       (a) In General.--The Secretary shall--
       (1) on a continuing basis,
       (2) upon a request from the Office of Technology 
     Evaluation, or
       (3) upon receipt of a petition filed by an interested 
     party,
     review and determine the foreign availability and the mass-
     market status of any item the export of which is controlled 
     under this title.
       (b) Petition and Consultation.--
       (1) In general.--The Secretary shall establish a process 
     for an interested party to petition the Secretary for a 
     determination that an item has a foreign availability or 
     mass-market status. In evaluating and making a determination 
     with respect to a petition filed under this section, the 
     Secretary shall consult with the Secretary of Defense, 
     Secretary of State, and other appropriate Government agencies 
     and with the Office of Technology Evaluation (established 
     pursuant to section 214).
       (2) Time for making determination.--The Secretary shall, 
     within 6 months after receiving a petition described in 
     subsection (a)(3), determine whether the item that is the 
     subject of the petition has foreign availability or mass-
     market status and shall notify the petitioner of the 
     determination.
       (c) Result of Determination.--In any case in which the 
     Secretary determines, in accordance with procedures and 
     criteria which the Secretary shall by regulation establish, 
     that an item described in subsection (a) has--
       (1) a foreign availability status, or
       (2) a mass-market status,
     the Secretary shall notify the President (and other 
     appropriate departments and agencies) and publish the notice 
     of the determination in the Federal Register. The Secretary's 
     determination shall become final 30 days after the date the 
     notice is published, the item shall be removed from the 
     National Security Control List, and a license or other 
     authorization shall not be required under this title or under 
     section 1211 of the National Defense Authorization Act of 
     Fiscal Year 1998 with respect to the item, unless the 
     President makes a determination described in section 212 or 
     213, or takes action under section 309, with respect to the 
     item in that 30-day period.
       (d) Criteria for Determining Foreign Availability and Mass-
     Market Status.--

[[Page S465]]

       (1) Foreign availability status.--The Secretary shall 
     determine that an item has foreign availability status under 
     this subtitle, if the item (or a substantially identical or 
     directly competitive item)--
       (A) is available to controlled countries from sources 
     outside the United States, including countries that 
     participate with the United States in multilateral export 
     controls;
       (B) can be acquired at a price that is not excessive when 
     compared to the price at which a controlled country could 
     acquire such item from sources within the United States in 
     the absence of export controls; and
       (C) is available in sufficient quantity so that the 
     requirement of a license or other authorization with respect 
     to the export of such item is or would be ineffective.
       (2) Mass-market status.--
       (A) In general.--In determining whether an item has mass-
     market status under this subtitle, the Secretary shall 
     consider the following criteria with respect to the item (or 
     a substantially identical or directly competitive item):
       (i) The production and availability for sale in a large 
     volume to multiple potential purchasers.
       (ii) The widespread distribution through normal commercial 
     channels, such as retail stores, direct marketing catalogues, 
     electronic commerce, and other channels.
       (iii) The conduciveness to shipment and delivery by 
     generally accepted commercial means of transport.
       (iv) The use for the item's normal intended purpose without 
     substantial and specialized service provided by the 
     manufacturer, distributor, or other third party.
       (B) Determination by secretary.--If the Secretary finds 
     that the item (or a substantially identical or directly 
     competitive item) meets the criteria set forth in 
     subparagraph (A), the Secretary shall determine that the item 
     has mass-market status.
       (3) Special rules.--For purposes of this subtitle--
       (A) Substantially identical item.--The determination of 
     whether an item in relation to another item is a 
     substantially identical item shall include a fair assessment 
     of end-uses, the properties, nature, and quality of the item.
       (B) Directly competitive item.--
       (i) In general.--The determination of whether an item in 
     relation to another item is a directly competitive item shall 
     include a fair assessment of whether the item, although not 
     substantially identical in its intrinsic or inherent 
     characteristics, is substantially equivalent for commercial 
     purposes and may be adapted for substantially the same uses.
       (ii) Exception.--An item is not directly competitive with a 
     controlled item if the item is substantially inferior to the 
     controlled item with respect to characteristics that resulted 
     in the export of the item being controlled.

     SEC. 212. PRESIDENTIAL SET-ASIDE OF FOREIGN AVAILABILITY 
                   DETERMINATION.

       (a) Criteria for Presidential Set-Aside.--
       (1) General criteria.--
       (A) In general.--If the President determines that--
       (i)(I) decontrolling or failing to control an item 
     constitutes a threat to the national security of the United 
     States, and export controls on the item would advance the 
     national security interests of the United States, and
       (II) there is a high probability that the foreign 
     availability of an item will be eliminated through 
     international negotiations within a reasonable period of time 
     taking into account the characteristics of the item, or
       (ii) failure to control an item would be contrary to the 
     provisions of section 309,
     the President may set aside the Secretary's determination of 
     foreign availability status with respect to the item.
       (B) Nondelegation.--The President may not delegate the 
     authority provided for in this paragraph.
       (2) Report to congress.--The President shall promptly--
       (A) report any set-aside determination described in 
     paragraph (1), along with the specific reasons why the 
     determination was made, to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     International Relations of the House of Representatives; and
       (B) publish the determination in the Federal Register.
       (b) Presidential Action in Case of Set-Aside.--
       (1) In general.--
       (A) Negotiations.--In any case in which export controls are 
     maintained on an item because the President has made a 
     determination under subsection (a), the President shall 
     actively pursue negotiations with the governments of the 
     appropriate foreign countries for the purpose of eliminating 
     such availability.
       (B) Report to congress.--Not later than the date the 
     President begins negotiations, the President shall notify in 
     writing the Committee on Banking, Housing, and Urban Affairs 
     of the Senate and the Committee on International Relations of 
     the House of Representatives that the President has begun 
     such negotiations and why the President believes it is 
     important to the national security that export controls on 
     the item involved be maintained.
       (2) Periodic review of determination.--The President shall 
     review a determination described in subsection (a) at least 
     every 6 months. Promptly after each review is completed, the 
     Secretary shall submit to the committees of Congress referred 
     to in paragraph (1)(B) a report on the results of the review, 
     together with the status of international negotiations to 
     eliminate the foreign availability of the item.
       (3) Expiration of presidential set-aside.--A determination 
     by the President described in subsection (a)(1)(A) shall 
     cease to apply with respect to an item on the earlier of--
       (A) the date that is 6 months after the date on which the 
     determination is made under subsection (a), if the President 
     has not commenced international negotiations to eliminate the 
     foreign availability of the item within that 6-month period;
       (B) the date on which the negotiations described in 
     paragraph (1) have terminated without achieving an agreement 
     to eliminate foreign availability;
       (C) the date on which the President determines that there 
     is not a high probability of eliminating foreign availability 
     of the item through negotiation; or
       (D) the date that is 18 months after the date on which the 
     determination described in subsection (a)(1)(A) is made if 
     the President has been unable to achieve an agreement to 
     eliminate foreign availability within that 18-month period.
       (4) Action on expiration of presidential set-aside.--Upon 
     the expiration of a Presidential set-aside under paragraph 
     (3) with respect to an item, the Secretary shall not require 
     a license or other authorization to export the item.

     SEC. 213. PRESIDENTIAL SET-ASIDE OF MASS-MARKET STATUS 
                   DETERMINATION.

       (a) Criteria for Presidential Set-Aside.--
       (1) General criteria.--If the President determines that--
       (A)(i) decontrolling or failing to control an item 
     constitutes a serious threat to the national security of the 
     United States, and
       (ii) export controls on the item would advance the national 
     security interests of the United States, or
       (B) failure to control an item would be contrary to the 
     provisions of section 309,
     the President may set aside the Secretary's determination of 
     mass-market status with respect to the item.
       (2) Nondelegation.--The President may not delegate the 
     authority provided for in this subsection.
       (b) Presidential Action in Case of Set-Aside.--
       (1) In general.--In any case in which export controls are 
     maintained on an item because the President has made a 
     determination under subsection (a), the President shall 
     report the determination, along with the specific reasons why 
     the determination was made, to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     International Relations of the House of Representatives, and 
     shall publish notice of the determination in the Federal 
     Register not later than 30 days after the Secretary publishes 
     notice of the Secretary's determination that an item has 
     mass-market status.
       (2) Periodic review of determination.--The President shall 
     review a determination made under subsection (a) at least 
     every 6 months. Promptly after each review is completed, the 
     Secretary shall submit a report on the results of the review 
     to the Committee on Banking, Housing, and Urban Affairs of 
     the Senate and the Committee on International Relations of 
     the House of Representatives.

     SEC. 214. OFFICE OF TECHNOLOGY EVALUATION.

       (a) In General.--
       (1) Establishment of office.--The Secretary shall establish 
     in the Department of Commerce an Office of Technology 
     Evaluation (in this subtitle referred to as the ``Office''), 
     which shall be under the direction of the Secretary. The 
     Office shall be responsible for gathering, coordinating, and 
     analyzing all the necessary information in order for the 
     Secretary to make determinations of foreign availability and 
     mass-market status under this Act.
       (2) Staff.--The Secretary shall ensure that the Office 
     include persons with the training, expertise and experience 
     in economic analysis, the defense industrial base, 
     technological developments, national security, and foreign 
     policy export controls to carry out the responsibilities set 
     forth in subsection (b) of this section. In addition to 
     employees of the Department of Commerce, the Secretary may 
     accept on nonreimbursable detail to the Office, employees of 
     the Departments of Defense, State, and Energy and other 
     departments and agencies as appropriate.
       (b) Responsibilities.--The Office shall be responsible 
     for--
       (1) conducting foreign availability assessments to 
     determine whether a controlled item is available to 
     controlled countries and whether requiring a license, or 
     denial of a license for the export of such item, is or would 
     be ineffective;
       (2) conducting mass-market assessments to determine whether 
     a controlled item is available to controlled countries 
     because of the mass-market status of the item;
       (3) monitoring and evaluating worldwide technological 
     developments in industry sectors critical to the national 
     security interests of the United States to determine foreign 
     availability and mass-market status of controlled items;

[[Page S466]]

       (4) monitoring and evaluating multilateral export control 
     regimes and foreign government export control policies and 
     practices that affect the national security interests of the 
     United States;
       (5) conducting assessments of United States industrial 
     sectors critical to the United States defense industrial base 
     and how the sectors are affected by technological 
     developments, technology transfers, and foreign competition; 
     and
       (6) conducting assessments of the impact of United States 
     export control policies on--
       (A) United States industrial sectors critical to the 
     national security interests of the United States; and
       (B) the United States economy in general.
       (c) Reports to Congress.--The Secretary shall make 
     available to the Committee on International Relations of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate as part of the 
     Secretary's annual report required under section 801 
     information on the operations of the Office, and on 
     improvements in the Government's ability to assess foreign 
     availability and mass-market status, during the fiscal year 
     preceding the report, including information on the training 
     of personnel, and the use of Commercial Service Officers of 
     the United States and Foreign Commercial Service to assist in 
     making determinations. The information shall also include a 
     description of determinations made under this Act during the 
     preceding fiscal year that foreign availability or mass-
     market status did or did not exist (as the case may be), 
     together with an explanation of the determinations.
       (d) 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, 
     consistent with the need to protect intelligence sources and 
     methods, furnish information to the Office concerning foreign 
     availability and the mass-market status of items subject to 
     export controls under this Act.

               TITLE III--FOREIGN POLICY EXPORT CONTROLS

     SEC. 301. AUTHORITY FOR FOREIGN POLICY EXPORT CONTROLS.

       (a) Authority.--
       (1) In general.--In order to carry out the purposes set 
     forth in subsection (b), the President may, in accordance 
     with the provisions of this Act, prohibit, curtail, or 
     require a license, other authorization, recordkeeping, or 
     reporting for 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.
       (2) Exercise of authority.--The authority contained in this 
     subsection shall be exercised by the Secretary, in 
     consultation with the Secretary of State and such other 
     departments and agencies as the Secretary considers 
     appropriate.
       (b) Purposes.--The purposes of foreign policy export 
     controls are the following:
       (1) To promote the foreign policy objectives of the United 
     States, consistent with the purposes of this section and the 
     provisions of this Act.
       (2) To promote international peace, stability, and respect 
     for fundamental human rights.
       (3) To use export controls to deter and punish acts of 
     international terrorism and 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 involved in directing, supporting, or participating 
     in acts of international terrorism.
       (c) Exception.--The President may not control under this 
     title the export from a foreign country (whether or not by a 
     United States person) of any item produced or originating in 
     a foreign country that contains parts or components produced 
     or originating in the United States.
       (d) Contract Sanctity.--
       (1) In general.--The President may not prohibit the export 
     of any item under this title if that item is to be exported--
       (A) in performance of a binding contract, agreement, or 
     other contractual commitment entered into before the date on 
     which the President reports to Congress the President's 
     intention to impose controls on that item under this title; 
     or
       (B) under a license or other authorization issued under 
     this Act before the earlier of the date on which the control 
     is initially imposed or the date on which the President 
     reports to Congress the President's intention to impose 
     controls under this title.
       (2) Exception.--The prohibition contained in paragraph (1) 
     shall not apply in any case in which the President determines 
     and certifies to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on International 
     Relations of the House of Representatives that--
       (A) there is a serious threat to a foreign policy interest 
     of the United States;
       (B) the prohibition of exports under each binding contract, 
     agreement, commitment, license, or authorization will be 
     instrumental in remedying the situation posing the serious 
     threat; and
       (C) the export controls will be in effect only as long as 
     the serious threat exists.

     SEC. 302. PROCEDURES FOR IMPOSING CONTROLS.

       (a) Notice.--
       (1) Intent to impose foreign policy export control.--Except 
     as provided in section 306, not later than 45 days before 
     imposing or implementing an export control under this title, 
     the President shall publish in the Federal Register--
       (A) a notice of intent to do so; and
       (B) provide for a period of not less than 30 days for any 
     interested person to submit comments on the export control 
     proposed under this title.
       (2) Purposes of notice.--The purposes of the notice are--
       (A) to provide an opportunity for the formulation of an 
     effective export control policy under this title that 
     advances United States economic and foreign policy interests; 
     and
       (B) to provide an opportunity for negotiations to achieve 
     the purposes set forth in section 301(b).
       (b) Negotiations.--During the 45-day period that begins on 
     the date of notice described in subsection (a), the President 
     may negotiate with the government of the foreign country 
     against which the export control is proposed in order to 
     resolve the reasons underlying the proposed export control.
       (c) Consultation.--
       (1) Requirement.--The President shall consult with the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on International Relations of the 
     House of Representatives regarding any export control 
     proposed under this title and the efforts to achieve or 
     increase multilateral cooperation on the issues or problems 
     underlying the proposed export control.
       (2) Classified consultation.--The consultations described 
     in paragraph (1) may be conducted on a classified basis if 
     the Secretary considers it necessary.

     SEC. 303. CRITERIA FOR FOREIGN POLICY EXPORT CONTROLS.

       Each export control imposed by the President under this 
     title shall--
       (1) have clearly stated and specific United States foreign 
     policy objectives;
       (2) have objective standards for evaluating the success or 
     failure of the export control;
       (3) include an assessment by the President that--
       (A) the export control is likely to achieve such objectives 
     and the expected time for achieving the objectives; and
       (B) the achievement of the objectives of the export control 
     outweighs any potential costs of the export control to other 
     United States economic, foreign policy, humanitarian, or 
     national security interests;
       (4) be targeted narrowly; and
       (5) seek to minimize any adverse impact on the humanitarian 
     activities of United States and foreign nongovernmental 
     organizations in the country subject to the export control.

     SEC. 304. PRESIDENTIAL REPORT BEFORE IMPOSITION OF CONTROL.

       (a) Requirement.--Before imposing an export control under 
     this title, the President shall submit to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on International Relations of the House of 
     Representatives a report on the proposed export control. The 
     report may be provided on a classified basis if the Secretary 
     considers it necessary.
       (b) Content.--The report shall contain a description and 
     assessment of each of the criteria described in section 303. 
     In addition, the report shall contain a description and 
     assessment of--
       (1) any diplomatic and other steps that the United States 
     has taken to accomplish the intended objective of the 
     proposed export control;
       (2) unilateral export controls imposed, and other measures 
     taken, by other countries to achieve the intended objective 
     of the proposed export control;
       (3) the likelihood of multilateral adoption of comparable 
     export controls;
       (4) alternative measures to promote the same objectives and 
     the likelihood of their potential success;
       (5) any United States obligations under international trade 
     agreements, treaties, or other international arrangements, 
     with which the proposed export control may conflict;
       (6) the likelihood that the proposed export control could 
     lead to retaliation against United States interests;
       (7) the likely economic impact of the proposed export 
     control on the United States economy, United States 
     international trade and investment, and United States 
     agricultural interests, commercial interests, and employment; 
     and
       (8) a conclusion that the probable achievement of the 
     objectives of the proposed export control outweighs any 
     likely costs to United States economic, foreign policy, 
     humanitarian, or national security interests, including any 
     potential harm to the United States agricultural and business 
     firms and to the international reputation of the United 
     States as a reliable supplier of goods, services, or 
     technology.

     SEC. 305. IMPOSITION OF CONTROLS.

       The President may impose an export control under this title 
     after the submission of the report required under section 304 
     and publication in the Federal Register of a notice of the 
     imposition of the export control .

     SEC. 306. DEFERRAL AUTHORITY.

       (a) Authority.--The President may defer compliance with any 
     requirement contained in section 302(a), 304, or 305 in the 
     case of a proposed export control if--
       (1) the President determines that a deferral of compliance 
     with the requirement is in the national interest of the 
     United States; and
       (2) the requirement is satisfied not later than 60 days 
     after the date on which the export control is imposed under 
     this title.

[[Page S467]]

       (b) Termination of Control.--An export control with respect 
     to which a deferral has been made under subsection (a) shall 
     terminate 60 days after the date the export control is 
     imposed unless all requirements have been satisfied before 
     the expiration of the 60-day period.

     SEC. 307. REVIEW, RENEWAL, AND TERMINATION.

       (a) Renewal and Termination.--
       (1) In general.--Any export control imposed under this 
     title shall terminate on March 31 of each renewal year unless 
     the President renews the export control on or before such 
     date. For purposes of this section, the term ``renewal year'' 
     means 2003 and every 2 years thereafter.
       (2) Exception.--This section shall not apply to an export 
     control imposed under this title that--
       (A) is required by law;
       (B) is targeted against any country designated as a country 
     supporting international terrorism pursuant to section 310; 
     or
       (C) has been in effect for less than 1 year as of February 
     1 of a renewal year.
       (b) Review.--
       (1) In general.--Not later than February 1 of each renewal 
     year, the President shall review all export controls in 
     effect under this title.
       (2) Consultation.--
       (A) Requirement.--Before completing a review under 
     paragraph (1), the President shall consult with the Committee 
     on Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on International Relations of the House of 
     Representative regarding each export control that is being 
     reviewed.
       (B) Classified consultation.--The consultations may be 
     conducted on a classified basis if the Secretary considers it 
     necessary.
       (3) Public comment.--In conducting the review of each 
     export control under paragraph (1), the President shall 
     provide a period of not less than 30 days for any interested 
     person to submit comments on renewal of the export control. 
     The President shall publish notice of the opportunity for 
     public comment in the Federal Register not less than 45 days 
     before the review is required to be completed.
       (c) Report to Congress.--
       (1) Requirement.--Before renewing an export control imposed 
     under this title, the President shall submit to the 
     committees of Congress referred to in subsection (b)(2)(A) a 
     report on each export control that the President intends to 
     renew.
       (2) Form and content of report.--The report may be provided 
     on a classified basis if the Secretary considers it 
     necessary. Each report shall contain the following:
       (A) A clearly stated explanation of the specific United 
     States foreign policy objective that the existing export 
     control was intended to achieve.
       (B) An assessment of--
       (i) the extent to which the existing export control 
     achieved its objectives before renewal based on the objective 
     criteria established for evaluating the export control; and
       (ii) the reasons why the existing export control has failed 
     to fully achieve its objectives and, if renewed, how the 
     export control will achieve that objective before the next 
     renewal year.
       (C) An updated description and assessment of--
       (i) each of the criteria described in section 303, and
       (ii) each matter required to be reported under section 
     304(b) (1) through (8).
       (3) Renewal of export control.--The President may renew an 
     export control under this title after submission of the 
     report described in paragraph (2) and publication of notice 
     of renewal in the Federal Register.

     SEC. 308. TERMINATION OF CONTROLS UNDER THIS TITLE.

       (a) In General.--Notwithstanding any other provision of 
     law, the President--
       (1) shall terminate any export control imposed under this 
     title if the President determines that the control has 
     substantially achieved the objective for which it was 
     imposed; and
       (2) may terminate any export control imposed under this 
     title that is not required by law at any time.
       (b) Exception.--Paragraphs (1) and (2) of subsection (a) do 
     not apply to any export control imposed under this title that 
     is targeted against any country designated as a country 
     supporting international terrorism pursuant to section 310.
       (c) Effective Date of Termination.--The termination of an 
     export control pursuant to this section shall take effect on 
     the date notice of the termination is published in the 
     Federal Register.

     SEC. 309. COMPLIANCE WITH INTERNATIONAL OBLIGATIONS.

       Notwithstanding any other provision of this Act setting 
     forth limitations on authority to control exports and except 
     as provided in section 304, the President may impose controls 
     on exports to a particular country or countries in order to 
     fulfill obligations or commitments of the United States under 
     resolutions of the United Nations and under treaties, or 
     other international agreements and arrangements, to which the 
     United States is a party.

     SEC. 310. DESIGNATION OF COUNTRIES SUPPORTING INTERNATIONAL 
                   TERRORISM.

       (a) License Required.--A license shall be required for the 
     export of an item to a country if the Secretary of State has 
     determined that--
       (1) the government of such country has repeatedly provided 
     support for acts of international terrorism; and
       (2) the export of the item 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) Notification.--The Secretary and the Secretary of State 
     shall notify the Committee on International Relations of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs and the Committee on Foreign 
     Relations of the Senate at least 30 days before issuing any 
     license required by subsection (a).
       (c) Determinations Regarding Repeated Support.--Each 
     determination of the Secretary of State under subsection 
     (a)(1), including each determination in effect on the date of 
     the enactment of the Antiterrorism and Arms Export 
     Amendments Act of 1989, shall be published in the Federal 
     Register.
       (d) Limitations on Rescinding Determination.--A 
     determination made by the Secretary of State under subsection 
     (a)(1) 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--
       (1) 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
       (2) 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.
       (e) Information To Be Included in Notification.--The 
     Secretary and the Secretary of State shall include in the 
     notification required by subsection (b)--
       (1) a detailed description of the item to be offered, 
     including a brief description of the capabilities of any item 
     for which a license to export is sought;
       (2) the reasons why the foreign country or international 
     organization to which the export or transfer is proposed to 
     be made needs the item which is the subject of such export or 
     transfer and a description of the manner in which such 
     country or organization intends to use the item;
       (3) the reasons why the proposed export or transfer is in 
     the national interest of the United States;
       (4) an analysis of the impact of the proposed export or 
     transfer on the military capabilities of the foreign country 
     or international organization to which such export or 
     transfer would be made;
       (5) an analysis of the manner in which the proposed export 
     would affect the relative military strengths of countries in 
     the region to which the item which is the subject of such 
     export would be delivered and whether other countries in the 
     region have comparable kinds and amounts of the item; and
       (6) an analysis of the impact of the proposed export or 
     transfer on the United States relations with the countries in 
     the region to which the item which is the subject of such 
     export would be delivered.

TITLE IV--EXEMPTION FOR AGRICULTURAL COMMODITIES, MEDICINE, AND MEDICAL 
                                SUPPLIES

     SEC. 401. EXEMPTION FOR AGRICULTURAL COMMODITIES, MEDICINE, 
                   AND MEDICAL SUPPLIES.

       Notwithstanding any other provision of law, the export 
     controls imposed on items under title III shall not apply to 
     agricultural commodities, medicine, and medical supplies.

     SEC. 402. TERMINATION OF EXPORT CONTROLS REQUIRED BY LAW.

       Notwithstanding any other provision of law, the President 
     shall terminate any export control mandated by law on 
     agricultural commodities, medicine, and medical supplies upon 
     the date of enactment of this Act except for a control that 
     is specifically reimposed by law.

     SEC. 403. EXCLUSIONS.

       Sections 401 and 402 do not apply to the following:
       (1) The export of agricultural commodities, medicine, and 
     medical supplies that are subject to national security export 
     controls under title II or are listed on the United States 
     Munitions List established under section 38 of the Arms 
     Export Control Act (22 U.S.C. 2778).
       (2) The export of agricultural commodities, medicine, and 
     medical supplies to a country against which an embargo is in 
     effect under the Trading With the Enemy Act.

    TITLE V--PROCEDURES FOR EXPORT LICENSES AND INTERAGENCY DISPUTE 
                               RESOLUTION

     SEC. 501. EXPORT LICENSE PROCEDURES.

       (a) Responsibility of the Secretary.--
       (1) In General.--All applications for a license or other 
     authorization to export a controlled item shall be filed in 
     such manner

[[Page S468]]

     and include such information as the Secretary may, by 
     regulation, prescribe.
       (2) Procedures.--In guidance and 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 other relevant 
     matters affecting the review of license applications.
       (3) Calculation of processing times.--In calculating the 
     processing times set forth in this title, the Secretary shall 
     use calendar days, except 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.
       (4) Criteria for evaluating applications.--In determining 
     whether to grant an application to export a controlled item 
     under this Act, the following criteria shall be considered:
       (A) The characteristics of the controlled item.
       (B) The threat to--
       (i) the national security interests of the United States 
     from items controlled under title II of this Act; or
       (ii) the foreign policy of the United States from items 
     controlled under title III of this Act.
       (C) The country tier designation of the country to which a 
     controlled item is to be exported pursuant to section 203.
       (D) The risk of export diversion or misuse by--
       (i) the exporter;
       (ii) the method of export;
       (iii) the end-user;
       (iv) the country where the end-user is located; and
       (v) the end-use.
       (E) Risk mitigating factors including, but not limited to--
       (i) changing the characteristics of the controlled item;
       (ii) after-market monitoring by the exporter; and
       (iii) post-shipment verification.
       (b) Initial Screening.--
       (1) Upon receipt of application.--Upon receipt of an export 
     license application, the Secretary shall enter and maintain 
     in the records of the Department information regarding the 
     receipt and status of the application.
       (2) Initial procedures.--
       (A) In general.--Not later than 9 days after receiving any 
     license application, the Secretary shall--
       (i) 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, and such 
     time shall not be included in calculating the time periods 
     prescribed in this title;
       (ii) refer the application, through the use of a common 
     data base or other means, and all information submitted by 
     the applicant, and all necessary recommendations and analyses 
     by the Secretary to the Secretary of Defense, the Secretary 
     of State, and the heads of and other departments and agencies 
     the Secretary considers appropriate;
       (iii) ensure that the classification stated on the 
     application for the export items is correct; and
       (iv) return the application if a license is not required.
       (B) Referral not required.--In the event that the head of a 
     department or agency determines that certain types of 
     applications need not be referred to the department or 
     agency, such department or agency head shall notify the 
     Secretary of the specific types of such applications that the 
     department or agency does not wish to review.
       (3) Withdrawal of application.--An applicant may, by 
     written notice to the Secretary, withdraw an application at 
     any time before final action.
       (c) Action by Other Departments and Agencies.--
       (1) Referral to other agencies.--The Secretary shall 
     promptly refer a license application to the departments and 
     agencies under subsection (b) to make recommendations and 
     provide information to the Secretary.
       (2) Responsibility of referral departments and agencies.--
     The Secretary of Defense, the Secretary of State, and the 
     heads of other reviewing departments and agencies shall take 
     all necessary actions in a prompt and responsible manner on 
     an application. Each department or agency reviewing an 
     application under this section shall establish and maintain 
     records properly identifying and monitoring the status of the 
     matter referred to the department or agency.
       (3) Additional information requests.--Each department or 
     agency to which a license application is referred shall 
     specify to the Secretary any information that is not in the 
     application that would be required for the department or 
     agency to make a determination with respect to the 
     application, and the Secretary shall promptly request such 
     information from the applicant. The time that may elapse 
     between the date the information is requested by that 
     department or agency and the date the information is received 
     by that department or agency shall not be included in 
     calculating the time periods prescribed in this title.
       (4) Time period for action by referral departments and 
     agencies.--Within 30 days after the Secretary refers an 
     application under this section, each department or agency to 
     which an application has been referred shall provide the 
     Secretary with a recommendation either to approve the license 
     or to deny the license. A recommendation that the Secretary 
     deny a license shall include a statement of reasons for the 
     recommendation that are consistent with the provisions of 
     this title, and shall cite both the specific statutory and 
     regulatory basis for the recommendation. A department or 
     agency that fails to provide a recommendation in accordance 
     with this paragraph within that 30-day period shall be deemed 
     to have no objection to the decision of the Secretary on the 
     application.
       (d) Action by the Secretary.--Not later than 30 days after 
     the date the application is referred, the Secretary shall--
       (1) if there is agreement among the referral departments 
     and agencies to issue or deny the license--
       (A) issue the license and ensure all appropriate personnel 
     in the Department (including the Office of Export 
     Enforcement) are notified of all approved license 
     applications; or
       (B) notify the applicant of the intention to deny the 
     license; or
       (2) if there is no agreement among the referral departments 
     and agencies, notify the applicant that the application is 
     subject to the interagency dispute resolution process 
     provided for in section 502.
       (e) Consequences of Application Denial.--
       (1) In general.--If a determination is made to deny a 
     license, the applicant shall be informed in writing by the 
     Secretary of--
       (A) the determination;
       (B) the specific statutory and regulatory bases for the 
     proposed denial;
       (C) what, if any, modifications to, 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 
     would be in a position to discuss modifications or 
     restrictions with the applicant and the specific statutory 
     and regulatory bases for imposing such modifications or 
     restrictions;
       (D) to the extent consistent with the national security and 
     foreign policy interests of the United States, the specific 
     considerations that led to the determination to deny the 
     application; and
       (E) the availability of appeal procedures.
       (2) Period for applicant to respond.--The applicant shall 
     have 20 days from the date of the notice of intent to deny 
     the application to respond in a manner that addresses and 
     corrects the reasons for the denial. If the applicant does 
     not adequately address or correct the reasons for denial or 
     does not respond, the license shall be denied. If the 
     applicant does address or correct the reasons for denial, the 
     application shall receive consideration in a timely manner.
       (f) Appeals and Other Actions by Applicant.--
       (1) In general.--The Secretary shall establish appropriate 
     procedures for an applicant to appeal to the Secretary the 
     denial of an application or other administrative action under 
     this Act. In any case in which the Secretary proposes to 
     reverse the decision with respect to the application, the 
     appeal under this subsection shall be handled in accordance 
     with the interagency dispute resolution process provided for 
     in section 502(b)(3).
       (2) Enforcement of time limits.--
       (A) In general.--In any case in which an action prescribed 
     in this section is not taken on an application within the 
     time period established by this section (except in the case 
     of a time period extended under subsection (g) 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.
       (B) Bringing court action.--If, within 20 days after a 
     petition is filed under subparagraph (A), the processing of 
     the application has not been brought into conformity with the 
     requirements of this section, or the processing of 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 time periods required by this 
     section.
       (g) Exceptions From Required Time Periods.--The following 
     actions related to processing an application shall not be 
     included in calculating the time periods prescribed in this 
     section:
       (1) Agreement of the applicant.--Delays upon which the 
     Secretary and the applicant mutually agree.
       (2) Prelicense checks.--A prelicense check (for a period 
     not to exceed 60 days) that may be required to establish the 
     identity and reliability of the recipient of items controlled 
     under this Act, if--
       (A) the need for the prelicense check is determined by the 
     Secretary or by another department or agency in any case in 
     which the request for the prelicense check is made by such 
     department or agency;
       (B) the request for the prelicense check is initiated by 
     the Secretary within 5 days after the determination that the 
     prelicense check is required; and
       (C) the analysis of the result of the prelicense check is 
     completed by the Secretary within 5 days.

[[Page S469]]

       (3) Requests for government-to-government assurances.--Any 
     request by the Secretary or another department or agency for 
     government-to-government assurances of suitable end-uses of 
     items approved for export, when failure to obtain such 
     assurances would result in rejection of the application, if--
       (A) the request for such assurances is sent to the 
     Secretary of State within 5 days after the determination that 
     the assurances are required;
       (B) the Secretary of State initiates the request of the 
     relevant government within 10 days thereafter; and
       (C) the license is issued within 5 days after the Secretary 
     receives the requested assurances.
       (4) Exception.--Whenever a prelicense check described in 
     paragraph (2) or assurances described in paragraph (3) are 
     not requested within the time periods set forth therein, then 
     the time expended for such prelicense check or assurances 
     shall be included in calculating the time periods established 
     by this section.
       (5) Multilateral review.--Multilateral review of a license 
     application to the extent that such multilateral review is 
     required by a relevant multilateral regime.
       (6) Congressional notification.--Such time as is required 
     for mandatory congressional notifications under this Act.
       (7) Consultations.--Consultation with foreign governments, 
     if such consultation is provided for by a relevant 
     multilateral regime as a precondition for approving a 
     license.
       (h) Classification Requests and Other Inquiries.--
       (1) Classification requests.--In any case in which the 
     Secretary receives a written request asking for the proper 
     classification of an item on the Control List or the 
     applicability of licensing requirements under this title, the 
     Secretary shall promptly notify the Secretary of Defense and 
     other departments and agencies the Secretary considers 
     appropriate. The Secretary shall, within 14 days after 
     receiving the request, inform the person making the 
     request of the proper classification.
       (2) Other inquiries.--In any case in which the Secretary 
     receives a written request for information under this Act, 
     the Secretary shall, within 30 days after receiving the 
     request, reply with that information to the person making the 
     request.

     SEC. 502. INTERAGENCY DISPUTE RESOLUTION PROCESS.

       (a) In General.--All license applications on which 
     agreement cannot be reached shall be referred to the 
     interagency dispute resolution process for decision.
       (b) Interagency Dispute Resolution Process.--
       (1) Initial resolution.--The Secretary shall establish, 
     select the chairperson of, and determine procedures for an 
     interagency committee to review initially all license 
     applications described in subsection (a) with respect to 
     which the Secretary and any of the referral departments and 
     agencies are not in agreement. The chairperson shall consider 
     the positions of all the referral departments and agencies 
     (which shall be included in the minutes described subsection 
     (c)(2)) and make a decision on the license application, 
     including appropriate revisions or conditions thereto.
       (2) Intelligence community.--The analytic product of the 
     intelligence community should be fully considered with 
     respect to any proposed license under this title.
       (3) Further resolution.--The President shall establish 
     additional levels for review or appeal of any matter that 
     cannot be resolved pursuant to the process described in 
     paragraph (1). Each such review shall--
       (A) provide for decision-making based on the majority vote 
     of the participating departments and agencies;
       (B) provide that a department or agency that fails to take 
     a timely position, citing the specific statutory and 
     regulatory bases for a denial, shall be deemed to have no 
     objection to the pending decision;
       (C) provide that any decision of an interagency committee 
     established under paragraph (1) or interagency dispute 
     resolution process established under this paragraph may be 
     escalated to the next higher level of review at the request 
     of any representative of a department or agency that 
     participated in the interagency committee or dispute 
     resolution process that made the decision; and
       (D) ensure that matters are resolved or referred to the 
     President not later than 90 days after the date the completed 
     license application is referred by the Secretary.
       (c) Final Action.--
       (1) In general.--Once a final decision is made under 
     subsection (b), the Secretary shall promptly--
       (A) issue the license and ensure that all appropriate 
     personnel in the Department (including the Office of Export 
     Enforcement) are notified of all approved license 
     applications; or
       (B) notify the applicant of the intention to deny the 
     application.
       (2) Minutes.--The interagency committee and each level of 
     the interagency dispute resolution process shall keep 
     reasonably detailed minutes of all meetings. On each matter 
     before the interagency committee or before any other level of 
     the interagency dispute resolution process in which members 
     disagree, each member shall clearly state the reasons for the 
     member's position and the reasons shall be entered in the 
     minutes.

TITLE VI--INTERNATIONAL ARRANGEMENTS; FOREIGN BOYCOTTS; SANCTIONS; AND 
                              ENFORCEMENT

     SEC. 601. INTERNATIONAL ARRANGEMENTS.

       (a) Multilateral Export Control Regimes.--
       (1) Policy.--It is the policy of the United States to seek 
     multilateral arrangements that support the national security 
     objectives of the United States (as described in title II) 
     and that establish fairer and more predictable competitive 
     opportunities for United States exporters.
       (2) Participation in existing regimes.--Congress encourages 
     the United States to continue its active participation in and 
     to strengthen existing multilateral export control regimes.
       (3) Participation in new regimes.--It is the policy of the 
     United States to participate in additional multilateral 
     export control regimes if such participation would serve the 
     national security interests of the United States.
       (b) Annual Report on Multilateral Export Control Regimes.--
     Not later than February 1 of each year, the President shall 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on International 
     Relations of the House of Representatives a report evaluating 
     the effectiveness of each multilateral export control regime, 
     including an assessment of the steps undertaken pursuant to 
     subsections (c) and (d). The report, or any part of this 
     report, may be submitted in classified form to the extent the 
     Secretary considers necessary.
       (c) Standards for Multilateral Export Control Regimes.--The 
     President shall take steps to establish the following 
     features in any multilateral export control regime in which 
     the United States is participating or may participate:
       (1) Full membership.--All supplier countries are members of 
     the regime, and the policies and activities of the members 
     are consistent with the objectives and membership criteria of 
     the multilateral export control regime.
       (2) Effective enforcement and compliance.--The regime 
     promotes enforcement and compliance with the regime's rules 
     and guidelines.
       (3) Public understanding.--The regime makes an effort to 
     enhance public understanding of the purpose and procedures of 
     the multilateral export control regime.
       (4) Effective implementation procedures.--The multilateral 
     export control regime has procedures for the implementation 
     of its rules and guidelines through uniform and consistent 
     interpretations of its export controls.
       (5) Enhanced cooperation with regime nonmembers.--There is 
     agreement among the members of the multilateral export 
     control regime to--
       (A) cooperate with governments outside the regime to 
     restrict the export of items controlled by such regime; and
       (B) establish an ongoing mechanism in the regime to 
     coordinate planning and implementation of export control 
     measures related to such cooperation.
       (6) Periodic high-level meetings.--There are regular 
     periodic meetings of high-level representatives of the 
     governments of members of the multilateral export control 
     regime for the purpose of coordinating export control 
     policies and issuing policy guidance to members of the 
     regime.
       (7) Common list of controlled items.--There is agreement on 
     a common list of items controlled by the multilateral export 
     control regime.
       (8) Regular updates of common list.--There is a procedure 
     for removing items from the list of controlled items when the 
     control of such items no longer serves the objectives of the 
     members of the multilateral export control regime.
       (9) Treatment of certain countries.--There is agreement to 
     prevent the export or diversion of the most sensitive items 
     to countries whose activities are threatening to the national 
     security of the United States or its allies.
       (10) Harmonization of license approval procedures.--There 
     is harmonization among the members of the regime of their 
     national export license approval procedures and practices.
       (11) Undercutting.--There is a limit with respect to when 
     members of a multilateral export control regime--
       (A) grant export licenses for any item that is 
     substantially identical to or directly competitive with an 
     item controlled pursuant to the regime, where the United 
     States has denied an export license for such item, or
       (B) approve exports to a particular end user to which the 
     United States has denied export license for a similar item.
       (d) Standards for National Export Control Systems.--The 
     President shall take steps to attain the cooperation of 
     members of each regime in implementing effective national 
     export control systems containing the following features:
       (1) Export control law.--Enforcement authority, civil and 
     criminal penalties, and statutes of limitations are 
     sufficient to deter potential violations and punish violators 
     under the member's export control law.
       (2) License approval process.--The system for evaluating 
     export license applications includes sufficient technical 
     expertise to assess the licensing status of exports and 
     ensure the reliability of end users.

[[Page S470]]

       (3) Enforcement.--The enforcement mechanism provides 
     authority for trained enforcement officers to investigate and 
     prevent illegal exports.
       (4) Documentation.--There is a system of export control 
     documentation and verification with respect to controlled 
     items.
       (5) Information.--There are procedures for the coordination 
     and exchange of information concerning licensing, end users, 
     and enforcement with other members of the multilateral export 
     control regime.
       (6) Resources.--The member has devoted adequate resources 
     to administer effectively the authorities, systems, 
     mechanisms, and procedures described in paragraphs (1) 
     through (5).
       (e) Objectives Regarding Multilateral Export Control 
     Regimes.--The President shall seek to achieve the following 
     objectives with regard to multilateral export control 
     regimes:
       (1) Strengthen existing regimes.--Strengthen existing 
     multilateral export control regimes--
       (A) by creating a requirement to share information about 
     export license applications among members before a member 
     approves an export license; and
       (B) harmonizing national export license approval procedures 
     and practices, including the elimination of undercutting.
       (2) Review and update.--Review and update multilateral 
     regime export control lists with other members, taking into 
     account--
       (A) national security concerns;
       (B) the controllability of items; and
       (C) the costs and benefits of controls.
       (3) Encourage compliance by nonmembers.--Encourage 
     nonmembers of the multilateral export control regime--
       (A) to strengthen their national export control regimes and 
     improve enforcement;
       (B) to adhere to the appropriate multilateral export 
     control regime; and
       (C) not to undermine an existing multilateral export 
     control regime by exporting controlled items in a manner 
     inconsistent with the guidelines of the regime.
       (f) Transparency of Multilateral Export Control Regimes.--
       (1) Publication of information on each existing regime.--
     Not later than 120 days after the date of enactment of this 
     Act, the Secretary shall, for each multilateral export 
     control regime (to the extent that it is not inconsistent 
     with the arrangements of that regime or with the national 
     interest), publish in the Federal Register and post on the 
     Department of Commerce website the following information with 
     respect to the regime:
       (A) The purposes of the regime.
       (B) The members of the regime.
       (C) The export licensing policy of the regime.
       (D) The items that are subject to export controls under the 
     regime, together with all public notes, understandings, and 
     other aspects of the agreement of the regime, and all changes 
     thereto.
       (E) Any countries, end uses, or end users that are subject 
     to the export controls of the regime.
       (F) Rules of interpretation.
       (G) Major policy actions.
       (H) The rules and procedures of the regime for establishing 
     and modifying any matter described in subparagraphs (A) 
     through (G) and for reviewing export license applications.
       (2) New regimes.--Not later than 60 days after the United 
     States joins or organizes a new multilateral export control 
     regime, the Secretary shall, to the extent not inconsistent 
     with arrangements under the regime or with the national 
     interest, publish in the Federal Register and post on the 
     Department of Commerce website the information described in 
     subparagraphs (A) through (H) of paragraph (1) with respect 
     to the regime.
       (3) Publication of changes.--Not later than 60 days after a 
     multilateral export control regime adopts any change in the 
     information published under this subsection, the Secretary 
     shall, to the extent not inconsistent with the arrangements 
     under the regime or the national interest, publish such 
     changes in the Federal Register and post such changes on the 
     Department of Commerce website.
       (g) Support of Other Countries' Export Control Systems.--
     The Secretary is encouraged to continue to--
       (1) participate in training of, and provide training to, 
     officials of other countries on the principles and procedures 
     for implementing effective export controls; and
       (2) participate in any such training provided by other 
     departments and agencies of the United States.

     SEC. 602. FOREIGN BOYCOTTS.

       (a) Purposes.--The purposes of this section are as follows:
       (1) To counteract 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.
       (2) To encourage and, in specified cases, require United 
     States persons engaged in the export of items 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.
       (b) Prohibitions and Exceptions.--
       (1) Prohibitions.--In order to carry out the purposes set 
     forth in subsection (a), the President shall issue 
     regulations prohibiting any United States person, with 
     respect to that person's activities in the interstate or 
     foreign commerce of the United States, from taking or 
     knowingly agreeing to take any of the following actions with 
     intent to comply with, further, or support any boycott 
     fostered or imposed by a foreign country against a country 
     that is friendly to the United States and 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, or requirement of, or a request from or on behalf of 
     the boycotting country (subject to the condition that the 
     intent required to be associated with such an act in order to 
     constitute a violation of the prohibition is not indicated 
     solely by 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).
       (B) Refusing, or requiring any other person to refuse, to 
     employ or otherwise discriminate against any United States 
     person on the basis of the 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 (other than furnishing normal 
     business information in a commercial context, as defined by 
     the Secretary) 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 that is known or 
     believed to be restricted from having any business 
     relationship with or in the boycotting country.
       (E) Furnishing information about whether any person is a 
     member of, has made a 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 the compliance with which is prohibited by 
     regulations issued pursuant to this paragraph, and no United 
     States person shall, as a result of the application of this 
     paragraph, be obligated to pay or otherwise honor or 
     implement such letter of credit.
       (2) Exceptions.--Regulations issued pursuant to paragraph 
     (1) shall provide exceptions for--
       (A) compliance, or agreement to comply, with requirements--
       (i) prohibiting the import of items from the boycotted 
     country or items produced or 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 boycotting 
     country on a carrier of the boycotted country or by a route 
     other than that prescribed by the boycotting country or the 
     recipient of the shipment;
       (B) compliance, or agreement 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, for purposes of 
     applying any exception under this subparagraph, 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) compliance, or agreement to comply, in the normal 
     course of business with the unilateral and specific selection 
     by a boycotting country, or a national or resident thereof, 
     or 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) compliance, or agreement to comply, with export 
     requirements of the boycotting country relating to shipment 
     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

[[Page S471]]

     by such a person to comply, with the laws of the country with 
     respect to the person's 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 such person's own use, including 
     the performance of contractual services within that country.
       (3) Limitation on exceptions.--Regulations issued pursuant 
     to paragraphs (2)(C) and (2)(F) shall not provide exceptions 
     from paragraphs (1)(B) and (1)(C).
       (4) Antitrust and civil rights laws not affected.--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) Evasion.--This section applies 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 or the regulations issued pursuant to this 
     subsection. The regulations issued pursuant to this section 
     shall expressly provide that the exceptions set forth in 
     paragraph (2) do not permit activities or agreements 
     (expressed or implied by a course of conduct, including a 
     pattern of responses) that are otherwise prohibited, pursuant 
     to the intent of such exceptions.
       (c) Additional Regulations and Reports.--
       (1) Regulations.--In addition to the regulations issued 
     pursuant to subsection (b), regulations issued pursuant to 
     title III shall implement the purposes set forth in 
     subsection (a).
       (2) Reports by united states persons.--The regulations 
     shall require that any United States person receiving a 
     request to furnish information, enter into or implement an 
     agreement, or take any other action referred to in 
     subsection (a) shall report that request to the Secretary, 
     together with any other information concerning the request 
     that the Secretary determines appropriate. The person 
     shall also submit to the Secretary a statement regarding 
     whether the person intends to comply, and whether the 
     person has complied, with the 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 item to which such report relates may be treated as 
     confidential if the Secretary determines that disclosure 
     of that information would place the United States person 
     involved at a competitive disadvantage. The Secretary 
     shall periodically transmit summaries of the information 
     contained in the reports to the Secretary of State for 
     such action as the Secretary of State, in consultation 
     with the Secretary, considers appropriate to carry out the 
     purposes set forth in subsection (a).
       (d) Preemption.--The provisions of this section and the 
     regulations issued under this section shall preempt any law, 
     rule, or regulation that--
       (1) is a 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; and
       (2) 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. 603. PENALTIES.

       (a) Criminal Penalties.--
       (1) Violations by an individual.--Any individual who 
     knowingly violates, conspires to violate, or attempts to 
     violate any provision of this Act or any regulation, license, 
     or order issued under this Act shall be fined up to 10 times 
     the value of the exports involved or $1,000,000, whichever is 
     greater, imprisoned for not more than 10 years, or both, for 
     each violation, except that the term of imprisonment may be 
     increased to life for multiple violations or aggravated 
     circumstances.
       (2) Violations by a person other than an individual.--Any 
     person other than an individual who knowingly violates, 
     conspires to violate, or attempts to violate any provision of 
     this Act or any regulation, license, or order issued under 
     this Act shall be fined up to 10 times the value of the 
     exports involved or $10,000,000, whichever is greater, for 
     each violation.
       (b) Forfeiture of Property Interest and Proceeds.--
       (1) Forfeiture.--Any person who is convicted under 
     paragraph (1) or (2) of subsection (a) shall, in addition to 
     any other penalty, forfeit to the United States--
       (A) any of that person's security or other interest in, 
     claim against, or property or contractual rights of any kind 
     in the tangible items that were the subject of the violation;
       (B) any of that person's security or other interest in, 
     claim against, or property or contractual rights of any kind 
     in the 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) Procedures.--The procedures in any forfeiture under 
     this subsection, and the duties and authority of the courts 
     of the United States and the Attorney General with respect to 
     any forfeiture action under this subsection, or with respect 
     to any property that may be subject to forfeiture under this 
     subsection, shall be governed by the provisions of chapter 46 
     of title 18, United States Code, to the same extent as 
     property subject to forfeiture under that chapter.
       (c) Civil Penalties; Administrative Sanctions.--
       (1) Civil penalties.--The Secretary may impose a civil 
     penalty of up to $1,000,000 for each violation of a provision 
     of this Act or any regulation, license, or order issued under 
     this Act. A civil penalty under this paragraph may be in 
     addition to, or in lieu of, any other liability or penalty 
     which may be imposed for such a violation.
       (2) Denial of export privileges.--The Secretary may deny 
     the export privileges of any person, including the suspension 
     or revocation of the authority of such person to export or 
     receive United States-origin items subject to this Act, for a 
     violation of a provision of this Act or any regulation, 
     license, or order issued under this Act.
       (3) Exclusion from practice.--The Secretary may exclude any 
     person acting as an attorney, accountant, consultant, freight 
     forwarder, or in any other representative capacity from 
     participating before the Department with respect to a license 
     application or any other matter under this Act.
       (d) Payment of Civil Penalties.--
       (1) Payment as condition of further export privileges.--The 
     payment of a civil penalty imposed under subsection (c) may 
     be made a condition for 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. The period for which the payment of 
     a penalty may be made such a condition may not exceed 1 year 
     after the date on which the payment is due.
       (2) Deferral or suspension.--
       (A) In general.--The payment of a civil penalty imposed 
     under subsection (c) may be deferred or suspended in whole or 
     in part for a period no longer than any probation period 
     (which may exceed 1 year) that may be imposed upon the person 
     on whom the penalty is imposed.
       (B) No bar to collection of penalty.--A deferral or 
     suspension under subparagraph (A) shall not operate as a bar 
     to the collection of the penalty concerned in the event that 
     the conditions of the suspension, deferral, or probation are 
     not fulfilled.
       (3) Treatment of payments.--Any amount paid in satisfaction 
     of a civil penalty imposed under subsection (c) shall be 
     covered into the Treasury as miscellaneous receipts except as 
     set forth in section 607(h).
       (e) Refunds.--
       (1) Authority.--
       (A) In general.--The Secretary may, in the Secretary's 
     discretion, refund any civil penalty imposed under subsection 
     (c) on the ground of a material error of fact or law in 
     imposition of the penalty.
       (B) Limitation.--A civil penalty may not be refunded under 
     subparagraph (A) later than 2 years after payment of the 
     penalty.
       (2) Prohibition on actions for refund.--Notwithstanding 
     section 1346(a) of title 28, United States Code, no action 
     for the refund of any civil penalty referred to in paragraph 
     (1) may be maintained in any court.
       (f) Effect of Other Convictions.--
       (1) Denial of export privileges.--Any person convicted of a 
     violation of--
       (A) a provision of this Act or the Export Administration 
     Act of 1979,
       (B) a provision of the International Emergency Economic 
     Powers Act (50 U.S.C. 1701 et seq.),
       (C) section 793, 794, or 798 of title 18, United States 
     Code,
       (D) section 4(b) of the Internal Security Act of 1950 (50 
     U.S.C. 783(b)),
       (E) section 38 of the Arms Export Control Act (22 U.S.C. 
     2778),
       (F) section 16 of the Trading with the Enemy Act (50 U.S.C. 
     App. 16),
       (G) any regulation, license, or order issued under any 
     provision of law listed in subparagraph (A), (B), (C), (D), 
     (E), or (F),
       (H) section 371 or 1001 of title 18, United States Code, if 
     in connection with the export of controlled items under this 
     Act or any regulation, license, or order issued under the 
     International Emergency Economic Powers Act, or the export of 
     items controlled under the Arms Export Control Act,
       (I) section 175 of title 18, United States Code,
       (J) a provision of the Atomic Energy Act (42 U.S.C. 201 et 
     seq.),
       (K) section 831 of title 18, United States Code, or
       (L) section 2332a of title 18, United States Code,

     may, at the discretion of the Secretary, be denied export 
     privileges under this Act for a period not to exceed 10 years 
     from the date of the conviction. 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) Related persons.--The Secretary may exercise the 
     authority under paragraph (1) with respect to any person 
     related through affiliation, ownership, control, or position 
     of responsibility to a person convicted of any violation of a 
     law set forth in paragraph (1) upon a showing of such 
     relationship with the convicted person. The Secretary shall 
     make such showing only after providing notice and opportunity 
     for a hearing.
       (g) Statute of Limitations.--
       (1) In general.--Except as provided in paragraph (2), a 
     proceeding in which a civil

[[Page S472]]

     penalty or other administrative sanction (other than a 
     temporary denial order) is sought under subsection (c) may 
     not be instituted more than 5 years after the later of the 
     date of the alleged violation or the date of discovery of the 
     alleged violation.
       (2) Exception.--
       (A) Tolling.--In any case in which a criminal indictment 
     alleging a violation under subsection (a) is returned within 
     the time limits prescribed by law for the institution of such 
     action, the limitation under paragraph (1) for bringing a 
     proceeding to impose a civil penalty or other administrative 
     sanction under this section shall, upon the return of the 
     criminal indictment, be tolled against all persons named as a 
     defendant.
       (B) Duration.--The tolling of the limitation with respect 
     to a defendant under subparagraph (A) as a result of a 
     criminal indictment shall continue for a period of 6 months 
     from the date on which the conviction of the defendant 
     becomes final, the indictment against the defendant is 
     dismissed, or the criminal action has concluded.
       (h) Violations Defined by Regulation.--Nothing in this 
     section shall limit the authority of the Secretary to define 
     by regulation violations under this Act.
       (i) Construction.--Nothing in subsection (c), (d), (e), 
     (f), or (g) limits--
       (1) the availability of other administrative or judicial 
     remedies with respect to a violation of a provision 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 any such violation; or
       (3) the authority to compromise, remit, or mitigate 
     seizures and forfeitures pursuant to section 1(b) of title VI 
     of the Act of June 15, 1917 (22 U.S.C. 401(b)).

     SEC. 604. MULTILATERAL EXPORT CONTROL REGIME VIOLATION 
                   SANCTIONS.

       (a) Imposition of Sanctions.--
       (1) In general.--The President, subject to subsection (c), 
     shall apply sanctions under subsection (b) for a period of 
     not less than 2 years and not more than 5 years, if the 
     President determines that--
       (A) a foreign person has violated any regulation issued by 
     a country to control exports for national security purposes 
     pursuant to a multilateral export control regime; and
       (B) such violation has substantially aided a country in--
       (i) acquiring military significant capabilities or weapons, 
     if the country is an actual or potential adversary of the 
     United States;
       (ii) acquiring nuclear weapons provided such country is 
     other than the declared nuclear states of the People's 
     Republic China, the Republic of France, the Russian 
     Federation, the United Kingdom, and the United States;
       (iii) acquiring biological or chemical weapons; or
       (iv) acquiring missiles.
       (2) Notification of congress.--The President shall notify 
     Congress of each action taken under this section.
       (b) Applicability and Forms of Sanctions.--The sanctions 
     referred to in subsection (a) shall apply to the foreign 
     person committing the violation, as well as to any parent, 
     affiliate, subsidiary, and successor entity of the foreign 
     person, and, except as provided in subsection (c), are as 
     follows:
       (1) A prohibition on contracting with, and the procurement 
     of products and services from, a sanctioned person, by any 
     department, agency, or instrumentality of the United States 
     Government.
       (2) A prohibition on the importation into the United States 
     of all items produced by a sanctioned person.
       (c) Exceptions.--The President shall not apply sanctions 
     under this section--
       (1) in the case of procurement of defense items--
       (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 foreign person or 
     other entity to which the sanctions would otherwise be 
     applied is a sole source supplier of essential defense items 
     and no alternative supplier can be identified; or
       (C) if the President determines that such items are 
     essential to the national security under defense coproduction 
     agreements;
       (2) in any case in which such sanctions would violate 
     United States international obligations including treaties, 
     agreements, or understandings; or
       (3) to--
       (A) items provided under contracts or other binding 
     agreements (as such terms are defined by the President in 
     regulations) entered into before the date on which the 
     President notifies Congress of the intention to impose the 
     sanctions;
       (B) after-market service and replacement parts including 
     upgrades;
       (C) component parts, but not finished products, essential 
     to United States products or productions; or
       (D) information and technology.
       (d) Exclusion.--The President shall not apply sanctions 
     under this section to a parent, affiliate, subsidiary, and 
     successor entity of a foreign person if the President 
     determines that--
       (1) the parent, affiliate, subsidiary, or successor entity 
     (as the case may be) has not knowingly violated the export 
     control regulation violated by the foreign person; and
       (2) the government of the country with jurisdiction over 
     the parent, affiliate, subsidiary, or successor entity had in 
     effect, at the time of the violation by the foreign person, 
     an effective export control system consistent with principles 
     set forth in section 601(b)(2).
       (e) Subsequent Modifications of Sanctions.--The President 
     may, after consultation with the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     International Relations of the House of Representatives, 
     limit the scope of sanctions applied to a parent, affiliate, 
     subsidiary, or successor entity of the foreign person 
     determined to have committed the violation on account of 
     which the sanctions were imposed, if the President determines 
     that--
       (1) the parent, affiliate, subsidiary, or successor entity 
     (as the case may be) has not, on the basis of evidence 
     available to the United States, itself violated the export 
     control regulation involved, either directly or through a 
     course of conduct;
       (2) the government with jurisdiction over the parent, 
     affiliate, subsidiary, or successor entity has improved its 
     export control system as measured by the criteria set forth 
     in section 601(b)(2); and
       (3) the parent, affiliate, subsidiary, or successor entity, 
     has instituted improvements in internal controls sufficient 
     to detect and prevent violations of the multilateral export 
     control regime.

     SEC. 605. MISSILE PROLIFERATION CONTROL VIOLATIONS.

       (a) Violations by United States Persons.--
       (1) Sanctions.--
       (A) In general.--If the President determines that a United 
     States person knowingly--
       (i) exports, transfers, or otherwise engages in the trade 
     of any item on the MTCR Annex, in violation of the provisions 
     of section 38 (22 U.S.C. 2778) or chapter 7 of the Arms 
     Export Control Act, title II or III of this Act, or any 
     regulations or orders issued under any such provisions,
       (ii) conspires to or attempts to engage in such export, 
     transfer, or trade, or
       (iii) facilitates such export, transfer, or trade by any 
     other person,
     then the President shall impose the applicable sanctions 
     described in subparagraph (B).
       (B) Sanctions described.--The sanctions which apply to a 
     United States person under subparagraph (A) are the 
     following:
       (i) If the item on the MTCR Annex involved in the export, 
     transfer, or trade is missile equipment or technology within 
     category II of the MTCR Annex, then the President shall deny 
     to such United States person, for a period of 2 years, 
     licenses for the transfer of missile equipment or technology 
     controlled under this Act.
       (ii) If the item on the MTCR Annex involved in the export, 
     transfer, or trade is missile equipment or technology within 
     category I of the MTCR Annex, then the President shall deny 
     to such United States person, for a period of not less than 2 
     years, all licenses for items the export of which is 
     controlled under this Act.
       (2) Discretionary sanctions.--In the case of any 
     determination referred to in paragraph (1), the Secretary may 
     pursue any other appropriate penalties under section 603.
       (3) Waiver.--The President may waive the imposition of 
     sanctions under paragraph (1) on a person with respect to an 
     item if the President certifies to Congress that--
       (A) the item is essential to the national security of the 
     United States; and
       (B) such person is a sole source supplier of the item, the 
     item is not available from any alternative reliable supplier, 
     and the need for the item cannot be met in a timely manner by 
     improved manufacturing processes or technological 
     developments.
       (b) Transfers of Missile Equipment or Technology by Foreign 
     Persons.--
       (1) Sanctions.--
       (A) In general.--Subject to paragraphs (3) through (7), if 
     the President determines that a foreign person, after the 
     date of enactment of this section, knowingly--
       (i) exports, transfers, or otherwise engages in the trade 
     of any MTCR equipment or technology that contributes to the 
     design, development, or production of missiles in a country 
     that is not an MTCR adherent and would be, if it were United 
     States-origin equipment or technology, subject to the 
     jurisdiction of the United States under this Act,
       (ii) conspires to or attempts to engage in such export, 
     transfer, or trade, or
       (iii) facilitates such export, transfer, or trade by any 
     other person,
     or if the President has made a determination with respect to 
     a foreign person under section 73(a) of the Arms Export 
     Control Act, then the President shall impose on that foreign 
     person the applicable sanctions under subparagraph (B).
       (B) Sanctions described.--The sanctions which apply to a 
     foreign person under subparagraph (A) are the following:
       (i) If the item involved in the export, transfer, or trade 
     is within category II of the MTCR Annex, then the President 
     shall deny, for a period of 2 years, licenses for the 
     transfer to such foreign person of missile equipment or 
     technology the export of which is controlled under this Act.
       (ii) If the item involved in the export, transfer, or trade 
     is within category I of the MTCR Annex, then the President 
     shall deny, for a period of not less than 2 years, licenses 
     for the transfer to such foreign person of items the export 
     of which is controlled under this Act.

[[Page S473]]

       (iii) If, in addition to actions taken under clauses (i) 
     and (ii), the President determines that the export, transfer, 
     or trade has substantially contributed to the design, 
     development, or production of missiles in a country that is 
     not an MTCR adherent, then the President shall prohibit, for 
     a period of not less than 2 years, the importation into the 
     United States of products produced by that foreign person.
       (2) Inapplicability with respect to mtcr adherents.--
     Paragraph (1) does not apply with respect to--
       (A) any export, transfer, or trading activity that is 
     authorized by the laws of an MTCR adherent, if such 
     authorization is not obtained by misrepresentation or fraud; 
     or
       (B) any export, transfer, or trade of an item to an end 
     user in a country that is an MTCR adherent.
       (3) Effect of enforcement actions by mtcr adherents.--
     Sanctions set forth in paragraph (1) may not be imposed under 
     this subsection on a person with respect to acts described in 
     such paragraph or, if such sanctions are in effect against a 
     person on account of such acts, such sanctions shall be 
     terminated, if an MTCR adherent is taking judicial or other 
     enforcement action against that person with respect to such 
     acts, or that person has been found by the government of an 
     MTCR adherent to be innocent of wrongdoing with respect to 
     such acts.
       (4) Advisory opinions.--The Secretary, in consultation with 
     the Secretary of State and the Secretary of Defense, may, 
     upon the request of any person, issue an advisory opinion to 
     that person as to whether a proposed activity by that person 
     would subject that person to sanctions under this subsection. 
     Any person who relies in good faith on such an advisory 
     opinion which states that the proposed activity would not 
     subject a person to such sanctions, and any person who 
     thereafter engages in such activity, may not be made 
     subject to such sanctions on account of such activity.
       (5) Waiver and report to congress.--
       (A) Waiver.--In any case other than one in which an 
     advisory opinion has been issued under paragraph (4) stating 
     that a proposed activity would not subject a person to 
     sanctions under this subsection, the President may waive the 
     application of paragraph (1) to a foreign person if the 
     President determines that such waiver is essential to the 
     national security of the United States.
       (B) Report to congress.--In the event that the President 
     decides to apply the waiver described in subparagraph (A), 
     the President shall so notify Congress not less than 20 
     working days before issuing the waiver. Such notification 
     shall include a report fully articulating the rationale and 
     circumstances which led the President to apply the waiver.
       (6) Additional waiver.--The President may waive the 
     imposition of sanctions under paragraph (1) on a person with 
     respect to a product or service if the President certifies to 
     the Congress that--
       (A) the product or service is essential to the national 
     security of the United States; and
       (B) such person is a sole source supplier of the product or 
     service, the product or service is not available from any 
     alternative reliable supplier, and the need for the product 
     or service cannot be met in a timely manner by improved 
     manufacturing processes or technological developments.
       (7) Exceptions.--The President shall not apply the sanction 
     under this subsection prohibiting the importation of the 
     products of a foreign person--
       (A) in the case of procurement of defense articles or 
     defense services--
       (i) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     requirements essential to the national security of the United 
     States;
       (ii) if the President determines that the person to which 
     the sanctions would be applied is a sole source supplier of 
     the defense articles and services, that the defense articles 
     or services are essential to the national security of the 
     United States, and that alternative sources are not readily 
     or reasonably available; or
       (iii) if the President determines that such articles or 
     services are essential to the national security of the United 
     States under defense coproduction agreements or NATO Programs 
     of Cooperation;
       (B) to products or services provided under contracts 
     entered into before the date on which the President publishes 
     his intention to impose the sanctions; or
       (C) to--
       (i) spare parts,
       (ii) component parts, but not finished products, essential 
     to United States products or production,
       (iii) routine services and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available, or
       (iv) information and technology essential to United States 
     products or production.
       (c) Definitions.--In this section:
       (1) Missile.--The term ``missile'' means a category I 
     system as defined in the MTCR Annex, and any other unmanned 
     delivery system of similar capability, as well as the 
     specially designed production facilities for these systems.
       (2) Missile technology control regime; mtcr.--The term 
     ``Missile Technology Control Regime'' or ``MTCR'' means the 
     policy statement, between the United States, the United 
     Kingdom, the Federal Republic of Germany, France, Italy, 
     Canada, and Japan, announced on April 16, 1987, to restrict 
     sensitive missile-relevant transfers based on the MTCR Annex, 
     and any amendments thereto.
       (3) MTCR adherent.--The term ``MTCR adherent'' means a 
     country that participates in the MTCR or that, pursuant to an 
     international understanding to which the United States is a 
     party, controls MTCR equipment or technology in accordance 
     with the criteria and standards set forth in the MTCR.
       (4) MTCR annex.--The term ``MTCR Annex'' means the 
     Guidelines and Equipment and Technology Annex of the MTCR, 
     and any amendments thereto.
       (5) Missile equipment or technology; mtcr equipment or 
     technology.--The terms ``missile equipment or technology'' 
     and ``MTCR equipment or technology'' mean those items listed 
     in category I or category II of the MTCR Annex.
       (6) Foreign person.--The term ``foreign person'' means any 
     person other than a United States person.
       (7) Person.--
       (A) In general.--The term ``person'' means a natural person 
     as well as a corporation, business association, partnership, 
     society, trust, any other nongovernmental entity, 
     organization, or group, and any governmental entity operating 
     as a business enterprise, and any successor of any such 
     entity.
       (B) Identification in certain cases.--In the case of 
     countries where it may be impossible to identify a specific 
     governmental entity referred to in subparagraph (A), the term 
     ``person'' means--
       (i) all activities of that government relating to the 
     development or production of any missile equipment or 
     technology; and
       (ii) all activities of that government affecting the 
     development or production of aircraft, electronics, and space 
     systems or equipment.
       (8) Otherwise engaged in the trade of.--The term 
     ``otherwise engaged in the trade of'' means, with respect to 
     a particular export or transfer, to be a freight forwarder or 
     designated exporting agent, or a consignee or end user of the 
     item to be exported or transferred.

     SEC. 606. CHEMICAL AND BIOLOGICAL WEAPONS PROLIFERATION 
                   SANCTIONS.

       (a) Imposition of Sanctions.--
       (1) Determination by the president.--Except as provided in 
     subsection (b)(2), the President shall impose both of the 
     sanctions described in subsection (c) if the President 
     determines that a foreign person, on or after the date of 
     enactment of this section, has knowingly and materially 
     contributed--
       (A) through the export from the United States of any item 
     that is subject to the jurisdiction of the United States 
     under this Act, or
       (B) through the export from any other country of any item 
     that would be, if it were a United States item, subject to 
     the jurisdiction of the United States under this Act,
     to the efforts by any foreign country, project, or entity 
     described in paragraph (2) to use, develop, produce, 
     stockpile, or otherwise acquire chemical or biological 
     weapons.
       (2) Countries, projects, or entities receiving 
     assistance.--Paragraph (1) applies in the case of--
       (A) any foreign country that the President determines has, 
     at any time after the date of enactment of this Act--
       (i) used chemical or biological weapons in violation of 
     international law;
       (ii) used lethal chemical or biological weapons against its 
     own nationals; or
       (iii) made substantial preparations to engage in the 
     activities described in clause (i) or (ii);
       (B) any foreign country whose government is determined for 
     purposes of section 310 to be a government that has 
     repeatedly provided support for acts of international 
     terrorism; or
       (C) any other foreign country, project, or entity 
     designated by the President for purposes of this section.
       (3) Persons against which sanctions are to be imposed.--
     Sanctions shall be imposed pursuant to paragraph (1) on--
       (A) the foreign person with respect to which the President 
     makes the determination described in that paragraph;
       (B) any successor entity to that foreign person;
       (C) any foreign person that is a parent or subsidiary of 
     that foreign person if that parent or subsidiary knowingly 
     assisted in the activities which were the basis of that 
     determination; and
       (D) any foreign person that is an affiliate of that foreign 
     person if that affiliate knowingly assisted in the activities 
     which were the basis of that determination and if that 
     affiliate is controlled in fact by that foreign person.
       (b) Consultations With and Actions by Foreign Government of 
     Jurisdiction.--
       (1) Consultations.--If the President makes the 
     determinations described in subsection (a)(1) with respect to 
     a foreign person, Congress urges the President to initiate 
     consultations immediately with the government with primary 
     jurisdiction over that foreign person with respect to the 
     imposition of sanctions pursuant to this section.
       (2) Actions by government of jurisdiction.--In order to 
     pursue such consultations with that government, the President 
     may delay imposition of sanctions pursuant to this section 
     for a period of up to 90 days. Following the consultations, 
     the President shall

[[Page S474]]

     impose sanctions unless the President determines and 
     certifies to Congress that government has taken specific and 
     effective actions, including appropriate penalties, to 
     terminate the involvement of the foreign person in the 
     activities described in subsection (a)(1). The President may 
     delay imposition of sanctions for an additional period of up 
     to 90 days if the President determines and certifies to 
     Congress that government is in the process of taking the 
     actions described in the preceding sentence.
       (3) Report to congress.--The President shall report to 
     Congress, not later than 90 days after making a determination 
     under subsection (a)(1), on the status of consultations with 
     the appropriate government under this subsection, and the 
     basis for any determination under paragraph (2) of this 
     subsection that such government has taken specific corrective 
     actions.
       (c) Sanctions.--
       (1) Description of sanctions.--The sanctions to be imposed 
     pursuant to subsection (a)(1) are, except as provided in 
     paragraph (2) of this subsection, the following:
       (A) Procurement sanction.--The United States Government 
     shall not procure, or enter into any contract for the 
     procurement of, any goods or services from any person 
     described in subsection (a)(3).
       (B) Import sanctions.--The importation into the United 
     States of products produced by any person described in 
     subsection (a)(3) shall be prohibited.
       (2) Exceptions.--The President shall not be required to 
     apply or maintain sanctions under this section--
       (A) in the case of procurement of defense articles or 
     defense services--
       (i) under existing contracts or subcontracts, including the 
     exercise of options for production quantities to satisfy 
     United States operational military requirements;
       (ii) if the President determines that the person or other 
     entity to which the sanctions would otherwise be applied is a 
     sole source supplier of the defense articles or services, 
     that the defense articles or services are essential, and that 
     alternative sources are not readily or reasonably available; 
     or
       (iii) if the President determines that such articles or 
     services are essential to the national security under defense 
     coproduction agreements;
       (B) to products or services provided under contracts 
     entered into before the date on which the President publishes 
     his intention to impose sanctions;
       (C) to--
       (i) spare parts,
       (ii) component parts, but not finished products, essential 
     to United States products or production, or
       (iii) routine servicing and maintenance of products, to the 
     extent that alternative sources are not readily or reasonably 
     available;
       (D) to information and technology essential to United 
     States products or production; or
       (E) to medical or other humanitarian items.
       (d) Termination of Sanctions.--The sanctions imposed 
     pursuant to this section shall apply for a period of at least 
     12 months following the imposition of sanctions and shall 
     cease to apply thereafter only if the President determines 
     and certifies to the Congress that reliable information 
     indicates that the foreign person with respect to which the 
     determination was made under subsection (a)(1) has ceased to 
     aid or abet any foreign government, project, or entity in its 
     efforts to acquire chemical or biological weapons capability 
     as described in that subsection.
       (e) Waiver.--
       (1) Criterion for waiver.--The President may waive the 
     application of any sanction imposed on any person pursuant to 
     this section, after the end of the 12-month period beginning 
     on the date on which that sanction was imposed on that 
     person, if the President determines and certifies to Congress 
     that such waiver is important to the national security 
     interests of the United States.
       (2) Notification of and report to congress.--If the 
     President decides to exercise the waiver authority provided 
     in paragraph (1), the President shall so notify the Congress 
     not less than 20 days before the waiver takes effect. Such 
     notification shall include a report fully articulating the 
     rationale and circumstances which led the President to 
     exercise the waiver authority.
       (f) Definition of Foreign Person.--For the purposes of this 
     section, the term ``foreign person'' means--
       (1) an individual who is not a citizen of the United States 
     or an alien admitted for permanent residence to the United 
     States; or
       (2) a corporation, partnership, or other entity which is 
     created or organized under the laws of a foreign country or 
     which has its principal place of business outside the United 
     States.

     SEC. 607. ENFORCEMENT.

       (a) General Authority and Designation.--
       (1) Policy guidance on enforcement.--The Secretary, in 
     consultation with the Secretary of the Treasury and the heads 
     of other departments and agencies that the Secretary 
     considers appropriate, shall be responsible for providing 
     policy guidance on the enforcement of this Act.
       (2) General authorities.--
       (A) Exercise of authority.--To the extent necessary or 
     appropriate to the enforcement of this Act, officers or 
     employees of the Department designated by the Secretary, 
     officers and employees of the United States Customs Service 
     designated by the Commissioner of Customs, and officers and 
     employees of any other department or agency designated by the 
     head of a department or agency exercising functions under 
     this Act, may exercise the enforcement authority under 
     paragraph (3).
       (B) Customs service.--In carrying out enforcement authority 
     under paragraph (3), the Commissioner of Customs and 
     employees of the United States Customs Services designated by 
     the Commissioner may make investigations within or outside 
     the United States and at ports of entry into or exit from the 
     United States where officers of the United States Customs 
     Service are authorized by law to carry out law 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 commodities 
     or technology at the ports of entry into or exit from the 
     United States where officers of the United States Customs 
     Service are authorized by law to conduct searches, 
     detentions, and seizures, and at the places outside the 
     United States where the United States Customs Service, 
     pursuant to agreement or other arrangement with other 
     countries, is authorized to perform enforcement activities.
       (C) Other employees.--In carrying out enforcement authority 
     under paragraph (3), the Secretary and officers and employees 
     of the Department designated by the Secretary may make 
     investigations within the United States, and may conduct, 
     outside the United States, pre-license and post-shipment 
     verifications of controlled items and investigations in the 
     enforcement of section 602. The Secretary and officers and 
     employees of the Department designated by the Secretary are 
     authorized to search, detain (after search), and seize items 
     at places within the United States other than ports referred 
     to in subparagraph (B). The search, detention (after search), 
     or seizure of items at the ports and places referred to in 
     subparagraph (B) may be conducted by officers and employees 
     of the Department only with the concurrence of the 
     Commissioner of Customs or a person designated by the 
     Commissioner.
       (D) Agreements and arrangements.--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) Specific authorities.--
       (A) Actions by any designated personnel.--Any officer or 
     employee designated under paragraph (2), in carrying out the 
     enforcement authority under this Act, may do the following:
       (i) Make investigations of, obtain information from, make 
     inspection of any books, records, or reports (including any 
     writings required to be kept by the Secretary), premises, or 
     property of, and take the sworn testimony of, any person.
       (ii) 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, 
     on request of the Attorney General and after notice to any 
     such person and a hearing, shall have jurisdiction to issue 
     an order requiring such person to appear and give testimony 
     or to appear and produce books, records, and other writings, 
     or both. Any failure to obey such order of the court may be 
     punished by such court as a contempt thereof. The attendance 
     of witnesses and the production of documents provided for in 
     this clause may be required from any State, the District of 
     Columbia, or in any territory of the United States at any 
     designated place. Witnesses subpoenaed under this subsection 
     shall be paid the same fees and mileage allowance as paid 
     witnesses in the district courts of the United States.
       (B) Actions by office of export enforcement and customs 
     service personnel.--
       (i) Office of export enforcement and customs service 
     personnel.--Any officer or employee of the Office of Export 
     Enforcement of the Department of Commerce (in this Act 
     referred to as ``OEE'') who is designated by the Secretary 
     under paragraph (2), and any officer or employee of the 
     United States Customs Service who is designated by the 
     Commissioner of Customs under paragraph (2), may do the 
     following in carrying out the enforcement authority under 
     this Act:

       (I) Execute any warrant or other process issued by a court 
     or officer of competent jurisdiction with respect to the 
     enforcement of this Act.
       (II) 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.
       (III) Carry firearms.

       (ii) OEE personnel.--Any officer and employee of the OEE 
     designated by the Secretary under paragraph (2) shall 
     exercise the authority set forth in clause (i) pursuant to 
     guidelines approved by the Attorney General.
       (C) Other actions by customs service personnel.--Any 
     officer or employee of the United States Customs Service 
     designated by

[[Page S475]]

     the Commissioner of Customs under paragraph (2) may do the 
     following in carrying out the enforcement authority under 
     this Act:
       (i) 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.
       (ii) 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.
       (iii) 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.
       (4) Other authorities not affected.--The authorities 
     conferred by this section are in addition to any authorities 
     conferred under other laws.
       (b) Forfeiture.--
       (1) In general.--Any tangible items lawfully seized under 
     subsection (a) by designated officers or employees shall be 
     subject to forfeiture to the United States.
       (2) Applicable laws.--Those provisions of law relating to--
       (A) the seizure, summary and judicial forfeiture, and 
     condemnation of property for violations of the customs laws;
       (B) the disposition of such property or the proceeds from 
     the sale thereof;
       (C) the remission or mitigation of such forfeitures; and
       (D) 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.
       (3) Forfeitures under customs laws.--Duties that 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 subsection by the 
     Secretary or any officer or employee of the Department that 
     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) Referral of Cases.--All cases involving violations of 
     this Act shall be referred to the Secretary for purposes of 
     determining civil penalties and administrative sanctions 
     under section 603 or to the Attorney General for criminal 
     action in accordance with this Act or to both the Secretary 
     and the Attorney General.
       (d) Undercover Investigation Operations.--
       (1) Use of funds.--With respect to any undercover 
     investigative operation conducted by the OEE that is 
     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 equipment, conveyances, and 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 of ``miscellaneous'' of the Act 
     of March 3, 1877, (40 U.S.C. 34), sections 3732(a) and 3741 
     of the Revised Statutes of the United States (41 U.S.C. 11(a) 
     and 22), subsections (a) and (c) of section 304 of the 
     Federal Property and Administrative Services Act of 1949 (41 
     U.S.C. 254 (a) and (c)), and section 305 of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     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 undercover 
     operation, and to operate such corporations or business 
     entities on a commercial basis, without regard to sections 
     1341, 3324, and 9102 of title 31, United States Code;
       (C) funds made available for export enforcement under this 
     Act and the proceeds from undercover operations may be 
     deposited in banks or other financial institutions without 
     regard to 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 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 the action 
     authorized by subparagraph (A), (B), (C), or (D) for which 
     the funds would be used is necessary for the conduct of the 
     undercover operation.
       (2) Disposition of business entities.--If a corporation or 
     business entity established or acquired as part of an 
     undercover operation has a net value of more than $250,000 
     and is to be liquidated, sold, or otherwise disposed of, the 
     Director of OEE shall report the circumstances to the 
     Secretary and the Comptroller General of the United States as 
     much in advance of such disposition as the Director of the 
     OEE (or the Director's 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. Any property or 
     equipment purchased pursuant to paragraph (1) may be retained 
     for subsequent use in undercover operations under this 
     section. When such property or equipment is no longer needed, 
     it shall be considered surplus and disposed of as surplus 
     government property.
       (3) Deposit of proceeds.--As soon as the proceeds from an 
     OEE undercover investigative operation with respect to which 
     an action is authorized and carried out under this subsection 
     are no longer needed for the conduct of such operation, the 
     proceeds or the balance of the proceeds remaining at the time 
     shall be deposited into the Treasury of the United States as 
     miscellaneous receipts.
       (4) Audit and report.--
       (A) Audit.--The Director of OEE shall conduct a detailed 
     financial audit of each closed OEE undercover investigative 
     operation and shall submit the results of the audit in 
     writing to the Secretary. Not later than 180 days after an 
     undercover operation is closed, the Secretary shall submit to 
     Congress a report on the results of the audit.
       (B) Report.--The Secretary shall submit annually to 
     Congress a report, which may be included in the annual report 
     under section 801, specifying the following information:
       (i) The number of undercover investigative operations 
     pending as of the end of the period for which such report is 
     submitted.
       (ii) The number of undercover investigative operations 
     commenced in the 1-year period preceding the period for which 
     such report is submitted.
       (iii) The number of undercover investigative operations 
     closed in the 1-year period preceding the period for which 
     such report is submitted and, with respect to each such 
     closed undercover operation, the results obtained and any 
     civil claims made with respect to the operation.
       (5) Definitions.--For purposes of paragraph (4)--
       (A) the term ``closed'', with respect to an undercover 
     investigative operation, refers to the earliest point in time 
     at which all criminal proceedings (other than appeals) 
     pursuant to the investigative operation are concluded, or 
     covert activities pursuant to such operation are concluded, 
     whichever occurs later; and
       (B) the terms ``undercover investigative operation'' and 
     ``undercover operation'' mean any undercover investigative 
     operation conducted by the 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 Congress required by 
     paragraph (4)(B).
       (e) Wiretaps.--
       (1) Authority.--Interceptions of communications in 
     accordance with section 2516 of title 18, United States Code, 
     are authorized to further the enforcement of this Act.
       (2) Conforming amendment.--Section 2516(1) of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(q)(i) any violation of, or conspiracy to violate, the 
     Export Administration Act of 2001 or the Export 
     Administration Act of 1979.''.
       (f) Post-Shipment Verification.--
       (1) In general.--The Secretary shall target post-shipment 
     verifications to exports involving the greatest risk to 
     national security including, but not limited to, exports of 
     high performance computers.
       (2) Repeal.--Section 1213 of the National Defense 
     Authorization Act for Fiscal Year 1998 is repealed.
       (g) Refusal To Allow Post-Shipment Verification.--
       (1) In general.--If an end-user refuses to allow post-
     shipment verification of a controlled item, the Secretary 
     shall deny a license for the export of any controlled item to 
     such end-user until such post-shipment verification occurs.
       (2) Related persons.--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 end-user refusing to allow post-
     shipment verification of a controlled item.
       (3) Refusal by country.--If the country in which the end-
     user is located refuses to allow post-shipment verification 
     of a controlled item, the Secretary may deny a license for 
     the export of that item or any substantially identical or 
     directly competitive item or class of items to all end-users 
     in that country until such post-shipment verification is 
     allowed.
       (h) Award of Compensation; Patriot Provision.--
       (1) In general.--If--
       (A) any person, who is not an employee or officer of the 
     United States, furnishes to a United States attorney, to the 
     Secretary of the Treasury or the Secretary, or to appropriate 
     officials in the Department of the Treasury or the Department 
     of Commerce, original information concerning a violation of 
     this Act or any regulation, order, or license issued under 
     this Act, which is being, or has been, perpetrated or 
     contemplated by any other person and in which the person 
     furnishing the information has not participated, and

[[Page S476]]

       (B) such information leads to the recovery of any criminal 
     fine, civil penalty, or forfeiture,
     the Secretary and the Commissioner of Customs, may, in the 
     sole discretion of the Secretary or the Commissioner, award 
     and pay an amount that does not exceed 25 percent of the net 
     amount recovered.
       (2) Dollar limitation.--The amount awarded and paid to any 
     person under this section may not exceed $250,000 for any 
     case.
       (3) Source of payment.--The amount paid under this section 
     shall be paid out of any penalties, forfeitures, or 
     appropriated funds.
       (i) Freight Forwarders Best Practices Program 
     Authorization.--There is authorized to be appropriated for 
     the Department of Commerce $3,500,000 and such sums as may be 
     necessary to hire 20 additional employees to assist United 
     States freight forwarders and other interested parties in 
     developing and implementing, on a voluntary basis, a ``best 
     practices'' program to ensure that exports of controlled 
     items are undertaken in compliance with this Act.
       (j) End-Use Verification Authorization.--
       (1) In general.--There is authorized to be appropriated for 
     the Department of Commerce $4,500,000 and such sums as may be 
     necessary to hire 10 additional overseas investigators to be 
     posted in the People's Republic of China, the Russian 
     Federation, the Hong Kong Special Administrative Region, the 
     Republic of India, Singapore, Egypt, and Taiwan, or any other 
     place the Secretary deems appropriate, for the purpose of 
     verifying the end use of high-risk, dual-use technology.
       (2) Report.--Not later than 2 years after the date of 
     enactment of this Act and annually thereafter, the Department 
     shall, in its annual report to Congress on export controls, 
     include a report on the effectiveness of the end-use 
     verification activities authorized under subsection (a). The 
     report shall include the following information:
       (A) The activities of the overseas investigators of the 
     Department.
       (B) The types of goods and technologies that were subject 
     to end-use verification.
       (C) The ability of the Department's investigators to detect 
     the illegal transfer of high risk, dual-use goods and 
     technologies.
       (3) Enhancements.--In addition to the authorization 
     provided in paragraph (1), there is authorized to be 
     appropriated for the Department of Commerce $5,000,000 to 
     enhance its program for verifying the end use of items 
     subject to controls under this Act.
       (k) Enhanced Cooperation With United States Customs 
     Service.--Consistent with the purposes of this Act, the 
     Secretary is authorized to undertake, in cooperation with the 
     United States Customs Service, such measures as may be 
     necessary or required to enhance the ability of the United 
     States to detect unlawful exports and to enforce violations 
     of this Act.
       (l) 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.
       (m) Authorization for Export Licensing and Enforcement 
     Computer System.--There is authorized to be appropriated for 
     the Department $5,000,000 and such other sums as may be 
     necessary for planning, design, and procurement of a computer 
     system to replace the Department's primary export licensing 
     and computer enforcement system.
       (n) Authorization for Bureau of Export Administration.--The 
     Secretary may authorize, without fiscal year limitation, the 
     expenditure of funds transferred to, paid to, received by, or 
     made available to the Bureau of Export Administration as a 
     reimbursement in accordance with section 9703 of title 31, 
     United States Code (as added by Public Law 102-393). The 
     Secretary may also authorize, without fiscal year limitation, 
     the expenditure of funds transferred to, paid to, received 
     by, or made available to the Bureau of Export Administration 
     as a reimbursement from the Department of Justice Assets 
     Forfeiture Fund in accordance with section 524 of title 28, 
     United States Code.
       (o) Amendments to Title 31.--
       (1) Section 9703(a) of title 31, United States Code (as 
     added by Public Law 102-393) is amended by striking ``or the 
     United States Coast Guard'' and inserting ``, the United 
     States Coast Guard, or the Bureau of Export Administration of 
     the Department of Commerce''.
       (2) Section 9703(a)(2)(B)(i) of title 31, United States 
     Code is amended (as added by Public Law 102-393)--
       (A) by striking ``or'' at the end of subclause (I);
       (B) by inserting ``or'' at the end of subclause (II); and
       (C) by inserting at the end, the following new subclause:

       ``(III) a violation of the Export Administration Act of 
     1979, the Export Administration Act of 2001, or any 
     regulation, license, or order issued under those Acts;''.

       (3) Section 9703(p)(1) of title 31, United States Code (as 
     added by Public Law 102-393) is amended by adding at the end 
     the following: ``In addition, for purposes of this section, 
     the Bureau of Export Administration of the Department of 
     Commerce shall be considered to be a Department of the 
     Treasury law enforcement organization.''.
       (p) Authorization for License Review Officers.--
       (1) In general.--There is authorized to be appropriated to 
     the Department of Commerce $2,000,000 to hire additional 
     license review officers.
       (2) Training.--There is authorized to be appropriated to 
     the Department of Commerce $2,000,000 to conduct professional 
     training of license review officers, auditors, and 
     investigators conducting post-shipment verification checks. 
     These funds shall be used to--
       (A) train and certify, through a formal program, new 
     employees entering these positions for the first time; and
       (B) the ongoing professional training of experienced 
     employees on an as needed basis.
       (q) Authorization.--There are authorized to be appropriated 
     to the Department of Commerce to carry out the purposes of 
     this Act--
       (1) $72,000,000 for the fiscal year 2002, of which no less 
     than $27,701,000 shall be used for compliance and enforcement 
     activities;
       (2) $73,000,000 for the fiscal year 2003, of which no less 
     than $28,312,000 shall be used for compliance and enforcement 
     activities;
       (3) $74,000,000 for the fiscal year 2004, of which no less 
     than $28,939,000 shall be used for compliance and enforcement 
     activities;
       (4) $76,000,000 for the fiscal year 2005, of which no less 
     than $29,582,000 shall be used for compliance and enforcement 
     activities; and
       (5) such additional amounts, for each such fiscal year, as 
     may be necessary for increases in salary, pay, retirement, 
     other employee benefits authorized by law, and other 
     nondiscretionary costs.

     SEC. 608. ADMINISTRATIVE PROCEDURE.

       (a) Exemptions From Administrative Procedure.--Except as 
     provided in this section, 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.
       (b) Procedures Relating to Civil Penalties and Sanctions.--
       (1) Administrative procedures.--Any administrative sanction 
     imposed under section 603 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) Availability of charging letter.--Any charging letter 
     or other document initiating administrative proceedings for 
     the imposition of sanctions for violations of the regulations 
     issued under section 602 shall be made available for public 
     inspection and copying.
       (c) Collection.--If any person fails to pay a civil penalty 
     imposed under section 603, the Secretary may ask the Attorney 
     General to commence a civil action in an appropriate district 
     court of the United States to recover the amount imposed 
     (plus interest at currently prevailing rates from the date of 
     the final order). No such action may be commenced more than 5 
     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.
       (d) Imposition of Temporary Denial Orders.--
       (1) Grounds for imposition.--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 this Act, or any regulation, 
     order, or license issued under this Act, including any 
     diversion of goods or technology from an authorized end use 
     or end user, and in any case in which a criminal indictment 
     has been returned against a person alleging a violation of 
     this Act or any of the statutes listed in section 603, the 
     Secretary may, without a hearing, issue an order temporarily 
     denying that person's United States export privileges 
     (hereafter in this subsection referred to as a ``temporary 
     denial order''). A temporary denial order shall be effective 
     for such period (not in excess of 180 days) as the Secretary 
     specifies in the order, but may be renewed by the Secretary, 
     following notice and an opportunity for a hearing, for 
     additional periods of not more than 180 days each.
       (2) Administrative appeals.--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--
       (A) 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 that constitutes or would constitute a 
     violation of this Act, or any regulation, order, or license 
     issued under this Act; or
       (B) a criminal indictment has been returned against the 
     person subject to the order alleging a violation of this Act 
     or any of the statutes listed in section 603.
     The decision of the administrative law judge shall be final 
     unless, within 10 working days after 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

[[Page S477]]

     the administrative law judge and the Secretary shall 
     constitute the administrative record for purposes of review 
     by the court.
       (3) Court appeals.--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 the 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 that constitutes or would constitute a violation of 
     this title, or any regulation, order, or license issued under 
     this Act, or whether a criminal indictment has been returned 
     against the person subject to the order alleging a violation 
     of this Act or of any of the statutes listed in section 603. 
     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.
       (e) Limitations on Review of Classified Information.--Any 
     classified information that is included in the administrative 
     record that is subject to review pursuant to subsection 
     (b)(1) or (d)(3) may be reviewed by the court only on an ex 
     parte basis and in camera.

          TITLE VII--EXPORT CONTROL AUTHORITY AND REGULATIONS

     SEC. 701. EXPORT CONTROL AUTHORITY AND REGULATIONS.

       (a) Export Control Authority.--
       (1) In general.--Unless otherwise reserved to the President 
     or a department (other than the Department) or agency of the 
     United States, all power, authority, and discretion conferred 
     by this Act shall be exercised by the Secretary.
       (2) Delegation of functions of the secretary.--The 
     Secretary may delegate any function under this Act, unless 
     otherwise provided, to the Under Secretary of Commerce for 
     Export Administration or to any other officer of the 
     Department.
       (b) Under Secretary of Commerce; Assistant Secretaries.--
       (1) Under secretary of commerce.--There shall be within the 
     Department an Under Secretary of Commerce for Export 
     Administration (in this section referred to as the ``Under 
     Secretary'') who shall be appointed by the President, by and 
     with the advice and consent of the Senate. The Under 
     Secretary shall carry out all functions of the Secretary 
     under this Act and other provisions of law relating to 
     national security, as the Secretary may delegate.
       (2) Additional assistant secretaries.--In addition to the 
     number of Assistant Secretaries otherwise authorized for the 
     Department of Commerce, there shall be within the Department 
     of Commerce the following Assistant Secretaries of Commerce:
       (A) An Assistant Secretary for Export Administration who 
     shall be appointed by the President, by and with the advice 
     and consent of the Senate, and who shall assist the Secretary 
     and the Under Secretary in carrying out functions relating to 
     export listing and licensing.
       (B) An Assistant Secretary for Export Enforcement who shall 
     be appointed by the President, by and with the advice and 
     consent of the Senate, and who shall assist the Secretary and 
     the Under Secretary in carrying out functions relating to 
     export enforcement.
       (c) Issuance of Regulations.--
       (1) In general.--The President and the Secretary may issue 
     such regulations as are necessary to carry out this Act. Any 
     such regulations the purpose of which is to carry out title 
     II or title III may be issued only after the regulations are 
     submitted for review to such departments or agencies as the 
     President considers appropriate. The Secretary shall consult 
     with the appropriate export control advisory committee 
     appointed under section 105(f) in formulating regulations 
     under this title. The second sentence of this subsection does 
     not require the concurrence or approval of any official, 
     department, or agency to which such regulations are 
     submitted.
       (2) Amendments to regulations.--If the Secretary proposes 
     to amend regulations issued under this Act, the Secretary 
     shall report to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on International 
     Relations of the House of Representatives on the intent and 
     rationale of such amendments. Such report shall evaluate the 
     cost and burden to the United States exporters of the 
     proposed amendments in relation to any enhancement of 
     licensing objectives. The Secretary shall consult with the 
     appropriate export control advisory committees appointed 
     under section 105(f) in amending regulations issued under 
     this Act.

     SEC. 702. CONFIDENTIALITY OF INFORMATION.

       (a) Exemptions From Disclosure.--
       (1) Information obtained on or before june 30, 1980.--
     Except as otherwise provided by the third sentence of section 
     602(c)(2), information obtained under the Export 
     Administration Act of 1979, or any predecessor statute, on or 
     before June 30, 1980, which is deemed confidential, including 
     Shipper's Export Declarations, or with respect 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.
       (2) Information obtained after june 30, 1980.--Except as 
     otherwise provided by the third sentence of section 13(b)(2) 
     of the Export Administration Act of 1979, 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 from disclosure 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 (or recordkeeping or reporting requirement) 
     under the Export Administration Act of 1979, under this Act, 
     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), including--
       (A) the export license or other export authorization 
     itself,
       (B) classification requests described in section 501(h),
       (C) information or evidence obtained in the course of any 
     investigation,
       (D) information obtained or furnished under title VII in 
     connection with any international agreement, treaty, or other 
     obligation, and
       (E) information obtained in making the determinations set 
     forth in section 211 of this Act,
     and information obtained in any investigation of an alleged 
     violation of section 602 of this Act except for information 
     required to be disclosed by section 602(c)(2) or 606(b)(2) of 
     this Act, shall be withheld from public disclosure and shall 
     not be subject to disclosure under section 552 of title 5, 
     United States Code, unless the release of such information is 
     determined by the Secretary to be in the national interest.
       (b) Information to Congress and GAO.--
       (1) In general.--Nothing in this title shall be construed 
     as authorizing the withholding of information from Congress 
     or from the General Accounting Office.
       (2) Availability to the congress--
       (A) In general.--Any information obtained at any time under 
     this title or under any predecessor Act regarding the control 
     of exports, including any report or license application 
     required under this title, shall be made available to any 
     committee or subcommittee of Congress of appropriate 
     jurisdiction upon the request of the chairman or ranking 
     minority member of such committee or subcommittee.
       (B) Prohibition on further disclosure.--No committee, 
     subcommittee, or Member of Congress shall disclose any 
     information obtained under this Act or any predecessor 
     Act regarding the control of exports which is submitted on 
     a confidential basis to the Congress under subparagraph 
     (A) unless the full committee to which the information is 
     made available determines that the withholding of the 
     information is contrary to the national interest.
       (3) Availability to the gao.--
       (A) In general.--Notwithstanding subsection (a), 
     information described in paragraph (2) 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 716 of title 31, 
     United States Code, 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 Comptroller General to have access 
     to such information.
       (B) Prohibition on further disclosures.--No officer or 
     employee of the General Accounting Office shall disclose, 
     except to Congress in accordance with this paragraph, any 
     such information which is submitted on a confidential basis 
     and from which any individual can be identified.
       (c) Information Exchange.--Notwithstanding subsection (a), 
     the Secretary and the Commissioner of Customs shall exchange 
     licensing and enforcement information with each other as 
     necessary to facilitate enforcement efforts and effective 
     license decisions.
       (d) Penalties for Disclosure of Confidential Information.--
       (1) Disclosure prohibited.--No officer or employee of the 
     United States, or any department or agency thereof, may 
     publish, divulge, disclose, or make known in any manner or to 
     any extent not authorized by law any information that--
       (A) the officer or employee obtains in the course of his or 
     her employment or official duties or by reason of any 
     examination or investigation made by, or report or record 
     made to or filed with, such department or agency, or officer 
     or employee thereof; and
       (B) is exempt from disclosure under this section.
       (2) Criminal penalties.--Any such officer or employee who 
     knowingly violates paragraph (1) shall be fined not more than 
     $50,000, imprisoned not more than 1 year, or both, for each 
     violation of paragraph (1). Any such officer or employee may 
     also be removed from office or employment.
       (3) Civil penalties; administrative sanctions.--The 
     Secretary may impose a civil

[[Page S478]]

     penalty of not more than $5,000 for each violation of 
     paragraph (1). Any officer or employee who commits such 
     violation may also be removed from office or employment for 
     the violation of paragraph (1). Subsections 603 (e), (g), 
     (h), and (i) and 606 (a), (b), and (c) shall apply to 
     violations described in this paragraph.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

     SEC. 801. ANNUAL AND PERIODIC REPORTS.

       (a) Annual Report.--Not later than February 1 of each year, 
     the Secretary shall submit to Congress a report on the 
     administration of this Act during the fiscal year ending 
     September 30 of the preceding calendar year. All Federal 
     agencies shall cooperate fully with the Secretary in 
     providing information for each such report.
       (b) Report Elements.--Each such report shall include in 
     detail--
       (1) a description of the implementation of the export 
     control policies established by this Act, including any 
     delegations of authority by the President and any other 
     changes in the exercise of delegated authority;
       (2) a description of the changes to and the year-end status 
     of country tiering and the Control List;
       (3) a description of the petitions filed and the 
     determinations made with respect to foreign availability and 
     mass-market status, the set-asides of foreign availability 
     and mass-market status determinations, and negotiations to 
     eliminate foreign availability;
       (4) a description of the regulations issued under this Act;
       (5) a description of organizational and procedural changes 
     undertaken in furtherance of this Act;
       (6) a description of the enforcement activities, 
     violations, and sanctions imposed under section 604;
       (7) a statistical summary of all applications and 
     notifications, including--
       (A) the number of applications and notifications pending 
     review at the beginning of the fiscal year;
       (B) the number of notifications returned and subject to 
     full license procedure;
       (C) the number of notifications with no action required;
       (D) the number of applications that were approved, denied, 
     or withdrawn, and the number of applications where final 
     action was taken; and
       (E) the number of applications and notifications pending 
     review at the end of the fiscal year;
       (8) summary of export license data by export identification 
     code and dollar value by country;
       (9) an identification of processing time by--
       (A) overall average, and
       (B) top 25 export identification codes;
       (10) an assessment of the effectiveness of multilateral 
     regimes, and a description of negotiations regarding export 
     controls;
       (11) a description of the significant differences between 
     the export control requirements of the United States and 
     those of other multilateral control regime members, the 
     specific differences between United States requirements and 
     those of other significant supplier countries, and a 
     description of the extent to which the executive branch 
     intends to address the differences;
       (12) an assessment of the costs of export controls;
       (13) a description of the progress made toward achieving 
     the goals established for the Department dealing with export 
     controls under the Government Performance Results Act; and
       (14) any other reports required by this Act to be submitted 
     to the Committee on Banking, Housing, and Urban Affairs of 
     the Senate and the Committee on International Relations of 
     the House of Representatives.
       (c) Congressional Notification.--Whenever the Secretary 
     determines, in consultation with other appropriate 
     departments and agencies, that a significant violation of 
     this Act poses a direct and imminent threat to United States 
     national security interests, the Secretary, in consultation 
     with other appropriate departments and agencies, shall advise 
     the Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on International Relations of the 
     House of Representatives of such violation consistent with 
     the protection of law enforcement sources, methods, and 
     activities.
       (d) Federal Register Publication Requirements.--Whenever 
     information under this Act is required to be published in the 
     Federal Register, such information shall, in addition, be 
     made available on the appropriate Internet website of the 
     Department.

     SEC. 802. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Repeal.--The Export Administration Act of 1979 (50 
     U.S.C. App. 2401 et seq.) is repealed.
       (b) Energy Policy and Conservation Act.--
       (1) Section 103 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6212) is repealed.
       (2) Section 251(d) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6271(d)) is repealed.
       (c) Alaska Natural Gas Transportation Act.--Section 12 of 
     the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 
     719j) is repealed.
       (d) Mineral Leasing Act.--Section 28(u) of the Mineral 
     Leasing Act (30 U.S.C. 185(u)) is repealed.
       (e) Exports of Alaskan North Slope Oil.--Section 28(s) of 
     the Mineral Leasing Act (30 U.S.C. 185(s)) is repealed.
       (f) Disposition of Certain Naval Petroleum Reserve 
     Products.--Section 7430(e) of title 10, United States Code, 
     is repealed.
       (g) Outer Continental Shelf Lands Act.--Section 28 of the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1354) is 
     repealed.
       (h) Arms Export Control Act.--
       (1) Section 38 of the Arms Export Control Act (22 U.S.C. 
     2778) is amended--
       (A) in subsection (e)--
       (i) in the first sentence, by striking ``subsections (c)'' 
     and all that follows through ``12 of such Act,'' and 
     inserting ``subsections (b), (c), (d) and (e) of section 603 
     of the Export Administration Act of 2001, by subsections (a) 
     and (b) of section 607 of such Act, and by section 702 of 
     such Act,''; and
       (ii) in the third sentence, by striking ``11(c) of the 
     Export Administration Act of 1979'' and inserting ``603(c) of 
     the Export Administration Act of 2001''; and
       (B) in subsection (g)(1)(A)(ii), by inserting ``or section 
     603 of the Export Administration Act of 2001'' after 
     ``1979''.
       (2) Section 39A(c) of the Arms Export Control Act is 
     amended--
       (A) by striking ``subsections (c),'' and all that follows 
     through ``12(a) of such Act'' and inserting ``subsections 
     (c), (d), and (e) of section 603, section 608(c), and 
     subsections (a) and (b) of section 607, of the Export 
     Administration Act of 2001''; and
       (B) by striking ``11(c)'' and inserting ``603(c)''.
       (3) Section 40(k) of the Arms Export Control Act (22 U.S.C. 
     2780(k)) is amended--
       (A) by striking ``11(c), 11(e), 11(g), and 12(a) of the 
     Export Administration Act of 1979'' and inserting ``603(b), 
     603(c), 603(e), 607(a), and 607(b) of the Export 
     Administration Act of 2001''; and
       (B) by striking ``11(c)'' and inserting ``603(c)''.
       (i) Other Provisions of Law.--
       (1) Section 5(b)(4) of the Trading with the Enemy Act (50 
     U.S.C. App. 5(b)(4)) is amended by striking ``section 5 of 
     the Export Administration Act of 1979, or under section 6 of 
     that Act to the extent that such controls promote the 
     nonproliferation or antiterrorism policies of the United 
     States'' and inserting ``titles II and III of the Export 
     Administration Act of 2001''.
       (2) Section 502B(a)(2) of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2304(a)(2)) is amended in the second 
     sentence--
       (A) by striking ``Export Administration Act of 1979'' the 
     first place it appears and inserting ``Export Administration 
     Act of 2001''; and
       (B) by striking ``Act of 1979)'' and inserting ``Act of 
     2001)''.
       (3) Section 140(a) of the Foreign Relations Authorization 
     Act, Fiscal Years 1988 and 1989 (22 U.S.C. 2656f(a)) is 
     amended--
       (A) in paragraph (1)(B), by inserting ``or section 310 of 
     the Export Administration Act of 2001'' after ``Act of 
     1979''; and
       (B) in paragraph (2), by inserting ``or 310 of the Export 
     Administration Act of 2001'' after ``6(j) of the Export 
     Administration Act of 1979''.
       (4) Section 40(e)(1) of the State Department Basic 
     Authorities Act of 1956 (22 U.S.C. 2712(e)(1)) is amended by 
     striking ``section 6(j)(1) of the Export Administration Act 
     of 1979'' and inserting ``section 310 of the Export 
     Administration Act of 2001''.
       (5) Section 205(d)(4)(B) of the State Department Basic 
     Authorities Act of 1956 (22 U.S.C. 305(d)(4)(B)) is amended 
     by striking ``section 6(j) of the Export Administration Act 
     of 1979'' and inserting ``section 310 of the Export 
     Administration Act of 2001''.
       (6) Section 110 of the International Security and 
     Development Cooperation Act of 1980 (22 U.S.C. 2778a) is 
     amended by striking ``Act of 1979'' and inserting ``Act of 
     2001''.
       (7) Section 203(b)(3) of the International Emergency 
     Economic Powers Act (50 U.S.C. 1702(b)(3)) is amended by 
     striking ``section 5 of the Export Administration Act of 
     1979, or under section 6 of such Act to the extent that such 
     controls promote the nonproliferation or antiterrorism 
     policies of the United States'' and inserting ``the Export 
     Administration Act of 2001''.
       (8) Section 1605(a)(7)(A) of title 28, United States Code, 
     is amended by striking ``section 6(j) of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2405(j))'' and 
     inserting ``section 310 of the Export Administration Act of 
     2001''.
       (9) Section 2332d(a) of title 18, United States Code, is 
     amended by striking ``section 6(j) of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2405)'' and 
     inserting ``section 310 of the Export Administration Act of 
     2001''.
       (10) Section 620H(a)(1) of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2378(a)(1)) is amended by striking ``section 
     6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 
     2405(j))'' and inserting ``section 310 of the Export 
     Administration Act of 2001''.
       (11) Section 1621(a) of the International Financial 
     Institutions Act (22 U.S.C. 262p-4q(a)) is amended by 
     striking ``section 6(j) of the Export Administration Act of 
     1979 (50 U.S.C. App. 2405(j))'' and inserting ``section 310 
     of the Export Administration Act of 2001''.
       (12) Section 1956(c)(7)(D) of title 18, United States Code, 
     is amended by striking ``section 11 (relating to violations) 
     of the Export Administration of 1979'' and inserting 
     ``section 603 (relating to penalties) of the Export 
     Administration Act of 2001''.

     SEC. 803. SAVINGS PROVISIONS.

       (a) In General.--All delegations, rules, regulations, 
     orders, determinations, licenses,

[[Page S479]]

     or other forms of administrative action which have been made, 
     issued, conducted, or allowed to become effective under--
       (1) the Export Control Act of 1949, the Export 
     Administration Act of 1969, the Export Administration Act of 
     1979, or the International Emergency Economic Powers Act when 
     invoked to maintain and continue the Export Administration 
     regulations, or
       (2) those provisions of the Arms Export Control Act which 
     are amended by section 802,
     and are in effect on the date of enactment of this Act, 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) Administrative and Judicial Proceedings.--
       (1) Export administration act.--This Act shall not affect 
     any administrative or judicial proceedings commenced or any 
     application for a license made, under the Export 
     Administration Act of 1979 or pursuant to Executive Order 
     12924, which is pending at the time this Act takes effect. 
     Any such proceedings, and any action on such application, 
     shall continue under the Export Administration Act of 1979 as 
     if that Act had not been repealed.
       (2) Other provisions of law.--This Act shall not affect any 
     administrative or judicial proceeding commenced or any 
     application for a license made, under those provisions of the 
     Arms Export Control Act which are amended by section 802, if 
     such proceeding or application is pending at the time this 
     Act takes effect. Any such proceeding, and any action on such 
     application, shall continue under those provisions as if 
     those provisions had not been amended by section 802.
       (c) Treatment of Certain Determinations.--Any determination 
     with respect to the government of a foreign country under 
     section 6(j) of the Export Administration Act of 1979, or 
     Executive Order 12924, that is in effect on the day before 
     the date of enactment of this Act, shall, for purposes of 
     this title or any other provision of law, be deemed to be 
     made under section 310 of this Act until superseded by a 
     determination under such section 310.
       (d) Lawful Intelligence Activities.--The prohibitions 
     otherwise applicable under this Act do not apply with respect 
     to any transaction subject to the reporting requirements of 
     title V of the National Security Act of 1947.
       (e) Implementation.--The Secretary shall make any revisions 
     to the Export Administration regulations required by this Act 
     no later than 180 days after the date of enactment of this 
     Act.

  Mr. SARBANES. Mr. President, I am pleased to join with my colleagues 
Senator Enzi, Senator Johnson, and Senator Gramm to introduce the 
Export Administration Act of 2001. The legislation we are introducing 
today is very similar to the legislation that was reported out of the 
Senate Banking Committee in the last Congress by a unanimous 20-0 vote.
  The Export Administration Act provides the President authority to 
control exports for reasons of national security and foreign policy. 
Let me begin by saying that I believe there is a very strong national 
interest in Congress reauthorizing the Export Administration Act.
  The EAA has not been reauthorized since 1990 except for temporary 
extensions in 1993, 1994, and last year. At the end of the last 
Congress we passed a temporary extension of the EAA that expires on 
August 20 of this year. Prior to this most recent temporary extension, 
the authority of the President to impose export controls had been 
exercised pursuant to the International Economic Emergency Powers Act 
(IEEPA). In my view, Congress should put in place a permanent statutory 
framework for the imposition of export controls. They should not be 
imposed in effect on a permanent basis pursuant to an emergency 
economic authority of the President. Just one example of the 
implications of depending on IEEPA is that the penalties that may be 
imposed for violations of export controls under IEEPA are significantly 
less than those imposed under the EAA.
  I believe this legislation is a carefully balanced effort to provide 
the President authority to control exports for reasons of national 
security and foreign policy, while also responding to the need of U.S. 
exporters to compete in the global marketplace.
  Extensive consultation took place with representatives of the 
previous Administration, including the Commerce Department, the Defense 
Department, the intelligence agencies and the National Security 
Council, as well as representatives of the different industry groups. I 
also understand that during the campaign then-Governor Bush also 
endorsed this legislation, and we would hope to work closely with the 
new Administration on this bill.
  I would like to commend Senator Enzi (who was the chairman of the 
International Trade and Finance Subcommittee of the Banking Committee 
in the last Congress), Senator Johnson (who was the ranking member of 
the Subcommittee), and Senator Gramm, as well as their staffs, for 
their efforts to develop a bipartisan consensus on this legislation.
  The legislation generally tracks the authorities provided the 
President under the Export Administration Act which expired in 1990. 
However a significant effort was made, with the assistance of the 
Legislative Counsel's Office, to provide these authorities in a more 
clear and straightforward manner. We believe this will make the statute 
both easier for the executive branch agencies to administer and for 
exporters to comply with.
  The bill also makes a number of significant improvements to the EAA. 
I would like to mention just a few. The legislation provides for the 
first time a statutory basis for the resolution of interagency disputes 
over export license applications. The intent is to provide an orderly 
process for the timely resolution of disputes, while allowing all 
interested agencies a full opportunity to express their views. This was 
an issue of great concern to the Administration, the national security 
community, and industry. I believe we have reached a reasonable 
resolution of this issue in the bill.
  The bill significantly increases both criminal and civil penalties 
for violations of the Export Administration Act, reflecting the 
seriousness of such violations.
  The bill provides new authority to the President to determine that a 
good has mass market status in the United States and should therefore 
be decontrolled. The President retains authority to set aside a mass 
market determination if he determines it would constitute a serious 
threat to national security and continued export controls would be 
likely to advance the national security interests of the United States. 
This was a provision of great importance to U.S. exporters.
  At the urging of Senator Enzi, the bill contains a provision that 
would require the President to establish a system of tiers to which 
countries would be assigned based on their perceived threat to U.S. 
national security. The intent is to provide exporters a clear guide as 
to the licensing requirements of an export of a particular item to a 
particular country.
  The bill would also require that any foreign company that declined a 
U.S. request for a post-shipment verification of an export would be 
denied licenses for future exports. The President would have authority 
to deny licenses to affiliates of the company, and to the country in 
which the company is located as well.
  On balance, I believe this bill is a very balanced piece of work. It 
commanded unanimous bipartisan support in the Banking Committee in the 
last Congress. It is my belief that it will receive broad bipartisan 
support in the Banking Committee and in the full Senate in this 
Congress. I believe it will be the first bill the Banking Committee 
will act on this year, and I would hope we could move it quickly to 
consideration by the full Senate. Early action by the full Senate 
would, in turn, give the House more time to act on the bill. I am 
hopeful that this will be the Congress in which the Export 
Administration Act is enacted back into law.
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