[Congressional Record (Bound Edition), Volume 147 (2001), Part 11]
[Senate]
[Pages 16266-16315]
[From the U.S. Government Publishing Office, www.gpo.gov]



                   EXPORT ADMINISTRATION ACT OF 2001

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
begin consideration of S. 149, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 149) to provide authority to control exports and 
     for other purposes.

  The Senate proceeded to consider the bill, which had been reported 
from the Committee on Banking, Housing, and Urban Affairs, with an 
amendment to strike all after the enacting clause and insert in lieu 
thereof the following:

     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.

[[Page 16267]]

        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 status 
              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.
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.
Sec. 311. Crime control instruments.

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

Sec. 401. Export license procedures.
Sec. 402. Interagency dispute resolution process.

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

Sec. 501. International arrangements.
Sec. 502. Foreign boycotts.
Sec. 503. Penalties.
Sec. 504. Missile proliferation control violations.
Sec. 505. Chemical and biological weapons proliferation sanctions.
Sec. 506. Enforcement.
Sec. 507. Administrative procedure.

           TITLE VI--EXPORT CONTROL AUTHORITY AND REGULATIONS

Sec. 601. Export control authority and regulations.
Sec. 602. Confidentiality of information.

                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Annual report.
Sec. 702. Technical and conforming amendments.
Sec. 703. 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) Control or controlled.--The terms ``control'' and 
     ``controlled'' mean any requirement, condition, 
     authorization, or prohibition on the export or reexport of an 
     item.
       (3) Control list.--The term ``Control List'' means the 
     Commerce Control List established under section 101.
       (4) Controlled country.--The term ``controlled country'' 
     means a country with respect to which exports are controlled 
     under section 201 or 301.
       (5) Controlled item.--The term ``controlled item'' means an 
     item the export of which is controlled under this Act.
       (6) Country.--The term ``country'' means a sovereign 
     country or an autonomous customs territory.
       (7) Country supporting international terrorism.--The term 
     ``country supporting international terrorism'' means a 
     country designated by the Secretary of State pursuant to 
     section 310.
       (8) Department.--The term ``Department'' means the 
     Department of Commerce.
       (9) 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.
       (10) Foreign availability status.--The term ``foreign 
     availability status'' means the status described in section 
     211(d)(1).
       (11) 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.
       (12) 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.
       (13) Mass-market status.--The term ``mass-market status'' 
     means the status described in section 211(d)(2).
       (14) 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 tems. 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.
       (15) National security control list.--The term ``National 
     Security Control List'' means the list established under 
     section 202(a).
       (16) 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.
       (17) Reexport.--The term ``reexport'' means the shipment, 
     transfer, transshipment, or diversion of items from one 
     foreign country to another.
       (18) Secretary.--The term ``Secretary'' means the Secretary 
     of Commerce.
       (19) 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)).
       (20) 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 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 
     in order 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.
       (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

[[Page 16268]]

     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 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 and intelligence sources 
     and methods, 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 contribute to the proliferation of weapons of mass 
     destruction or the means to deliver them.
       (d) Enhanced Controls.--
       (1) In general.--Notwithstanding any other provisions of 
     this title, the President may determine that applying the 
     provisions of section 204 or 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, the item may be excluded from the provisions of 
     section 204, 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.
       (2) Report to congress.--The President shall promptly 
     report any determination described in paragraph (1), along 
     with the specific reasons for the determination, to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on International Relations of the 
     House of Representatives.

     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 review 
     on a continuing basis 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.
       (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:

[[Page 16269]]

       (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 not less than 3 tiers for 
     purposes of this section.
       (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 the lowest tier. Countries 
     that represent the highest risk of diversion or misuse of an 
     item on the National Security Control List shall be assigned 
     to the highest tier.
       (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 a tier other than the lowest or highest tier, 
     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(14) 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 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; except that in the case of reexports of an item to a 
     country designated as a country supporting international 
     terrorism pursuant to section 310, controls may be maintained 
     if the value of the controlled United States content is more 
     than 10 percent 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 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.--
       (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

[[Page 16270]]

     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 
                   STATUS DETERMINATION.

       (a) Criteria for Presidential Set-Aside.--
       (1) General criteria.--
       (A) In general.--If the President determines that--
       (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,
       (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
       (iii) United States controls on the item have been imposed 
     under 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 for the 
     determination, 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) (i) or 
     (ii) 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) (i) or (ii) 
     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) United States controls on the item have been imposed 
     under 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 
     promptly report the determination, along with the specific 
     reasons for the determination, 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 section 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.--
       (A) In general.--The Secretary shall ensure that the Office 
     include persons to carry out the responsibilities set forth 
     in subsection (b) of this section that have training, 
     expertise, and experience in--
       (i) economic analysis;
       (ii) the defense industrial base;
       (iii) technological developments; and
       (iv) national security and foreign policy export controls.
       (B) Detailees.--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;
       (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,

[[Page 16271]]

     and Urban Affairs of the Senate as part of the Secretary's 
     annual report required under section 701 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) Foreign Products.--No authority or permission may be 
     required under this title to reexport to a country 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, except that in the case of 
     reexports of an item to a country designated as a country 
     supporting international terrorism pursuant to section 310, 
     controls may be maintained if the value of the controlled 
     United States content is more than 10 percent of the value of 
     the item.
       (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.
       (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

[[Page 16272]]

       (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 at any time any export control imposed 
     under this title that is not required by law.
       (b) Exception.--Paragraphs (1) and (2) of subsection (a) do 
     not apply to any export control imposed 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--
       (1) of items listed on the control list of a multilateral 
     export control regime, as defined in section 2(14); or
       (2) 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.--Notwithstanding any other provision 
     of this Act setting forth limitations on the authority to 
     control exports, a license shall be required for the export 
     of any 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.

     SEC. 311. CRIME CONTROL INSTRUMENTS.

       (a) In General.--Crime control and detection instruments 
     and equipment shall be approved for export by the Secretary 
     only pursuant to an individual export license. 
     Notwithstanding any other provision of this Act--
       (1) any determination by the Secretary of what goods or 
     technology shall be included on the list established pursuant 
     to this subsection as a result of the export restrictions 
     imposed by this section shall be made with the concurrence of 
     the Secretary of State, and
       (2) any determination by the Secretary to approve or deny 
     an export license application to export crime control or 
     detection instruments or equipment shall be made in 
     concurrence with the recommendations of the Secretary of 
     State submitted to the Secretary with respect to the 
     application pursuant to section 401 of this Act,

     except that, if the Secretary does not agree with the 
     Secretary of State with respect to any determination under 
     paragraph (1) or (2), the matter shall be referred to the 
     President for resolution.
       (b) Exception.--The provisions of this section shall not 
     apply with respect to exports to countries that are members 
     of the North Atlantic Treaty Organization or to Japan, 
     Australia, or New Zealand, or to such other countries as the 
     President shall designate consistent with the purposes of 
     this section and section 502B of the Foreign Assistance Act 
     of 1961 (22 U.S.C. 2304).

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

     SEC. 401. 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 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

[[Page 16273]]

       (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 402.
       (e) Consequences of Application Denial.--
       (1) In general.--If a determination is made to deny a 
     license, the applicant shall be informed in writing, 
     consistent with the protection of intelligence information 
     sources and methods, 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 be considered 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 402(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.
       (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.

[[Page 16274]]

       (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 
     the head of any department or agency 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. 402. 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 in 
     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 position, 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 an official appointed by the President, by and with the 
     advice of the Senate, or an officer properly acting in such 
     capacity, 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 V--INTERNATIONAL ARRANGEMENTS; FOREIGN BOYCOTTS; SANCTIONS; AND 
                              ENFORCEMENT

     SEC. 501. 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 
     President 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 uniform and 
     consistent interpretation and implementation of its rules and 
     guidelines.
       (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, practices, and 
     standards.
       (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.
       (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

[[Page 16275]]

       (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 (in the judgment of the 
     Secretary of State) 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 that it is not 
     inconsistent with arrangements under the regime (in the 
     judgment of the Secretary of State) 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. 502. 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 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

[[Page 16276]]

     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. 503. PENALTIES.

       (a) Criminal Penalties.--
       (1) Violations by an individual.--Any individual who 
     willfully 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.
       (2) Violations by a person other than an individual.--Any 
     person other than an individual who willfully 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 $5,000,000, 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 (relating to criminal 
     forfeiture), 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 $500,000 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.
       (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 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. 504. 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--

[[Page 16277]]

       (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 503.
       (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.
       (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.

[[Page 16278]]

       (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. 505. 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 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. 506. 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 and 
     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 Service 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 items 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 502. 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.

[[Page 16279]]

       (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 or 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 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 a 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 by the Commissioner of Customs or any officer 
     or employee of the United States Customs Service designated 
     by the Commissioner), 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 503 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 701, 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

[[Page 16280]]

     (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.--The Secretary shall target 
     post-shipment verifications to exports involving the greatest 
     risk to national security.
       (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) 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.
       (i) 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.
       (j) 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.
       (k) 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.
       (l) 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.
       (m) 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. Such funds shall be deposited in an 
     account and shall remain available until expended.
       (n) 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.''.
       (o) 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.
       (p) Authorization.--
       (1) In general.--There are authorized to be appropriated to 
     the Department of Commerce to carry out the purposes of this 
     Act--
       (A) $72,000,000 for the fiscal year 2002, of which no less 
     than $27,701,000 shall be used for compliance and enforcement 
     activities;
       (B) $73,000,000 for the fiscal year 2003, of which no less 
     than $28,312,000 shall be used for compliance and enforcement 
     activities;
       (C) $74,000,000 for the fiscal year 2004, of which no less 
     than $28,939,000 shall be used for compliance and enforcement 
     activities;
       (D) $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
       (E) 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.
       (2) Limitation.--The authority granted by this Act shall 
     terminate on September 30, 2004, unless the President carries 
     out the following duties:
       (A) Provides to Congress a detailed report on--
       (i) the implementation and operation of this Act; and
       (ii) the operation of United States export controls in 
     general.
       (B)(i) Provides to Congress legislative reform proposals in 
     connection with the report described in subparagraph (A); or
       (ii) certifies to Congress that no legislative reforms are 
     necessary in connection with such report.

     SEC. 507. 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 503 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, 
     except that the review shall be initiated in the United 
     States Court of Appeals for the District of Columbia Circuit, 
     which shall have jurisdiction of the review.
       (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 502 shall be made available for public 
     inspection and copying.
       (c) Collection.--If any person fails to pay a civil penalty 
     imposed under section 503, 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

[[Page 16281]]

     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 503, 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 503.

     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 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 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 503. 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 VI--EXPORT CONTROL AUTHORITY AND REGULATIONS

     SEC. 601. 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(a) 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(a) in amending regulations issued under 
     this Act.

     SEC. 602. 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 
     502(c)(2) and by section 507(b)(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 502(c)(2) 
     and by section 507(b)(2), 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 401(h),
       (C) information or evidence obtained in the course of any 
     investigation,
       (D) information obtained or furnished under title V 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 502 of this Act except for information 
     required to be disclosed by section 502(c)(2) or 507(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

[[Page 16282]]

     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 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). Sections 503 
     (e), (g), (h), and (i) and 507 (a), (b), and (c) shall apply 
     to violations described in this paragraph.

                  TITLE VII--MISCELLANEOUS PROVISIONS

     SEC. 701. ANNUAL REPORT.

       (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 any enhanced control imposed on an 
     item pursuant to section 201(d);
       (5) a description of the regulations issued under this Act;
       (6) a description of organizational and procedural changes 
     undertaken in furtherance of this Act;
       (7) a description of the enforcement activities, 
     violations, and sanctions imposed under this Act;
       (8) 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;
       (9) summary of export license data by export identification 
     code and dollar value by country;
       (10) an identification of processing time by--
       (A) overall average, and
       (B) top 25 export identification codes;
       (11) an assessment of the effectiveness of multilateral 
     regimes, and a description of negotiations regarding export 
     controls;
       (12) a description of the significant differences between 
     the export control requirements of the United States and 
     those of other multilateral control regime members, and the 
     specific differences between United States requirements and 
     those of other significant supplier countries;
       (13) an assessment of the costs of export controls;
       (14) 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
       (15) 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) Federal Register Publication Requirements.--Whenever 
     information under this Act is required to be published in the 
     Federal Register, such information shall, in addition, be 
     posted on the Department of Commerce or other appropriate 
     government website.

     SEC. 702. 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 503 
     of the Export Administration Act of 2001, by subsections (a) 
     and (b) of section 506 of such Act, and by section 602 of 
     such Act,''; and
       (ii) in the third sentence, by striking ``11(c) of the 
     Export Administration Act of 1979'' and inserting ``503(c) of 
     the Export Administration Act of 2001''; and
       (B) in subsection (g)(1)(A)(ii), by inserting ``or section 
     503 of the Export Administration Act of 2001'' after 
     ``1979''.
       (2) Section 39A(c) of the Arms Export Control Act (22 
     U.S.C. 2779a(c)) 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 503, section 507(c), and 
     subsections (a) and (b) of section 506, of the Export 
     Administration Act of 2001''; and
       (B) by striking ``11(c)'' and inserting ``503(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 ``503(b), 
     503(c), 503(e), 506(a), and 506(b) of the Export 
     Administration Act of 2001''; and
       (B) by striking ``11(c)'' and inserting ``503(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''.

[[Page 16283]]

       (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 503 (relating to penalties) of the Export 
     Administration Act of 2001''.
       (13) Subsection (f) of section 491 and section 499 of the 
     Forest Resources Conservation and Shortage Relief Act of 1990 
     (16 U.S.C. 620c(f) and 620j) are repealed.
       (14) Section 904(2)(B) of the Trade Sanctions Reform and 
     Export Enhancement Act of 2000 is amended by striking 
     ``Export Administration Act of 1979'' and inserting ``Export 
     Administration Act of 2001''.
       (15) Section 983(i)(2) of title 18, United States Code (as 
     added by Public Law 106-185), is amended--
       (A) by striking the ``or'' at the end of subparagraph (D);
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``; or''; and
       (C) by inserting the following new subparagraph:
       ``(F) the Export Administration Act of 2001.''.
       (j) Civil Aircraft Equipment.--Notwithstanding any other 
     provision of law, any product that--
       (1) is standard equipment, certified by the Federal 
     Aviation Administration, in civil aircraft, and
       (2) is an integral part of such aircraft, shall be subject 
     to export control only under this Act. Such product shall not 
     be subject to controls under section 38(b)(2) of the Arms 
     Export Control Act (22 U.S.C. 2778(b)).
       (k) Repeal of Certain Export Controls.--Subtitle B of title 
     XII of division A of the National Defense Authorization Act 
     for Fiscal Year 1998 (50 U.S.C. App. 2404 note) is repealed.

     SEC. 703. SAVINGS PROVISIONS.

       (a) In General.--All delegations, rules, regulations, 
     orders, determinations, licenses, 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 702,

     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 702, 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 702.
       (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. Notwithstanding 
     any other provision of this Act, nothing shall affect the 
     responsibilities and authorities of the Director of Central 
     Intelligence under section 103 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 rise in very strong support of S. 149, 
the Export Administration Act of 2001.
  Earlier this year, I was pleased to join with my colleagues, Senator 
Enzi, Senator Johnson, and Senator Gramm, in introducing this 
legislation.
  This legislation was reported out of the Senate Banking, Housing, and 
Urban Affairs Committee by a vote of 19-1. It was a bipartisan vote, 
obviously, of 19-1. The legislation has been very strongly endorsed by 
the administration. That was in early April of this year. The Export 
Administration Act provides for the President to control exports for 
reasons of national security and foreign policy.
  Let me begin by saying I believe there is a very strong national 
interest in reauthorizing the Export Administration Act. I think that 
is a view held by a clear majority of the Congress.
  It is important to understand a bit about the historical situation as 
we consider this legislation. Regrettably, the Export Administration 
Act has not been reauthorized since 1990, except for three temporary 
extensions in 1993, in 1994, and again last year. At the end of the 
last Congress, we passed a temporary extension of the Export 
Administration Act that expired on August 20 of this year, just a few 
weeks ago.


  Prior to this most recent temporary extension and since the EAA 
expired on August 20, the authority of the President to impose export 
controls has been exercised pursuant to the International Economic 
Emergency Powers Act, the so-called IEEPA. This is generally how we 
have been functioning throughout this decade with respect to export 
controls.
  I believe strongly that Congress should put in place a permanent 
statutory framework for the imposition of export controls. They should 
not be imposed pursuant to an emergency economic authority of the 
President. It can be done that way. It has been done that way. That is 
the currently existing situation. But I don't think that is the most 
desirable way to proceed. It doesn't give you the most substantial 
statutory framework, obviously. It doesn't introduce an element of 
stability and permanency into the arrangements. In fact, I believe 
strongly that this legislation provides greater protection for national 
security and foreign policy concerns than is provided under IEEPA or 
provided under the previous Export Administration Act.
  Just one example: The penalties that can be imposed under IEEPA for 
violation of export controls are significantly less than the penalties 
that are provided for in the legislation that is before us. Let me 
repeat that.
  Under the current arrangement in which the export control regime has 
been put in place by the President's invoking of his economic emergency 
powers, the penalties for violation are substantially less than the 
penalties which we provide in this legislation. 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.
  I point out that effective competition by U.S. exporters in the 
global marketplace, which will strengthen their economic position--that 
is, the economic position of U.S. exporters--and thereby strengthen the 
economic position of the United States in the global marketplace, also 
has important national security and foreign policy implications for the 
United States. In the end, our national security and foreign policy 
strength rests in part on our economic strength. I think we need to 
keep that in mind as we consider this legislation.
  In preparation for acting on this legislation, the Banking Committee 
this year held two hearings with representatives of industry groups and 
former Defense Department officials.
  I might note that the committee held extensive hearings in the prior 
Congress with respect to this issue. So there has been a continual 
period now, over a number of years, of very careful examination of 
export controls and how to address this matter. Extensive consultation 
took place with representatives of the new administration, including 
the Commerce Department, the Defense Department, the State Department, 
the intelligence agencies, and the National Security Council.
  Prior to the markup of the legislation in the Banking Committee 
earlier this year, Dr. Rice, the Assistant to the

[[Page 16284]]

President for National Security Affairs, sent a letter to the committee 
dated March 21 of this year, which I quote:

       The Administration has carefully reviewed the current 
     version of S. 149, the Export Administration Act of 2001, 
     which provides authority for controlling exports of dual-use 
     goods and technologies. As a result of its review, the 
     Administration has proposed a number of changes to S. 149. 
     The Secretary of State, Secretary of Defense, Secretary of 
     Commerce, and I agree that these changes will strengthen the 
     President's national security and foreign policy authorities 
     to control dual-use exports in a balanced manner, which will 
     permit U.S. companies to compete more effectively in the 
     global market place. With these changes, S. 149 represents a 
     positive step towards the reform of the U.S. export control 
     system supported by the President. If the Committee 
     incorporates these changes into S. 149, the Administration 
     will support the bill.

  Mr. President, a major effort was made to work through the list of 
proposals by the administration. That resulted in those proposals being 
incorporated into the bill during the Banking Committee's markup. As a 
consequence, in effect we met the standard that the administration set 
for us. They were incorporated in the markup.
  The administration is supportive of this bill. It has expressed that 
support on more than one occasion. They have been in constant 
communication with us about this matter. We are obviously proceeding 
not only in accordance with our own judgment, but it also represents 
the judgment of the administration as well. In fact, in late March 
President Bush, in speaking to high-tech leaders in the White House, 
urged quick passage of the bill by the Senate. He reiterated that 
support in May in a speech he gave in Washington.
  In April, the Office of Management and Budget submitted to the 
Congress a statement of administration policy on S. 149, which said in 
part:

       The Administration supports S. 149, as reported by the 
     Senate Banking Committee. The bill provides authority for 
     controlling exports of dual-use goods and technologies. The 
     Administration believes that S. 149 would allow the United 
     States to successfully meet its national security and foreign 
     policy objectives without impairing the ability of U.S. 
     companies to compete effectively in the global marketplace. 
     As reported, S. 149 includes a number of changes that the 
     administration sought to strengthen the President's national 
     security and foreign policy authorities to control dual-use 
     exports.

  Let me underscore: changes they sought to strengthen the President's 
national security and foreign policy authorities to control dual-use 
exports.

       The Administration will continue to work with Congress to 
     ensure that our national security needs are incorporated into 
     a rational export control system.

  Mr. President, I ask unanimous consent that the Statement of 
Administration Policy submitted by the Office of Management and Budget 
with respect to S. 149 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                              Office of Management and Budget,

                                   Washington, DC, April 26, 2001.

                   Statement of Administration Policy


               s. 149--export administration Act of 2001

       The Administration supports S. 149, as reported by the 
     Senate Banking Committee. The bill provides authority for 
     controlling exports of dual-use goods and technologies. The 
     Administration believes that S. 149 would allow the United 
     States to successfully meet its national security and foreign 
     policy objectives without impairing the ability of U.S. 
     companies to compete effectively in the global marketplace. 
     As reported, S. 149 includes a number of changes that the 
     Administration sought to strengthen the President's national 
     security and foreign policy authorities to control duel-use 
     exports. The Administration will continue to work with 
     Congress to ensure that our national security needs are 
     incorporated into a rational export control system.
     Pay-As-You-Go Scoring
       S. 149 would affect receipts and direct spending; 
     therefore, it is subject to the pay-as-you-go (PAYGO) 
     requirement of the Omnibus Budget Reconciliation Act (OBRA) 
     of 1990. OMB's preliminary scoring estimates is that the 
     PAYGO effect of this bill is minimal. Final scoring of this 
     legislation may deviate from this estimate.

  Mr. SARBANES. Mr. President, I commend Senator Gramm, who was 
actually chairman of the committee at the time that we brought the 
legislation forward. And I commend Senator Enzi and Senator Johnson. 
Senator Enzi and Senator Johnson, respectively, were the chairman and 
ranking member of the Subcommittee on International Trade and Finance 
of the Banking Committee in the last Congress. They carried forward 
their strong interest in this legislation in this Congress and have 
played an instrumental role in helping to shape the legislation. I 
thank them for their very dedicated efforts, and the efforts of their 
staff which contributed so much to developing a bipartisan consensus on 
this legislation.
  Also, I acknowledge the significant contributions made by Senator 
Bayh and by Senator Hagel, who are the chairman and ranking member of 
the International Trade and Finance Subcommittee in this Congress, for 
their contributions in moving the legislation forward this year.
  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 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 significant concern to the administration, to the national 
security community, and to industry. And I believe we have reached a 
reasonable resolution of this issue in the bill.
  One of the things that industry was seeking was a process whereby 
they would get an ultimate decision. This bill sets out a process of 
interagency consultation that provides for moving it up to the next 
level, if there is not agreement, so that it keeps moving forth. In the 
end, it can reach the President for decision. But at least it works 
within a framework in which the industry knows that at the end they 
will get a decision; it will not simply disappear into the great void 
with no decision of any sort forthcoming.
  We think this is a very reasonable way to structure the situation. I 
simply note that it is still reserved to the President, in the end, the 
ultimate authority to rule on the matter with respect to export 
controls.
  As I mentioned earlier, 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 because it has 
mass market status--in other words, there is a set of criteria, but 
essentially generally available in the marketplace--it should be 
controlled. But the President retains authority to set aside a mass 
market determination if he determines that it would constitute a 
serious threat to national security and that continued export controls 
would be likely to advance the national security interests of the 
United States.
  We have tried to recognize changes that are taking place in the 
marketplace, to factor them into the thinking, but even so in the last 
analysis reserving to the President the authority to set aside a mass 
market determination. I think this is, again, another example of the 
concern of those of us who have helped to shape this legislation to 
make sure that we are able to protect national security and foreign 
policy interests. We are trying to, in effect, accommodate the market 
changes and the needs of our exporters in terms of participating 
effectively and competitively in the global marketplace but, at the 
same time, making sure the President retains the power and the 
authority that might be necessary, under certain circumstances, to 
protect our national security interests and our foreign policy 
interests.

[[Page 16285]]

  At the urging of Senator Enzi, who has been a very thoughtful and 
dedicated exponent of this legislation--and in my perception has bent 
over backwards to try to accommodate concerns in shaping this 
legislation--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 
legislation requires that there be at least three such tiers. The 
intent is to provide exporters a clear guide as to the licensing 
requirements of the 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 postshipment 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.
  Overall, I believe this bill is a very balanced piece of work. As I 
mentioned at the outset, it commanded overwhelming bipartisan support 
in the committee. It has the strong support of the administration. It 
is my belief it will receive broad bipartisan support in the full 
Senate.
  In criticizing this bill when it was brought up in this Chamber in 
April--it was up for 1 day; we had 1 day of debate on the legislation--
some of my colleagues registered objections. They thought that the bill 
tipped the balance towards meeting commercial needs versus national 
security needs, that it placed an emphasis on export decontrol without 
an adequate assessment of the national security implications of that 
decontrol. Others said that the bill's restriction on Presidential 
authorities to regulate national security-related exports, the 
liberalization of exports of all goods, poses a problem and needs to be 
resolved. And we had other comments in that vein.
  I want to take a moment to respond to these assertions because I 
respectfully disagree with them. First of all, it is very important to 
note that the alternative to reauthorizing the Export Administration 
Act is the International Emergency Economic Powers Act.
  As we indicated earlier, that is really not a satisfactory framework 
under which to operate.
  This was made clear in letters that Dr. Rice, Assistant to the 
President for National Security Affairs, sent to Senator Gramm and 
myself on August 2. In the course of that letter she stated:

       I am pleased that the Senate plans to take up S. 149. 
     Because the current Export Administration Act (EAA) will 
     expire on August 20, 2001, the President is prepared to use 
     the authorities provided to him under the International 
     Emergency Economic Powers Act (IEEPA) to extend the existing 
     dual-use export control programs. As you know, IEEPA 
     authority has previously been used to administer our export 
     control programs. Since a new EAA will provide us the 
     strongest authority to administer dual-use export controls, 
     particularly as related to enforcement, penalties for export 
     control violations, and the protection of business 
     proprietary information, we support swift enactment of S. 
     149.

  Mr. President, I ask unanimous consent to print the full text of the 
letter in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              The White House,

                                       Washington, August 2, 2001.
     Hon. Paul Sarbanes,
     Chairman, Committee on Banking, Housing, and Urban Affairs, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: Thank you for your efforts to advance 
     the Senate's consideration of S. 149, the Export 
     Administration Act of 2001. This bill has the 
     Administration's strong support.
       I am pleased that the Senate plans to take up S. 149 on 
     September 4, 2001. Because the current Export Administration 
     Act (EAA) will expire on August 20, 2001, the President is 
     prepared to use the authorities provided to him under the 
     International Emergency Economic Powers Act (IEEPA) to extend 
     the existing dual-use export control program. As you know, 
     IEEPA authority has previously been used to administer our 
     export control programs. Since a new EAA will provide us the 
     strongest authority to administer dual-use export controls, 
     particularly as related to enforcement, penalties for export 
     control violations, and the protection of business 
     proprietary information, we support swift enactment of S. 
     149.
       I look forward to continuing to work with you on these 
     important national security issues.
           Sincerely,

                                             Condoleezza Rice,

                                        Assistant to the President
                                    for National Security Affairs.

  Mr. SARBANES. Aside from the issue that the Export Administration Act 
is better than IEEPA, which I think is clear, let me address the 
assertions that S. 149 would weaken the national security protections 
in the previous Export Administration Act.
  I believe quite strongly that just the opposite is the case, as 
witnessed by the support the administration and the national security 
community have extended to this legislation. We have already talked 
about the increased civil and criminal penalties for violations of the 
EAA. The penalties are stronger in this legislation, not only with 
respect to the existing ones in IEEPA but also with respect to the 
penalties in the previously existing Export Administration Act.
  Let me mention some other provisions that significantly expand the 
President's authority to impose export controls on dual-use goods and 
technology in regard to the EAA.
  Section 201(c) of this legislation states:

       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 contribute to the 
     proliferation of weapons of mass destruction or the means to 
     deliver them.

  This authority did not exist in the EAA. It is the so-called enhanced 
proliferation control initiative which until now has been implemented 
through an executive order. This provision would give the President 
broad statutory authority to impose controls on any export that could 
contribute to proliferation or delivery of weapons of mass destruction, 
if there was a concern about the end use or the end user of the export.
  Section 201(d) of this legislation, the so-called enhanced controls 
provision, provides:

       Notwithstanding any other provision of this title, the 
     President may determine that applying the provisions of 
     section 204 or 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.

  It goes on to say:

       If the President determines that enhanced control should 
     apply to such item, the item may be excluded from the 
     provisions of section 204, section 211, or both, until such 
     time as the President shall determine that such enhanced 
     control should no longer apply to such item.

  Section 204 is a section on containing parts and components that says 
you can't put on controls if the parts and components are less than 25 
percent of the total value of the export. But the President will be 
given the power, in effect, to ignore that restriction and impose the 
controls. Under the previous EAA, the President did not have the 
authority to set aside the parts and components or the foreign 
availability provisions, which is what 211 requires refers to. So this 
represents a very significant expansion of the President's export 
control authority.
  We have had a lot of discussions about foreign availability, mass 
market provisions and the President's standards to set aside this 
authority. It should be clear that this broad setaside power, separate 
and apart from the powers the President has in the foreign availability 
and mass market provisions themselves, is a very important addition to 
Presidential authority and one that was important to the national 
security community.
  Furthermore, the legislation provides that notwithstanding any other 
provisions of the act setting forth limitations on the authority to 
control exports, the President may impose controls listed on a control 
list of a multilateral export control regime.
  This is a very broad authority for the President to set aside all the 
requirements of the EAA and impose controls on any export that is on a 
control list pursuant to an international agreement.
  This is an important provision because export controls are most 
effective when they are implemented in

[[Page 16286]]

concert with the controls of other supplier nations. One of the things 
we seek to do in this legislation is encourage the development of such 
multilateral export control regimes. Actually, the majority of items 
today subject to export controls in the U.S. are controlled by most of 
the other supplier nations through four multilateral export control 
regimes: the Waasenaar agreement, which relates to arms and dual-use 
items useful for conventional arms purposes; the nuclear suppliers 
group; the missile technology control regime; and the Australia group, 
which relates to items useful for chemical and biological weapons. 
These four regimes form the multilateral basis for export controls, and 
they are obviously an important element for effective nonproliferation.
  One of our objectives here, of course, is to work closely with others 
in further developing multilateral cooperation and strengthening the 
contribution of these regimes to the nonproliferation objectives.
  Let me point out, we are constantly encouraging other countries to 
put in place a thoroughly considered, rational export control regime. 
We go to other countries and say: We need you to put this in place. We 
want you to join the multilateral regimes, and we want you to establish 
your own bilateral control systems so we can get a handle on this 
problem worldwide. I am very supportive of those efforts.
  What position does it put our interlocutors and our negotiators in 
when they go to these countries and then they say, ``You don't seem to 
have established your own regimes''? What is the U.S. regime?
  It is another argument for putting this legislation into place so 
that the U.S. has a fully developed, rational, comprehensive framework 
dealing with export controls, and then we, in a sense, try to pull 
other countries towards it or in that direction in order to enhance the 
multilateral controls that exist worldwide.
  Now one other point I want to underscore is, of course, the regime is 
designed to prevent exporters from moving out, moving overseas, exports 
with dual-use technology. When we make the judgment and go through this 
process, it has a negative effect on our national security or foreign 
policy interests, and of course you are going to have people trying to 
get around this all the time--some few people.
  We have enforcement provisions now that are much tougher. One of the 
things in this bill is a significant increase in the authorization 
levels for the Department of Commerce in a whole host of areas in order 
to try to tighten up the enforcement of this regime. In fact, we have a 
number of various provisions that are designed to strengthen our 
various export controls and to ensure that the resources the Department 
needs are available to it in order to carry out the provisions of the 
legislation.
  Now most exporters want to comply with the regime. They are not out 
to try to send abroad technology that can be abused to the harm of 
American interests. A number of them invest significant amounts of 
money in trying to comply with the regime's reporting and recording 
requirements. So it is important to the export community to have a 
comprehensive, rational statutory framework. They know, then, what the 
rules of the game are. I think it encourages compliance; it draws, in a 
sense, on the business community to help implement this matter. So I 
think that also represents an important step.
  Let me draw to a conclusion by once again saying this is a balanced 
effort to address a complex area of national security concerns that 
also impact U.S. trade interests. We received just this morning a 
letter sent to Senator Daschle, the majority leader of the Senate, 
signed by Secretary of State Powell, Secretary of Defense Rumsfeld, and 
Secretary of Commerce Evans. Mr. President, I think this letter is of 
sufficient import that I am going ask unanimous consent it be printed 
in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                September 4, 2001.
     Hon. Thomas A. Daschle,
     Majority Leader, U.S. Senate,
     Washington, DC.
       Dear Senator Daschle: We would like to bring to your 
     attention proposed legislation that will be before you 
     shortly for consideration: S. 149, the Export Administration 
     Act of 2001. This bill addresses the subject of export 
     controls, which is very important to the President. He spoke 
     definitively about reforming our export control policies and 
     process during his campaign.
       Earlier this year, our agencies conducted an intensive 
     review of S. 149, as proposed by Senators Gramm, Enzi, 
     Sarbanes, and Johnson. As a result of the review, we 
     recommended that the Senate Banking Committee make a number 
     of changes to the bill to strengthen the President's ability 
     to control sensitive dual-use goods and technology. The 
     Committee made the requested changes. Accordingly, we 
     strongly support the bill passed by the Senate Banking 
     Committee.
       S. 149 is an important step in our efforts to improve the 
     effectiveness and efficiency of our export control system. S. 
     149 will provide the President with the authority and 
     flexibility he needs to administer a stronger, updated export 
     control system. The Administration will continue to review 
     our policies and procedures in this area and will consult 
     with Congress as we identify any additional necessary 
     changes.
       President Bush strongly supports the bill as passed by the 
     Senate Banking Committee and wants to move forward in this 
     important area. We urge you to support S. 149 so that the 
     President will be able to sign a new export control law soon.
           Sincerely,
     Colin L. Powell,
       Secretary of State.
     Donald H. Rumsfeld,
       Secretary of Defense.
     Donald L. Evans,
       Secretary of Commerce.

  Mr. SARBANES. Mr. President, as we move forward in the debate, I 
presumably will have a chance to examine in greater detail the 
provisions of the legislation. I read through this legislation again 
over the weekend, from start to finish. I must say to you, on this 
issue I have always been sensitive to the national security and foreign 
policy arguments. In the past, in considering this legislation, I have 
never been one who sort of willy-nilly wanted to remove export 
controls. I think they have a very important role to play.
  I think this legislation substantially strengthens the ability of the 
President and the administration to exercise export controls on behalf 
of national security and foreign policy interests. So I very much hope 
my colleagues will be supportive of this legislation as we move ahead.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, I rise in support of S. 149, the Export 
Administration Act of 2001. Consideration and passage of this bill are 
essential for the advancement of our national security, our foreign 
policy, and our economic interests.
  I am very excited that today is here. This is the culmination of a 
lot of effort on the part of Senator Johnson, myself, Senator Sarbanes, 
and Senator Gramm. Almost 3 years ago now, Senator Johnson and I, as 
chairman and ranking member of the International Finance Trade 
Subcommittee of the Banking Committee, were given the task of looking 
at the Export Administration Act to see if it could be renewed. It had 
expired in 1994, and there was recognition that there was a huge gap in 
our national security. That was brought to light a lot, of course, by 
the Cox commission, which looked at some of the ways China was stealing 
secrets from the United States. A very extensive document during the 
original part of this process was a top secret document, and later a 
public version was put out; it brought a lot of attention to the issue. 
There had been 12 previous attempts to renew the Export Administration 
Act. They had failed. Only one version in the House had even gotten out 
of committee.
  It is an interesting bill because here in the Senate there are 100 
Senators who are concerned about national security. There are also 100 
Senators who are concerned about the economic interests of the United 
States. When a bill is balanced, it will have more than 50 percent in 
favor, but we have found that the way these coalitions merge, there are 
more than a majority in opposition to everything that has happened. We 
faced the unique challenge

[[Page 16287]]

of trying to do what the other 12 bills had not been able to do. To do 
that, Senator Johnson and I went through a process and saw exactly how 
the whole process worked. We visited each stage of the licensing 
process.
  It occurs to me at this moment that there may be people who don't 
understand the licensing process. There is a lot of confusion among 
people about the different licensing processes because there isn't just 
one. We are only talking about the Export Administration Act.
  The Export Administration Act is different from the Arms Export 
Control Act. It is different by way of what is controlled. The Arms 
Export Control Act, of course, handles defense articles and services. 
The Export Administration Act, on the other hand, handles dual-use 
products. That could be very confusing. Dual-use products are primarily 
not used for a military purpose but could have a military purpose. That 
is the main distinction between the Arms Export Control Act and the 
Export Administration Act.
  The jurisdiction between these two acts is different because the 
State Department and the Defense Department, of course, have a much 
greater interest and need to control the defense articles and services. 
The Commerce Department has been given the jurisdiction over dual-use 
products provided they are involved with the Department of Defense, the 
Department of State, and the security agencies, all of which have some 
voice in the licensing process.
  One of the big changes in this bill is the way that licensing process 
happens so that each of those agencies has a little greater role in 
being able to object to a license.
  At any rate, the Republicans and the Democrats on the Banking 
Committee and on the subcommittee went through a bipartisan process and 
worked together to reach a point of balance with a majority of the 
security folks who are interested in the bill and a majority of the 
economic interest folks who are interested in the bill. And there is 
overlap. That is how it is possible to have a vast majority from both 
sides. I am pleased to have a bill before us today that, after a lot of 
changes, I think has reached that point.
  I have to thank Senator Sarbanes and Senator Gramm for giving us the 
opportunity to pursue this. I know it is not the most exciting bill in 
the world. In fact, some people would say it is an accounting sort of 
thing, a boring sort of thing. But it is one of the most important 
bills that will pass. It is just very detailed. That makes it difficult 
to consider.
  Over the last 3 years, a lot of people have looked at this, a lot of 
people have given suggestions and, in fact, the handful of people who 
have provided the most opposition have also provided the most change. 
We have put in 59 changes based on their suggestions for how we needed 
to increase national security. We have been working with everyone. We 
are still willing to work with everyone. Of course, the latest one we 
worked with is the President. The President suggested 16 changes that 
are also included in the bill.
  At this point, we appear to have a balance that still has a vast 
working majority to pass the bill and I think a bill that will provide 
national security. Of course, the best evidence that it will provide 
national security is the President himself. The President has strongly 
urged the Senate to pass it quickly.
  I have a chart of President Bush's support:

       In working with the Senate, we're working to tighten 
     control of sensitive technology products with unique military 
     applications, and to give our industry an equal chance in 
     world markets. I believe we've got a good bill, and I urge 
     the Senate to pass it quickly.

  That was March 28. Later:

       During the campaign, I promised to lead an effort to reform 
     our export control system, so that it safeguards genuine 
     military technology while letting American companies sell 
     items that are already widely available. I'm pleased to 
     report the Senate Banking Committee passed a revised EAA, 
     which my administration strongly supports. It's now time to 
     pass it for the House, so I can sign it into law.

  There have been numerous statements by the President. He has had an 
interest in this bill, clear back to when he was campaigning and this 
was part of his Web site. Since August 20, we have been operating under 
the International Economic Emergency Powers Act, IEEPA, that was 
referred to by the chairman of the committee, Senator Sarbanes, due to 
the expiration of the EAA. It is one of those temporary extensions we 
passed.
  Operating EAA under IEEPA is unacceptable. IEEPA applies minimal 
penalties to exporters of unlicensed technologies and puts confidential 
business records of the business community at risk of exposure. I want 
to mention some of the changes and the differences between penalties 
because that is a big security portion of this bill.
  Under criminal penalties, for companies that willfully violate under 
IEEPA, there is a penalty of $50,000 per violation. Under the old EAA 
of 1979, which has been extended a few times, there is a $1 million 
penalty, considerably greater than the $50,000 penalty, or five times 
the value of the exports, whichever is greater.
  Under the bill we are considering, instead of even the $1 million 
fine under EAA, it will be $5 million per violation or 10 times the 
value of the exports, whichever is greater.
  Persons who willfully violated under the IEEPA would have gotten a 
$50,000 penalty or 10 years imprisonment or both. Under the EAA, they 
would get $250,000 or 10 years imprisonment or both. But under the bill 
we are considering at the present time, instead of the $250,000, it 
will be $1 million or 10 times the value of the exports, whichever is 
greater, or 10 years imprisonment, or both. We have considerably 
increased the penalties.
  Under IEEPA, the penalties are almost the cost of doing business or 
perhaps less than that. Under the EAA, the amount of the violations has 
been bypassed by inflation, but that has been easily taken care of in 
this bill.
  Under civil penalties, it is the same situation. Under IEEPA a civil 
penalty is $10,000, and under EAA a civil penalty is $100,000. Under 
this bill, a civil penalty will be $500,000.
  The last major revision to the EAA came when the Soviet Union was 
still in existence and considered a threat to our national security. 
That revision of the EAA of 1979 occurred before the Berlin Wall came 
crumbling down and freedom was unleashed for the first time in almost a 
generation for millions of Europeans.
  At that time, almost all of the new invention development was also 
Government funded. Today most of it is done by the private sector which 
is forging ahead without Government money involved. There is no need to 
postpone passage of this critical legislation any further.
  The issues surrounding the reauthorization of the EAA have been 
studied and studied and restudied. The President, Secretary Rumsfeld, 
Secretary Powell, Secretary Evans, and National Security Adviser 
Condoleezza Rice have endorsed this bipartisan and responsible 
legislation.
  Here is one of the messages from Condoleezza Rice, National Security 
Adviser:

       The Secretary of State, Secretary of Defense, Secretary of 
     Commerce, and I agree that [S. 149 as reported] will 
     strengthen the President's national security and foreign 
     policy authorities to control dual-use exports in a balanced 
     manner, which will permit U.S. companies to compete more 
     effectively in the global marketplace. S. 149 represents a 
     positive step towards the reform of the U.S. export control 
     system supported by the President.

  In listening to the arguments of the critics of this reasonable bill, 
there seems to be a misunderstanding about what the current law is. If 
a comparison of the 1979 EAA and S. 149 were made, one would find 
numerous similarities, as were pointed out by Senator Sarbanes, 
chairman of the committee. In addition, one would find several new and 
more extensive national security control authorities included in S. 149 
that allow the President to restrict the export of technologies 
critical to our national security.
  Senator Sarbanes has covered that in his remarks. Contrary to what 
the critics would have you believe, this bill is not a radical new 
approach to export controls or a radical departure from the current 
export control system. It

[[Page 16288]]

updates and simplifies certain aspects of the act that are outdated or 
unnecessary but keeps the basic structure of the 1979 act.
  There are reasons why this administration's national security experts 
are unified in their support of S. 149. It builds upon the framework of 
the current law, or the 1979 act, while modernizing, simplifying, and 
streamlining the act and export control processes, again involving all 
of the people who have been involved in it in the past in this 
administration and the previous administration to come up with a 
balanced proposal.
  It requires a risk analysis of proposed exports and emphasizes 
transparency and accountability to both the Congress and the exporter. 
With transparency and accountability, we and the people trying to put 
products out will have a better opportunity to follow the process and 
stay within the law.
  S. 149 embraces national security and foreign policy export controls 
even going well beyond the 1979 act in several respects. For example, 
the bill grants to the President special control authorities for cases 
involving national security and international terrorism, as well as 
international commitments made by the United States. Section 201(c) 
allows controls to be imposed based on end user and end use of an item 
if it would contribute to the proliferation of weapons of mass 
destruction. Section 201(d) adds enhanced controls which allow the 
President to impose controls on any item, including those items with 
incorporated parts for national security purposes.
  These two national security protections are not in current law and 
could be used regardless of the foreign availability or mass market 
status of the item. In addition, the bill retains the Presidential set-
aside authority in the case of foreign availability determination, 
section 212, as well as unlimited set-aside authority for mass market 
determination.
  Those are two determinations. Foreign availability, of course, is if 
the same product of the same quality is available from other countries 
that can compete with our industry and do not have to follow our export 
laws, under some very careful criteria that has been outlined in the 
bill, then they have the right to export those properties. The 
President has the right to override it.
  Mass market, of course, has already been explained as those items you 
can go to the store and buy at a relatively low price anywhere in the 
country, which makes any regulation over their export very difficult. A 
tourist coming to the country can go to the store, pick up the item, 
put it in their suitcase, and take it home. If it is that widely 
available, then it is very difficult to control.
  The purpose of our bill, of course, is to build a higher fence around 
fewer items and really concentrate on those things that can be 
controlled and need to be controlled and put more effort and resources 
into it. The general authorities contained throughout the bill are 
entirely consistent with the current law. The bill requires concurrence 
with the Secretary of Defense for identifying which items are to be 
included on the control list for national security purposes.
  There are three stages to this. There is a control list which gives 
people an idea of what kinds of items need to be licensed. There is a 
country tiering system. This is the one that evaluates countries in the 
world. No countries are named specifically, but the President, in 
cooperation with the experts that he has, would rank these people 
through three tiers from bad to good, with a whole bunch in the middle, 
which would all have different rights to access things on the control 
list based on their sensitivity. Then, of course, if it has to be 
licensed, it has to go through a licensing process.
  So we are talking about concurrence of the Secretary of Defense for 
identifying items to be included on the control list for national 
security purposes, and this is consistent with current law.
  The foreign policy export control authorities in title III are 
exercised by the Secretary of Commerce in consultation with the 
Secretary of State. This is also identical to current law. In addition, 
the authority for the issuance of regulations is the same as the EAA of 
1979.
  The Banking Committee determined that a flexible but transparent 
process was essential to keep the export control system from becoming 
obsolete the day after it becomes law. S. 149 allows flexibility for 
the administration in implementation of export controls because 
technology is changing at a phenomenal rate. Business models are very 
different from those employed a decade ago and, of course, 
globalization is breaking down some of the traditional barriers to 
trade and investment.
  As a result, it is vital that Congress resist the temptation to lock 
into a statute policy toward a specific country or a specific item. 
Experience has shown that this is not an advisable course of action in 
most cases. Flexibility is needed in the light of rapid technological 
change. To illustrate this point, the Congress placed in fiscal year 
1998 the National Defense Authorization Act provisions relating to 
high-performance computers. Concerns were genuine about the export of 
computers to potentially dangerous end users. However, to my knowledge, 
never before had the Congress locked into statute a specific parameter 
of control for an item.
  In addition, the Congress initially required a 180-day waiting period 
before the President could change the MTOPS control threshold, the 
speed of the computers. As we all know, this was in the midst of some 
of the most rapid advancements in computing power constraining the 
administration's ability to keep pace with technological progressions.
  In keeping with the need for flexibility, the Banking Committee 
adopted an amendment offered by Senator Bennett that would repeal the 
MTOPS 180-day waiting period. This does not mean computers would not be 
controlled. Instead, it means the President may control computer 
exports in a way that is more effective, more updated.
  S. 149 emphasizes the need for strengthened multilateral export 
control regimes. Multilateral controls are the most desirable because 
they are the most effective. This is where we get our allies and our 
friends, again any country that we can talk into it, to join us in the 
control effort. As Senator Sarbanes pointed out, we have been 
emphasizing to other countries they need to have a good export control 
act, a good export licensing process. We are the ones who are behind 
the curve on doing that.
  The multilateral controls need to be more emphasized. We used to have 
a process, a regime, called COCOM, and it was a mandatory group of our 
allies that under agreement would eliminate exports on which they 
agreed across the board.
  After the fall of the Berlin Wall, COCOM disappeared. We have a 
process called Wassenaar now, the Wassenaar Arrangement, which is more 
of a voluntary effort. Section 501 of this act urges the President to 
undertake efforts to strengthen or build upon multilateral export 
control regimes.
  I had the distinct pleasure of serving as a cochair with Senator 
Bingaman and Congressman Cox and Congressman Berman on the 
congressionally mandated Study Group on Enhancing Multilateral Export 
Controls for U.S. National Security. The study group, with the 
assistance of the Stimson Center, came to the conclusion that reform of 
the export control system is vital to U.S. national security 
objectives. Now we recommend that the U.S. should seek to improve the 
Wassenaar Arrangement with the long-term goal of merging existing 
multilateral regimes.
  Additionally, the study group recommended that the U.S. should reform 
its export control laws to build confidence and support among allies 
and friends for improving multilateral export control regimes. The 
provisions in S. 149 are consistent with these recommendations and 
should help to guide the administration as it seeks to strengthen the 
multilateral efforts and arrangements so we do not unnecessarily punish 
U.S. firms with unilateral controls.

[[Page 16289]]

  Finally, and importantly, the bill greatly enhances enforcement. It 
substantially increases criminal and civil penalties for violators, and 
I went through some of those differences between what happens with the 
Executive order we are under now and the previous EAA act of 1979 and 
the present one. It adds new resources for enforcement activities 
including an additional $4.5 million for end-use checks.
  It strengthens postshipment verifications, checking to see if the 
product actually went where the product was supposed to go.
  By targeting resources to exports involving the greatest risk rather 
than focusing solely on computers--there are other things out there 
that need to be checked on--this puts more money into the checking and 
targets those things that create the greatest risk to the United 
States.
  The Banking Committee took a tough stand on violators of postshipment 
verifications. We do not believe we should reward those entities that 
deny postshipment verifications. Therefore, the bill requires the 
Secretary to deny licenses to end users that do not allow postshipment 
verification for a controlled item. That is pretty well nailed down 
with the company involved, any subsidiaries of the company. I think it 
keeps them from getting around any provision of that. It strengthens 
postshipment verification, which is something that needed to be done.
  In conclusion, I offer a couple of quotes from a general and a former 
National Security Adviser, Brent Scowcroft. On June 8, 2001, when the 
Center for Strategic and International Studies publicly released its 
report on computer exports and national security in the global era, 
General Scowcroft said that some seem chained to the same policies that 
are largely not useful, and that there is a natural bureaucratic 
tendency to cling to the current rules.
  As we consider S. 149, I urge my colleagues to be mindful of General 
Scowcroft's comment and do the right thing and support passage of the 
Export Administration Act of 2001. Export control issues have been 
intensely reviewed and all the results of the studies come to the same 
conclusion. It is best for Congress to reauthorize the EAA now. The 
Senate should act now and pass this bill.
  I express thanks to the chairman, Senator Sarbanes, and Senator 
Gramm, to my coworker on this, Senator Johnson, and the new chairman 
and ranking member of the Subcommittee on International Trade and 
Finance, Senators Bayh and Hagel who have done a great job.
  I would be remiss if I did not mention some of the staff people: 
Katherine McGuire; my legislative director, Amy Dunathan; the Banking 
Committee staff, Joel Oswald, who used to be on my staff. There was a 
3-year time and there has been some transition. Paul Nash, Naomi 
Campbell, and Marty Gruenberg have done a tremendous job working around 
the clock in putting together this bill. They have been good at 
coordinating our efforts so we could get together with everybody.
  As I mentioned, we are still willing to talk to anybody about any of 
the provisions but think that a bill has been put in place now that has 
some balance to it. Of course, 16 changes we made on behalf of the 
President incorporated a number of issues that some of the security 
chairmen had been concerned about. We think we have a bill that should 
and can be passed.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Corzine). The Senator from South Dakota.
  Mr. JOHNSON. Mr. President, I rise today in support of S. 149, the 
Export Administration Act of 2001. It is difficult to overstate the 
urgency of reauthorizing EAA, which expired on August 20. We are now 
operating under the International Emergency Economic Powers Act, an 
improvised export control measure that has weak enforcement powers and 
that has been challenged in the courts. President Bush and his national 
security team have repeatedly urged Congress to pass S. 149, and I rise 
today to urge my colleagues to do just that.
  S. 149 is both a national security and a trade bill. It is one of the 
best examples that I have seen of a law that accounts for the vast 
geopolitical and commercial changes of the past decade and at the same 
time provides flexibility for the continued changes we must expect over 
the coming decades.
  The Export Administration Act has seen no major revisions since 1985. 
Since that time, the Soviet Union has collapsed, the cold war has ended 
and a new world order, including new threats, have emerged. At the time 
the political landscape has changed dramatically, so too has the 
commercial landscape. A global marketplace for goods, services and 
technology has developed, and once unimaginable technological 
advancements are now available on a widespread basis. The high tech 
sector is largely responsible for the remarkable change in our access 
to computers and the Internet, and we must take great care not to 
jeopardize that economic vitality.
  I have spent the last few years working on EAA with my colleagues 
across the aisle. When we started this effort, Senator Enzi and I were, 
respectively, the ranking member and chairman of the International 
Trade and Finance Subcommittee of the Banking Committee. From the 
beginning, we have had the full support of Chairman Sarbanes and 
Senator Gramm, and I am hard pressed to recall a situation in my 15 
years in Congress where a bipartisan team was completely cohesive. 
There is a reason why our team of unlikely bedfellows has held together 
so well, and the reason is that S. 149 is a very good bill.
  I believe in this bill. I believe it will help our nation. It will 
strengthen our national security. It will create an environment that 
promotes further technological advancement and fosters economic 
vitality. And it provides a structure that can grow and change into the 
future.
  S. 149 creates a new framework for export controls on dual-use items. 
By targeting enforcement efforts on problem areas, this more focused 
approach is just good, common sense. S. 149 will make exporting some 
items easier, and make exporting other items much more difficult. As 
Representative Cox has stated, ``We ought not to have export controls 
to pretend to make ourselves safe as a country. We ought to have export 
controls that work.'' At the same time, S. 149 will impose real costs 
and penalties on those who violate the law. Some violators will serve 
prison terms along with their hefty fines.
  While no one has more respect than I do for the deliberative process 
that allows the Senate to create thoughtful and responsible laws, I am 
struck by the irony of today's debate. I understand that several of my 
distinguished colleagues will object to reauthorization of EAA on the 
grounds that S. 149 will somehow compromise our national security. They 
will urge us to delay passage of EAA in the interest of our national 
security. They will demand further study before we move forward with S. 
149, which has nearly unanimous support of both industry and 
government, including the national security community. I look forward 
to hearing from those colleagues because I am having some difficulty 
understanding how delaying passage of EAA does anything but harm our 
nation and our national security. I must remind my colleagues that EAA 
has expired. We are operating under IEEPA and will continue to do so 
until we enact S. 149. This is the real national security threat.
  The argument that S. 149 compromises our national security is, I 
believe, based on a false premise. That premise is that national 
security and a strong export economy are incompatible. In fact, our 
national security depends on a strong export economy and America's 
continued leadership in the high tech field. I agree with the way 
Senator Gramm framed the question last year:

       Is our security tied to our being the leader in technology, 
     or is it tied to our ability to hold onto the technology we 
     have and not share it with anybody?

  Clearly, our security is tied to being the leader in technology, and 
security experts confirm this point.

[[Page 16290]]

  As Dr. Donald A. Hicks, former Under Secretary of Defense for 
Research & Engineering and chairman of the Defense Science Board Task 
Force on Globalization and Security testified before the Banking 
Committee on February 14, 2001:

       Today, the ``U.S. defense industrial base'' no longer 
     exists in its Cold War form . . . DoD is relying increasingly 
     on the U.S. commercial advanced technology sector to push the 
     technological envelope and enable the Department to ``run 
     faster'' than its competitors. DoD is not a large enough 
     customer, however, to keep the U.S. high-tech sector vibrant. 
     Exports are now the key to growth and good health. . . . If 
     U.S. high-tech exports are restricted in any significant 
     manner, it could well have a stifling effect on the U.S. 
     military's rate of technological advancement.

  Without a vibrant high technology sector, our national security will 
suffer. And without the ability to export dual-use items, the high tech 
sector will simply not be able to support our national security needs. 
We must not lose sight of this critical point.
  This is not to say that we should never restrict exports of our 
goods, services and technologies. On the contrary. In fact, S. 149 is 
largely about establishing the most effective mechanism for restricting 
the export of dual-use items that pose a potential national security or 
foreign policy threat. Based on recommendations from national security 
experts, including the Cox Committee and the WMD Commission, S. 149 
takes a risk-based approach to export control. This approach is 
sensible, and allows resources to be used where they are most 
effective.
  More specifically, S. 149 targets export controls on those items and 
destinations that the U.S. determines to pose the greatest risk to 
national security and foreign policy, while removing ineffective 
controls that serve as unnecessary barriers to trade. This so-called 
``tiering'' approach is an ingenious solution to the current situation. 
Today, 99.4 percent of all export applications are approved. This leads 
me to believe that the current system is not making effective use of 
our export control resources.
  My colleagues on the Banking Committee determined that the U.S. 
export control regime should focus on controlling those items that pose 
the greatest risk to national security. A useful way of thinking about 
the right approach was voiced by Dr. Hicks before our committee. He 
said the U.S. ``must put up higher walls around a much smaller group of 
capabilities and technologies.''
  We on the Banking Committee identified two categories of exports 
whose control does little to enhance our national security, and the 
control of which could in fact undermine our security interests by 
endangering America's technology leadership. We determined that it is 
best to heed the wise counsel of former Secretary of Defense and 
National Security Advisor Frank Carlucci that ``we should do only that 
which has an effect, not that which simply makes us feel good. . . .''
  Based on this principle, we concluded that there is little national 
security benefit derived from controlling U.S. items if substantially 
identical items can be acquired through another source or if such items 
are produced and available for sale in large volume to multiple 
purchasers. For these reasons, we created the so-called ``foreign 
available'' and ``mass market'' exceptions to export controls.
  Specifically, the foreign available exception acknowledges that 
unilateral control on items that are readily available from foreign 
sources are ineffective, and in fact may be counterproductive. The 
Defense Science Board Task Force on Globalization and Security noted in 
its final report that:

     Shutting U.S. companies out of markets served instead by 
     foreign firms could inhibit the competitiveness of the U.S. 
     commercial advanced technology and defense sectors upon which 
     U.S. economic security and military-technical advantage 
     depend.

  Stated another way, Mr. John Douglass, president of the Aerospace 
Industries Association, noted before our committee that such unilateral 
measures punish the exporter rather than the importer.
  The ``mass market'' exception likewise acknowledges the futility of 
trying to control items that are virtually uncontrollable by the nature 
of their wide distribution channels, large volumes, and general 
purposes.
  While S. 149 strives to be as targeted as possible, it also provides 
appropriate flexibility by recognizing that the President should have 
the ability to impose controls in certain critical circumstances, 
including cases involving national security, international obligations, 
and international terrorism. At the same time, the bill promotes 
accountability, discipline and transparency in the decision-making 
process through review and other procedures.
  Some have criticized S. 149 for reducing the power of the President 
in a way that I believe is, frankly, misleading. In fact, S. 149 grants 
the President unprecedented authority to set aside foreign availability 
or mass market determinations. President Bush and his national security 
team themselves believe that S. 149 as reported gives the President 
full and sufficient authority to maintain controls when it is in 
America's national security or foreign policy interest.
  One other aspect of the bill worthy of note involves how risk 
management techniques can be used to target our export control 
resources. First, the bill's system builds in controls for 
technological and political change by imposing a risk analysis 
requirement and continual review of controlled items. In addition, S. 
149 establishes a country tiering system that assigns items and 
countries to tiers according to their potential threat to U.S. national 
security. This flexibility to classify risk by both destination and 
product will be highly effective in targeting our efforts. In addition, 
a new Office of Technical Evaluation would be established in the 
Department of Commerce to assess, evaluate and monitor technological 
and other developments. And finally, S. 149 places a great emphasis on 
post-shipment verification resources of exports posing the greatest 
risk to U.S. national security.
  As a final matter, I would like to discuss the role of penalties in 
S. 149. Under the 1979 act, and especially under IEEPA, which we 
currently operate under, penalties are modest from any perspective. In 
fact, penalties are modest enough that businesses intent on violating 
our export laws simply factor the penalties in as a cost of doing 
business. That is how inadequate, how modest, how unsatifactory the 
current regime, both under the old 1949 act and under IEEPA are. A 
company that willfully violates export laws today is liable for a mere 
$50,000 per violation--chicken feed. Under S. 149, that company would 
pay a minimum penalty of $5 million per violation, and could owe 
significantly more. Individuals who willfully violate the law will owe 
a minimum penalty of $1 million and could serve up to a 10-year prison 
sentence. Civil penalties for any violation of export law rise from 
$10,000 per violation under IEEPA to $500,000 per violation under S. 
149.
  My distinguished colleagues, reauthorization of EAA is critical to 
our nation's interests.
  We are now operating under a grossly inadequate emergency control 
system, IEEPA, and that situation will not change until we enact S. 
149. Our situation is urgent. Under current law, exporters face anemic 
penalties for violations, and in fact the entire structure is 
vulnerable to court challenge. Until we pass EAA, we do indeed face a 
national security crisis.
  In addition, we must not lose sight of the impact our export control 
system on dual-use items could have on our high tech sector. The 
American economy has achieved unprecedented growth largely as a result 
of high tech innovations. In addition to creating wealth for our 
citizens, new technologies have enhanced our national security by 
giving us a competitive edge in development of our own security 
systems. The bill beefore us does nothing to compromise our security. 
On the contrary, S. 149 takes a common sense approach to export 
controls that significantly enhances our national security and economic 
vitality.
  S. 149 is bipartisan, and has the strong support of the 
administration, the national security community, and business 
organizations.

[[Page 16291]]

  This morning, our chairman, Chairman Sarbanes, submitted for the 
Record the most recent letter expressing support for the passage of 
this bill from President Bush, Secretary of Defense Rumsfeld, Secretary 
of State Powell, Secretary of Commerce Evans, and National Security 
Adviser Condoleezza Rice previously indicated her support for this 
bill--not the concept but this bill.
  I thank many for the extraordinary effort they have given to the 
creation of this bipartisan legislation. This kind of legislation has 
the support of Republicans and Democrats. It passed the Senate Banking 
Committee on a vote of 19-1. It has the support of the administration 
as well as the Senate.
  A lot of significant work ought to be credited to Marty Gruenberg of 
Senator Sarbanes' staff; Amy Dunathan of Senator Gramm's staff; 
Katherine McGuire of Senator Enzi's staff; Joel Oswald, Senator Enzi's 
former Banking Committee staff; Paul Nash, my former Banking Committee 
staffer; Naomi Campbell of my staff; and certainly Senator Bayh of 
Indiana and Senator Hagel of Nebraska have made significant 
contributions as well to the furthering of this legislation.
  This legislation has been reviewed by the Bush administration. They 
state in their letters there is intensive review of S. 149. They 
express their strong support. I express my strong support. It is my 
hope that this debate will proceed in an expedited fashion and that we 
will very quickly pass this legislation by the overwhelming bipartisan 
margin it deserves, and that it will go to the President who asked that 
it be presented to him for his signature.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. THOMPSON. Mr. President, I would like to address S. 149. I 
believe my colleagues who have spoken are correct in that they have 
substantial support for this legislation. I do not doubt they have a 
majority of the Democrats and a majority of the Republicans. I do not 
doubt they have the support of the administration. My understanding was 
that the President made a campaign statement or commitment with regard 
to this issue during the last campaign. President Clinton made the same 
commitment during his campaign for President.
  The President had a group of high-tech executives to the White House, 
just as President Clinton did, to promote this sort of legislation. My 
colleagues are correct in that the President now supports essentially a 
continuation of the Clinton policy with regard to the liberalization or 
loosening of our export controls law. I disagreed with it when 
President Clinton was President. I disagree with it now.
  While we need an Export Administration Act and while we need to take 
into consideration commercial circumstances and changes in the world, I 
think the balance between our national security interests and our 
commerce interests is not there.
  This is not really a bill, as I think about it, that is supposed to 
balance as such. It is a bill that has very specific purposes. It is 
consistent with our export administration process that we have had for 
decades in this country. It is based on the notion that there are some 
items we need to try to keep out of the hands of some people for as 
long as we can. The most ardent proponents of liberalized trade 
restrictions, of course, would acknowledge that. We have the so-called 
rogue nations, and so forth, to which, we all acknowledge, we should 
not let any of this high-tech stuff get through. If we were really in a 
world where the technology genie were totally out of the bottle, I 
suppose we would not bother ever making the distinctions between really 
bad countries and pretty bad countries and friends because it would be 
out there for all to have. This is based on the proposition that is not 
the case, that there are some things controllable and that we should 
try to keep these things out of the hands of some entities and some 
countries for as long as we can.
  When you look at the purpose of the act we are dealing with today, I 
think it correctly states that the purpose is about national security 
export controls, it is not about enhancing exports. In fact, you might 
say it is kind of anti-export. I think the norm is and should be that 
this country is for free trade. I certainly have tried to be one of the 
leaders in that area. I think the President ought to have trade 
promotion authority. I think we need to do more in that area. I think 
it is the basis for a large segment of our economic security and 
prosperity in this country.
  We had a debate with regard to a section of NAFTA recently. I think 
most of us are very committed to the process. But the fact that we have 
an export administration process and an Export Administration Act 
acknowledges that, be that as it may, there are some things that bring 
in extremely serious national security considerations.
  I refer to S. 149. It says the purposes of this act are 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. It further says the purpose is to stem the proliferation 
of weapons of mass destruction. It doesn't really talk about a balance 
of those grave and primary considerations that we all must acknowledge 
are, more than anything else, against some commercial considerations. 
Here we are talking about I think our total exports to these control 
countries, which are about 3 percent of our exports. So we are talking 
about a small fraction--3 percent of our exports as balanced against 
what I just described in the act.
  I am not for some kind of equipoise, or some kind of a balance, when 
it comes to these things. We shouldn't control things that are 
uncontrollable. We shouldn't be foolish about it. But we ought to have 
a very careful process that is not weighted or prejudiced in any way by 
those whose interest it is to get things out the door, whose interest 
is to export, whose interest is to come to the White House and come to 
the Congress and lobby on behalf of more and more exports for economic 
reasons. You don't have the average man on the street with a lobbying 
team coming up here saying be very, very careful about how you 
liberalize our export control laws because we are concerned about what 
we read about what is going on in the world in terms of proliferation.
  The world has changed a lot. We should look at these matters from 
time to time to see whether or not we are operating in the right 
century. We don't have the old Soviet Union anymore. We don't have the 
threat that posed. But in its place are several new threats which, in 
many cases, are more dangerous than the ones we had.
  We know, for example, that with the development of technology, 
weapons of mass destruction can now kill many, many more people than 
they otherwise could. There are ways of delivering weapons of mass 
destruction that did not exist a short time ago to countries such as 
the United States.
  We have biological weapons that stagger the imagination with the 
description of the devastation that just a small amount of it can 
wreak, again, accompanying that with the means to deliver them, the 
means that did not exist a short time ago. That is the other side of 
the technological coin, the technology that has helped us in so many 
ways and has made the world a better place. That is the other side of 
that coin. It is real.
  Of course, the world has changed in another way. My colleagues are 
correct when they say that more of this technology is available around 
the world. In some cases, to some extent perhaps, there is nothing we 
can do about it. But in some cases, to some extent, there is something 
we can do about it. Therein lies what we are trying to deal with here 
with regard to our export administration policy; that is, being very 
careful in making sure, with regard to the things we can have some 
control over, even if it is just to slow down the bad actors that wish 
our country and our national security ill, that it is a good thing to 
do. If we are not willing and committed to doing that, regardless of 
what it does to trade in a certain segment of exports, then we should 
not have any export policy at all; we should not have any export 
restrictions at all. I do not think we are

[[Page 16292]]

there. I do not think that anyone would advocate that.
  But it concerns me to hear that my colleagues think by passing this 
bill we are in some way enhancing our security. We are not. You can 
make a case that it is out of balance the other way, that we are trying 
to control things that are uncontrollable, and it is hurting our 
exports to the extent we need a new balance. I disagree with that 
strongly, but you can make that case. But I do not think you can have 
your cake and eat it, too.
  I do not think you can liberalize trade so people do not have to have 
licenses anymore for some of this dangerous stuff while at the same 
time claiming you are enhancing national security. It is just not the 
case. And it is not as if I have the answer as to where to draw the 
line. It is not as if my colleagues have the answer as to where to draw 
the line. Reasonable export controls that do not do any more harm than 
is necessary but protect us to the extent possible: It is very 
difficult to draw that line.
  What is important is that we have a process because that line has to 
be drawn every day. There are thousands of applications--15,000 to 
20,000 applications--for exports on an annual basis. We must have a 
very carefully thought-out process where responsible people, in all 
objectivity, with requisite expertise, have an opportunity to pass on 
these things and make those judgments. That is what this is all about: 
whether or not we are setting up the right responsible framework, not 
to be so irresponsible that we shut things down, but, on the other 
hand, that we recognize that the world is a much more dangerous place, 
that countries have the ability to harm us and harm our allies, which 
would directly involve us immediately, more so than ever before, and 
that we must do what is reasonably necessary to keep these things out 
of the hands--as the world's leading manufacturer in the creative 
genius behind most of the advanced technology that is going on in the 
world in so many areas now, that we have a stewardship, we have a 
responsibility to use that in a proper and correct way.
  As I said, it may be difficult to draw that line, but we must have a 
procedure that errs, if it is to err, on the side of national security. 
Because even the bill, as drafted, points out that this is the purpose 
of the Export Administration Act. This is the fundamental purpose of an 
Export Administration Act.
  So does this act take into consideration sufficiently the matters of 
national security? And does it take into consideration sufficiently the 
matters of commerce and exports?
  If we are going to talk about balance, let's talk for a minute about 
the side where we have our concern, the things that we are trying to 
address. In many different ways this is just a part of an overall 
policy of recognizing we live in a more dangerous world. But while 
realizing that genie is out of the bottle, we are trying to--through 
our policies, through our diplomacy, and through our policies--mitigate 
somewhat the danger that we see.
  As I have stated, because of the proliferation of weapons of mass 
destruction, the world is a more dangerous place in many respects than 
ever before. Numerous reports have confirmed that a ballistic missile 
strike on the United States is not a distant but an imminent threat.
  The Rumsfeld report, published in July of 1998, concluded that 
emerging ballistic missile powers such as Iran and North Korea could 
strike the United States within 5 years of deciding to acquire missile 
capability.
  Shortly after that, North Korea surprised our intelligence agencies 
by successfully launching a three-stage rocket over Japan, essentially 
confirming the Rumsfeld conclusions. Certainly they, along with Iraq, 
Syria, Libya, and others, can strike our allies and our troops 
stationed abroad today.
  In September of 1999, the national intelligence estimate of the 
ballistic missile threat concluded that the United States would ``most 
likely'' face ICBM threats from Russia, China, North Korea, and 
possibly from Iran and Iraq over the next 15 years, and that North 
Korea could deliver a light payload sufficient for biological or 
chemical weapons to the United States right now. It has also said that 
some rogue states may have some ICBMs much sooner than previously 
thought, and those missiles would be more sophisticated and dangerous 
than previously estimated.
  The classified briefings are even more disconcerting. Perhaps the 
most alarming report from these commissions and intelligence sources is 
that, despite the urgency of this problem, the United States' lax 
export controls are contributing to the proliferation of weapons of 
mass destruction by global bad actors--our own export policies. The Cox 
commission concluded that U.S. export control policies have 
facilitated, rather than impeded, China's ability to acquire military-
useful technology. The Rumsfeld commission has said the U.S. export 
control policies make it a major, albeit unintentional, contributor to 
the proliferation of ballistic missiles and associated weapons of mass 
destruction.
  There you have it. I do not know how it can be stated much plainer 
than that and with more authority than that; that we have a serious 
problem on our hands and that our own policies are contributing to that 
problem.
  Nowhere is it more clear than in the case of China, which is really 
the country that stands to benefit from changes to our export control 
laws the most, and, ironically, is also the country of greatest 
proliferation concern.
  China was described by the Rumsfeld commission as a significant 
proliferator of ballistic missiles, weapons of mass destruction, and 
enabling technologies. The PRC has sold missiles to Pakistan, missile 
parts to Libya, cruise missiles to Iran, and shared sensitive 
technologies with North Korea. All these actions have occurred despite 
the PRC's public assurances and commitments to several international 
proliferation regimes.
  Within the last few days, this Government sanctioned a Chinese 
company again for transferring missile components to Pakistan. Even 
more disturbing is that many of the items that China is proliferating 
to rogue nations around the world may have been legally acquired from 
the United States. The Cox commission notes that China has deliberately 
taken advantage of our lax export enforcement policies to further its 
proliferation efforts.
  China has illegally diverted or misused many sensitive dual-use 
technologies or items to further their military modernization. In 
January of 2000, the licensing threshold for high-performance computers 
was 2,000 MTOPS. In January of 2001, the licensing threshold was 75,000 
MTOPS, a fortyfold increase in a 12-month period.
  (Mr. NELSON of Nebraska assumed the chair.)
  Mr. THOMPSON. As the Cox committee points out, no threat assessment 
was ever conducted. As we have seen the rapid decontrol of 
supercomputers in this country to countries such as China, under the 
notion that, well, MTOP is not a valid criteria anymore and they will 
get it from somebody else anyway, the defense authorization bill in 
1998 required that if we are going to do this rapid decontrol of our 
computers, that we do a national security assessment as a part of that, 
because the real bottom line is, we don't know what the effects of this 
rapid decontrol are. We don't know what the significance to national 
security is.
  We operated for a long time under the notion that it was very 
important--and the Cox committee will bear this out--to try to keep the 
supercomputers at a certain level out of the hands of Russia and China 
and countries such as that because they use them for nuclear 
simulation, their stockpile enhancement programs, things of that 
nature. We have totally changed our view about that based on no study, 
based on anecdotal comments by people who come and testify before these 
committees who have a direct or indirect interest in companies or 
represent companies that are interested in exporting in many cases--not 
all of them, but many--time after time. We have not really had any in-
depth study or analysis by this Government as to what the effect of 
this substantial change in our policy is to our national security.

[[Page 16293]]

  I am not saying I know the answer. I rest assured that no one else, 
even in this body, has the answer. It is extremely complex, but it is 
extremely important. I know of no other change of that importance in 
that short period of time that has undergone less assessment. That is 
one of the things we should address.
  The PRC diverted and used these American supercomputers to improve 
their nuclear weapons. The Cox commission notes that in 1992, U.S. 
satellite manufacturers transferred missile design information to the 
PRC without obtaining the legally required license, and China used that 
information to improve the reliability of its rockets.
  We are all familiar with the Hughes-Loral problem. I noticed the 
report in the Wall Street Journal the other day that Loral apparently 
is about to cut a deal with the State Department and Justice to pay a 
fine and still be allowed to go ahead and launch Chinese rockets in the 
future, going back to their business. I will be interested in comparing 
the amount of that civil fine with the profit they make over the 
subsequent launches that they have in their deals with the Chinese.
  In 1993, China diverted six high-precision machine tools it obtained 
from McDonnell-Douglas and used them to manufacture military aircraft 
and cruise missile components. Just months ago we learned that Chinese 
technicians were installing fiber optic cable for Iraqi air defense in 
violation of U.N. sanctions. This fiber optic system is based on U.S. 
technology sold to China in the mid-1990s.
  According to published reports, we have discovered twice that 
companies in China were assisting Saddam Hussein with regard to his 
antiaircraft capability, which is what this fiber optic cable is used 
for, in order to help him shoot down our aircraft in the no-fly zone. 
There have been over 300 incidents where Saddam's troops have shot at 
our aircraft over that no-fly zone. I hope and pray they never hit one. 
I hope and pray that if they do, we don't discover that the technology 
used to shoot that airplane down did not originally emanate from the 
United States of America. I would not want to be the one to try to tell 
the mother of that pilot who was shot down: Ma'am, we are sorry about 
your son, but they probably could have gotten this ability from someone 
else if we hadn't given it to them.
  The Cox commission informs us that China pursues a deliberate policy 
of using commercial contacts to advance its efforts to obtain U.S. 
military technology. The commission states that China uses access to 
its markets to induce U.S. businesses to provide military-related 
technology and to lobby on behalf of liberalized export standards, a 
policy that has had significant success.
  We see from the Rumsfeld report, the Deutch commission, the biennial 
CIA reports, the nature of this threat and the fact that it is based on 
technology, technology in some cases where we are certainly the leader. 
We know that a lot of this proliferation activity from these rogue 
nations, a lot of their assistance comes from China. We claim we need a 
missile defense system. I believe we do because of the threats these 
rogue nations present to us. They, in turn, are getting their 
capability in significant part from countries such as China and Russia. 
We simultaneously, with all of that liberalizing of our export laws, 
make it easier to sell high tech items and equipment to China and 
Russia. That does not make sense.
  Where is the balance? What do we balance that threat against? What is 
the concern--that our export licensing procedure is too onerous? It is 
not like we are stopping these exports. As was said, 99 percent of them 
are approved. It is just the ones that are disapproved that are really 
important, important to our national security. It is not like we are 
trying to stop a great many exports because we are not. We are trying 
to have a procedure where we are more likely to not let something 
important slip through the cracks.
  Let's be clear about how much business is at stake. The total value 
of goods subject to export controls in 1998 was approximately $20 
billion, less than 3 percent of U.S. exports. The fact that an item is 
controlled does not mean that it can't be exported. It only means that 
it has to go through a review process. The overwhelming majority of 
them are approved.
  But what this legislation does is take certain categories, 
incorporated parts, mass marketing, foreign availability, and says, 
with regard to those items, with regard to those matters, if someone 
within the bowels of the Department of Commerce essentially decides 
that they fit into these categories, you don't have to have a license 
at all. You don't have to go through that process. It decontrols those 
matters and takes them outside of the regulatory process altogether.
  They say the President can stop it. We will talk about that in a 
minute.
  First of all, let's understand what we are doing here. In the past 
there was no such animal as the one I just described. In the past, 
foreign availability was legitimate as a consideration, and it ought to 
be. When the licensers looked at the matter, if there was foreign 
availability, that was something they could take into consideration in 
issuing the license. Now it is taken out of their hands. If someone in 
commerce, their technical evaluation team, decides that there is 
foreign availability, it doesn't even come through the process anymore.
  Mass marketing is a whole new concept. Mass marketing was not even 
used, that concept was not even used in prior administrations.
  Now I am sad to say that the embedded component was, but it makes 
less sense of all. If an item is controlled and deemed to be 
significant from a potential national security purpose, under this bill 
if it constitutes 25 percent or less of the item that it is 
incorporated in, then it is decontrolled.
  So if you have a controlled item and it is put into an item that is 
bigger and worth more, that is not controlled, that makes the item that 
is controlled decontrolled. Of course, all an importer has to do, in 
some cases, is to buy the larger item and take out the item that 
perhaps he wants, which is the embedded part.
  If it is significant from a national security standpoint before it 
goes into the larger item, it is significant from a national security 
standpoint after it is put into it. What does money have to do with it? 
What is the fact that it is or is not 25 percent of the price of a 
larger item? Of what significance is that? Especially from a national 
security standpoint. That makes no sense whatsoever.
  So when we talk about building higher walls around fewer things, 
point out the higher walls to me. When we talk about making it more 
difficult to export some things, making it easier for some and harder 
for others, somebody point out to me the things that this bill makes it 
more difficult to export.
  This legislation provides broad and sometimes exclusive authority to 
the Secretary of Commerce on important procedural issues such as 
commodity classifications, license and dispute referrals, license 
exemptions, and development of export administration regulations.
  I have a lot of faith in our new Secretary of Commerce. I think he is 
a fine man, excellent choice, and is doing a great job. But the fact 
remains that the mission of the Department of Commerce is to promote 
exports. We used to criticize Secretary Ron Brown for his export 
policies and getting items changed from one list to another to make it 
easier to export, and things of that nature. The Commerce Department 
simply doesn't have the personnel and expertise to protect national 
security. It should not have to. That is not their job. Somehow we have 
set it up this way.
  We are letting the tail wag the dog. If national security concerns 
ought to be given adequate consideration in an export decision, the 
Departments of State and Defense must be given greater authority and a 
greater role in this process. This legislation doesn't do that. Really, 
to the contrary, it increases the authority of the Department of 
Commerce.
  Let me go over a few things here, and keep in mind, first of all, the 
purposes of this bill, the stated purposes of this

[[Page 16294]]

bill. I didn't hear it discussed much when we were talking about the 
details of it. I think it is probably the most important part:

       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.

  And also:

       To stem the proliferation of weapons of mass destruction. . 
     . .

  That is the stated purpose. Whose job is it to do that? Well, we are 
going to give it to the guy who is in charge of commercial activities.
  Look at some of these areas. The Secretaries of Commerce and Defense 
must concur in order to add items to the control list. While this is an 
improvement over the previous draft of S. 149, which left sole 
discretion to the Department of Commerce, S. 149 still gives the 
Department of Commerce a veto over the Department of Defense if the 
Secretary of Defense believes an item should be controlled on the 
national security control list.
  Secondly, on commodity classification, the Secretary of Commerce has 
sole discretion over classifying items when exporters make commodity 
classification requests. These classifications determine whether items 
will require license or not and are particularly critical for new 
technologies. Commerce must notify Defense, but it is not required to 
solicit any input.
  What about the interagency dispute resolution process? Well, S. 149 
gives the Secretary of Commerce sole authority to select a chairperson 
of, and determine procedures for, the interagency committee to review 
license applications. The chairperson considers the positions of all 
the reviewing agencies but then makes the final decision on the license 
application. The only role of the Department of Defense is to provide a 
position, and additional levels of review are resolved by a majority 
vote.
  What about foreign availability and mass marketing? The Secretary of 
Commerce has sole authority to determine whether items are foreign 
available or mass marketed. He must consult with other agencies, 
including the Department of Defense. Since items determined to be 
foreign available and mass marketed are automatically removed from the 
national control list and decontrolled, this authority to Commerce 
essentially creates a loophole around the Department of Defense veto 
over removing items from the national security control list.
  What about issuing regulations? The Department of Commerce and the 
President have the authority to issue regulations. These regulations 
must be submitted for review to any department or agency the President 
considers appropriate, but the legislation explicitly notes that the 
requirement to submit the regulations for review doesn't require the 
concurrence or approval of any reviewing department.
  Finally, the catch-all provision in S. 149 provides that unless 
otherwise reserved to the President or department or agency in the 
United States, all power, authority, and discretion conferred by this 
act shall be exercised by the Secretary of Commerce.
  Mr. President, that is substantial authority and control by the 
Office of the Secretary of Commerce. Regarding matters of national 
security, they should not have to bear that much responsibility. So now 
in the act here, we are not really building higher walls around 
anything. We are not trying to come up with a procedure to determine 
the national security implications of what we are about to do. We 
recognize that there is more dangerous technology out there than ever 
before, and we are providing it to people who are misusing it, but we 
want to continue to do that at a more efficient rate.
  With regard to the increased penalties on exporters, I think by and 
large that is an improvement. But the act totally decontrols large 
segments of exports. So if you are decontrolled, how are you going to 
get in trouble? If I were an exporter, I would make that tradeoff, too. 
Give me a penalty on something that there is no way I could ever be 
accused of violating if it falls under one of these items that don't 
even require a license. How do you violate something like that? We are 
going to make a higher, more onerous penalty on you for violating this, 
but we are going to amend the law so it doesn't apply to you.
  The Presidential override: It is true that there is a section here 
that, as the proponents indicate, really does override both the 
incorporated parts provision and the mass marketing and foreign 
availability provisions. In other words, the President can step in 
regardless of any of those provisions. To me, it is inconsistent with 
and renders a nullity many of the provisions in the foreign 
availability section, for example, because that section says the 
President must jump through all these hoops and go negotiate with all 
these countries and report back to Congress.
  In other words, Mr. President, if you are going to step in on behalf 
of national security, we are going to make it awfully tough on you; you 
have to jump through all these hoops. They are saying: Enhanced control 
provisions, no, no; the President, if he wants to use this section, 
does not have to do all that; in other words, if there is a significant 
threat, not just a threat to national security but a significant threat 
to national security.
  I am not sure how all that operates. I think it bears more studying. 
I think we are going to have to look at those sections together. If it 
does what is suggested, I still think we need to ask ourselves: Do we 
want to create whole new categories that are essentially determined by 
the Secretary of Commerce to decontrol and then say to our President: 
Catch me if you can?
  If we have made a mistake out of these thousands of applications we 
get every year--another section says the President cannot delegate this 
authority, so let's make it as tough on him as we can; he does not have 
many other responsibilities; let's create these whole new avenues of 
decontrol and then say to the President: You have the authority if you 
can come up with something.
  I do not know how much longer he is going to sit over there with a 
skeletal staff in some of these departments. Some people are estimating 
it will be 14 months before he gets his full team together, as far as 
his government is concerned.
  Assuming the President does have the authority ultimately to step in, 
is that a wise idea? We are not just giving him new authority to step 
in with regard to an old situation. We are creating a whole new 
situation, a much more decontrolled situation, and giving him the 
invitation without delegating any authority. If he personally wants to 
step into one of these situations, he has the authority to do that. He 
did not need this authority before because we did not have a concept 
such as foreign availability except as something to be considered. We 
did not have a concept of decontrol based on foreign availability or 
mass marketing up until this bill.
  Under those sections, if a company can persuade the Department of 
Commerce that it ought to be decontrolled, then it is decontrolled; 
there is no license requirement. We cannot even keep up with the number 
of computers we are sending to China or anywhere else. We do not even 
have a list to make some cumulative effect assessment if we wanted to.
  The business community ought to have their say. I get the top 
rankings from the businesses and small businesses. I do pretty good by 
them. But I must say, when it comes to matters of export controls based 
on national security in a world where we are being threatened as we 
speak by weapons of mass destruction, it irritates me somewhat when I 
see in this export bill ``the Secretary shall permit the widest 
possible participation by the business community on the export control 
advisory committees.''
  This bill allows the Secretary to appoint advisory committees to 
advise the Secretary on these matters--quite objectively, I am sure. It 
also says the Secretary has to disclose to them information consistent 
with national security and intelligence sources and methods pertaining 
to the reasons for the export controls which are in effect or 
contemplated.
  If you want to impose any export controls for national security 
purposes,

[[Page 16295]]

you have to go to these business entities and explain what you are 
doing and why you are doing it. Not only is that unnecessary, I am 
afraid it gives an indication or it belies the purposes of this act.
  This bill is going to pass, and we all know that. The forces behind 
it are strong. When you have the administration and probably the 
majority of both parties supporting it, that is a pretty fair 
indicator. I understand that. But for some time now, starting back a 
couple of years ago, the chairman of the Intelligence Committee, the 
chairman of the Foreign Relations Committee, the chairman of the Armed 
Services Committee, the chairman of the Governmental Affairs Committee, 
and the chairman of the Commerce Committee, along with Senator Kyl, who 
is an expert in these matters, have had grave concerns about the 
balance we are striking; that we are continuing a policy based upon the 
tremendous pressures that are being brought to bear and based on 
campaign commitments that were made. It is not in the best long-term 
interests of this Nation.
  I do not think any of us can say for sure to what extent it is not or 
in what way our security might be harmed, but we are concerned that the 
process is not properly weighted. We are concerned that if we are going 
to err, we err on the part of national security; that when we are 
willing to engage in such debate to take on our European allies, to 
take on Russia and China all for the sake of a national missile defense 
system, based on the concept of tremendous threats this country faces--
and I believe in the system--we must move forward on it because I 
believe in the threats, but we are refusing to acknowledge and 
recognize what is right before us and that we are helping to create the 
threat.
  When we are exporting high-tech items to countries that have already 
shown that they will take them legally or illegally, that they will 
divert them for military purposes, that they will send them to rogue 
nations, and we come up with a concept to make it even easier because 
it takes 40 days to go through a licensing process--we do not want our 
companies to have to wait 40 days for people take an adequate look at 
this before they do that--I do not think we have our values in the 
right place; I do not think we are looking at what is right before us.
  I am not suggesting we not reauthorize the Export Administration Act. 
I am not suggesting we build a wall around our technology. We know we 
cannot do that. But we must have a procedure that is not dominated by 
commercial interests, either outside Government or inside Government. 
And those in the Department of Commerce who are rightfully concerned 
about our commercial interests, that is their job. It cannot be 
dominated that way. We have to have a fair shot. All this is weighted 
too heavily on the side of people who have vested interests in foreign 
commercial relationships.
  We have a $100 billion trade deficit with China today. I just got 
back from China with the distinguished chairman of the Banking 
Committee. The biggest meeting we had was with the American Chamber of 
Commerce in Shanghai. We have tremendous foreign investment over there. 
That is fine. That is well and good. But surely to goodness we are not 
going to let that cause us, when we are considering matters of this 
nature, to come down too heavily on making the process more efficient 
for exports of potentially sensitive materials.
  Again, we are not even talking about stopping exports. What we are 
talking about is a procedure where, more likely than not, we can stop 
from making one substantial mistake. We should not back end load this 
process and put all that responsibility on the President, if he or his 
people are fortunate enough to catch something on which those who, with 
good intentions, just simply do not have the expertise to make a call.
  That is what we are concerned about. So I hope in the rush to get 
this bill approved and passed, which will eventually happen, we will 
have an opportunity to get some fair considerations for some 
amendments. I would overhaul this whole bill if it were left up to me, 
but it is not, and I do not have the votes. I am not going to stand in 
the way any longer. We have held this up now for a couple of years, and 
we cannot do it any longer. The votes are too great, and I see that. We 
could not filibuster it successfully if we wanted.
  Surely we can consider some amendments that just as an example might 
give a little bit more time to an agency to review a complicated export 
request based on the potential impact of the export on national 
security. An agency now only has 30 days. If they do not get back 
within 30 days, it is deemed to be approved. Thirty days is fine for 
most things, but they ought to be able to have 60 days, if they need 
it, for the complexity of the analysis or if the reviewing agency 
requires additional time based on the potential impact of export on 
national security, a bit of additional time under those circumstances.
  I hope we consider an amendment requiring the Secretary of Commerce 
to refer commodity classification requests to the Secretary of Defense 
and the Secretary of State. The current draft of the bill requires the 
Secretary of Commerce to notify the Secretary of Defense of commodity 
classification requests, but there is no referral, and the Secretary of 
State is not even required to be notified.
  That is a prudent addition, an improvement. We should have unanimous 
consent of all the reviewing agencies on a license application. The Cox 
committee recommended that. It can still be taken up and ultimately 
approved if need be, but if the Department of Defense, for example, 
objects and no one else does, or the CIA or whoever, should that not 
require their sign-off?
  As to postshipment verification, S. 149 says the Secretary of 
Commerce may deny licenses to countries that deny postshipment 
verification, although it says the Secretary shall deny licenses to 
particular end users. I suggest we add to that language that the 
Secretary of Commerce shall deny licenses to countries. Why do we 
mandate denying a license to an end user that will not let you verify 
it but leave it discretionary with the Secretary of Commerce to deny to 
a country that will not let you verify, when in many, if not all, of 
these cases it is a country policy?
  We have an agreement, for example, with the country of China. If we 
are being denied the right to go in and do our postshipment 
verification, it makes no sense to blame it on a company. It is the 
country that is denying us. So why should we make it mandatory on a 
company but discretionary with the country that is calling the shots?
  As to foreign availability, the definition of ``foreign 
availability'' requires only that an item or substantially identical or 
directly competitive item be available to control countries from 
sources outside the United States in sufficient quantities at a price 
not reasonably excessive. This definition does not speak to relative 
quality. In other words, if it is out there, if other countries can 
supply it but if it is not the same quality as that of the United 
States, and it is potentially dangerous and it is something that can 
potentially be used for military purposes to a country of some concern, 
would we not want to take into consideration the fact we are 
liberalizing or loosening our standards because they have access to a 
similar item even though it is not of the same quality as our item? We 
ought to consider that carefully.
  The deemed export issue, the definition of ``exports'' in S. 149 
includes transfers of items out of the country or transfers of items 
within the country with the knowledge and intent that a person will 
take the item out of the country, but it does not cover any transfer of 
technology to a foreign national.
  We have had a concept of deemed exports in this country for a long 
time, and that is if you give a foreign national the same kind of 
controlled information that is sent abroad, it ought to operate under 
the same rules if it is the same information because of the 
potentiality of it getting back, and we know that happens.
  Under the current definition of the statute, the Secretary of 
Commerce

[[Page 16296]]

has discretion over whether to control deemed exports. I do not think 
the Secretary of Commerce ought to have that discretion.
  Now my concern here is that there has been pressure from the business 
community to eliminate the deemed export requirement altogether, and S. 
149 includes language stating it is the committee's understanding that 
the administration will be reviewing the deemed export process with a 
view toward clarifying its application. I do not have any idea what 
that means. What I think it means is that we are going to work to get 
rid of this sucker, but we need a deemed export rule and we need it to 
be mandatory.
  We had hearings and heard countless hours of testimony about what was 
happening in our National Laboratories when we were concerned about the 
information was getting out, and we saw the thousands of hours and 
thousands of people who were coming in from other countries who had 
access to information. Private industry was doing much better than the 
Government, but our own Government people were not submitting the 
necessary documentation for deemed exports to tell our people what 
information these folks had access to. It was common sense. We do not 
want to cut off foreign students. We do not want to cut off foreign 
experts, the technology; it benefits our own economy; we need that 
interplay. But it is common sense to protect yourself a little bit. We 
need to do that.
  There are others we might consider, but those are some I hope within 
the next couple of days we have the opportunity to consider in some 
detail with an idea toward tightening it up some, and making it so when 
we leave this, having passed it, we have not unwittingly done something 
that made it more difficult in the operation of this process. It all 
sounds pristine when we describe it.
  It goes here and here and here, and then someone has this right and 
the other fellow has the other right and these thousands of things that 
come rushing through, but in actual application it is not always quite 
that smooth. This bill, thank goodness, devotes some additional funding 
for this licensing process, which I think is a good thing. Let us make 
sure that in all of this we do what we can, at least around the edges, 
is the way I would look at it, to make sure we give enough time to 
properly consider these things, and we have them considered by the 
entities that ought to be looking at it and not being totally weighted 
or unduly weighted toward the commercial side.
  So I look forward to the discussion. I congratulate my colleagues on 
their perseverance to get this bill this far. We have been arguing and 
discussing this bill for a long time. It is one of those cases where 
people have strong feelings on both sides and make valid points on both 
sides. Everyone is trying to strive for the right thing and the proper 
balance, and hopefully at the end of the day we will have something 
that will not produce grave concern among the American people.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I will take a few moments to make a 
brief response to my able colleague from Tennessee. I know the 
distinguished Senator from Wyoming also wants to speak.
  Much of what was contained in my colleague's statement I agree with 
regarding concerns and how to address them. I think there are basic 
differences of perception of this bill and what it does. As I said at 
the outset, I am frank to say I think the bill provides greater 
protection for national security and foreign policy interests than 
either the previous Export Administration Act or the regime in place 
under IEEPA.
  In my opening statement I didn't have the material at hand and I made 
reference to the significant improvement in the commitment of resources 
for enforcement which is extremely important in any regime. You can 
have a nice paper regime, and if you do not have the resources for 
enforcement it does not have any reality. I will go through those 
quickly.
  Beginning on page 296, we have a number of provisions of additional 
resources for enforcement programs. I want those in the Record because 
I think they are important: $3.5 million additional authorization to 
the Department of Commerce to hire 20 additional employees to assist 
U.S. 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.
  We are trying to draw on the export community, in effect, to become 
an active partner in trying to maintain the controls and support the 
regime. The freight forwarders are an integral aspect of the export 
process. This provision would be very important.
  We go on to $4.5 million to hire new investigators to be posted 
abroad in order to verify the end use of high-risk dual-use technology; 
$5 million for the end-use verification program. That is in addition to 
the authorization I was just talking about. The station oversees 
investigators. There is $5 million for upgrading the computer licensing 
and enforcement system within the Department of Commerce; $2 million 
for additional license review officers, and $2 million to train license 
review officers, auditors, and investigators. That is a total of $22 
million in additional enforcement programs. It significantly boosts the 
budget by about 50 percent. We are talking about a 50-percent increase 
in the commitment of resources.
  I listened carefully to my colleague. A fair amount of what the 
Senator discussed involved matters that are not affected in the export 
control regime. If a nation is transferring military technology, that 
is not part of the export regime which deals with dual-use technology. 
We confront that situation in some instances.
  I was interested by the reference of the Senator to these various 
commissions. My colleague from Wyoming, in fact, was the cochair of one 
of those commissions investigating some of the problems. There were a 
number of references to the commission chaired by Rumsfeld in terms of 
our export program. I point out to my colleague we have a letter today 
from the same Rumsfeld, as far as I understand it, endorsing this 
legislation and urging Members to act on it. That is the very Rumsfeld, 
unless I am mistaken, being cited in terms of a particular point of 
view with respect to export controls.
  One item the Senator mentioned as a possible amendment, the notion 
that there had to be a unanimous decision of the interagency group with 
respect to a license approval. What that means is the issue then would 
never get off of the first tier in terms of going up the appeals 
process because any one of the departments or agencies involved in the 
interagency review could, in effect, stop it at that level.
  That is not the scheme of the legislation. The scheme of the 
legislation is that the matter can move forward as long as there is a 
majority decision, but the dissenting voice in the majority decision 
can take it to the next level for review so it can be moved up the line 
in terms of the officials examining this matter, and eventually, of 
course, can be taken right to the President for an ultimate decision 
that will resolve a dispute between one department and another with 
respect to the issuance of a license. If they all agree that the 
license should be issued, it will be issued; if they all agree it 
should not be issued, it will not be issued.
  What do you do if they differ? If they differ and you require 
unanimity for issuing the license, in effect, it is blocked at that 
level. What this arrangement provides is that you can continue to move 
forward, but an appeal can be taken to the next level and to the level 
beyond that and eventually to the President for a determination. I 
think that is a much fairer process. It is a more open process. It is a 
more transparent process and that means that the exporters at least 
will get a decision and will not simply disappear into the great void 
where they are left without any decision.
  Much of what has motivated the business community is the argument

[[Page 16297]]

that ``we need to know, we need a judgment.'' If we can't do the 
license, let us know we cannot do the license within a limited period 
of time and we will go on about our business in other ways. If we can 
do the license, let us know within a period so we are in the bidding or 
competitive process in terms of trying to land this contract.
  I don't think we can go from the majority to unanimity because then 
we are right back where we were. One of the old problems we have 
confronted is an impediment and a burden on trade without making a 
contribution to national security that can't be achieved according to 
the procedures in this legislation. It is not as though we say if there 
is a majority decision at the lowest level, that decides the matter. 
That only begins the process and the department that has been outvoted 
can appeal the matter and take it up the line.
  It seems to me that is a much more sensible way in which to proceed. 
I think one of the things this bill provides to industry, which I think 
they are reasonable in seeking, is a defined process within a limited 
time period that in the end gives them an answer, yes or no. But it 
gives them an answer.
  That is an improvement over current arrangements where they may well 
be simply left in limbo. It is reasonable to expect the Government 
decisionmakers and the Government process to work in such a way that in 
the end they get a decision.
  One of the premises on tightening up is that if you have foreign 
availability or mass market, that you are not contributing in any 
significant way to stemming the spread of technology by inhibiting it 
because it is available from other sources generally available. So it 
seems sensible to try to take those goods and services out of the 
surveillance as a starter. We do not do that anywhere near completely 
because in both instances we provide authorities whereby that can be 
suspended.
  The reason we have the double Presidential authority--for example, on 
foreign availability--is the part in the foreign availability section 
is designed to get the executive to try to negotiate and arrive at a 
multilateral restraint. This technology is available, foreign 
available, so it can be acquired there--comparable technology. If that 
is so, we are saying to the President: You should try to see if you can 
negotiate an agreement. We have the three 6-month periods, the 18-month 
period, in which if he has not been successful in doing that, that 
authority, in effect, comes to an end. But we have the general catch-
all authority which enables the President to, in effect, limit or 
control it or prohibit it on the basis of the general authority.
  The mass marketing does not have that. He can keep rolling that over, 
if he chooses. But, in any event, he has this reserve power under the 
enhanced control that enables him to deal with parts and components. It 
enables him to deal with foreign availability. It enables him to deal 
with mass marketing in which, in effect, a very, very broad authority 
and power has been committed to the President. That is one of the 
reasons it seems to me clear that the administration and the various 
officials are supportive of this legislation.
  We are trying to improve the process, provide some certainty in how 
it works, make sure the private sector gets answers, and at the same 
time reserve to the President the ultimate authority to make control 
decisions based on national security and foreign policy interests. So I 
think the basic scheme, the basic arrangement is one that, in fact, 
deals more adequately with national security and foreign policy 
interests than either the existing regime now under IEEPA or the 
previous Export Administration Act.
  Mr. THOMPSON. Will the Senator yield?
  Mr. SARBANES. Surely.
  Mr. THOMPSON. I would appreciate a clarification on comparing the 
Presidential set-aside on foreign availability with the enhanced 
controls; the former section, section 212, and enhanced controls is 
under 201.
  I will ask a question in a moment. I know the Senator knows that 
under 212, the Presidential set-aside, if he determines that failing to 
control an item would constitute a threat to the national security, the 
President can set aside the Secretary's determination of foreign 
availability. Then it requires the President to pursue negotiations, as 
the Senator has described. It requires the President to notify Congress 
that he has begun such negotiations. The President shall review a 
determination at least every 6 months and notify the committees. Then, 
18 months after the date, the determination is made; if the President 
has been unable to achieve an agreement to eliminate foreign 
availability with these other countries he is negotiating with within 
the 18 months, then the set-aside is lifted. But when you come over 
here to enhanced controls, it seems to give the President broad 
authority to lift the application of provisions of, in this case, 
foreign availability.
  I take it from what the Senator said a moment ago he thinks with 
enhanced controls the President would still be required to enter into 
the negotiations with foreign countries, for example. And, if so, which 
of these other provisions--the notifying Congress--presumably the 
cutoff would not apply, the 18-month cutoff.
  I am a little curious, if the President has enhanced controls, you 
would think that would obviate all of these other reporting conditions 
and negotiation requirements and things of that nature because that 18-
month requirement certainly would be obviated, and it would make the 
requirements under the set-aside unnecessary.
  Will the Senator comment or give me his view on that? There is a lot 
of legislation here. I have referred to it once. We will have an 
opportunity to discuss it.
  Mr. SARBANES. I understand exactly what the Senator is referring to. 
The Presidential set-aside of foreign availability status 
determination, which is section 212, is designed to encourage the 
President, in a foreign availability issue, to achieve, if possible, a 
multilateral agreement through international negotiations. And that is 
sort of spelled out in there as part of the purpose. You know, we 
emphasize negotiations, the reports to the Congress, the periodic 
review of determination, and the expiration of the set-aside at a 
certain period, although he can renew it for 6 months over three times, 
for an 18-month period.
  Over and above that, the President is given an enhanced control 
authority in section 201(d). That is on page 183, section 201(d). Let 
me read that because I think it makes it clear that, without being 
bound up in the process of section 211:

       Notwithstanding any other provisions of this title, the 
     President may determine that applying the provisions of 
     section 204 or 211--

  Section 204 is the parts and components section. ``Incorporated Parts 
and Components,'' is section 204.
  Section 211 is, of course, the ``Foreign Availability and Mass-Market 
Status'' section--

     the President may determine that applying the provisions of 
     sections 204 or 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 controls should apply to such item, the item 
     may be excluded from the provisions of section 204, 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 section.

  That is a pretty far-reaching authority. We seek the President's 
determination on that. Then the only report is, the President shall 
promptly report any determination described in paragraph 1 along with 
specific reasons for the determination to the Banking Committee in the 
Senate and the International Relations Committee in the House.
  Mr. THOMPSON. Will the Senator yield for a moment?
  Mr. SARBANES. Sure.
  Mr. THOMPSON. I just noticed when the Senator was reading under 
enhanced control that it refers to control 204, incorporated parts, 
211, which has to do with the determination of foreign availability 
along with mass marketing. But it does not refer to 212. Enhanced 
control does not refer to 212; it

[[Page 16298]]

refers to 211, which has to do with making the determination of foreign 
availability, but it does not refer to 212, which has to do with 
Presidential set-aside.
  The first question would be, Do in fact the enhanced controls 
override 212?
  Mr. SARBANES. Surely 212 defines how the President can carve out from 
211 foreign availability, and 213 defines how the President can set 
aside mass market status determinations, both of which are in section 
211. So 211 sets out these things, and then 212 and 213 provide the 
Presidential carve-out from the requirements of 211. This isn't 
relevant if the President invokes section 201(d) because 201(d) in 
effect negates section 211. So there is no reason to go to the carve-
outs in 212 or 213. The President doesn't have to invoke 201(d). And he 
can do the carve-outs according to 212 and 213, depending on whether it 
is foreign availability or mass market.
  Mr. THOMPSON. I see what the Senator is saying. If you are assuming 
that the determination made by the Secretary of foreign availability 
and the President's decision to set that aside were made 
simultaneously, I am wondering whether or not there could be a 
situation where that would not be the case, that a determination could 
be made of foreign availability by the Secretary. The President doesn't 
have anything to do with that. Then at a later date the President makes 
a determination that this is not working out very well and he wants to 
use his enhanced authority. But enhanced authority doesn't refer to 
212, which gives him the right to set aside which foreign availability 
would subsume.
  Mr. SARBANES. No. I don't want to bring in 201(d) under 212 or 213 
because 201(d) is over and above 212 and 213. This is a tremendous 
authority to give to the President. It is over and above. If you 
subsumed them under, then you would be creating problems.
  Mr. THOMPSON. That gets to my second point, if I may. I go back to my 
original question. If that is the case, then why is the section under 
212--the set-aside that has to do with the President's actions in the 
case of set-aside, which has to do with pursuing negotiations with 
foreign governments, notifying Congress, periodic review, exploration 
of Presidential set-aside --if the President did in fact decide to use 
his enhanced control authority, why would any of that be applicable? 
Certainly the exploration of the Presidential set-aside would not be 
applicable. Or would it?
  Mr. SARBANES. Why do you have it at all? It is a reasonable question. 
Here is the answer as I perceive it. You are trying to set up a 
framework and a regime in the way of proceeding. As a general 
proposition, for the sake of transparency, for rationality, for 
understanding in the export community what is being done, the sort of 
standard way of proceeding, so to speak, on both foreign availability 
and mass marketing would be to follow the procedures in 212 and 213 
which have been worked out and are designed, as I said, certainly in 
the case of foreign availability, to accomplish the objective of trying 
to develop multilateral negotiations.
  So this is the process you set out to be followed. Conceivably, that 
is the process which, generally speaking, the executive branch would 
pursue. But in a sense, in an abundance of caution, with respect to 
national security and foreign policy interests, we give the enhanced 
control power to the President contained in 201(d). There he doesn't 
have to go through these notices. He doesn't have to go through these 
procedures. He is not bound into a timeframe.
  But you don't simply do that. If you just did that and nothing else, 
you would have, in a sense, sort of a process without any sort of 
standards or review.
  We have a process of standards and review. But then we go on to say, 
as I said, with an abundance of caution, that in any event the 
President can exercise the 201(d) authority. That is essentially to 
take care of the argument--actually, I think the Senator used the 
phrase earlier in his statement about unintended consequences. This is 
really to foreclose any unintended consequences in sections 212 and 213 
by giving the President this broad authority contained in 201(d) on 
enhanced controls.
  Mr. THOMPSON. It seems to me what we are getting down to is that if a 
foreign availability determination has been made, the President has the 
discretion of operating under 211, going through the notice 
requirements, going through the consultation requirements, and going 
through the negotiation with foreign governments----
  Mr. SARBANES. It is 212.
  Mr. THOMPSON. Yes.
  Mr. SARBANES. It is not 211?
  Mr. THOMPSON. That is correct. But he may not proceed linearly. When 
a determination is made of foreign availability, if he at the outset 
wants to use his enhanced control authority under 201, he may do that. 
Then none of the provisions having to do with 212 would apply. Would 
that be correct?
  Mr. SARBANES. Yes. The President could do that. Generally speaking, 
the President would use 212 and 213 in addressing foreign availability 
and mass marketing, because that is the process, as I spelled out, that 
has certain benefits that flow from its use. But he would not have to 
do that. He could invoke 201(d). That is why I said earlier in my 
opening statement that I thought this legislation gave very significant 
authorities to the President to make these judgments about national 
security and foreign policy interests, and it is one of the reasons 
that I think the administration, after very careful review of this 
legislation, is so supportive of it.
  Mr. THOMPSON. I thank the Senator.
  Mr. SARBANES. I yield the floor.
  The PRESIDING OFFICER (Mrs. Clinton). The Senator from Wyoming.
  Mr. ENZI. Madam President, I will make brief comments while my 
colleagues are preparing to speak.
  I am pleased we have had the opening statements that we have had so 
far, and particularly I am pleased with this colloquy we have just had 
which shows that we have built some supreme authority into the 
Presidential position that gives the President the right to trump the 
other provisions that are in the bill but that still puts a process in 
place which we hope will be followed because foreign availability will 
definitely bite us if we do not work with other countries to control 
it.
  Mr. SARBANES. Right.
  Mr. ENZI. That is why we are concentrating on the multilateral 
control as opposed to the way we have been doing it which is the 
unilateral control. Unilateral control does not work. Every report 
shows that.
  I also thank the Senator from Tennessee for his comments about the 
commission that was chaired by Mr. Rumsfeld and the expertise that he 
alluded to--and I would confirm--that Mr. Rumsfeld has on weapons of 
mass destruction. Of course, one of the reasons that I am very willing 
to point that out is to reemphasize the letter that we had printed in 
the Record this morning from the Secretary of State, Colin Powell, the 
Secretary of Defense, Donald Rumsfeld, and the Secretary of Commerce, 
Donald Evans, which is dated today, and was delivered to us, that shows 
the support of these three Secretaries for S. 149. It isn't a hedged 
support; it is a very specific support. We appreciate the expertise of 
Mr. Rumsfeld in the area of weapons of mass destruction and, while 
these are dual-use items, he gives the same level of credence to our 
bill as to his report.
  Another fine line that needs to be pointed out is that in our bill 
one of the things we did not do was turn the process over to the 
bureaucrats. We turned the process over to the elected officials. We 
went to the power at the top. The reason we did that is because there 
is a tendency among bureaucrats to pigeonhole things, to avoid 
decisions; and if you build a process that allows them to avoid 
decisions, they will avoid decisions. That is why we put some of the 
time limits that are in here in here. But there is, at any step of the 
process, the capability of stopping the whole process. And that is also 
built in this bill.
  Mr. Thompson. Would the Senator yield for a moment?

[[Page 16299]]


  Mr. ENZI. Yes.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. I am supposed to be a witness in the Judiciary 
Committee. I wonder if I could be allowed to lay down an amendment 
before I leave the Chamber.
  Mr. ENZI. I appreciate that. I was hoping we would get to amendments. 
I yield for that purpose.


                           Amendment No. 1481

  Mr. THOMPSON. Madam President, I send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Tennessee [Mr. Thompson] proposes an 
     amendment numbered 1481.

  Mr. THOMPSON. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To modify the exceptions for required time periods)

       On page 232, strike lines 16 through 18, and insert the 
     following:
       (1) Agreement of the applicant; complexity of analysis; 
     national security impact.--
       (A) Agreement of the applicant.--Delays upon which the 
     Secretary and the applicant mutually agree.
       (B) Complexity of analysis.--The reviewing department or 
     agency requires more time due to the complexity of the 
     analysis, if the additional time is not more than 60 days.
       (C) National security impact.--The reviewing department or 
     agency requires additional time because of the potential 
     impact on the national security of foreign policy interests 
     of the United States, if the additional time is not more than 
     60 days.

  Mr. THOMPSON. Madam President, the amendment I have offered makes a 
small but significant change in the license application review process.
  This amendment allows executive branch agencies such as the 
Department of Defense or the Department of State that are reviewing 
licensing applications to have an extension of up to 60 days to review 
the license if the analysis involved in reviewing the license is 
complex or based on the potential impact of the export on the national 
security or foreign policy interests of the United States. This 
amendment should not be controversial. The amendment is simple and easy 
to understand and, in my view, it is very hard to oppose. For example, 
if the Department of Defense is reviewing a license application for 
sensitive dual-use technologies that are controlled under our export 
control process, it should be able to get additional time if the 
analysis is complex or if the export presents particularly sensitive 
national security concerns.
  This change is small but very important. The House International 
Relations Committee accepted this amendment unanimously by voice vote 
in its recent markup of the Export Administration Act of 2001. And this 
amendment reflects a recommendation made by the Cox commission on U.S. 
National Security and Military/Commercial Concerns with the People's 
Republic of China. The Cox commission report concluded that U.S. export 
control policies and practices have ``facilitated the PRC's efforts to 
obtain militarily useful technology.'' One of the issues the Cox 
commission discussed was the fact that in 1995, the U.S. reduced the 
time available for national security agencies to consider export 
licenses. The commission said that these new deadlines placed national 
security agencies under ``significant time pressures.'' It concluded 
that the time allowed for consideration of licenses was ``not always 
sufficient for the Department of Defense to determine whether a license 
should be granted, or if conditions should be imposed.'' The Cox 
commission recommends:

       With respect to those controlled technologies and items 
     that are of greatest national security concern, current 
     licensing procedures should be modified.  .  .to provide 
     longer review periods when deemed necessary by any reviewing 
     Executive department or agency on national security grounds.

  The current version of the legislation contains strict time 
restrictions. Reviewing agencies, such as the Department of Defense, 
the Department of State, or the Department of Energy, have 30 calendar 
days to provide a recommendation to the Department of Commerce. If they 
do not provide a recommendation within 30 days, they are deemed not to 
have any objection. This means that if the Department of Defense, for 
example, has inadequate time to complete a complex review, the license 
application is automatically granted and sensitive dual-use technology 
is exported. Allowing additional time in particularly complex or 
sensitive cases would protect our national security at little cost to 
any economic interests.
  Under the current draft of the legislation, the longest time an 
applicant could wait for an answer under the legislation is 129 days. 
The Secretary of Commerce has 9 days from receipt of the license 
application to refer it to the appropriate reviewing agencies. These 
agencies have 30 days to respond. If there is an interagency dispute 
regarding whether to grant the license, it is referred to the 
interagency dispute resolution process. The interagency process must 
resolve the issue or refer it to the President within 90 days after the 
license application is referred to the interagency process by the 
Secretary of Commerce. In fiscal year 1999, average processing time for 
all applications was 40 days. Applications that did not need to be 
referred to another agency, which comprised 14 percent of all 
applications, had an average processing time of 20 days, and 
applications that were referred to reviewing agencies had an average 
processing time of 43 days. This amendment would provide up to 60 
additional days of review for export license applications that are 
complex or based on the potential impact on U.S. national security or 
foreign policy interests. While this could lengthen the process 
somewhat in the most sensitive cases, it would have little or no impact 
on the majority of export licenses.
  Madam President, this change to the legislation is small, but 
significant. It is designed to address a national security issue 
identified by the Cox commission and it implements one of the Cox 
commission's recommendations. The House International Relations 
Committee accepted this amendment unanimously during its markup of the 
Export Administration Act. I hope that my colleagues will join me in 
supporting this important amendment.
  I yield the floor.
  Mr. HELMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. HELMS. I thank the Chair.
  Mr. SARBANES. Will the Senator yield for just a moment?
  Mr. HELMS. Yes, of course.
  Mr. SARBANES. Madam President, we have an amendment pending. I would 
just hold it pending because I believe a number of Members wish to make 
opening statements on the legislation. I invite Members who have 
opening statements to come to the Chamber so we can get the opening 
statements done, and then presumably later in the afternoon we will 
revert back to the amendment.
  Mr. THOMPSON. My understanding is that this will probably be the vote 
at 5 o'clock.
  Mr. SARBANES. In between, I was hoping we would get the opening 
statements out of the way.
  Mr. THOMPSON. Yes.
  Mr. SARBANES. A number of Members have gotten in touch with us and 
have indicated they wish to do so. I just wanted to set out the 
procedure.
  Mr. THOMPSON. I say to my colleague also that if, by chance, after 
reviewing this, we could come to an agreement on this amendment, I will 
tell the leadership that we would have another amendment which we could 
vote on by 5 o'clock. So we would still have a vote at 5 o'clock, as 
the leadership wishes.
  Mr. SARBANES. Does the Senator from Tennessee have a total list of 
amendments he is thinking of offering so we can put these amendments in 
context? That helps to make a judgment as to whether we are simply 
unraveling carpet step by step or whether there is a finite picture we 
can look at to make some determination.
  Mr. THOMPSON. If I may respond, the Senator has a floating list that 
I

[[Page 16300]]

would be glad, when I get back, to sit down and go over with him. 
Frankly, I am evaluating several that I have prepared based on the 
debate and the remarks that are made. I would enjoy the opportunity to 
sit down and discuss with him and other Members some of the ones I 
probably will introduce in the next day or two.
  Mr. SARBANES. I thank the Senator, and I thank the Senator from North 
Carolina for his usual courtesy in allowing us to have this exchange.
  The PRESIDING OFFICER. The Senator from North Carolina has the floor.
  Mr. HELMS. Madam President, I ask unanimous consent that at a time 
deemed to be appropriate by the managers of the bill I be recognized to 
be heard for 30 minutes on this bill.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from North Carolina is recognized for 30 minutes.
  Mr. HELMS. Madam President, I ask unanimous consent that it be in 
order for me to deliver my remarks seated at my desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HELMS. Madam President, I feel obliged to voice my strong 
opposition to S. 149, the pending Export Administration Act of 2001.
  I do this because this bill does not protect the national security of 
the American people. It does not control the export of our most 
sensitive dual-use items. It does not promote U.S. foreign policy.
  Instead, this is an indiscriminate trade promotion bill, and I am 
obliged to state that I am troubled by the fact that this bill, S. 149, 
was written in fact, by the business community to maximize future sales 
to Communist China, and to other such countries that represent the 
highest risk of technology diversion and proliferation.
  Make no mistake about it, this legislation will enable dangerous 
regimes around the world to arm themselves through the use of the best 
dual-use technology America has to offer.
  This bill's sponsors argue that because the cold war is over, the 
world is a much safer place and that we need to rid ourselves of 
outdated export controls that inhibit trade and harm the economy. These 
Pollyannas could not be more mistaken.
  As the ranking Republican on the Foreign Relations Committee, I feel 
obliged to make clear that I hold a very different view. It is a view 
based on years of experience in foreign policy and national security 
matters, and sharpened by ongoing intelligence assessments. My view is 
shared by the other ranking members of the national security committees 
of the Senate; that is why we have joined together in opposing this 
legislation.
  The fact is, despite the fall of the Soviet Union, the world is 
actually a far more complicated and dangerous place due to the 
proliferation of weapons of mass destruction and ballistic missiles. 
During the past 30 years alone, the number of countries pursuing 
nuclear weapons programs has doubled, the number of countries pursuing 
ballistic missile programs has tripled, and more than a dozen 
countries, including most state sponsors of terrorism, have offensive 
biological and chemical weapons programs.
  Even worse, this activity is being fueled by Russia and Communist 
China, two members of the United Nations Security Council who are 
illicitly selling to rogue countries the dual-use technologies so 
critical to their weapons of mass destruction and missile programs.
  For years, some other Senators and I have cautioned the Senate about 
these growing threats; we have argued forcefully for a national missile 
defense system to make the United States less vulnerable to blackmail 
or missile attack itself. But missile defense cannot alone keep us 
safe. What we desperately need, and don't have, is a comprehensive 
strategy that ranges from a credible strategic deterrent to rigorus 
export controls as our first line of defense.
  At a time when the United States of America is becoming increasingly 
vulnerable to rogue states and others armed with WMD-tipped ballistic 
missiles, it makes absolutely no sense for the United States to 
liberalize its export controls over the technology and know-how so 
critical to these weapons programs. Moreover, doing so sends all of the 
wrong signals to our allies, and others, about our commitment to 
nonproliferation.
  I have also tried as best I can to make clear my view about the need 
to deal firmly with Communist China, which is dramatically increasing 
its military spending and modernizing and expanding its nuclear forces. 
China's leaders talk openly about preparing for a future conflict with 
the United States. Meanwhile, Communist China is making every effort to 
acquire U.S. technology and know-how, through theft, circumvention of 
export laws, or legitimate commercial activity.
  In the past year and a half alone, Communist China illegally used 
U.S. supercomputers to improve its nuclear weapons. And just a few 
months ago, we learned that Chinese technicians were installing fiber 
optic cable for Iraq's air defenses, a clear violation of U.N. 
sanctions. Worse yet, this assistance and technology--which was 
provided to Chinese companies by American business firms when the 
previous administration mistakenly decontrolled this equipment over--
and I must emphasize ``over''--the objections of the National Security 
Agency in 1994--has been of great help to Saddam Hussein in his quest 
to shoot down American pilots.
  Seven months ago, a CIA report made clear that China continues ``to 
take a very narrow interpretation of their non-proliferation 
commitments with the United States.'' Just recently, we learned that 
the Communist Chinese are continuing to ship missile parts and 
components to Pakistan despite Beijing's pledge in November 2000 to 
stop all such transfers and set up an export control system.
  Consideration of this bill by the Senate sends all of the wrong 
signals, wrong messages, to China. It reminds Beijing that the United 
States is all too willing to place profit before principle.
  Let me address some of the major elements of this legislation that 
have convinced me that its passage will seriously jeopardize the 
national security of the United States.
  To begin, no one--and I repeat no one--has conducted a thorough 
national security risk assessment to determine the possible impact of 
this bill's sweeping changes on our national security. Rather, many 
have blindly accepted the anecdotes and assertions of industry as the 
basis for changes in the bill.
  Second, this bill does not adequately cover ``deemed exports,'' more 
commonly understood as the transfers of sensitive knowledge from one 
person to another within the United States. Under this bill, the 
information and know-how passed to visiting scientists and others does 
not appear to be illegal.
  Third, this bill creates a new licensing exemption category called 
mass marketed items, which allows companies to produce their products 
off of the control lists, notwithstanding the sensitivity of the item. 
If an item is widely available in the United States, then the bill's 
authors argue that it shouldn't be controlled.
  Fourth, when coupled with a new definition of foreign availability 
that further loosens controls, this bill has the potential to decontrol 
large numbers of items. For example, according to one outside expert, 
under S. 149, the high-precision electronic switches needed to detonate 
atomic bombs could be up for sale by claiming that they are needed as 
spare parts for medical equipment; this is what Iraq tried as recently 
as 1998.
  Fifth, despite the fact that the purpose of the EAA is to safeguard 
our nation's security, the various advisory committees and consultative 
requirements placed on the administration in the bill do not require 
that national security or non-proliferation experts be included, while 
labor organizations and the business community are clearly mentioned.
  Sixth, this legislation prohibits export controls on sensitive parts 
if they are incorporated into more expensive commercial items or if the 
controlled

[[Page 16301]]

item in shipping overseas for final assembly. In other words, despite 
the national security importance of an item, whether or not it's 
controlled depends to some degree on its relative monetary value and 
where it is produced. So if a special airborne navigation or radar 
system requires a license when exported individually, a license would 
not be required if it were merely a part of an expensive aircraft.
  And last, but certainly not least, S. 149 provides extraordinary 
authority to the Secretary of Commerce on important procedural issues 
such as commodity classifications, license referrals, dispute 
resolutions, and the development of export administration regulations. 
If national security concerns are to be given adequate consideration in 
export decisions, then the Departments of State and Defense must be 
given greater authority in the export licensing process. And if these 
two departments are found already to have sufficient authority under 
current practice, then why not codify it?
  The bottom line is that there seem to be more loopholes and 
exemptions from export controls in this bill than there are export 
controls. Could it be that the drafters of this legislation assume that 
any effort to obtain a license will meet with failure, and that no 
effort should therefore be spared in ensuring that companies need not 
bother to ask for one.
  I cannot understand why the bill goes to such great lengths to ensure 
that no exporter will ever be required to tell the U.S. government what 
he proposes to export, and to whom he intends to sell it. Just because 
an exporter is required to obtain a license for a sale does not mean 
that the sale is going to be denied. In fact, over 80 percent of all 
license applications are approved.
  At the same time, the requirement for a license enables the United 
States Government to ensure that U.S. companies do not contribute, 
either intentionally or unintentionally, to the arming of potentially 
hostile regimes. Licenses also allow the government to track 
acquisition efforts by various countries and groups. Without the 
licensing of dual-use commodities, the U.S. will know less about the 
potential proliferation of dangerous technologies, will be less able to 
combat that proliferation, and will lose the ability to exhort other 
nations to take steps to strengthen their regimes.
  Notwithstanding these facts, the bill's authors will argue that they 
have made considerable changes to the bill that address many of the 
concerns my colleagues and others have raised in the past. For example, 
the Banking Committee will argue that:
  Penalties for violations of this Act have been raised in order to 
punish violators and deter others. While this is true, this bill also 
raises the evidentiary standard for illicit transfers. Moreover, 
raising penalties doesn't make much difference when fewer items are 
being controlled, or when enforcement procedures--such as the mandatory 
conduct of post-shipment verifications on high-performance computers--
are stripped from the law.
  An Executive order will be issued to cover deemed exports, give the 
Department of Defense more visibility and a larger role in the 
commodity classification process, and strengthen the voice and role of 
other agencies. However, to date, a draft of the Executive order has 
yet to be provided for review. But more importantly, given the 
significance of these matters, doesn't it make sense to make these 
changes part of the law?
  It doesn't make sense to control mass marketed items that can be 
purchased at Radio Shack and carried out of the country. The problem 
with this argument is that if items were controlled, they wouldn't be 
available for purchase at Radio Shack. But beyond that, acquiring 
widely available items illegally denies end-users the parts, 
maintenance, and servicing agreements essential to their long-term 
operation.
  Since most licenses are approved anyway, requiring a licensing only 
harms U.S. companies by slowing them down. The fact is, DoD and the 
intelligence community benefit greatly from the opportunity to look at 
and understand complex dual-use items before they are shipped abroad, 
and the licensing data provides an important audit trail that is useful 
for conducting cumulative effects analyses and other follow-ups.
  This bill addresses all of the major findings and recommendations of 
the Cox commission report. Upon closer examination, many of the Cox 
commission's conclusions are not addressed, but are simply explained 
away. For example, the Cox commission recommended that the government 
conduct a comprehensive review of the national security implications of 
exporting high-performance computers to the PRC, yet S. 149 does away 
with that requirement. The Cox commission also recommended that current 
licensing procedures be modified to provide longer review periods when 
deemed necessary by any reviewing department or agency on national 
security grounds, and require a consensus by all reviewing departments 
and agencies for license approval. Unfortunately, S. 149 also fails to 
fully adopt these proposals as well.
  The Wassenaar arrangement is a weak multilateral regime that fails to 
control many dual-use items to the advantage of our European partners. 
It is true that Wassenaar is an inadequate agreement, but it is also 
true that the U.S. government has contributed to its weakness by making 
changes to our export control laws that seemed to undercut our 
Wassenaar partners. But rather than pushing for greater decontrol, we 
should follow up on President Bush's statement that we need a stronger 
regime--closer to what we had under COCOM--to prevent the proliferation 
of sensitive dual-use items to rogue states. It is unfortunate that the 
United States is giving up its leadership role on this issue and 
walking away from years of progress in the export control and 
nonproliferation field.
  Finally, some have argued that failure to pass S. 149 will result in 
economic harm to our country and the loss of thousands of U.S. jobs. 
These claims ignore the fact that, according to the Congressional 
Research Service, controlled exports represented less than 3 percent of 
total U.S. exports in 1998. And since over 80 percent of all licenses 
are approved, only a few billion dollars in sales were lost due to 
denied licenses--an extremely low percentage of the United States' $10 
trillion GDP. These numbers also demonstrate that while exports are 
being controlled--and mainly to embargoed countries or those at high 
risk of diversion, such as China--American firms are not losing out to 
foreign competition.
  Industry simply does not want the U.S. government reviewing the 
export of sensitive dual-use items, even if it is for national security 
purposes. If current licensing procedures are cumbersome for business, 
then the solution is to improve the efficiency and operations of the 
export process, not decontrol sensitive items simply to avoid the 
process altogether.
  Despite all of these dubious arguments by the drafters and supporters 
of this flawed bill, the core problem with S. 149 is its fundamental 
refusal to recognize that sometimes the United States must go it alone 
to make a point. The structure of S. 149 fails to take into account the 
ability of the U.S. to lead other nations by demonstrating self-
restraint and a commitment to principle. It restricts the U.S. ability 
to control exports unless other nations are already doing likewise, or 
can be guaranteed to do the same in the near term.
  I do not believe in the contrived arguments of those who say if you 
can't beat them, join them. Industry reasons that if America cannot 
stop rogue states from acquiring weapons of mass destruction, then why 
should we be ceding market share to our competitors? They say that the 
United States cannot stop dictators or communist governments from 
denying their people certain basic rights and freedoms, so why not 
conduct business as usual with them?
  Well, that is not the American way. Americans do not support profit 
at any price, especially if that price is our national security or our 
moral dignity. The American people will not support the prospect of 
fueling our economy by selling sensitive technologies to tyrants and 
potential adversaries. This is

[[Page 16302]]

what we witnessed in the eight years of the Clinton-Gore 
administration, and it is time for this type of nonsense to stop.
  We don't need another eight years of intelligence reports that are 
leaked to the press, outlining in great detail how the PRC is using 
American technology to improve its armed forces; how Russian and 
Communist Chinese entities are transferring American technology to 
rogue states around the world; how American security, interests and 
friends have been jeopardized; and how it is completely legal thanks to 
the Export Administration Act of 2001.
  Rather, the Senate should follow the wisdom and courage of the House 
International Relations Committee. Under the fine leadership of 
Chairman Henry Hyde and Tom Lantos, the HIRC was able to pass, with 
overwhelming bipartisan support, numerous amendments--similar to the 
ones my colleagues and I will offer this week--that put national 
security back into this legislation.
  While the United States does need a new Export Administration Act, 
the bill should protect our national security, not jeopardize it at the 
expense of marginal increases in trade. The bill should give every 
government department a role commensurate with its expertise and 
responsibilities. And the bill should send the right message to our 
allies, friends and adversaries, that United States takes non-
proliferation issues seriously, and will continue to take the lead in 
the efforts. We need a new EAA but not this one.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. KYL. Madam President, I understand the Senator from Virginia 
wishes to speak. He will be ready in about 5 or 6 minutes. In the 
meantime, I thought I might respond, if it is in the schedule of the 
ranking member and chairman, to a point that was the subject of a 
colloquy with the Senator from Maryland and Senator Thompson. Is that 
all right?
  Mr. SARBANES. Certainly.
  Mr. KYL. I noted that one of the subjects of discussion in the 
colloquy between the Senator from Maryland and the Senator from 
Tennessee had to do with the President's authority under this 
legislation to waive certain provisions, important provisions, because 
they deal with a question of whether or not an item that is on the 
control list--so-called commerce control list--should be waived or 
whether there should be a waiver of either the embedded product rule or 
the foreign availability and mass market rule under sections 204 and 
211 of the act.
  The point was made by the Senator from Maryland that if there were a 
problem with one of the dual-use items on the list, the President had 
the authority to waive that. Therefore, those of us who have concerns 
about the legislation need not be concerned. The Senator from Wyoming 
made the further point that in this case we didn't want to turn this 
matter over to the bureaucrats so we gave the authority directly to the 
President.
  I appreciate the sentiment behind those vows. There is a problem with 
them however. That is, the President, with all of his other 
responsibilities, can't possibly exercise this authority without the 
help of the so-called bureaucrats, without the help of a staff.
  I have in my hand just a partial list of the commerce control list 
items. It specifically says at the top: This index is not an exhaustive 
list of the controlled items.
  I haven't bothered to count these. There are hundreds and hundreds of 
items. I don't know how many pages. It is single spaced, and there must 
be 60 or 80 items per page and probably 20, 30, 40 pages of an awful 
lot of items that could be the subject of the export regulations that 
are the subject of this bill. It would be impossible for the President 
to be able to devote his attention to this list and intelligently deal 
with it. In fact, it would be bad public policy for us to require that 
the President be the only person permitted to exercise the authority. 
Yet that is exactly what this proposed legislation does.
  A provision of the section being discussed that was not quoted occurs 
on page 184 of the printed version of S. 149. At the end of the section 
on enhanced controls, it reads as follows:

       The President may not delegate the authority provided for 
     in this subsection.

  Well, usually we provide that the President may delegate 
responsibility because, frankly, he has better things to do than be a 
staffer going through all of these items with the background to know 
whether or not some of them should be taken off the list or not. It is 
simply unrealistic to expect any President, despite a President's 
intelligence and willingness to get into the details, to be able to 
exercise that authority with the limitation here. That is the primary 
reason for our concern.
  We appreciate the fact that the President has a waiver authority. But 
in most cases the President's waiver authority can be realistically 
administered and utilized. I think it is unrealistic to expect the 
President to be able to do that in this case.
  One of the possible amendments, I advise the Senator from Maryland, I 
will present--if not I, another Member will--is an amendment to try to 
solve this particular problem and conform this provision of the bill 
more to the type of legislation that ordinarily accompanies a 
Presidential waiver authority. We think that would improve the 
administration of this act and make the waiver authority really 
meaningful. I advise the Senator of that point. I intend to make a 
statement that generally speaks to this issue of the Export Control 
Administration reauthorization.
  I also want to speak specifically to the amendment offered by the 
Senator from Tennessee before we have a vote on that amendment. Given 
the fact that there are a couple of other Senators prepared to make 
remarks at this time, I am willing to stand back and let those Senators 
make those remarks and then I will come and make mine later.
  If there is anything I have just said that is subject to correction, 
I would be happy to stand for any questioning with respect to my 
comments, but perhaps we will have an opportunity to debate that at the 
time I offer an amendment, unless there is a possibility we might work 
that out between the proponents and opponents of the legislation in the 
meantime.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Madam President, I say very briefly to my distinguished 
colleague from Arizona, this is quite a broad sweeping power we are 
providing to the executive branch. I think it is reasonable to expect 
the decision will be made by the President. That does not mean the 
President has to staff his own decision. It will obviously be staffed 
for him. But the determination to provide the enhanced controls ought 
to be a Presidential determination.
  We do not expect that is going to be before him very often, but when 
that sort of issue arises, it seems to us it is reasonable that the 
President should make that judgment.
  One of the difficulties we have been experiencing all along is the 
way the export control regime gets bound up down the line and the 
decisions never go to the top to be made in those instances in which 
there are differences of opinion. In most instances, you have unanimity 
below either for the license or against the license. That is over and 
done with. But in those instances in which that is not the case and the 
President is going to exercise his sweeping authority, we do not think 
it is unreasonable to expect a determination to be the President's.
  I am very frank to say, I do not know to whom you would otherwise 
delegate it, since he represents the ultimate arbiter amongst the 
departments and agencies, and I do not see any way you can give that 
role to anybody else because anybody else would be out of one or 
another, presumably out of one or another of the departments or 
agencies. You are not, as it were, above it making this separate and 
independent determination which the President will make.
  The other point I want to note is that the President and his team 
support this legislation, so they obviously do not see in it the kind 
of extended practical problems which the Senator has--

[[Page 16303]]

presumably they do not see that in the bill; otherwise, they not only 
would not have supported it, but they have been very strong in their 
support. It is fair to say that their support is anything but pro 
forma. It is very active and very vital, and they have gone over this 
legislation very carefully over an extended period of time and reached 
the judgment they are very much behind it. That is, of course, what 
they urged on the Senate, including, of course, the receipt this 
morning--I do not know if the Senator has yet had an opportunity to see 
it--a letter from Secretary Powell, Secretary Rumsfeld, and Secretary 
Evans in very strong support of the legislation.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Madam President, I say to the Senator from Maryland, yes, I 
have seen the letter. I agree with him the support is much more than 
pro forma; it is sincere and thought-out support. I do not know how 
many pages of this very complex legislation there are. There are 
numerous areas that represent room for improvement, and support for any 
legislation generally does not obviate the possibility of improvements 
and compromises.
  I hope, as this debate goes forward, we might consider the 
possibility that in this particular area a mechanism be found to 
provide for a waiver that is more realistic in its ability to be 
practically used than to require the President, not delegated to anyone 
else, as being the only person who could grant such a waiver.
  We will talk more about that later. The Senator from Virginia is 
here, and I do not want to impinge upon his time. Perhaps we can work 
that out. If we cannot, perhaps we will need to offer an amendment.
  I thank the Senator.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ALLEN. Madam President, I am pleased to rise in support of S. 
149, the Export Administration Act of 2001. Back on June 28, 2001, I 
joined my colleagues of the Republican Senate high-tech task force, 
Senators Allard, Bennett, Brownback, Burns, Grassley, Hatch, and 
Hutchison, in sending a letter to majority leader Tom Daschle urging 
him to bring S. 149 to the Senate floor as early as possible. I am 
grateful to the majority leader for heeding our request and permitting 
the Senate to consider this very important legislation.
  I ask unanimous consent that the letter my colleagues and I sent to 
Senator Daschle be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                          High Tech Task Force, June 28, 2001.

     Hon. Tom Daschle,
     Senate Majority Leader, The Capitol, Washington, DC.
       Dear Mr. Leader: As members of the Senate Republican High 
     Tech Task Force, we write to ask you to schedule floor 
     consideration of S. 149, the Export Administration Act of 
     2001 (``EAA''), as the next piece of business on the Senate 
     floor following conclusion of the pending health care bill. 
     Prompt consideration of this bipartisan bill would be a 
     welcome sign of your willingness to pursue a bipartisan 
     agenda.
       As you know, Senators Gramm and Enzi have worked diligently 
     to craft the broadly-supported pending EAA bill which was 
     reported out of the Banking Committee by a 19-1 vote. The 
     Bush Administration also deserves great credit for weighing 
     in to support this critical piece of legislation. President 
     Bush himself last month stated publicly that he hopes the 
     Congress will send him the EAA bill for his signature.
       The proposed EAA legislation represents a logical 
     improvement over the outdated EAA Act passed in 1979 and the 
     current patchwork of executive orders regulating export 
     controls issued under the International Emergency Economic 
     Powers Act. The bill dramatically enhances our national 
     security needs by increasing penalties, focusing attention on 
     truly sensitive items, and granting the President new 
     authority in cases involving national security and terrorism. 
     At the same time, the legislation will remove punitive 
     regulatory controls on mass market and foreign availability 
     technology products that have hindered the competitiveness of 
     our technology industries. Study after study have concluded 
     that the present system of export controls has the unenviable 
     distinction of harming private enterprise without enhancing 
     security.
       At a time when our technology industries are seeing 
     declining sales, it is imperative that the Congress remove 
     unnecessary and ineffective barriers to exports that will 
     keep technology jobs in this country.
       The current extension of the 1979 EAA Act will expire on 
     August 20, 2001. Given this bill's strong bipartisan support, 
     we believe it could be quickly considered and passed by the 
     full Senate, thereby minimizing the interruption of the 
     Senate schedule for other business. Therefore, we look 
     forward to your prompt scheduling of floor action on this 
     important legislation.
           Sincerely,
         Sam Brownback, George Allen, Chuck Grassley, Kay Bailey 
           Hutchison, Robert F. Bennett, Orrin Hatch, Conrad 
           Burns, Wayne Allard.

  Mr. ALLEN. Madam President, I congratulate Senator Gramm, Senator 
Enzi, and Senator Sarbanes who have worked diligently to craft this 
broadly supported measure. President Bush and his team also deserve a 
great deal of credit for weighing in, in support of this legislation.
  This bill represents a logical improvement over the outdated Export 
Administration Act that was passed in 1979 and the current patchwork of 
Executive orders regulating export controls issued under the 
International Emergency Economic Powers Act. S. 149 dramatically 
enhances our national security needs by increasing penalties, by 
focusing attention on truly sensitive items, and granting the President 
new control authority in cases involving national security and 
terrorists.
  At the same time, this legislation will remove unnecessarily 
burdensome punitive regulatory controls on mass market and readily 
available foreign technology products that have hindered the 
competitiveness of U.S. technology industries.
  Many studies have concluded that the present system of export 
controls has the unenviable distinction of harming American private 
enterprise without enhancing our security. At a time when our 
technology industries are seeing declining sales--and, indeed, the 
technology sector of our economy is in a recession--it is imperative 
that the Congress remove unnecessary and ineffective barriers to 
exports and, by doing so, help keep technology jobs in our country.
  Current U.S. policy on export controls is harming good paying jobs 
for Americans, and it is time that Congress acts to remedy this 
situation.
  Existing export controls which aim to keep our computing power out of 
the hands of potential U.S. adversaries do not work given the 
technological and global realities of the 21st century. These policies 
must be reformed. One may ask why. There are five main reasons. No. 1, 
they are outdated; No. 2, they are ineffective; No. 3, they are 
unrealistic; No. 4, they are potentially dangerous; and No. 5, these 
current laws are bad economics.
  Let me expand on that and actually cite some studies that point out 
the inefficiencies and ineffectiveness of these current laws.
  They are outdated: The current policy was formulated during the cold 
war when we once had a very clear adversary, the U.S.S.R., and when 
computers were the size of a dorm room.
  Today's international makeup is much more vague. Our potential 
adversaries or enemies are not as easily identified, and computers are 
now the size of a large remote control. There are some computers, such 
as Zybernaut's Mobile Assistant, which you can wear on your belt. They 
weigh a couple of pounds at most.
  The export controls we have now are ineffective. Access to high-
performance computing capability cannot be restricted. Almost anyone, 
whether they are in Vienna or Venezuela or Virginia, can download 
computing power off the Internet or link lower level computers together 
to perform certain calculations.
  These current laws are unrealistic. The United States cannot attempt 
to control access to computer hardware or components when foreign 
competitors are producing the same types of technology as domestic 
firms.
  In today's global economy, the United States no longer has a clear 
monopoly on technological innovation. These rules are potentially 
dangerous. By struggling to control access to computers and computer 
hardware that is readily available worldwide, we are diverting 
resources from policing the

[[Page 16304]]

truly sensitive capabilities. All the while, our military is way behind 
the curve when it comes to taking advantage of the very technologies we 
are trying to restrict.
  Finally, these current laws are just bad economics. As high-tech 
industry suffers a dramatic downshift, we are limiting their access to 
the fastest growing consumer markets in the world. In the new global 
economy, being first to market is a critical advantage. Currently our 
companies are not on a level playing field. This hurts their ability to 
make inroads into millions of potential new customers, not to mention 
reducing how much U.S. firms can spend on continued R&D, or research 
and development, to maintain our competitive and innovative leadership.
  I say to my colleagues in the Senate, the time is right to modernize 
and reform export controls. Leading members of the Senate Banking 
Committee have worked closely to develop a thoughtful, reasonable 
approach to balancing U.S. national security and economic interests. 
There is broad bipartisan support for reform, including among the 
national security establishment.
  President Bush and his national security advisers, including 
Secretary of State Colin Powell, and Condoleezza Rice, Commerce 
Secretary Don Evans, Defense Secretary Donald Rumsfeld, former 
President Clinton, four former Secretaries of Defense, the Pentagon, 
the Defense Science Board, and the General Accounting Office, Democrats 
and Republicans alike, have all drawn the same conclusions: The current 
system is broken.
  For example, under the current law, the President is required to use 
an outmoded standard called MTOPS, millions of theoretical operations 
per second, to measure computer performance and set export control 
thresholds based on country tiers.
  A recent report on ``Computer Exports and National Security in the 
Global Era'' issued by the Center for Strategic and International 
Studies reflects the widespread consensus amongst those in the U.S. 
defense and security communities that MTOPS-based computer hardware 
controls are ``ineffective given the global diffusion of information 
technology and rapid increases in performance.''
  The report explains, for example, while various U.S. computer systems 
are currently subject to controls based on their MTOPS ratings, the 
equivalent computing power can be easily achieved by clustering several 
widely available low-level systems.
  A recent report from the Department of Defense itself also concludes, 
``MTOPS has lost its effectiveness as a control measure due to rapid 
technology advances.'' The General Accounting Office's report to the 
Senate Armed Services Committee similarly concludes that the MTOPS 
standard is outdated and invalid and the current export control system 
for high-performance computers which focuses on controlling individual 
machines is ineffective because it cannot prevent countries of concern 
from linking or clustering many lower performance uncontrolled 
computers to collectively perform at higher levels than current export 
controls allow.
  The Defense Science Board echoes this same analysis, warning that 
``clinging to a failing policy of export controls has undesirable 
consequences beyond self-delusion.''
  Finally, a multilateral export control study recently released by the 
security-minded Harry Stimson Center reflects the overall consensus 
view that:

       [T]he system of controlling the export of militarily 
     sensitive goods is increasingly at odds with the world 
     characterized by rapid technological innovation, the 
     globalization of business and the internationalization of the 
     industrial base, including that of defense companies. 
     Although efforts have been made to adapt Cold War processes 
     and regulations to changed circumstances, the current 
     approach to controlling militarily relevant trade has failed 
     to keep pace with changing international conditions and often 
     falls short of adequately protecting U.S. national security 
     interests.

  In effect, the Center for Strategic and International Studies, the 
Department of Defense, the General Accounting Office, and the Defense 
Science Board all agree that while the most advanced stand-alone high-
performance computers may be controllable, high-performance computing 
is not. Thus, by struggling to control the uncontrollable, the Federal 
Government is diverting our attention away from the export of truly 
sensitive technologies. By keeping ineffective export controls in 
place, the Federal Government is restricting U.S. industry's access to 
the fastest growing consumer markets around the world without achieving 
any significant national security advantage. In the process, the 
Federal Government is creating an unlevel playing field for U.S. 
companies and stifling future research and development efforts upon 
which U.S. technological and military supremacy demands and depends.
  For the U.S. computer industry to maintain its preeminence in 
innovation and business, we must promote policies that encourage 
investment in R&D, not hinder it. S. 149 represents a solid stride 
toward an export control system that effectively balances our Nation's 
economic and national security interests.
  As it relates to computer exports, this bill removes the MTOPS 
regulatory straitjacket and empowers the President, the Secretary of 
Commerce, and the Secretary of Defense to review the national security 
control lists and determine both what computers should be controlled 
and how they may be controlled. The bill does not alter the way in 
which computer exports are currently controlled under existing 
regulations. Rather, it simply gives the President, the Secretary of 
Commerce, and the Secretary of Defense the flexibility to reassess the 
effectiveness of these controls in the future, taking into account all 
relevant risk assessment factors, including the factors affecting an 
item's controllability, such as foreign availability and mass market 
status, as well as other relevant factors such as, in the case of 
computers, whether the capability or performance provided by the item 
can be effectively restricted.
  Passage of S. 149 does not in any way equal decontrol of computer 
hardware sales. Many levels of restrictions will still exist to protect 
U.S. national security interests if the EAA becomes law, such as rogue 
country embargoes. Those rogue country embargoes will remain in place, 
and user restrictions will allow the Government to prevent specific 
sale of computer technology to certain organizations or individuals, 
and protections over highly specialized military hardware and software 
applications will still exist.
  The success of export control efforts depends on vigorous enforcement 
of the law, with meaningful punishment of violators. For many potential 
violators, the monetary penalties associated with the current Export 
Administration Act pose no compelling deterrent. The Weapons of Mass 
Destruction Commission noted that under current law, ``an export 
control violator could view the risk and burden of penalty for a 
violation as low enough to merely be a cost of doing business, to be 
balanced against the revenue received from an illegal transaction.''
  The Cox committee recommended that particular attention be given to 
reestablishing higher penalties for export control violations. Toward 
that end, S. 149 significantly enhances criminal and civil penalties 
for export control violations.
  Section 503 of the bill imposes a criminal fine of up to 10 times the 
value of the exports or $1 million for each violation, whichever is 
greater, for willfully violating or willfully conspiring to violate the 
provisions of S. 149 or any regulation issued under it.
  In addition, individuals may be imprisoned for a period of up to 10 
years, and companies can be fined up to 10 times the value of the 
export, or $5 million, whichever is greater, for each violation.
  Additionally, the Secretary of Commerce may impose on a violator, in 
addition to or in lieu of the criminal penalties, a maximum civil fine 
of $500,000 for each export control violation. This bill gives the 
Secretary of Commerce the discretion he or she needs to take into 
account the aggravating and mitigating factors that may be present in 
any given case.

[[Page 16305]]

  Finally, the Government will be able to focus its resources on those 
critical technologies it must protect, rather than wasting time and 
money on the futile exercise of attempting to control access to 
commodity computing power and technology.
  I say to Members of the Senate, Senators Enzi, Gramm, and Sarbanes 
have worked diligently in crafting an outstanding bill. The passage of 
S. 149 is important to the future of national security and economic 
interests of the people of the United States of America. I thank 
Members for their efforts and urge support of S. 149.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Madam President, I held in August, in Reno, NV, a high-tech 
townhall meeting. I have held a number in Nevada. Although we do not 
manufacture a lot of computers and computer equipment in Nevada, we 
have a high-tech industry. There is no issue more important to them 
than passing this legislation. If it is important to people in the 
high-tech industry in Nevada, it is also important in the high-tech 
industry around the country. I have had numerous calls over the last 
year and a half from companies around America indicating the importance 
of this legislation. It is high time we did something about this.
  I applaud and commend Senators Sarbanes and Gramm, the chairman and 
ranking member of the committee of jurisdiction, for their advocacy for 
the last many months on this issue. Of course, members of the 
committee, Senators Enzi and Johnson, have worked extremely hard and 
have done exemplary work in helping move the legislation.
  I strongly support passage of S. 149. This bill is a product of many 
years of hard work. A number of people have worked on this. I worked 
with my friend, Senator Bennett of Utah, on the appropriations level 
making sure, especially last year, we had some legislation impacting on 
this. This bill represents a well-crafted, appropriate balance between 
a more modern, effective export control system and the U.S. national 
security interests.
  I talked about this high-tech meeting held in Reno at the University 
of Nevada. It was a hearing to determine what is going on in Nevada and 
around the country with the high-tech industry. It is very clear at 
this time in the history of the United States there is hemorrhaging 
taking place. There are many examples. We have a high-tech company on 
the front page of the Reno paper today trying to maintain their listing 
with NASDAQ. One year ago their stock was about $35 a share; it is now 
at 40 cents a share. There are many other examples of this. This is a 
high-tech company mentioned on the front page of the Gazette Journal 
today. There are companies such as this all over America.
  We as a country need to maintain our competitive edge. If this 
legislation does not pass, this equipment will be manufactured 
someplace else using non-Americans and it will be the same product. We 
need to do it here. That is what this is about. You can talk about what 
percentage moves through and how little it matters. It is something we 
need to do. Many business coalitions, including the Computer Systems 
Policy Project, the Business Roundtable, the American Electronics 
Association, the Electronics Industry Association, the Association of 
Manufacturing Technology, and the Computer Coalition of Responsible 
Exports are supportive of S. 149. Among the members are Apple, AT&T, 
Boeing, Compaq, Dell, Hewlett-Packard, IBM, Intel, SGI, Sun 
Microsystems, Unisys, and United Technology. These are extremely 
important businesses in America. They are important employers in 
America. They are important on a worldwide scene. That they are joining 
with us in maintaining how important it is to pass this legislation 
says a lot.
  I throw a bouquet to the Bush administration for having three of 
their top Cabinet officers write a letter saying how important this 
legislation is. It is important. We heard from the Secretary of State, 
the Secretary of Defense, and the Secretary of Commerce indicating this 
legislation is critically important. This is bipartisan legislation.
  Having worked this floor the past couple years or more, I have never 
seen a piece of legislation with so much support held up by so few 
people. Everybody wants this to pass. But in the Senate, it is 
difficult to get this to the point where it will pass. And it will 
pass. It will. It is hard to find someone who does not believe the 
current system of export controls in the United States is broken and 
needs to be fixed. We cannot continue with what we now have.
  We have four former Secretaries of Defense who support this 
legislation. The Pentagon supports this legislation. The Defense 
Science Board and General Accounting Office, Democrats and Republicans 
alike, have drawn the same conclusion: Existing export controls aimed 
to keep computing power out of the hands of U.S. adversaries has not 
worked and must be reformed.
  Why? No. 1, what we have is outdated. Everyone knows how rapidly the 
computer industry is changing. In the Clark County Courthouse in Las 
Vegas, NV, one floor was dedicated to taking care of the computer needs 
of Clark County. That same work can be done in a very small office now, 
not one whole floor. We had to have the temperature controlled to a 
certain degree; no longer is that necessary. In fact, I bet we can do 
on my laptop most everything that could be done on the vast floor 25 
years ago.
  This is important. The present law is outdated. The current policy 
was formulated during the cold war. The cold war is over, when we had 
one obvious adversary, when computers were the size of a dorm room, and 
some the size of dormitories. Today's international makeup is much more 
vague. Potential enemies are not as easily identified, and computers 
are now the size of a remote control for a television set.
  Another reason we must change this law is the present law is 
ineffective. Access to high-performance computing capability cannot be 
restricted. Anyone, whether Indonesia or Indiana, can download 
computing power off the Internet or link lower level computers together 
to form certain calculations. You do not have to have a degree from 
Harvard in computer science to do that. High school kids can do it. 
Probably my grandchildren in the sixth grade can do a lot of this. Why 
does the law need to be changed?
  The current law is unrealistic. The United States cannot attempt to 
control access to computer hardware components when foreign competitors 
are producing the same types of technology as domestic firms. In 
today's global economy, the United States no longer has a clear 
monopoly in technology innovations. We must change because the present 
law provides potential dangers. By struggling to control access to 
computers and computer hardware that is readily available worldwide, we 
revert resources from the true areas we need to police. All the while, 
our military is way behind the curve when it comes to taking advantage 
of the very technologies we are trying to restrict.
  Finally, it is just bad economics to keep the present law in force. 
As the high-tech industry suffers a dramatic downshift, we are limiting 
their access to the fastest growing consumer markets in the world. In 
the new global economy, being first to market is a critical advantage. 
Currently our companies are not on a level playing field. The computer 
made in France can get there much quicker than a computer made in the 
United States. This hurts our companies' ability to make inroads with 
millions of potential new customers, not to mention how much U.S. firms 
can spend on continued R&D, research and development, to maintain our 
competitive and innovative leadership.
  The current law requires the President to use an outmoded metric, 
MTOPS, which stands for millions of theoretical operations per second--
MTOPS. The current law requires the President to use MTOPS to measure 
computer performance and set computer thresholds based on country 
tiers. What does this mean?
  A recent report on ``Computer Exports and National Security in the 
Global Era'' issued by the Center for

[[Page 16306]]

Strategic and International Studies, CSIS, reflects the widespread 
consensus among those in the U.S. defense and security community that 
MTOPS-based computer hardware controls are ``ineffective given the 
global diffusion of information technology and rapid increases in 
performance.'' The report continues and explains that while various 
U.S. computer systems are currently subject to controls based on their 
MTOPS rating, the equivalent computing power can be easily achieved by 
clustering several widely available low-level systems: Radio Shack.
  The conclusion of the CSIS report could not be more clear. No. 1, 
MTOPS are a useless measure of performance; No. 2, MTOPS cannot 
currently measure performance of current microprocessors or sources of 
supercomputering like clustering; and third, this makes MTOPS-based 
hardware controls irrelevant. The best choice is to eliminate MTOPS.
  This study is only the most recent of a host of export reports to 
identify the system governing computer exports is broken. A recent 
report from the Department of Defense concludes, for example, that:

       MTOPS has lost its effectiveness as a control measure . . . 
     due to rapid technology advances.

  On this point, the Department of Defense has emphasized that:

       Controls that are ineffective due to market and technology 
     realities do not benefit national security. In fact, they can 
     harm national security by giving a false sense of protection; 
     by diverting people and other finite export controls 
     resources from areas in which they can be effective; and by 
     unnecessarily impeding the U.S. computer industry's ability 
     to compete in global markets.

  Those who oppose this legislation are living in a dream world, a 
world of more than two decades ago. In reality, there is every reason 
to pass this legislation. Four Secretaries of Defense, I repeat, 
current Cabinet officers, scientists all over the world--scientists in 
the United States--America's burgeoning high-tech industry, without 
question or qualification, support this legislation.
  The General Accounting Office's report to the Senate Armed Services 
Committee similarly concluded, with the CSIS report, that the MTOPS 
standard is ``outdated and invalid'' and:

       The current export control system for high performance 
     computers, which focuses on controlling individual machines, 
     is ineffective because it cannot prevent countries of concern 
     from linking or clustering many lower performance 
     uncontrolled computers to collectively perform at a higher 
     level than current export controls allow.

  Finally, in this regard the Defense Science Board echoes this same 
analysis, warning that ``clinging to a failing policy of export 
controls has undesirable consequences beyond self-delusion.''
  We could go on literally all afternoon, reading from reports and 
studies, scientific analysis that says the present system is worthless, 
it is broken; all it does is hurt our economy. It doesn't do anything 
to protect our security. In effect, the Department of Defense, the 
General Accounting Office, the Defense Science Board, the Center for 
Strategic International Studies, and a multitude of other entities and 
organizations all agree that while the most advanced stand-alone high-
performance computers may be controllable, high-performance computing 
is not.
  By struggling to control the uncontrollable, we are diverting our 
attention from the export of truly sensitive capabilities. By keeping 
ineffective export controls in place, we are unnecessarily restricting 
U.S. industry's access to consumer markets around the world. In the 
process, we create an unlevel playing field for U.S. companies and we 
stifle future R&D efforts on which U.S. technological and military 
supremacy depends.
  What does this all mean? Should we throw away any attempt to control 
technology and ``sell, sell, sell''? Of course not. We must develop a 
new, more effective system that better balances our economic priorities 
with national security interests. S.149 represents a critical step 
forward toward this very worthwhile goal. As it relates to computer 
exports, the bill removes the MTOPS straitjacket and empowers the 
President of the United States, his Secretary of Commerce, and his 
Secretary of Defense to review the National Security Control List and 
determine both what computers should be controlled and how they may be 
controlled.
  This bill does not eliminate controls. It just sets up a modern 
standard of controlling what we are going to do with exporting 
computers. This bill does not--and I think we need to be very clear on 
this point--alter the way in which computer exports are currently 
controlled under existing regulations. Rather, it simply gives the 
President, the Secretary of Commerce, and the Secretary of Defense the 
flexibility to reassess the effectiveness of these controls in the 
future, taking into account all relevant risk assessment factors, 
including the factors affecting an item's controllability, such as 
foreign availability, mass market status, as well as other relevant 
factors such as, in the case of computers, whether the capability of 
performance provided by that item can be effectively restricted.
  The chairman of the Banking Committee, Senator Sarbanes, I think has 
done an excellent job explaining this today. We have a lot of very 
talented people in the Senate. But as far as your basic intelligence 
and someone who understands what goes on around here, there is no one I 
have more confidence in than the Senator from Maryland. He is a Rhodes 
scholar in more than name only. He is somebody who is truly very 
intelligent. And when he said today--I talked to him before he came to 
the floor, and then I heard him say it on on the floor--he read this 
bill from cover to cover, that says a lot. This is a heavy piece of 
legislation. This is a bill that would take a long afternoon of reading 
if it could be done. It is about 350 pages long. If you wanted to have 
somebody who knew the bill better than he--and I don't know who that 
would be--to give him a test on it, either essay or multiple choice, he 
would pass it with a great score.
  He has certainly stated on several occasions today, this bill is 
going to improve the security of this country and allow our commercial 
interests to be more competitive. I think it is important we keep that 
in mind. Two considerations: Our security is going to be maintained, 
and we are going to be able to be commercially more effective than we 
have been. We are going to continue leading the world in selling these 
computers that our scientists have developed.
  The bill we are considering takes all challenges into account and 
will allow, I repeat, the United States to move forward and formulate 
an export control policy that recognizes the technological, trade, and 
political realities of the 21st century. In so doing, this bill will 
effectively promote U.S. economic and national security interests, a 
goal we should all agree is important.
  It is not as if computer companies will be able to sell willy-nilly 
to anyone who comes calling in search of, for example, a submarine 
detection system. This legislation applies several levels of 
restrictions to protect our national security interests, including, but 
not limited to, total embargoes on shipping products to rogue nations 
such as Iran and Iraq at the present time; end-user restrictions that 
identify specifically who in certain countries the United States can 
and cannot sell to; and, finally, controls over the most critical 
technologies, highly specialized, military-designed software and 
hardware applications.
  That is pretty strong.
  By focusing our resources in these areas, instead of wasting our time 
and money on trying to control commercial computing power, the 
government will be able to better keep the most critical applications 
out of the wrong hands.
  I want to stress to my colleagues that the need for export control 
reform is widely supported.
  To quote an esteemed member of our country's National Security 
community, former National Security Advisor Brent Scowcroft, ``It's a 
whole new world. And I think it's past time we respond to that world. 
The genesis of invention and innovation used to be the

[[Page 16307]]

military-industrial complex but the government doesn't control 
technology the way it used to.''
  The bill we are considering takes all of these challenges into 
account and will allow the United States to move forward and formulate 
an export control policy that recognizes the technological, trade and 
political realities of the 21st century.
  I say again that the Department of Defense, the General Accounting 
Office, the Defense Science Board and the Center for Strategic and 
International Studies have all concluded that MTOPS is an ``outdated 
and invalid'' metric and that the current system is ineffective. Repeal 
of the National Defense Authorizing Act language would give the 
President the flexibility to develop a more modern and effective 
system.
  This is a good bill for Nevada. It is a good bill for the country. It 
is a good bill for the world. I urge my colleagues to follow the lead 
of the managers of this bill, the Senator from Maryland and the Senator 
from Wyoming, and move forward. Defeat the amendments that will be 
offered by just a small number of Members. Defeat them overwhelmingly. 
This is important legislation. We need to send a message to the world 
that we mean business in maintaining our superiority in the production 
of computers.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I rise in opposition to the amendment to S. 
149 proposed by the Senator from Tennessee. This amendment contains 
substantial changes that will not only upset the delicate balance of 
control between agencies established in S. 149, but it will create a 
burdensome licensing, classification and regulatory process and further 
fuel the turf battles between agencies.
  This amendment would allow a reviewing agency to stop the clock 
during the licensing application process ``due to the complexity of the 
analysis'' or ``because of the potential impact on the national 
security or foreign policy interests of the United States.'' Simply 
put, it would unnecessarily delay licensing decisions and, ultimately, 
reduce the competitiveness of U.S. exports.
  This amendment is unneeded at best and harmful to national security 
and the economy at worst. The danger of this amendment lies in that it 
would enable a single agency to delay the approval of a license for up 
to 60 days due to the ``complexity of the analysis.'' Used effectively 
as a delay tactic, a reviewing agency could bury an application in the 
``complex analysis required'' bin and walk away for 2 months. The 
natural bureaucratic tendency to avoid risk would cause unprocessed 
license applications to languish for days weeks or even months without 
any action. This extended delay would not only greatly increase the 
overall processing time, but it could bring the entire process to a 
grinding halt and destroy an exporters ability to meet market demand 
quickly and efficiently. Furthermore, at this point, the exporter is in 
limbo, as she or he neither has the approval needed to move forward or 
the denial needed to make improvements.
  One exception would allow for 60 days, but there are two exceptions 
in here. So it can be read that an agency would get 120 days by 
utilizing the two exceptions one right after the other.
  Although proponents argue that this amendment would ensure ample time 
for the Department of Defense, the Department of State or other 
reviewing agencies to conduct their investigations, it is, in reality, 
a solution in search of a problem. Never has there been a case where 
the Departments of State and Defense have not had enough time to 
adequately review a license application. In fact, Fiscal Year 2000 data 
from the Department of Commerce indicates that the average time for the 
review of a license by the Department of Defense was only 13 days. The 
Department of Energy averaged 22 days, while the State Department 
averaged 9 days. All three agencies demonstrated that the 30 days 
currently permitted to review a license is more than adequate. 
Exporters lose their customers when faced with uncertainty about 
delivery times. This amendment could place all export licenses in 
virtual limbo for five months--surely enough time for competitors to 
easily step in and fill our exporters orders.
  Moreover, any agency that might conceivably require more time to 
review an application is fully protected under S. 149. First, an agency 
may exercise any of the carefully thought-out exceptions listed in 
Section 401(g). For example, under Sec. 401(g)(1), the applicant might 
be willing to provide additional time in order to have a better chance 
at approval. Second, an agency is always free to return a 
recommendation of disapproval, thereby kicking the application into the 
interagency dispute resolution process. Third, once within the 
interagency process, an agency can escalate a decision to a higher 
level.
  Second, the amendment undoes the discipline of the entire system. A 
key recommendation of the various commissions that have studied our 
export control system is to increase discipline in the export control 
system. Without strict deadlines, discipline disappears. And without 
discipline, the system is unworkable. An undisciplined system is the 
same as no system at all. The consequences for both our national 
security and economic interests would be severe.
  It was mentioned in the arguments in favor that the Cox commission 
had taken a look at this and proponents argue that the longer review 
periods were provided for by the Cox commission.
  The Banking Committee extensively reviewed the recommendations of the 
Cox committee, and indeed adopted virtually all of their dual-use-
related suggestions. Recommendation 31 of the Cox committee did suggest 
longer review periods for national security purposes. However, the Cox 
committee made that recommendation only with regard to items that are 
of the greatest national security concern. For other items, the Cox 
committee strongly recommended streamlining the process and providing 
greater transparency, predictability, and certainty.
  S. 149 does not classify items as of ``greatest national security 
concern'' or ``lesser national security concern.'' Instead, it sets up 
a risk-based system that allows the administration to make such 
determinations within the bill's guidelines. Based on past experience 
and demonstrated agency data, both the administration and the bill 
sponsors believe that S. 149's system--by setting mandatory time 
periods with the existing ``stop the clock'' exceptions--is the most 
effective framework for operating export controls.
  In conclusion, this amendment, although it is portrayed as simple and 
common-sense, undoes the key element of discipline of S. 149. It would 
result in a application system bogged down by bureaucracy and politics, 
a system in which delays are the rule rather than the exception. It is 
not simple or technical, but would undo the careful balance of the 
bill. I urge its rejection.
  I thank the President. I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, I apologize to my colleagues for being 
late; I was busy on a matter important to my State. I wanted to come 
over today both to oppose the amendment that is before us and to speak 
on behalf of the bill itself. Let me do those in reverse order.
  First of all, our colleagues can be proud of the fact that the bill 
before us today is truly bipartisan, and I want to congratulate Senator 
Sarbanes for his leadership on this bill, both as chairman of the 
Banking Committee now and as ranking member when the bill was 
originally written. I also want to thank Senator Johnson and Senator 
Enzi for their leadership on this bill.
  This bill tries to deal with an inherent conflict that we face as a 
nation. On the one hand, we want to be the greatest technological giant 
in the world. We want to dominate the world in producing everything 
that embodies new technology because the country that controls that 
technology ultimately dominates the world economically. It has the 
highest wages, and the

[[Page 16308]]

brightest future. So, we have not only a goal but a passion to see that 
when new tools are produced, when new technology is implemented in the 
marketplace, that it is American technology, implemented by Americans.
  We are the most technologically and scientifically friendly society 
in history, which is one of the reasons we are the greatest country in 
the history of the world. This bill is very much about that, but it is 
also about our other objective, which is to try to see, to the maximum 
extent we can, that new technology does not get into the hands of those 
who would use it to harm America or her interests and to engage in 
terrorist activities around the world. And that is the inherent 
conflict between these two goals.
  What this bill is trying to do is to find a way to deal with this 
inherent conflict. I personally believe, after having now spent some 
2\1/2\ years working on this bill, that we have come to a good 
solution. We have come as close as you can come to reconciling these 
differences. Let me try to explain how.
  I know some of our colleagues are concerned that we have gone too far 
in trying to promote American sales of technologically advanced 
products. I believe, upon close scrutiny of this bill, objective 
observers will conclude that charge is not true. This bill tries to 
recognize something that we do not like to admit but that everybody has 
to admit is true: if a technology is generally available, if you can go 
to Radio Shack and buy something, if it is mass marketed all over the 
world--it may have defense implications; it may be something you would 
want to prevent a terrorist or terrorist state from getting--but if 
something is mass marketed, then would-be terrorists can go to Radio 
Shack and buy it. Would-be terrorist nations could get access to 
something that is mass marketed.
  One of the great strengths of the bill is that we introduce a new 
concept into American law--the concept of mass marketing. What we say 
is, if a technology is available on a mass market basis, if you can buy 
it all over the world, it is too late to protect it. So we propose 
building a higher wall around a smaller number of items. That is the 
logic of this bill. It is a very simple logic.
  The second component of the bill recognizes that it is very difficult 
to prove somebody knowingly sold or transferred technology that is 
protected. And since it is very difficult to prove that--very difficult 
to catch bad actors--we want the penalties to be extraordinarily stiff. 
Penalties in current law are so small as to be irrelevant to a modern 
corporate entity.
  Our penalties, which can run into the tens and hundreds of millions 
of dollars, can, for repeat offenses and a pattern of behavior, result 
in imprisonment or life imprisonment or penalties that affect anybody's 
behavior.
  So we build a higher wall around a smaller number of items. We 
recognize it is certainly true that you can go into any Radio Shack and 
buy a computer that is more powerful than the most powerful computer 
that existed in the world when I was a college professor.
  I remember running multiple regressions which people now run on 
calculators. I had these punchcards that had all this data--more 
precious than life, almost. You would tote big boxes of these 
punchcards over to the computer center at 4:30 in the morning. They had 
an entire building that had an analog computer--an entire building. And 
it had so little storage capacity that my little multiple regression 
took the entire memory of the entire computer. And this whole building 
was devoted to running this computer. Now any college student taking 
college statistics can perform the same transaction on a modern 
calculator.
  Obviously modern technology can be put to defense use. But the point 
is, if our purpose is just to feel good, then we could do a lot of 
different things. But in writing this bill, we want to have a 
meaningful impact in the law. So for technologies that are readily 
available, that can be purchased anywhere, we decided to take them off 
the list of restricted export items.
  We have put together a system where the security agencies have the 
strongest voice they have ever had in the process. We have put together 
a procedure whereby an agency that has doubt can buck the decision up 
to a higher level, if they can get approval by a Senate-confirmed 
person in their department.
  We make it easier to say no. We give the President an all-
encompassing power: if the President of the United States, having 
reviewed all the data, concludes that the sale of an item represents a 
national security threat, no matter whether it is mass marketed or 
anything else, then the President can intervene and say no. Now, the 
President himself has to do it. This cannot be delegated to somebody 
else, removing the President's responsibility to answer whether it is 
wise or promotes the public interest. That is the basic structure of 
this bill.
  This bill is strongly supported by the administration. It is 
supported by the Defense Department. It embodies the recommendations 
from the Cox Commission, whose key recommendation was that Congress 
quit trying to do things that only make it look as if it is concerned 
about national security, and instead focus on national security. We 
have done that.
  Some of our colleagues have concerns. I am hopeful, perhaps as early 
as in the morning, that I will get a chance to sit down with them to 
see whether, even at this late date, we might work something out that 
could give them greater confidence in what we are doing. But 
regardless, we have a good bill. It is a bill the country needs, and it 
is important.
  Let me add, my trusty staff has just passed me a note reminding me 
that we made no less than 59 changes in trying to deal with the 
concerns some of our colleagues raised in the last Congress. It is not 
as if the chairman of the Banking Committee, Senator Sarbanes, and I 
have been deaf in terms of listening to their concerns. We have 
listened to them, and we have responded. We have made 59 changes in the 
bill and worked with the previous administration. And when the new 
administration came, we gave the bill to them, and they made suggested 
changes which we made. So, I think we have tried to work with 
everybody. But the point is, we are not through working. If we can 
improve the bill, we want to do it.
  Let me address a central point, though. I think it is important that 
people understand the logic of the bill. I then want to talk very 
briefly about the Thompson amendment.
  Ultimately, you have to ask yourself a question: Is America's 
security enhanced by our being the dominant economic power in the world 
that generates the great bulk of modern technology and that implements 
it first? Or could we promote our national security by freezing things 
as they are, by stopping the production and the export and the 
utilization of technology that might in the future have national 
security ramifications?
  Some people still seem to have this vision of the Cold War--that Ivan 
is at the gate, that technology is coming out of defense research 
establishments and into the American private sector, and then into the 
world private sector, and it is then absorbed by would-be adversaries.
  The plain truth is, that concept of the world is no longer valid. 
Most of the modern technology is coming from the private sector. In a 
sense, we are back to where we were in World War I, where one of the 
things we tried to do was take modern technology and implement it for 
military use. Then, as we developed what Eisenhower called the military 
industrial complex and redeveloped basically this university defense 
industry consortium, it was the engine for new technology.
  But today technology comes from the private sector, from 
international companies. If we don't let them implement the technology 
and put it to work and produce products here, they will produce them 
elsewhere. The net result is that we will have less control than we do 
now.
  Ultimately, the security of America is based on our ability to 
produce new technology, not on the technology that exists today. It is 
based on the technology we are going to generate in the

[[Page 16309]]

future and that we are going to implement before anyone else. The only 
way we can keep that system intact is by allowing American industry to 
use modern technology.


                           Amendment No. 1481

  Mr. GRAMM. The Thompson amendment on its face looks desirable. But in 
reality, it assaults a system that we have put into place that forces a 
decision. Let's say I am Texas Instruments, and I want to export a 
technology. I have to file an application. Now, if I can prove that the 
technology is mass marketed that it is readily available or if we find 
that the technology is going to be mass marketed in the future, then 
all of those factors can come into play in making the export decision. 
But if at any point in the process an official believes there is a 
national security concern, then all he has to do is say no.
  The only thing that any one person on the whole panel representing 
all of these national security agencies--the Department of Defense, the 
Department of State, the Department of Commerce--has to do to stop the 
process is to utter the magic word ``no.'' And when they say no, the 
process is stopped, and the decision can be appealed to the next 
highest level--ultimately, to the President himself. But there is no 
lack of ability to stop a sensitive product from being exported.
  What I am concerned about--I have no question in my mind whatsoever 
of the good intent of this amendment--is that if we make it easy to not 
say ``no'' but just say ``let's wait,'' if we make it easy for someone 
to avoid making a decision, no politician and nobody governed by 
politicians will ever make a hard decision as long as there is any 
viable alternative. That is a chiseled-in-stone law of public behavior. 
And if we make it possible for people to delay because it is complex or 
because they say it has the potential of having national security 
interest, then what is going to happen? The whole process is going to 
get tied up. This bill, which tries to achieve a delicate balance 
between jobs and security, will end up being destroyed.
  I want my colleagues to know, in asking them to vote against this 
amendment, that any representative of any agency who is serving on the 
review panel has a right to stop the process by saying no. What they 
don't have the right to do is to say: Well, let's think about this for 
6 months, or let's wait for a year while some foreign competitor is 
developing the same technology. They have to say yes or no, but they 
can say no.
  Secondly, I remind my colleagues that in part in response to concerns 
that were raised by Senator Thompson and others, we put a Presidential 
waiver in the bill where the President. Even if the review process says 
yes, even if under the law the export is exempt from the review, if the 
President finds that the product poses a national security concern, 
then the President has the right to intervene.
  Some people are going to say: Well, you made it so the President 
can't use it because how can the President do all these things? But we 
already know that the President doesn't do all these things. The 
practical implication of this waiver is that when a process is stopped 
that has otherwise been approved or that would otherwise be exempt, the 
decision is not going to be made by a deputy assistant secretary in the 
Commerce Department or an unknown person in the Defense Department. The 
person who will have to answer to the public for the decision is the 
President.
  What does that do? It guarantees that the agency representatives are 
not going to make this decision to circumvent the process for a light 
or transient reason. But if the President believes, based on the best 
advice he is given, that the product should not be exported, then the 
decision is made and it is not exported.
  I do believe we have put together a good system of checks and 
balances. The Thompson amendment makes it too easy to bail out of the 
system. An agency representative can always say no if he objects, but 
what he cannot do is cause delay after delay. That is what we are 
trying to deal with here, and I hope my colleagues will vote no on the 
Thompson amendment.
  Let me repeat, since I see that our distinguished colleague has come 
to the Chamber, I am hopeful we can get together, perhaps in the 
morning, with those who still have concerns about the bill to see if 
there is anything we can do to deal with those concerns. I know some 
suggestion has been made that we might have a blue ribbon panel to 
evaluate the entire process. I haven't talked to Chairman Sarbanes in 
any detail about that. But I think that is something we would be 
willing to look at as an addition to what we are doing.
  What we want to do is pass a good bill that I believe America needs.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I take this opportunity while Senator 
Gramm is still with us on the floor to depart from the debate on S. 149 
for a moment and say a few words about my very able and distinguished 
colleague who announced earlier this afternoon that he will not be 
seeking re-election next year in 2002. I think that comes as a surprise 
to many of us. We heard the stories, but no one ever assumed they would 
amount to anything. All of a sudden, they have.
  I just want to say a few words about our working relationship and 
also, of course, to wish Senator Gramm the very best. I know that this 
decision was influenced by his desire, in a sense, to begin a new 
career and by some family considerations. Of course, I respect those. 
Obviously his presence here in the Senate--a very strong presence, I 
might observe--will be missed post-2002 or post-January 3, 2003.
  Just as we are co-managing this reauthorization of the Export 
Administration Act today, I think we have accomplished a great deal 
working together in our respective roles on the Senate Banking, 
Housing, and Urban Affairs Committee.
  Senator Gramm was Chairman of the Committee from January 1999 to June 
2001. I have to say that virtually every major piece of legislation 
that came out of our Committee came out either unanimously or very 
close to it with one exception. We had a big dust-up, as it were, over 
the financial services modernization bill, essentially over the CRA 
provisions.
  We subsequently worked it out with the Administration and the bill 
finally passed on the Senate floor in November of 1999 by a vote of 90-
8. In the end, we found our way through and reached an understanding 
and an accommodation.
  I want to acknowledge Senator Gramm for his leadership during his 
chairmanship on the following bills: the Competitive Market Supervision 
Act, the International Monetary Stability Act, the Manufactured Housing 
Improvement Act, and the Public Utility Holding Company Act. In the 
area of housing and urban affairs, we have passed into law elderly 
housing legislation; reforms to the rural housing program; and reforms 
to the Native American housing program. This year we passed Market-to-
Market reform and reauthorization legislation through the Committee. 
The President also signed into law the Iran-Libya Sanctions Extension 
Act on August 3, 2001. I think the Committee has had a very good track 
record under his leadership in the last Congress and at the beginning 
of this Congress.
  I also want to acknowledge that without Senator Gramm's active 
leadership on the Export Administration Act, we actually would not be 
on the floor today. I also look forward to working closely with him on 
the reauthorization of the Export-Import Bank and the Defense 
Production Act.
  I have to say we are going to miss Senator Gramm. I think that is 
obvious. I want to say that despite what the press wanted to report 
about our working relationship, I think we have had a very positive and 
constructive relationship. It happens that we differ from time to time 
on an issue--but what is this place about if it doesn't allow room for 
those sorts of differences? Yet as I indicated, in virtually every 
instance we were able to accommodate those differences, work through 
them in a rational fashion, and reach good decisions on behalf of the 
public.

[[Page 16310]]

  I know of the determination and commitment with which Senator Gramm 
has represented the people of Texas as one of their two U.S. Senators 
in this body. I know of his own very strong commitment to a peaceful 
and prosperous America, and his keen interest in economic policy. We 
have had a lot of very good discussions in the Committee on that very 
subject. I didn't want the occasion of his announcement just a little 
earlier this afternoon to pass without taking the floor and making a 
few comments. I look forward to continuing to work very closely and 
cooperatively with Senator Gramm over the balance of this year and all 
of next year. I hope we can continue to cooperate together and do good 
things for the country. I say this to my colleague with all respect and 
affection.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, let me first say that I appreciate Senator 
Sarbanes' remarks. When your mama says something nice about you, people 
expect it. I do think Senator Sarbanes is correct, and I don't think I 
will do him any harm in Maryland by saying that he and I differ on a 
lot of subjects. In fact, it might well help him politically by saying 
that. But when we ended up running the Banking Committee--Senator 
Sarbanes as a Democrat and me as a Republican--everybody assumed that 
people who differed on as many issues as we differed on would never get 
anything done. I appreciate very much his kind comments, and I 
appreciate his pointing out the plain truth, which is that we have 
gotten a near record amount done. We have achieved that by recognizing 
that under our system you get things done by working with people 
instead of running over people. I have been chairman and Senator 
Sarbanes has been chairman, and I assume he will be chairman for the 
remainder of my time, but you never know. Maybe Senator Reid will have 
a change of heart and decide to come join us. Who knows?
  In any case, I am very proud of our record, and I am very proud to 
have Senator Sarbanes' friendship. Thank you.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Mr. President, if I may take a minute, I have been 
fortunate in the last 3 years or so to spend most of my time here on 
the floor. Every time Senator Gramm of Texas comes to the floor I 
always anticipate a good experience. I may not agree with what he is 
saying, but nobody is more in tune with the subject matter and more 
entertaining than Senator Gramm.
  I have not served on committees with Senator Gramm. He served in the 
House, as I did, and we have served in the Senate together. We have 
never worked on committees together, as you do a lot of times, where 
you really get to know people. But I have gotten to know Phil Gramm by 
virtue of the fact that I have such great respect for what he says. I, 
like Senator Sarbanes, don't agree all the time with what he says, but 
I have to tell you I have great appreciation for the way Senator Gramm 
says it and the fact that he is a man of conviction. He talks about 
what he believes is the way it should be.
  He is a person who got an education not in an easy fashion. Senator 
Gramm may not want a lot of people to know, but I have heard him saying 
this, so I am not speaking out of school. He had some learning 
disabilities. Yet he turned out to be one of the finest scholars Texas 
had and one of the finest scholars the Senate has ever had. He is a 
Ph.D., a professor.
  I am going to enjoy very much the next 18 months with Senator Gramm, 
as I have the prior 19 years or so I have spent in Washington with him. 
But there will never be another Phil Gramm. He is one of a kind. He has 
really dedicated his life to public service, for which I have no doubt 
the State of Texas is a better place.
  Phil Gramm is virtually unbeatable in Texas. It is bad news for the 
people of the State of Texas that he is leaving. The good news for us 
in Washington is that he is leaving and we are going to have an 
opportunity to take the Senate seat. We could never do that with 
Senator Gramm here. We know it is an uphill battle he left there.
  I wish words could connote the warm feeling that I have for Phil 
Gramm. I just think the world of him. I like him a lot. He is a fine 
person, and I hope his family is proud of him and also the people of 
Texas, as they should be.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. THOMPSON. Mr. President, I suppose I am going to have to say 
something nice about Senator Gramm. In all honesty, I have a tremendous 
amount of admiration for Senator Gramm, and it was with great sadness 
that I learned a short time ago he decided not to run again. Regardless 
of what anybody else does here, I think this institution needs a Phil 
Gramm. The institution is going to have to come up with another one 
now, it looks like. But the institution has been better for his having 
been here.
  I know of no one who has more intellectual honesty and who is more 
fearless in the pursuit of the things in which he believes. More often 
than not, they are the things in which I believe. But that is almost 
beside the point. I want to express publicly to him my tremendous 
admiration for him and for the service he has rendered the State of 
Texas and our country.
  I will yield to anyone else at any time who wants to speak to this 
subject. But if not, I will continue on with the business at hand. I 
believe Senator Enzi wants to speak.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, it is with a lot of regret and sadness that 
I learned of this decision this afternoon. I came to the Senate just 
4\1/2\ years ago, which would be about the equivalent of the college 
degree.
  During that time, I have gotten to study under Phil Gramm. There have 
been a lot of times that I really thought I ought to be paying him 
tuition. It has been a tremendous educational process. If we could just 
get him to be a little more outspoken.
  I do recall he said when he retires he is going to retire to a town 
in the United States that does not have a single traffic light. I 
assume there are still some of those in Texas. If there are not, 
Wyoming would welcome the Senator with open arms. We would love to have 
him there and, of course, we are looking forward to the game against 
his alma mater, Texas A&M, the team the Senator follows day in and day 
out, and we are looking forward to a good contest.
  I thank the Senator for all of the instruction that he has given, for 
the education he has provided for America. I have appreciated the 
stands he has taken and the ferocity with which he has taken them. 
Thanks again for the education.
  Mr. GRAMM. Thank you, Mike.
  Mr. REID. Mr. President, I ask unanimous consent that the Senate vote 
in relation to the Thompson amendment No. 1481 at 5:15 p.m. today, with 
no second-degree amendments in order to the Thompson amendment; that 
prior to the vote there be 4 minutes for debate equally divided in the 
usual form, with no other intervening action or debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. So we will vote at 5:15 on this amendment that we are 
discussing right now.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I will address the issue concerning the 
amendment I have submitted having to do with the amount of time 
agencies would have to consider a license application. This amendment 
provides additional exceptions from acquired time periods for 
processing license applications if the reviewing agency requires more 
time due to the complexity of the analysis or if the reviewing agency 
requires additional time based on the potential impact of the export on 
national security or foreign policy interests of the United States. It 
limits any additional time to not more than 60 days.
  In other words, what this amendment does--first of all, as it is 
currently drafted, it gives an agency 30 days to

[[Page 16311]]

look over this license application and to come to a decision as to 
whether or not it wants to go along with it or try to oppose it. If the 
agency is not heard from within 30 days, then it is deemed the agency 
waives its rights and the agency approves it.
  What this amendment does is it takes a particular set of 
circumstances where there are national security implications; in other 
words, the Department of Defense takes a look at something and says: 
Perhaps this is a very complex application, and it very well may have 
national security implications. We simply cannot get this done in 30 
days. We need additional time.
  As to the Cox Commission, I hope my friends who are sponsoring this 
legislation will not choose the Cox Commission as authority when it 
chooses and ignore the Cox Commission when it makes recommendations 
that oppose it because the Cox Commission concluded in its 
determination that there were undue time pressures brought to bear on 
these agencies sometimes. We needed to get the merchandise out the door 
when these agencies were trying to make these national security 
determinations, so they came up with recommendations that are 
consistent with what we are talking about here.
  The amendment was accepted unanimously by voice vote in the House 
International Relations Committee markup of the Export Administration 
Act. The Cox Commission recommended this: With respect to those 
controlled technologies and items that are of greatest national 
security concern, current licensing procedures should be modified to 
provide longer review periods when deemed necessary by the reviewing 
executive department or agency on national security grounds.
  I have heard it said this is when there is great national security 
concern.
  As I indicated, the Cox committee recommended additional time be 
given under appropriate circumstances, and these are appropriate 
circumstances. Opponents of this amendment say these are just 
circumstances where there is substantial national security concern.
  I ask my colleagues, how do we know whether or not there is a 
substantial national security concern if the agencies that are 
determining that do not have sufficient time enough to investigate it? 
Are we going to decide if the Department of Defense believes it needs 
additional time and believes there may be national security concerns? 
Are we going to cut them off prematurely because they cannot make out a 
prima facie case at that point?
  Should they not, as the agency dealing with this and having the 
expertise, be given, in a matter of national security--as we are trying 
to get the merchandise out the door, let us remember what we are 
talking about--national security. Do we not let the Department of 
Defense have a little additional time to make sure we are not sending 
something dangerous to somebody dangerous?
  I do not fully appreciate the talk of the balance between jobs and 
security. We are not dealing with a jobs bill. We are dealing with a 
bill that is designed to protect national security. We are not 
balancing off how much money somebody could make. Three percent of our 
total exports are exports to these controlled companies, so we are 
talking about most all of them are approved. We are talking about a 
fraction of 3 percent.
  They have a very effective lobby and they have been doing their job 
well, but let us not lose sight of the smallness of the exports we are 
talking about in terms of the total economic picture. Even if it were 
large, I would think the same way about it. If we want to talk about a 
balance or a tradeoff, are we not willing to trade off a fraction of 3 
percent over against, say, the Department of Defense when it has a 
national security concern, having an additional 60 days to take a look 
at it? Are we that eager to get the merchandise out the door when we 
are being told on a regular basis these rogue nations are developing 
this additional technology; that they are developing weapons of mass 
destruction; that China and Russia are supplying them with technology 
that will assist them in their weapons of mass destruction; that China, 
which will greatly benefit from this bill, is taking our technology and 
using it for military purposes; when our commissions and agencies are 
telling us in their reports, whether it be Rumsfeld, Deutch, or our own 
intelligence agencies that report on a biannual basis, that these 
threats are growing and that they are using American technology; when 
we hear things like Saddam Hussein has been furnished by a Chinese 
company with technology that will assist him in his fiber optic cable 
network that will actually assist him in shooting down American 
airplanes--we have caught him twice at it now--and it is being supplied 
by a company that has a relationship with a company in the United 
States?
  I hope if one of our boys gets shot down over there it is not 
determined it is with American technology. It is not farfetched. I am 
not claiming I can suggest anything that would forever prohibit that, 
but we can surely give the Department of Defense an extra 60 days if it 
believes it has a national security concern.
  We have gotten past, I suppose, the debate on things such as foreign 
availability. We are going to have somebody down in the bowels of the 
Department of Commerce determine all that needs to be deregulated and 
it is out the door; anything they say is foreign available. Mass 
marketing: Somebody within the bowels of the Department of Commerce 
decides it is mass marketed so all of that goes out the door. Embeded 
components: If something is regulated and considered to be sensitive 
because it can be used potentially for military purposes, it is 
regulated, you have to have a license. But if somebody puts it in a 
bigger component, you do not have to have a license for it or the 
bigger component if the bigger component is worth more than 75 percent 
of the total value of what is being shipped. It makes no sense at all. 
It makes no national security sense. It might make economic sense for 
some folks. But all that is by the board. We passed that. We will do 
that and tell the President, catch him if you can, fixing it so the 
President can't delegate any of this. The President has to make the 
determination that he wants to come in with oversight action that will 
go against this entire regulatory process when we have thousands of 
these applications a year. We are not going to be able to do anything 
with that. The train left the station. I can count votes.


  Apparently, we have decided in this Nation to turn a blind eye to the 
proliferation activities in this world, to the fact that we are now 
subject to being hit from some of the smaller rogue nations, countries 
that are starving their own people to death, putting their money into 
missile and nuclear capability, to now hit us, our allies, or our 
troops in the field, and we are opening the door wider to send stuff to 
countries that are supplying the rogue nations. We have apparently made 
that decision.
  For goodness' sake, can't we give the Department of Defense a little 
more time when they are asking us to hold up a little bit and make sure 
we are not hurting our country? Do we have to draw the line at an 
additional 60 days for that kind of consideration? If we can't do this, 
we might as well fold up our tent and do anything that exporters want 
to do. I don't see why we ought to have an export process anymore. It 
clearly will not be designed to protect this country, which was its 
original design.
  I hope history does not prove this is an even more unwise decision 
than I fear it might be. The cold war certainly is over, and it has 
left a country that is more vulnerable than ever to our own technology. 
Most of it we are not dealing with today. We are not dealing with 
nontechnology matters. We are dealing with limited items in a very 
narrow regulatory process. We approve 98 percent of them anyway, even 
in the regulatory process. The average time it takes is 40 days. We 
can't stop and take a deep breath long enough to make sure we are not 
hurting our country, when it takes 40 days on average to get

[[Page 16312]]

this done? And the overwhelming majority are already approved.
  We need to reauthorize the Export Administration Act. We need to 
tighten it up, instead of loosening it. But that will not happen. It 
will be loosened. I ask, can't we at least consider the agencies 
involved, as the Cox commission suggested?
  It has been said if there is a national security concern, they can 
raise it later in the review process. If the Department of Defense has 
not had time to adequately investigate the matter, it is already in the 
interagency review process and they will not have the information on 
which to base an objection. Do we want to force the process along so 
fast we ensure the Department of Defense or the affected agency does 
not have sufficient time to make an objection, had they known the full 
extent of the nature of the export and perhaps the end user and how it 
would be used and the potential uses for it?
  We may have to go down this road, but we don't have to get in the 
jetstream. We don't have to do it with blinders. I suggest this is a 
minimalist amendment that we would want to pass to benefit the process 
and to show the world we are not so intent on trade and money that we 
will not even take modest measures to make sure we are not making a 
mistake with regard to something important to our country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. While the parties have been speaking, and we have been in 
contact with the White House to see how difficult the time schedule in 
the S. 149 bill would be to meet, I have been told there is no problem 
meeting those time schedules, that the agencies can do that, the 
agencies have done that; that the records show they have been able to 
meet those time deadlines, and the administration is opposed to this 
amendment.
  This amendment allows the reviewing agency to stop the clock during 
the licensing application process. One of our difficulties in arriving 
at a bill has been to eliminate turf battles. The agencies are working 
very cooperatively, but there is the potential of who will be in charge 
of what and how long the delay and who can cause them, which changes 
the balance between the agencies. This bill has that balance between 
agencies.
  The agencies agree--and there will be a letter on everyone's desk--
that they have the capability of operating 60 days under this bill. 
This bill does not just give 60 days. It could give 120 days the way it 
is written, which in addition to the 30 is 150 days for a process that 
has been workable in less than 30 days by each of the three main 
agencies that have been reviewing the bill.
  Under this amendment, a single agency could further delay the 
approval of the license based on the complexity of analysis and then 
potentially use the other excuse to delay it another 60 days. The bill 
already provides for several different ways to stop the clock on any 
bill. The license applicant and the Secretary of Commerce mutually 
agree more time is necessary to process the application, or if more 
time is needed to verify and identify the reliability of an end user, 
or if additional time is necessary to secure government to government 
assurances regarding item end use, or if more time is required for 
multilateral review if applicable or if additional time is needed to 
allow for congressional notification, if that is required, if more time 
is necessary to permit consultation with foreign governments, then, of 
course, we have the essential provisions of the bill. First, an agency 
could exercise any of these thought-out exceptions that are very 
carefully defined in the bill. The two provisions in this amendment are 
not carefully defined. So they give a very broad, general, bureaucratic 
approach that allows people to pigeon hole a bill and walk away from it 
for at least 60 to 120 days. They could use the carefully thought-out 
defined provisions in section 401(g).
  Second, any of the agencies are free to return a recommendation of 
disapproval. That kicks the application into the interagency dispute 
resolution process which would give additional time for the review.
  Third, once within the interagency process, the agency can escalate a 
decision to the higher level.
  In practicality, after you and I have watched the process, Mr. 
President, and seen how it works, it also works if the agency calls and 
says we can give you a disapproval right now unless you can provide 
additional time or information. That same process is an effective way 
of stopping the clock, provided the application doesn't have to go back 
to ground zero when it comes back in again. That is a mechanism that 
has been used.
  This amendment unravels the discipline of the system that has been 
set out. With its capability of escalating clear up to the President, 
there is a recognition that this can take a lot more time. That is how 
the time element was addressed under the recommendations we had from 
the different commissions.
  A key recommendation of the various commissions that study our export 
system is to increase the discipline in the export system. Without 
deadlines, discipline disappears. Without discipline, the system is 
unworkable. An undisciplined system is the same as no system at all. 
The consequences for both our national security and economic interests 
would be severe.
  My colleague mentioned the Cox report. The Cox report was done before 
S. 149 was done, or even S. 1712 was done. We reviewed those 
recommendations. Recommendation No. 31 did suggest longer review 
periods for national security purposes. The Cox Commission made that 
recommendation only with items that are of the greatest national 
security concern. For other items, the Cox Commission strongly 
recommended streamlining the process and providing greater 
transparency, predictability, and certainty. We did that, plus building 
into the system this system of referrals, that easier process of 
resolving interagency disputes or interagency concerns, the ability to 
escalate in the process. So that got built into the system at the same 
time, which answers some of those concerns.
  S. 149 does not classify items as being ``of greatest national 
security concern'' or ``of lesser national security concern.'' It sets 
up a risk-based system that allows the administration to make such 
determinations within the bill's guidelines. Based on past experience 
and demonstrated agency data, both the administration and the bill's 
sponsors believe that S. 149's system, by setting mandatory time 
periods with the existing ``stop the clock'' exceptions, is the most 
effective framework for operating export controls. For that reason, the 
bill does not include that particular and specific aspect of the Cox 
Commission recommendation.
  This amendment, although it is portrayed as simple and common sense, 
undoes the key element of the discipline in S. 149. It would result in 
an application system bogged down by bureaucracy and politics, a system 
in which delays are the rule rather than the exception. It is not a 
simple or technical change but would undo the careful balance of the 
bill.
  I have mentioned what can be a tendency. What we tried to do with the 
bill was escalate the decisions up to the higher levels of government 
rather than have the decisions made at the bureaucratic level. We have 
tried to eliminate possibilities that, rather than make a decision, 
people would pigeonhole things. This is one of those opportunities to 
pigeonhole things for 60 to 120 days, with an undefined but good-
sounding concern.
  I do urge rejection of this amendment and ask colleagues on behalf of 
the administration to join me in that rejection.
  Mr. REID. I suggest the absence of quorum.
  The PRESIDING OFFICER (Mr. Johnson). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KYL. Mr. President, I had indicated earlier that I wanted to 
speak in favor of the Thompson amendment. I do that at this time.

[[Page 16313]]

  It has been explained by the Senator from Tennessee. The point is, 
there are some matters that would be very complicated, very complex. 
Everyone acknowledges that. It may be that a 30-day time for review in 
that circumstance would be inadequate.
  All this amendment does is to say that the department, in that case, 
could ask for an additional period of time, up to 60 days, to review 
and be able to make its recommendation for export license under the 
legislation.
  This was the recommendation of the Cox committee report in 1999, when 
it indicated that the existing 30-day limit for departmental license 
review may be inadequate for complex requests that could have a lasting 
national security impact. And since the legislation before us allows 
only for extensions on a limited basis, and we think that it would be 
appropriate, for, for example, the Defense Department, should it deem 
it necessary to have a little more time, that that at least be written 
into the bill as a possibility. That is what Senator Thompson has 
sought to accomplish through his amendment. It seems to me to be 
eminently reasonable. Therefore, I urge my colleagues to support this 
very reasonable amendment.
  The primary argument I have heard about it relates to a political 
matter; that is, that the White House supports the legislation. We have 
been advised that the White House supports the legislation without 
change. I want to comment on that a moment.
  My friends on the Democratic side of the aisle, the Senator from 
Maryland, for example, in response to something I said earlier, wanted 
to be sure I was aware of the administration's support. Indeed, I was. 
I would like to make this offer to any of my Democratic colleagues. I 
will support this legislation based upon the fact that the 
administration supports it if my Democratic colleagues will commit to 
me today that they will do the same for legislation that the 
administration supports.
  In other words, if I can get a letter from the Secretary of Defense 
or the Secretary of Commerce or the Secretary of State on a matter that 
will come before the Senate in the future, since they regard the 
administration so highly with respect to the EAA and suggest that is 
the reason why this legislation should be adopted without change, then 
it seems to me, unless they are picking and choosing which opinion of 
the administration they regard so highly, they should also regard 
highly other opinions of the administration and be equally willing to 
support those positions.
  I am sure that as Senators we all like to pick and choose the things 
on which we agree or don't agree with any administration. I am a 
Republican. I happen to have a disagreement with the administration now 
and then--not very often; in fact, very seldom. On this matter I do 
have some disagreement.
  I think it is not a sufficient argument in and of itself to say that 
because the administration supports something, therefore we should vote 
for it and then turn around on a subsequent matter which the 
administration strongly supports and vote against them. I suspect that 
my Democratic friends more often than not will find themselves in that 
position in the future.
  Mr. SARBANES. Will the Senator yield?
  Mr. KYL. I am delighted to yield to the Senator from Maryland.
  Mr. SARBANES. Earlier in the day when I first spoke on this bill, I 
don't think the Senator was in the Chamber. I was very careful to make 
the point that I supported this bill on the basis of my own judgment 
about its contents. I then went on to add the point that the 
administration was supportive of this bill, and obviously one finds 
some comfort in that since much of what is in the bill involves the 
executive branch making it work. So particularly on a bill such as 
this, if they were against it, that would give one pause for thought.
  I simply say to my colleague, it is a very interesting challenge he 
puts forward. Without anticipating that he would make such a challenge, 
I was very careful in my opening statement to make the point that my 
support for the bill was based on my own judgment about its provisions 
having worked through it very carefully. Over and above that judgment, 
I also, of course, alluded to the fact that the administration was very 
supportive of it.
  Mr. KYL. Mr. President, I very much appreciate that comment from the 
Senator from Maryland because that is the basis on which we should 
approach this legislation--our own evaluation. I know that because of 
the Senator's work on this issue. Prior to the strong expressions from 
the administration, the Senator from Maryland was very supportive of 
the legislation. I know that he is very truthful in what he just said. 
I appreciate that. That is the position each of us should take with 
respect to legislation regardless of which administration is in power 
at the time and whether or not that administration supports the 
legislation.
  My point is that it is not a sufficient argument that we should 
reject all the amendments because the administration supports the bill. 
We should debate each on the merits. And on the merits of this 
amendment, I see no real opposition. If because these matters of 
national security are so important to the United States and there is 
such a background of violations, particularly in this area of dual-use 
technology, of countries acquiring things and then selling them to 
somebody else or providing them in some other way to another country to 
proliferate weapons of mass destruction inimical to the interests of 
the United States, because we have such a history of that, so many 
examples of it, we should be bending over backward to ensure that we 
have proper control over the export of these dual-use technologies. And 
we should not simply be opening it up to essentially free license, and 
if an agency isn't able to complete its review within a 30-day period, 
the clock runs out and you are deemed to have supported the export of 
this particular item.
  That is putting it exactly backward because matters of national 
security should be our highest test. The rule should be exactly the 
opposite. If you can't complete the review in 30 days, then you should 
get a little more time to complete the review, not to be told: Sorry, 
the clock ran out; if you could not get it done in 30 days, no matter 
how complicated, no matter how important the national security 
interest, the export is allowed.
  That is the problem with taking an approach that if the 
administration supports the bill, it can't be changed in any respect.
  There are some things about this bill that should be changed. 
Representatives of the administration have made it clear to the Senator 
from Tennessee and myself and others that they recognize there will 
have to be implementation of this legislation by executive order. Some 
of the concerns we have expressed, they assured us, would be dealt with 
in this executive order in some way or other. I have absolute 
confidence in the administration with respect to that. Obviously, they 
have not issued any executive order yet. It would be premature to do 
so.
  But failing to understand what specific things might be addressed, we 
think it is important to try to fix those problems now, and one of the 
problems deals with this question of possibly needing a little more 
time. I just ask my colleague, what could be lost, what could be wrong 
with having a department--let's say the Department of Defense, if it 
says it needs more time--get a little more time? This is too serious to 
put an arbitrary 30-day clock on and say: Sorry, time is up, national 
security be damned; the 30 days ran out, and the export is allowed to 
go forward. This is the problem with this strict provision in the law 
with no ability to move out of it.
  That is why the Thompson amendment makes sense. That is why I hope my 
colleagues support the Thompson amendment. It is specifically 
recommended by the Cox Commission report. I believe--and I ask my 
colleague from Tennessee if my recollection is correct--the House of 
Representatives has already incorporated this recommendation of the Cox 
committee report in its legislation. I am not certain. I ask the 
Senator from Tennessee for his understanding of that.

[[Page 16314]]


  Mr. THOMPSON. Yes. The House committee reported this out with 
unanimous consent.
  Mr. KYL. Mr. President, that includes the provision of the Senator's 
amendment in it; is that correct?
  Mr. THOMPSON. I believe it is essentially the same.
  Mr. KYL. Very similar thereto. There you have it. It seems to me we 
are already making changes to the legislation. We should not be so 
hidebound to every specific jot and tittle in a bill which is now 327 
pages long, very complicated, that we can't make a few changes in this 
legislation.
  I urge my colleagues to consider exactly what Senator Thompson is 
proposing. It is simple and straightforward. It seems to me that for us 
to just say, no, there is going to be no extra time, no matter how 
complex the issue or how strongly the Department of Defense may want 
it, they are not going to get any more time, is not wise public 
policymaking. I urge my colleagues to support the Thompson amendment.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. What was the unanimous consent with regard to the 
provision of time right before the vote?
  The PRESIDING OFFICER. Four minutes evenly divided prior to the vote.
  Mr. THOMPSON. All right. That was my understanding, 2 minutes per 
side.
  The PRESIDING OFFICER. The Senator is correct.
  The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I want to take advantage of these few 
minutes to address a couple of the points the Senator from Arizona 
raised.
  First of all, in fiscal year 2000, the data indicates that the 
average time for the review of a license by the Department of Defense 
was 13 days. The Department of Energy averaged 22 days. The State 
Department averaged 9 days. The 30-day time period that is in the bill 
is identical to the current practice under the Executive order. The 
amendment would add an additional 60 days in each of two separate 
circumstances.
  Of course, one of the things we were trying to do here was to set up 
a process whereby applicants could get a definitive decision within a 
defined timeframe. Now there are provisions in the bill to stop the 
running of a clock, a couple of which directly go to the end user issue 
which the Senator from Arizona raised, as requiring further time to 
ascertain the end user issue.
  There are these exceptions that stop the clock, as it were, on the 
time period. That involves the identity and reliability of the end user 
in one instance and additional time to secure the government-to-
government assurances regarding end item use. So the very concern that 
the Senator raised is actually addressed in the legislation in terms of 
stopping the clock and providing extra time.
  I think it is important to underscore that one of the things we were 
trying to provide to the exporters, which we think is important, was 
that they could get an answer within a defined period of time. Often 
they are more concerned in some instances in getting an answer. They 
need to know, yes or no. They are often competing in an environment in 
which they have to find out whether they can move forward or not. A 
department having difficulty with the application can simply say: We 
think it should be denied. Of course, if they say that, you can then 
start the interagency appeal process working. But of course that 
extends over a sustained period of time.
  So we think the framework that is in the legislation really 
adequately addresses these concerns. It does represent a balance, and, 
as I indicated earlier, we are giving quite extensive powers to the 
executive branch in here.
  One of the things the business community was concerned to get was a 
framework with some discipline in it into which they could get an 
answer. If you are left hanging, you don't know what to do.
  So given the provisions for stopping the clock that are in there, we 
think to add another 60 days on top of this period would extend the 
process to such an extent that the exporters really could not function 
in the real world.
  Now if the time period was taking a lot longer to get agency 
response, we could be sensitive to that argument. But that is not the 
case. In any event, the very people who are concerned with making this 
work, upon whom the burden would fall, have indicated that they find 
the time periods that are in the bill quite acceptable and, in fact, 
are in opposition to the proposed amendment. They are the very ones who 
would have to make the process work. So I think that is also an 
important consideration to take into account.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. THOMPSON. Mr. President, this amendment does nothing to lessen 
the certainty for the exporters. Under the old law, it is 30 days the 
agencies have. Under the new law, it will be 30 days. The only 
difference is that in the case of potential national security, an 
agency would have additional time. The agency doesn't have to take that 
time. If the average time for these licenses, as the Senator described, 
was 13 days, it certainly doesn't sound like that bureaucratic mess we 
heard described earlier.
  The PRESIDING OFFICER. I remind the Senator that we are now under 
controlled time.
  Mr. THOMPSON. I will use my 2 minutes. It doesn't sound like that 
bureaucratic mess we had earlier. These 14-day cases are streamlined 
where there is no controversy. We are trying to deal with a situation 
where national security might be involved. You don't know whether or 
not you want to object, if you are an agency, until you get into it.
  I have heard it referred to again that the agencies apparently do not 
want this, and it may be politically incorrect for me to say this, but 
it is quite obvious the administration has passed the word they want 
this bill passed without amendments, even to the point where they do 
not want agencies to be given the opportunity to ask for another 60 
days, even in a matter of national security. I think that is extremely 
unfortunate.
  It is surprising to me, but apparently that is the case. However, it 
does not make it right.
  I ask my colleagues, in light of the proliferation concerns that this 
country has, in light of the developing technology, the fact that it is 
being proliferated around the world and posing a danger to us, that 
certainly in this export licensing process we can afford to give our 
agencies, such as the Department of Defense, a little additional time 
if they have a national security concern.
  It is not going to put anybody out of business, and it is not going 
to hurt the overall export process. And what if it does if we are 
saving something from being exported that otherwise should not be? It 
is a very simple matter to dispose of, but it is a very important 
matter to get right.
  I yield the floor.
  Mr. GRAMM. Mr. President, I yield myself 2 minutes.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I have no question about the sincerity of 
Senator Thompson's amendment. He has worked with us on this bill, and 
against us to some extent. We have made 59 changes in the bill to 
accommodate Senator Thompson and people who share his concerns, but let 
me explain to my colleagues why this amendment is not good.
  We have established a system that for the first time is giving the 
security agencies a voice in this process. We have changed the system 
so one member of the panel, from any one agency, can vote no, and the 
process at that point is denied and it has to be appealed to a higher 
level.
  It is not like the old system, where the person from the Department 
of Defense could express concern but they could be overridden. Under 
the current system, you just have to have one person say no and the 
process either ends or it is bumped up to the next level.
  Finally, we give the President a new national security power that 
says no

[[Page 16315]]

matter what the circumstances are, no matter whether a product is mass 
marketed or not, no matter whether a terrorist group or a terrorist 
nation or a would-be adversary could get the product from any other 
source, if the President believes it threatens national security, it is 
stopped.
  What this amendment would do would basically terminate the 
effectiveness to the system by saying that at any point anybody 
believes there is complexity in the analysis or there is a potential 
impact on national security or foreign policy interest, they could 
indefinitely delay. What we want is a decision. Remember, the reviewing 
officers can vote no, but we want them to vote yes or no. That is what 
the process is about.
  I urge my colleagues to defeat this amendment.
  I move to table the amendment, and I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. I announce that the Senator from Vermont (Mr. Jeffords), 
the Senator from Massachusetts (Mr. Kennedy), the Senator from 
Washington (Mrs. Murray), and the Senator from New Jersey (Mr. 
Torricelli) are necessarily absent.
  Mr. NICKLES. I announce that the Senator from Pennsylvania (Mr. 
Santorum), the Senator from New Hampshire (Mr. Gregg), and the Senator 
from Alaska (Mr. Murkowski) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas, 74, nays 19, as follows:

                      [Rollcall Vote No. 274 Leg.]

                                YEAS--74

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Graham
     Gramm
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchison
     Inouye
     Johnson
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Miller
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reed
     Reid
     Roberts
     Rockefeller
     Sarbanes
     Schumer
     Smith (OR)
     Stabenow
     Stevens
     Thomas
     Wellstone
     Wyden

                                NAYS--19

     Cochran
     DeWine
     Feingold
     Frist
     Grassley
     Helms
     Hutchinson
     Inhofe
     Kyl
     McCain
     Sessions
     Shelby
     Smith (NH)
     Snowe
     Specter
     Thompson
     Thurmond
     Voinovich
     Warner

                             NOT VOTING--7

     Gregg
     Jeffords
     Kennedy
     Murkowski
     Murray
     Santorum
     Torricelli
  The motion was agreed to.
  Mr. SARBANES. Mr. President, I move to reconsider the vote.
  Mr. ENZI. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. SARBANES. Mr. President, we are prepared to continue debate on 
this measure.
  Mr. President, that is the last vote today. If there are Members who 
wish to speak on the bill--earlier I thought there were and I am now 
not certain--we would be prepared to stay on in order to get that done 
and thereby help to clear the deck so we can move ahead tomorrow with 
respect to other amendments and towards final passage of this 
legislation. I have no one at the moment indicating any desire to 
speak.

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