[Congressional Record (Bound Edition), Volume 147 (2001), Part 12]
[Senate]
[Pages 16524-16542]
[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 
resume consideration of S. 149, which the clerk will report.
  The assistant legislative clerk read as follows:

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

  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Madam President, as we debate our system of export 
controls in this new era, we hear an array of arguments that reflect 
America's preeminent role in the world, our military and economic 
power, and the absence of the threat of major war that has prevailed 
since the demise of the Soviet Union a decade ago. We hear proud claims 
that trade is the new currency of international politics; that the 
strength of our economy, now more than ever, underpins our national 
power and global influence; and that in the brave new world of the 
Information Age, most technological flows are uncontrollable, or 
controls are meaningless due to the availability of the same technology 
from foreign competitors.
  The business of America is business, we are told, and those of us who 
believe national security controls exist to protect national security, 
rather than simply expedite American exports, are accused of old 
thinking, of living in a dangerous past rather than a prosperous and 
peaceful present. For many, the new definition of national security--in 
a haunting echo of the thinking that inaugurated the last century--
predicates the safety and well-being of the American people upon the 
free flows of trade and finance that make our economy the envy of the 
world, and our business leaders a dominant force in our time.
  I am an ardent free trader, and I believe economic dynamism is indeed 
a central pillar of national strength. But I do not believe our 
prosperity requires us to forego very limited and appropriate controls 
on goods and technologies that, in the wrong hands, could be used to 
attack our civilian population here at home, or against American troops 
serving overseas. Experts agree that both rogue regimes and hostile 
terrorist organizations are actively seeking components for weapons of 
mass destruction, many of which are included in the list of goods we 
control under our current export licensing system.
  Unlike in the Cold War era, when we created our export control regime 
to keep sensitive technologies out of the hands of the Soviet Union, 
this era is characterized by an array of diverse threats emanating from 
both hostile nations and non-state actors. Hostile nations like Iran 
and North Korea are disturbingly close to developing multiple-stage 
ballistic missiles with the capability to target the United States. 
These and other nations, including Syria and Iraq, receive significant 
and continuing technical assistance and material support for their 
weapons development efforts from China and Russia, with whom much of 
our trade in dual-use items is conducted. The intelligence community 
has made startlingly clear the proliferation record of China and 
Russia, as well as North Korea, and the adverse consequences of their 
weapons development and technology transfers to American security 
interests.
  I do not believe that S. 149 adequately addresses these threats. 
Unfortunately, the Senate yesterday rejected a reasonable amendment 
offered by Senator Thompson allowing the relevant national security 
agencies to receive a 60-day time extension to review particularly 
complex license applications. This reform, proposed by the Cox 
Commission, and a number of amendments adopted by the House 
International Relations Committee in its markup of the Export 
Administration Act, properly addressed some of the deficiencies in the 
current version of S. 149.
  S. 149 has the strong support of the business community and the Bush 
Administration. In the short term, proponents of this legislation are 
correct: loosening our export controls will assist American businesses 
in selling advanced products overseas. In another age, proponents of 
free trade in sensitive goods with potentially hostile nations were 
also correct in asserting the commercial value of such enterprise: 
Britain's pre-World War I steel trade with Germany earned British 
plants substantial profits even as it allowed Germany to construct a 
world-class navy. Western sales of oil to Imperial Japan in the years 
preceding World War II similarly earned peaceful nations commercial 
revenues. In both cases, friendly powers caught on to the destructive 
potential of such sales and embargoed them, but it was too late. Such 
trade inflicted an immeasurable cost on friendly nations blinded by 
pure faith in the market, and in the power of commerce to overcome the 
ambitions of hostile powers that did not share their values.

[[Page 16525]]

  I resolutely support free trade. But I cannot with a clear conscience 
support passage of legislation that weakens our national security 
controls on sensitive exports to a point that we may one day be 
challenged, or face attack, from weapons derived from the very 
technologies we have willingly contributed to the world. Our peaceable 
intentions, our love of prosperity and stability, are not shared by 
those who would do America harm, and whose hostile ambitions today may 
well be matched tomorrow by the ability to deliver on that threat. We 
should make it harder, not easier, for them to do so.
  Our export control regime should undergo significant reform to 
address the challenges and opportunities of our time. Proponents of S. 
149 focus on the opportunities this legislation affords American 
business. I have worked with Senators Thompson, Kyl, Shelby, Helms, and 
Warner to highlight the reality that this bill does not adequately 
address the national security challenges we face today. National 
security controls cover only a tiny fraction of total American exports; 
the overwhelming majority of export applications for dual-use items are 
approved by our government; limited controls properly exist to help 
prevent highly sensitive technologies from falling into the wrong 
hands; and such safeguards are more relevant than ever in the face of 
the multifaceted and unconventional threats to our country unleashed by 
the information revolution.
  A number of proponents of S. 149 argue that American companies should 
not be straitjacketed by U.S. national security controls even as their 
foreign competitors remain free to peddle similar technologies to 
proliferators and rogue regimes. This argument overlooks the fact that 
America continues to lead the world in technological innovation; our 
products are often unique when compared with those produced by 
businesses in France, Germany, or Japan. More fundamentally, such an 
approach only emboldens potential enemies who seek access to our 
markets in sensitive goods. In concert with friends and allies, we 
should endeavor to shame foreign companies who sell dangerous items to 
rogue buyers by making their identities public--not scramble for market 
access in dangerous technologies at their expense, as if nothing more 
than corporate profits were at stake. We should also make it a 
diplomatic priority to construct a new multilateral export control 
regime, in concert with like-minded nations, to fill the vacuum created 
by the collapse of COCOM, which regulated Allied exports during the 
Cold War to keep critical technologies out of Soviet hands.
  As a proud free-trader, I maintain that we should continue to 
carefully review our most sensitive exports; we can, in fact, exercise 
some control over their end use. I fear we shall one day reap the 
bitter harvest we sow in our neglect of the consequences to America's 
security of an overly complacent export licensing regime. As a nation, 
we may have to learn the hard way that winking at the proliferation 
threats we face today, in light of clear evidence that nations to which 
we export sensitive technologies continue to apply and share them with 
our enemies, diminishes our national security to a point for which no 
amount of corporate profits will compensate.
  I thank Senator Thompson for his efforts on this legislation. I do 
not believe that his amendment yesterday should have been defeated. I 
thought it was a reasonable amendment. I think it is also another 
example of a compelling requirement for campaign finance reform.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Clinton). The Senator from South Dakota.
  Mr. JOHNSON. Madam President, S. 149 is, in fact, a balance that 
modernizes our export control laws to account for the geopolitical, 
commercial, and technological changes of this past decade.
  This bill recognizes that on occasion exports must be controlled for 
national security and for foreign policy reasons. S. 149 substantially 
increases the President's authority to impose controls when in fact 
they are necessary.
  I have great respect for the few opponents of this legislation. 
However, I believe it is a misstatement to suggest that this bill 
somehow diminishes our Nation's ability to control technology which 
needs to be controlled when in fact this legislation imposes greater 
controls where necessary and significantly increases penalties and 
decreases the likelihood of sales that are inappropriate.
  At the same time this legislation acknowledges that a vibrant 
American economy is a critical component of our national security. 
Senator Bennett, our friend from Utah, spoke eloquently to this point 
yesterday.
  Advancements in high technology allow us to ``run faster'' than our 
enemies. To foster continued advancements, we must take great care not 
to punish American businesses by limiting unnecessarily their 
marketplace, if those same products will simply be provided by our 
foreign competitors.
  The observation is made, well, what about unique American technology? 
This legislation takes that into account. It allows for strong 
limitations where it is truly unique and where those sales would, in 
fact, pose some jeopardy to our Nation's security.
  S. 149 balances our national security interests and our commercial 
interests with a first and foremost concern for national security--
appropriately so. But it does recognize that our prosperity and our 
security are, in fact, interrelated.
  This has been a thoroughly bipartisan process--a process, frankly, 
that I would like to see more often the case on the floor of this body.
  I have great gratitude for the work of Chairman Sarbanes, ranking 
member Gramm, Senator Enzi, and some others who have contributed in a 
constructive way to this legislation. And Senators Thompson and Kyl 
have made valuable suggestions to enhance the bill. I thank them for 
their role and their sincere concern for our Nation's security. I thank 
Senators Dayton and Roberts for their constructive input on this 
legislation as well.
  I urge the House to move expeditiously to pass the EAA so the White 
House can sign this bill into law. This is a high priority for the 
White House.
  For those who may have some concern about the expertise of the vast 
bipartisan majority of this Senate in support of this legislation out 
of national security concerns, I again remind the body that this 
legislation not only had the overwhelming bipartisan support of 
thoughtful Senators on both sides of the aisle but is urgently 
supported by President Bush, by Secretary of Defense Rumsfeld, 
Secretary of State Powell, Commerce Secretary Evans, and National 
Security Adviser Condoleezza Rice. Certainly those in the White House 
have taken national security as a first and foremost concern. Any 
suggestion that somehow that issue has been taken lightly by the 
advocates of this bill is simply incorrect.
  This has been, frankly, a model for how the Senate can work together 
for the good of our Nation. It is not a Republican bill. It is not a 
Democrat bill. But it is a bill put together across the aisle with the 
cooperation of the White House. It has been extremely gratifying, 
frankly, to have been so closely involved in the creation of this 
reauthorization.
  To reject this legislation, to fall back on the Executive order, 
which is under legal challenge, and which extends far less authority to 
the White House to control the sales of high-tech items around the 
world, would be a tragic mistake. This Nation needs a modern dual-use 
technology trade regime. This legislation provides that.
  Those in our Government who are given the great responsibility of 
national security have applauded this bill. It is the kind of balance 
our country needs. I believe the Senate has performed its work very 
ably to bring this bill to this point.
  It is my hope we can conclude this debate very soon, work with our 
colleagues in the other body, and deliver this bill onto the desk of 
the President, who has urged us over and over again to pass this bill 
and to again have in place a strong, powerful, dual-use technology 
trade regime for our Nation.

[[Page 16526]]

  Madam President, I yield the floor and suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. THOMPSON. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1527

  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 1527:
       On page 197, line 15, strike ``substantially inferior'' and 
     insert ``not of comparable quality''.

  Mr. THOMPSON. Madam President, this amendment addresses the issue of 
foreign availability. As all who have listened to our discussion up 
until now realize, one of the more important pieces of S. 149 has to do 
with foreign availability. Essentially, what this bill does is say if 
the Department of Commerce makes a determination that some item has 
foreign availability status, then that item is essentially 
decontrolled. It does not go through the licensing process anymore, the 
idea being that it is out there and anybody can get it, and why control 
it.
  Frankly, I think it is not a good idea. I think that foreign 
availability should be taken into consideration, as we always have in 
our export policy taken foreign availability into consideration. We do 
not want to try to stop the export of items that are clearly out there 
in the domain, but it should not be an overriding consideration. We 
should not be deregulating whole categories of items, and not even 
being able to keep up with how much we are shipping to some country, 
and what kind of item we are sending to some country.
  This foreign availability concept takes these large categories 
totally outside the regulatory process that we are fearful might 
contain something that might turn out to be harmful to our national 
security. We ought to have a way for the appropriate representatives in 
our Government to judge these matters, item by item, and case by case, 
to make a determination. It may take a few days, a few weeks in some 
cases perhaps, to make this determination, but it is well worth it 
because the reason for export control laws is not primarily commerce; 
it is primarily national security.
  If you look at this bill, you will see that the purpose of the export 
control law is to prevent the proliferation of weapons of mass 
destruction and things that are detrimental to our national security or 
things that potentially are. But, anyway, I am in the minority on that.
  The administration supports this concept of foreign availability. The 
majority leadership supports this concept. So that being the case, we 
have attempted to enter into discussions whereby, hopefully, we could 
convince our colleagues on the other side of this issue that there is 
some validity to our concern and, hopefully, the idea being that they 
would make some accommodation to us on this concept.
  I am happy to say that we have been able to reach some accommodation 
on this issue that addresses some of our concerns.
  This amendment that I have just offered makes an important change to 
the definition of ``foreign availability.'' Under S. 149, items could 
be decontrolled and bypass any kind of review so long as similar items 
that were available from foreign countries were not substantially 
inferior to U.S. items. In other words, foreign availability would kick 
in and the decontrol would kick in under the bill as long as countries 
could get things that were not substantially inferior.
  Our belief is that we ought to make sure, before we decontrol our 
items, they can really get items that are comparable to what we have. 
If they can get items that are inferior to what we have, then we should 
still maintain controls because we have something they cannot otherwise 
get. And they are sensitive matters or they would not have been on the 
control list. So we ought to be careful about that.
  So this amendment changes that standard of ``not substantially 
inferior'' to ensure that the items are of ``comparable quality'' to 
U.S. items. It is a small but significant change that ensures that we 
will not decontrol superior American technology just because inferior 
items are available overseas.
  So I think this strengthens this provision in an important way. It 
certainly does not address all of our concerns, but it does strengthen 
this provision in an important way to make sure if we are going to 
enter into this, what I consider to be a very large decontrol process, 
in a very dangerous time, to very dangerous countries, that we ought to 
at least make sure that if we are claiming they can get these items 
anyway, it is really the same kind of items we have, the same quality 
we have. I think this amendment would go a long way toward ensuring 
that.
  I thank my colleagues on the other side of this issue for entering 
into real discussions with us on it. Hopefully, we have come to an 
agreement on this issue.
  I yield the floor.
  Mr. SARBANES. Madam President, I thank the Senator from Tennessee for 
his contribution throughout this debate. As he said, we have listened 
and considered carefully. I am perfectly prepared to accept this 
amendment. And I think introducing this quality concept about which he 
spoke yesterday is an important improvement and addition to this bill. 
I am happy to be supportive of it.
  Mr. ENZI. I, too, thank the Senator from Tennessee for his 
cooperation and diligence in the months of working on this bill with 
us, and with the 59 other changes in the bill as well, and for his 
willingness to work with us on this change. We are happy to accept it.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  Mr. SARBANES. I urge adoption of the amendment.
  The PRESIDING OFFICER. If not the question is on agreeing to 
amendment No. 1527.
  The amendment (No. 1527) was agreed to.
  Mr. SARBANES. 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. Madam President, I suggest the absence of a quorum.
  Mr. THOMPSON addressed the Chair.
  Mr. SARBANES. I withhold the request.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Madam President, I suggest that while we are waiting on 
another Senator, who I believe has one more amendment to consider, we 
discuss the matters of deemed exports and commodity classification. We 
have had some discussions about those subjects also. If I may, I will 
simply relate what my understanding is with regard to those issues.
  First of all, on the deemed export issue, we have had concerns on 
this side that the legislation did not adequately address the problem 
of deemed exports. As most who follow this issue know, a deemed export 
comes about when, in a typical situation, sensitive information is 
passed to a foreign national who perhaps is working at one of our 
National Laboratories or working in one of our businesses on sensitive 
information, who may or may not have a government contract, the idea 
being that with regard to the physical exporting of an item, that 
information should then be controlled when giving it to a foreign 
national. That should be reported. We should go through a reasonable 
process to make sure no damage is being done.
  We learned from hearings with regard to our National Laboratories, 
for example, that we were woefully behind as a government from even 
private industry; that we were not paying attention in our National 
Laboratories to the deemed export requirements. There were hardly any 
deemed export notifications or licenses issued by our laboratories. Our 
laboratories contain

[[Page 16527]]

probably the most sensitive matters that we have in this Nation, 
including the maintenance of our nuclear stockpile, our Stockpile 
Stewardship Program, including information concerning our most 
sensitive weapons.
  We believed we should deal with the deemed export issue. The 
administration has said it would like to address this complex issue--
and it is complex--through regulation rather than include it in the 
legislation. We have agreed that a letter will be sent to the 
administration from both supporters and opponents of this bill asking 
the administration to review existing regulations and address this 
issue.
  Continued control of deemed exports is an essential component of our 
export control process. Right now there is substantial noncompliance, 
as I said. This letter is designed to urge the administration to 
develop new regulations that ensure understanding of and compliance 
with the responsibility to control deemed exports.
  I understand there are some in the business community who do not like 
the concept of deemed exports at all. My understanding and intention, 
as far as this letter is concerned, is not to give the administration 
the option of continuing a deemed export policy or not; it is to 
tighten up the policy and make sure it is updated and clear in terms of 
what responsibilities are under that policy.
  It is a reasonable request that they be given the opportunity to 
address it. It is a very complex issue. We don't want to create onerous 
requirements. These foreign students and scientists who come to America 
make valuable contributions in many different ways. But we simply have 
to exercise common sense and protect ourselves and go through an 
appropriate process when it comes to deemed exports.
  I am happy. I believe we have reached some agreement that we write 
the administration and express generally those thoughts.
  Could I get an amen on that?
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Madam President, again, I appreciate the care, concern, and 
detail in which the Senator from Tennessee and the Senator from 
Arizona, and others who have participated on this, have expressed their 
concerns about the deemed export controls. We do recognize that the 
problem is not primarily in the private sector; that it is primarily in 
the government and educational and health institutions. The private 
sector has some proprietary rights they try to preserve, but it would 
be a problem there, too, and we wanted it addressed in all those 
sectors.
  Mr. THOMPSON. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Arizona.


                           Amendment No. 1529

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

       The Senator from Arizona [Mr. Kyl] proposes an amendment 
     numbered 1529.

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

       On page 296, strike line 1 through line 7 and insert the 
     following:
       ``(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, any substantially identical or 
     directly competitive item or class of items, any item that 
     the Secretary determines to be of equal or greater 
     sensitivity than the controlled item, or any controlled item 
     for which a determination has not been made pursuant to 
     section 211 to all end-users in that country until such post-
     shipment verification is allowed.''

  Mr. KYL. Madam President, let me explain what this amendment does and 
indicate to my colleagues that I believe I have the concurrence of the 
chairman of the committee and the ranking member of the subcommittee 
and have met this morning with the ranking member of the Banking 
Committee who worked out the language with us. In fact, much of this is 
his language.
  This is the amendment I spoke to yesterday regarding the post-
shipment verification that sometimes has to occur when we say, in the 
granting of an export, we will grant the license to send the item 
overseas but for a peaceful purpose, for a commercial purpose, or 
research, or university, a business purpose; we don't want you to take 
this item and put it in your defense facility or a nuclear weapons 
facility, something of that kind. We are going to verify, after we ship 
it, that it went to the right place.
  Remember these are dual-use items. They have two different uses. They 
may be very useful in a private way, business way. They may also be 
useful in a military way. Let me give an example.
  Not too long ago, some folks in Germany developed a very important 
medical device called the lithotriptor which, with a high-energy beam, 
literally zaps kidney stones so they break up into a million little 
pieces and surgery is not necessary to remove them. It is a very 
important medical treatment now for people. It is nonintrusive, no 
surgery, and has a great success rate.
  These are very sophisticated pieces of equipment. They have some 
special switching components in them. It turns out that Iraq has found 
that those switches are useful in their nuclear weapons program. This 
is a good example of a dual-use item. It was not invented for defense 
purposes. It has an item in it that can be used for weapons. We know 
that. We don't want that item to be used for that purpose.
  Saddam Hussein has ordered 50 of these. I don't think there is a need 
for 50 lithotriptors in Iraq, frankly. We want to be careful about the 
export of items that are available on the market. Any hospital can buy 
a lithotriptor if they have enough money. They are available. By now I 
am sure there are more companies than just the one German company that 
make them. These are items that can be acquired. They have dual-use 
capabilities.
  In the granting of an export license on this kind of product, you 
have to be careful that it is not used for military purposes.
  It may be that the example I used isn't technically correct in the 
way the bill would work, but I think I make my point.
  The bill has a provision in it which says that if a company to which 
you sell, let's say a company in China, uses this product improperly, 
or they don't let you inspect to see where they have used it to verify 
that the shipment went to where it was supposed to go, then the 
Secretary shall cut that company off from further exports; they can't 
buy anything else from the United States.
  But since countries such as China have established a rather gray 
relationship between the Government and businesses, there also needs to 
be a way of making the same point with the Government of China or any 
other government.
  I am not trying to pick on China. There happen to be some very 
egregious examples of the Government of China right now not living up 
to agreements or post-shipment verification. We need to have some kind 
of enforcement mechanism in a country such as China as well. I proposed 
that we have the same kind of provision and say if the Chinese 
Government won't permit a post-shipment verification, then the 
Secretary shall stop such exports until they begin to comply. Well, 
supporters of the bill said, ``That is too drastic; why don't you say 
`may' so that the Secretary has total discretion?'' I was willing to do 
that. That would have been the simplest way to solve the problem.
  That is something I would like to offer in the spirit of cooperation 
with my friend Phil Gramm, who said, ``Let's try to work a few of these 
things out; since we know the bill will pass, you can make it 
marginally better.'' So we sat down with him. Frankly, the language we 
are offering is not what I would have personally offered, but it is 
acceptable to him and it marginally

[[Page 16528]]

makes the bill better. I will read it and offer it. It is simple. It 
says: 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, any substantially identical or 
directly competitive item or class of items, any item that the 
Secretary determines to be of equal or greater sensitivity than the 
controlled item, or any controlled item for which a determination has 
not been made pursuant to section 211 to all end users in that country 
until such post-shipment verification is allowed.
  That latter reference to section 211 has to do with the item subject 
to foreign availability. It would have been simpler to say the 
Secretary may deny a license for any item on the list until post-
shipment verification is allowed by the country in question. Total 
discretion of the Secretary would have been easier. We have created 
jobs for lawyers now. I am not necessarily against that, but when we 
have terms such as this in the statute, we are going to have litigation 
on what it means. It would have been easier to do it the other way. But 
this is the language I will offer. The Secretary, at least with respect 
to some items on the control list, can say to a country such as China, 
for example: Until you are willing to allow post-shipment verification 
of items A and B, which you already have, then we are not going to 
grant a license on items X, Y, and Z. They can pick what those items 
are if they so choose.
  In closing, I will give examples of what would happen to illustrate 
the need for this particular provision. In 1998, very recently, China 
agreed to allow post-shipment verification for all exports. They signed 
an agreement. But the Cox Commission issued its report and deemed the 
terms of the agreement wholly inadequate, from the U.S. point of view, 
to ensure that these verifications really occur.
  The amendment I proposed is designed to try to fill a void the Cox 
Commission identified in the U.S.-China agreement. For example, the 
Commission's report discusses a number of weaknesses in the agreement 
as it relates to the export of high-performance computers. According to 
the Bureau of Export Administration, out of 857 high performance 
computers that have been shipped to China, only 132 post-shipment 
verifications have been performed. Some of these have been outstanding 
for a long time. First you get foot-dragging, and then you get a 
``no.'' On other occasions they say: If you allow us to do the post-
shipment verification, that ought to suffice. But, of course, it does 
not. These items would not necessarily be subject to the terms of this 
section, although they might. I think it illustrates the nature of the 
problem that exists if you don't have an enforcement mechanism. You 
have to have the will to enforce.
  I think there will be great questions as to whether or not the 
Secretary, in the exercise of his discretion, is going to be willing to 
deny a license to an American company which, after all, hasn't done 
anything wrong and is simply trying to make a buck, in order to get 
China to enforce the limitation. Let me respond to that point.
  Any American company which understands that the item it is wanting to 
export to a third-tier country, countries of concern here, has dual-use 
capability has to exercise some responsibility. I think it has to take 
some of the consequences of the person to whom it is exporting not 
being willing to guarantee that the item is going to be used for 
appropriate purposes.
  So I don't think you can make the case that all we are doing here is 
potentially punishing American businesses that are totally innocent and 
therefore we should not really be very forward-leaning in the 
enforcement of this section.
  The fact is that any American business worth its salt should want to 
ensure that the terms of the export license are being complied with. It 
doesn't want to sell dual-use technology to a country that could use it 
against us militarily. It ought to be willing to ensure that the 
verification of the end user has in fact been established and enforced.
  So it seems to me there is no argument that all we are doing here is 
hurting American businesses. Any American business would have the same 
interest as the U.S. Government in ensuring that the end user is in 
fact who it is supposed to be, both from a national security standpoint 
and being able to make future exports.
  There has even been an idea advanced, that I think has some merit, 
which would put all of the burden on American business. It would 
basically privatize this enforcement and say the Government is going to 
get out of this business; it cost a lot of money, and we have trouble 
getting in the door to verify these things. Private industry, in 
effect, has to certify that the item it sold abroad went to the user 
that filled out on the form the certificate. And if the company isn't 
willing to verify that, or isn't able to certify it under penalty of 
some financial detriment here in the United States, then it is going to 
become much more careful about to whom those items are sold and how the 
post-shipment verification is actually implemented.
  So my suggestion to American businesses is, if you really want to 
continue to be able to export, then help us work out a system that 
ensures that these items you are exporting, which have a dangerous 
potential use, get to the proper people and are not misused. If you are 
not willing to help us do this and if you are going to argue against 
enforcement of a section such as this, then something worse could 
happen. You could have the enforcement responsibility put on your 
shoulders. And if you are not able to certify that it went to the right 
place, you are not going to be able to make exports in the future. 
Everybody should have an interest in making this work.
  Let me close with a note about some testimony that verified the need 
for this. David Tarbell, Deputy Under Secretary of Defense for 
Technology Security Policy, testified in July at a hearing before the 
House International Relations Committee regarding the right to perform 
post-shipment verifications. He very diplomatically said:

       The Chinese government has been unwilling to establish a 
     verification regime and end-use monitoring regime that would 
     get all of the security interests that we are interested in 
     to ensure that items that are shipped are not diverted.

  Impressed further by Chairman Hyde about whether the post-shipment 
verification regime is a failure, Secretary Tarbell delicately said:

       I am not sure I would characterize it as a complete 
     failure, but it is close to it. It is not something I have a 
     great deal of confidence in.

  The point here is to create something that we do have confidence in, 
that we know would work, that we can enforce and ensure the safety and 
security of the United States in the future, knowing we have not 
allowed the wrong people to get the wrong things into their hands in a 
way that comes back against the United States in a military way.
  Therefore, I urge my colleagues to support the amendment I have 
offered and which has the concurrence of Senators Gramm and Enzi and, I 
believe, the Senator from Maryland, Mr. Sarbanes.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Again, we appreciate the participation in the 59 changes 
before and now this change. It shows the level of detail in which 
Senator Thompson and Senator Kyl have approached this bill. We 
appreciate this change. We are willing to accept it.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  The question is on agreeing to the amendment.
  The amendment (No. 1529) was agreed to.
  Mr. SARBANES. Madam President, I move to reconsider the vote.
  Mr. GRAMM. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. THOMPSON. Madam President, I ask the Senator from Maryland if we 
may make a brief statement as to our understanding on the second letter 
we have discussed. That will complete our business, I believe.

[[Page 16529]]


  Mr. SARBANES. Certainly.
  Mr. THOMPSON. Madam President, this has to do with commodity 
classification. We have had some concern that when people in the 
business of exporting items come into the Department of Commerce and 
they get a different classification for a commodity--in other words, 
something might be subject to license and they believe it should not be 
subject to license anymore--they can come in and get that 
consideration. That is appropriate. That needs to be done, but it needs 
to be done in a manner which protects the Government and the country's 
interest from a national security standpoint.
  The executive branch has traditionally dealt with this issue through 
interagency agreements. We think they need to be updated. The existing 
agreement is 5 years old and needs to be updated to create an increased 
role for the Departments of Defense and State.
  Both the opponents and supporters of this legislation will send a 
letter to the administration requesting the issuance of a new Executive 
order on commodity classification to ensure the participation of the 
National Security Agency. We believe that with regard to many of these 
issues, as the administration is trying to staff up and with our 
discussions with them and among each other, we have realized just how 
outdated the existing agreement is. We are going to send a letter to 
them to bring this to their attention further, and suggest they issue 
an Executive order.
  We assume this will be done in an appropriate manner, and we will not 
have to take additional action. That option, of course, is always 
there. Pending that, we think this is an appropriate way to proceed.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Madam President, I thank the Senator from Tennessee again 
for his emphasis. It is important that there be updates on the 
different procedures, particularly the ones that are done through memos 
of understanding between the agencies.
  We appreciate the willingness of the Senator from Tennessee to allow 
that to continue to be done that way so there is more flexibility to 
react to current crises under that kind of ability. We have prepared a 
letter to that effect, and we will be sending it.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Madam President, one final note. We have had some 
discussion in this Chamber concerning the possibility of an amendment 
that would create a so-called blue ribbon commission to address 
additional concerns as to how our export policies might be affecting 
national security. I believe it is fair to say, not having heard from 
my other colleagues on this issue, that we have not been able to reach 
agreement with regard to that.
  Without a doubt, we will continue to work together among ourselves to 
try to agree on the composition of such a commission. I think we all 
agree the concept is a good idea, and that we ought to take a long 
impassioned look at what we are doing. We will continue to work on 
that, but for right now I believe we can take that off the table.
  That concludes our comments on the bill in terms of these amendments.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Madam President, I thank the distinguished Senator from 
Tennessee for his very positive and constructive contributions 
throughout.


                           Amendment No. 1530

  Mr. SARBANES. Madam President, I send a managers' amendment to the 
desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The senior assistant bill clerk read as follows:

       The Senator from Maryland [Mr. Sarbanes], for himself, Mr. 
     Gramm, Mr. Enzi, and Mr. Johnson, proposes an amendment 
     numbered 1530.

  Mr. SARBANES. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 193, line 10, strike ``party'' and insert 
     ``person''.
       On page 193, line 16, strike ``party'' and insert 
     ``person''.
       On page 205, line 7, after ``competition'' insert ``, 
     including imports of manufactured goods''.
       On page 222, line 6, strike ``Crime'' and insert ``In order 
     to promote respect for fundamental human rights, crime''.
       On page 223, line 3, strike ``The'' and insert ``Except as 
     herein provided, the''.
       On page 223, line 9, after the period, insert the 
     following: ``The provisions of subsection (a) shall apply 
     with respect to exports of any of the items identified in 
     subsection (c).''.
       On page 223, between lines 9 and 10, insert the following:
       (c) Report.--Notwithstanding the provisions of section 602 
     or any other confidentiality requirements, the Secretary 
     shall include in the annual report submitted to Congress 
     pursuant to section 701 a report describing the aggregate 
     number of licenses approved during the preceding calendar 
     year for the export of any items listed in the following 
     paragraphs identified by country and control list number:
       (1) Serrated thumbcuffs, leg irons, thumbscrews, and 
     electro-shock stun belts.
       (2) Leg cuffs, thumbcuffs, shackle boards, restraint 
     chairs, straitjackets, and plastic handcuffs.
       (3) Stun guns, shock batons, electric cattle prods, 
     immobilization guns and projectiles, other than equipment 
     used exclusively to treat or tranquilize animals and arms 
     designed solely for signal, flare, or saluting use.
       (4) Technology exclusively for the development or 
     production of electro-shock devices.
       (5) Pepper gas weapons and saps.
       (6) Any other item or technology the Secretary determines 
     is a specially designed instrument of torture or is 
     especially susceptible to abuse as an instrument of torture.
       On page 226, line 8, insert ``and'' after ``title;''.
       On page 226, strike lines 9 through 22 and insert the 
     following:
       (ii) upon receipt of completed application--

       (I) ensure that the classification stated on the 
     application for the export items is correct;
       (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 any other departments and agencies 
     the Secretary considers appropriate; or
       (III) return the application if a license is not required.

       On page 296, line 13, strike ``parties'' and insert 
     ``persons.''
       On page 296, line 11, after ``necessary'' insert ``, to be 
     available until expended,''.
       On page 296, line 20, after ``necessary'' insert ``, to be 
     available until expended,''.
       On page 297, line 20, after ``$5,000,000'' insert ``, to be 
     available until expended,''.
       On page 298, line 12, after ``necessary'' insert ``, to be 
     available until expended,''.
       On page 300, line 12, after ``$2,000,000'' insert ``, to be 
     available until expended,''.
       On page 300, line 14, after ``$2,000,000'' insert ``, to be 
     available until expended,''.
       On page 311, strike lines 2 through 4 and insert the 
     following:
     ``other export authorization (or recordkeeping or reporting 
     requirement), enforcement activity, or other operations under 
     the Export Administration Act of 1979, under this Act, or 
     under the Export''
       On page 311, line 14, insert ``by an employee or officer of 
     the Department of Commerce'' after ``investigation''.
       On page 315, strike lines 6 through 10 and insert the 
     following: (1), except that no civil penalty may be imposed 
     on an officer or employee of the United States, or any 
     department or agency thereof, without the concurrence of the 
     department or agency employing such officer or employee. 
     Sections 503 (e), (g), (h), and (i) and 507 (a), (b), and (c) 
     shall apply to actions to impose civil penalties under this 
     paragraph. At the request of the Secretary, a department or 
     agency employing an officer or employee found to have 
     violated paragraph (1) shall deny that officer or employee 
     access to information exempt from disclosure under this 
     section. Any officer or employee who commits a violation of 
     paragraph (1) may also be removed from office or employment 
     by the employing agency.
       On page 315, line 11, insert the following:

     SEC. 603. AGRICULTURAL COMMODITIES, MEDICINE, MEDICAL 
                   DEVICES.

       (a) Applicability of Trade Sanctions Reform and Export 
     Enhancement Act of 2000.--Nothing in this Act authorizes the 
     exercise of authority contrary to the provisions of the Trade 
     Sanctions Reform and Export Enhancement Act of 2000 (Public 
     Law 106-387; 114 Stat. 1549, 549A-45) applicable to exports 
     of agricultural commodities, medicine, or medical devices.
       (b) Title II Limitation.--Title II does not authorize 
     export controls on food.
       (c) Title III Limitation.--Except as set forth in section 
     906 of the Trade Sanctions Reform and Export Enhancement Act 
     of 2000, title III does not authorize export controls on 
     agricultural commodities, medicine, or medical devices unless 
     the procedures set forth in section 903 of such Act are 
     complied with.

[[Page 16530]]

       (d) Definition.--In this section, the term ``food'' has the 
     same meaning as that term has under section 201(f) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(f)).
       On page 318, on line 2, strike ``and''.
       On page 318, on line 3, insert after ``(15)'' the 
     following: ``a description of the assessment made pursuant to 
     section 214, including any recommendations to ensure that the 
     defense industrial base (including manufacturing) is 
     sufficient to protect national security; and'' and 
     redesignate paragraph 15 accordingly.
       On page 324, strike lines 1 through 4 and redesignate 
     paragraphs (14) and (15) accordingly.
       Beginning on page 324, line 21, strike all through page 
     325, line 5, and insert the following:
       (j) Civil Aircraft Equipment.--Notwithstanding any other 
     provision of law, any product that is standard equipment, 
     certified by the Federal Aviation Administration, in civil 
     aircraft, and is an integral part of such aircraft, shall be 
     subject to export control only under this Act. Any such 
     product shall not be subject to controls under section 
     38(b)(2) of the Arms Export Control Act (22 U.S.C. 2778(b)).
       On page 325, between lines 5 and 6, insert the following:
       (k) Civil Aircraft Safety.--Notwithstanding any other 
     provision of law, the Secretary may authorize, on a case-by-
     case basis, exports and reexports of civil aircraft equipment 
     and technology that are necessary for compliance with flight 
     safety requirements for commercial passenger aircraft. Flight 
     safety requirements are defined as airworthiness directives 
     issued by the Federal Aviation Administration (FAA) or 
     equipment manufacturers' maintenance instructions or 
     bulletins approved or accepted by the FAA for the continued 
     airworthiness of the manufacturers' products.
       On page 325, line 6, strike ``(k)'' and insert ``(l)''.

  Mr. SARBANES. Madam President, the managers' amendment consists of 
provisions intended to clarify, correct, and improve the bill.
  Section 211: This provision amends the term ``interested party'' in 
Section 211 (foreign availability and mass market status) to ensure its 
consistency with terms used in the rest of the bill. Sections 205, 302, 
and 307 all refer to ``interested person(s)''. The managers' amendment 
corrects the references in Section 211 by replacing ``interested 
party'' with ``interested person''.
  Sections 214 and 701: This provision clarifies the duties of the 
Office of Technology Evaluation. Section 214 of the bill establishes an 
Office of Technology Evaluation to analyze information and provide 
assessments for use in export control policy. The managers' amendment 
clarifies that when assessing the effect of foreign competition on 
critical US industrial sectors, the Office is to consider imports of 
manufactured goods. It also modifies Section 701 (annual report) to 
ensure that the Commerce Department's annual report to Congress 
includes a description of such assessments. The managers worked closely 
with Senator Hollings to include this provision.
  Section 311: The next provision modifies Section 311 (crime control 
instruments). Section 311 preserves authority contained in existing law 
(Section 6(n) of the Export Administration Act of 1979) to ensure that 
crime control and detection instruments and equipment may be exported 
only subject to an export license. The managers' amendment further 
provides that any item or technology that the Secretary of Commerce 
determines is a specially designed instrument of torture or is 
especially susceptible to abuse as an instrument of torture can be 
exported only pursuant to an individual export license. In addition, 
the Annual Report of the Bureau of Export Administration must describe 
the aggregate number of licenses approved during the preceding calendar 
year for the export of any such items by country and control list 
number. This provision was included in the Managers Amendment at the 
request of Senators Leahy and Biden.
  Section 401: The next provision makes a technical correction to 
Section 401 (export license procedures). Section 401 requires Commerce 
to take four actions--hold incomplete applications, refer applications 
to other agencies, confirm commodity classification, and return 
application--at the beginning of the license review process. As 
drafted, however, some of these actions are mutually incompatible (for 
example, Commerce cannot hold an incomplete application while 
simultaneously referring the application to another agency). The 
managers' amendment revises the language to correct this inadvertent 
incompatibility.
  Section 506: This provision amends the term ``interested parties'' in 
Section 506 (enforcement) to ensure its consistency with terms used in 
the rest of the bill. Sections 205, 302, and 307 all refer to 
``interested person(s)''. The managers' amendment corrects the 
references in Section 506 by replacing ``interested parties'' with 
``interested person''.
  Section 506: The next provision makes technical amendments to Section 
506. Sections 506(h), (i), (l), and (o) all contain funding 
authorizations for personnel or activities of the Bureau of Export 
Administration. The managers' amendment clarifies that the funding is 
to remain available until expended.
  Section 602: This provision clarifies a provision in Section 602 
(confidentiality of information). Section 602 outlines the treatment of 
confidential information obtained after 1980. The managers' amendment 
clarifies that the provision applies to not only to information 
obtained through license applications, but to information obtained 
through enforcement activity or other EAA operations.
  Section 602: This provision further clarifies Section 602 
(confidentiality of information). Section 602 provides that information 
obtained through licenses, classification requests, investigations, 
treaty, or the foreign availability/mass-market process shall be kept 
confidential unless its release is in the national interest. It goes on 
to provide penalties against those who violate this prohibition. The 
managers' amendment makes three changes: it (1) clarifies the 
investigations referred to are those carried out by Department of 
Commerce officials; (2) ensures that penalties on violators are imposed 
with the agreement of the violators' employing agency; and (3) allows 
violators to be denied further access to confidential information and 
to be removed from office.
  Section 603: The next provision adds a technical provision relating 
to the Trade Sanctions Reform and Export Enhancement Act of 2000 
(TSRA). TSRA established restrictions on sanctions dealing with 
agricultural commodities, medicine, and medical devices. The managers' 
amendment adds a new Section 603 that is intended to hold TSRA harmless 
by (1) ensuring that no authority in this Act may be exercised contrary 
to TSRA; (2) clarifying the limitations on national security controls; 
and (3) clarifying the application of TSRA procedures to foreign policy 
controls. Senators Roberts and Dayton were instrumental in crafting 
this language, and worked with bill managers to perfect the text.
  Section 702: This provision corrects a technical reference in Section 
702 (technical and conforming amendments). As drafted, the reference 
would have affected the Forest Resources Conservation and Shortage 
Relief Act of 1990. The managers' amendment removes the reference and 
thus any inadvertent impact on the Forest Resources Act.
  Section 702: The next provision corrects a drafting error in Section 
702 (technical and conforming amendments). Section 702(j) preserves 
authority contained in existing law (Section 17(c) of the Export 
Administration Act of 1979) to ensure that standard civil aircraft 
products remain subject to the EAA. As drafted, Section 702(j) 
inadvertently departed from current law by breaking the original 
paragraph into subparagraphs. Because this structure could cause 
confusion in interpretation, the managers' amendment returns the text 
to its original structure.
  Section 702: This provision addresses a humanitarian issue. U.S. 
aircraft manufacturers cannot export critical aircraft safety parts to 
countries subject to U.S. embargo. Without those parts, the planes may 
crash, with terrible humanitarian implications. A presidential waiver 
to export such parts is available, but is rarely invoked and takes 
years. The managers' amendment provides that exports of civil aircraft 
equipment to comply with flight safety requirements for commercial 
passenger aircraft may be authorized on a case-by-case basis. Senators 
Dodd,

[[Page 16531]]

Bond, Murray, and Roberts expressed particular interest in addressing 
this problem.
  Mr. ENZI. Madam President, the managers' amendment to S. 149 adds a 
new provision to address a pressing humanitarian issue: flight safety.
  U.S. aircraft manufacturers have sold commercial passenger aircraft 
internationally since the 1950s. Moreover, some European-made 
commercial aircraft are made with U.S. components. As a result, U.S. 
aircraft are used widely around the world.
  The safe operation of these aircraft depends on the replacement of 
worn parts, repair of unsafe components, and receipt of technical 
bulletins and airworthiness directives. These parts, services, and 
information are highly specialized, and often are available only from 
the original manufacturer.
  Over the years, several nations that operate U.S.-made aircraft, or 
European-made aircraft that incorporate U.S. parts, have become subject 
to U.S. embargo. As a result, U.S.-made aircraft items cannot be 
exported to those countries. This poses a significant threat to the 
safe operation of those airplanes. Without replacement parts, repair, 
and technical information, the planes literally may fall out of the 
sky, with terrible humanitarian implications for passengers and those 
on the ground. We all remember with horror the terrible 1992 crash, 
resulting from a failed part, of an El-Al plane into an Amsterdam 
apartment complex. All 4 crew and an estimated 70 Amsterdam residents 
were killed. The risks are real for U.S. citizens traveling to 
embargoed countries, or making up part of United Nations delegations. 
Citizens of U.S. allies are at risk. And not least of all, innocent 
citizens of embargoed countries are particularly vulnerable.
  Under current law, the administration has some flexibility to allow 
flight safety exports to nations such as Sudan and Syria. However, 
exports to Iran or Iraq require a presidential waiver--a process that 
takes years and is rarely invoked. The difficulty of obtaining such a 
waiver has meant that U.S. manufacturers cannot provide critical flight 
safety parts or information to those nations.
  The managers' amendment addresses this humanitarian issue while 
retaining the integrity of the embargo. It provides that aircraft 
equipment exports to comply with safety requirements for commercial 
passenger aircraft may be authorized on a case-by-case basis. It is 
tightly circumscribed: it applies only to parts for civil aircraft used 
for commercial passengers, and it requires a case-by-case analysis.
  Senators Dodd, Bond, Murray, and Roberts are keenly interested in 
this provision and should be commended for addressing this critical 
humanitarian problem.
  Mr. SARBANES. Madam President, this managers' amendment has been 
carefully worked over. I do not think there is any matter of 
controversy in it. I am prepared to go to adoption of the managers' 
amendment.
  The PRESIDING OFFICER. Is there further debate? If not, the question 
is on agreeing to amendment No. 1530.
  The amendment (No. 1530) was agreed to.
  Mr. SARBANES. I move to reconsider the vote.
  Mr. GRAMM. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. SARBANES. Madam President, we are prepared to go to third reading 
of the bill, and then there are going to be some comments. If we can go 
to third reading of the bill.
  Mr. THOMPSON. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GRAMM. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAMM. Madam President, I simply want to make a closing statement 
on this important bill. I begin by thanking the chairman of the 
committee, Senator Sarbanes, for his leadership, and Senator Johnson 
for the work, they have done on the bill. I especially want to thank 
Senator Enzi for his indispensable leadership on this bill; it is no 
understatement to say that we would not be here today were it not for 
Senator Enzi's leadership on this bill for the past two years.
  I have had the privilege of serving in the Senate now going into my 
18th year, and I have never seen a Senator do the things Senator Enzi 
has done on this bill--in terms of being willing to meet the various 
agencies involved in export administration, sitting for endless hours 
and watching how the process works, and doing something we seldom do in 
this line of work: learn how the process works practically. We are 
often not willing to spend the time or get our hands dirty. The quality 
of the bill before us is due in very large part to Senator Enzi, and I 
want to publicly and personally thank him for his leadership. It sets a 
new standard for what a Senator ought to be in terms of hard work 
behind the scenes, getting the facts, understanding the mechanism. We 
like to deal with theory and leave the practical matters up to somebody 
else. That is not the way Senator Enzi does business.
  I thank our two colleagues, Senator Thompson and Senator Kyl. Maybe 
people listening to this debate wonder why I would thank them, given 
that we have some fundamental disagreements, but good law is made by 
basically trying to accommodate people who do not agree with you while 
maintaining your principles. I think, quite frankly, they have improved 
the bill.
  Counting the two changes that Senator Sarbanes, Senator Enzi and I 
agreed to this morning, we have made 61 changes in this bill in trying 
to build a consensus. I believe the product we have produced is a 
quality product, it will stand the test of time, and it will work.
  The points I want to make are: In listening to some of the critics, 
one may have gotten the idea that somehow this bill lessens our 
commitment to national security. We have an apparent conflict in 
America between our desire to produce and sell items that embody high 
technology, and we want to produce and sell them because the country 
that develops new technology creates new jobs and creates the best 
jobs.
  So, while we want to be the world leader in that technology, we have 
a conflicting goal in wanting to prevent would-be adversaries and 
dangerous people from getting technology that can be used to harm us or 
to harm our interests. That is what this bill is about.
  Today, 99.4 percent of the applications for a license are granted. 
When a process is saying ``yes'' 99.4 percent of the time, it is a 
nonsense process.
  We have about 10 times as many items on this controlled list as we 
should have. We need to build a higher fence around a smaller number of 
items, and when people knowingly violate the law and transfer this 
technology we ought to come down on them like a ton of bricks.
  Under this bill, the penalties can run into the tens of millions of 
dollars and people can end up going to prison for life. Those are 
pretty stiff sentences.
  We have put together an excellent bill. It represents a compromise 
between two competing national goals. It is legislation at its best. 
Many times we claim bipartisanship on bills when they really are not 
totally bipartisan. This bill is about as bipartisan as anything we 
have ever done on the Banking Committee since I have been in the 
Senate, and I think it represents good law.
  It is supported by the President. We have some 80 Members of the 
Senate who have voted basically to maintain the position. I am very 
proud of it, and I commend it to my colleagues. This is a good bill we 
can be proud of.
  I am ready to vote, and I yield the floor.
  The PRESIDING OFFICER (Mr. Corzine). The Senator from Nevada.
  Mr. REID. Mr. President, we are now in agreement on the unanimous 
consent request I will now propound.
  I ask unanimous consent that a vote on final passage of S. 149 occur 
at 4:00 p.m. today, with rule 12, paragraph 4 being waived; that no 
substitute

[[Page 16532]]

amendments be in order; that the committee substitute amendment be 
agreed to; the motion to reconsider be laid upon the table, and that 
the time until 4:00 be divided between the majority and minority for 
morning business, with the exception of 8 minutes prior to the 4:00 
p.m. vote, which would allow Senators Enzi, Gramm, Sarbanes, and 
Thompson each to have 2 minutes prior to the vote.
  The PRESIDING OFFICER. Is there objection?
  Mr. THOMPSON. Reserving the right to object.
  Mr. REID. If the Senator would withhold, our able staff indicated I 
misread this. It is right before my eyes, so if I could just repeat 
this.
  The vote will occur at 4:00 p.m. today, with rule 12, paragraph 4 
being waived; that no other amendments be in order; that the committee 
substitute amendment be agreed to; the motion to reconsider be laid 
upon the table; the time until 4:00 p.m. be divided between the 
majority and minority for morning business, with the final 8 minutes 
prior to 4:00 p.m. being allotted to Senators Enzi, Gramm, Sarbanes, 
and Thompson each allowed to speak 2 minutes prior to the vote on the 
bill.
  Mr. THOMPSON. Mr. President, reserving the right to object, I do 
believe it would be appropriate to divide the final few minutes equally 
between the proponents and the opponents.
  Mr. REID. That would be very fine. So what we say is 4 minutes for 
the opposition and 4 minutes for those propounding passage of the 
legislation be divided equally.
  Mr. THOMPSON. Further, I want to take a few minutes right now in 
morning business or as a part of this UC, either one.
  Mr. REID. I say to my friend that will be certainly appropriate. We 
will get this unanimous consent request agreed to and the Senator can 
have lots of time. Senator Torricelli wants 15 minutes, but we will be 
glad to wait until the Senator from Tennessee has completed his 
statement.
  Mr. THOMPSON. That is satisfactory to me.
  The PRESIDING OFFICER. Is there objection to the request as modified? 
Without objection, it is so ordered.
  The committee substitute, as amended, is agreed to and the motion to 
reconsider is laid upon the table.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  Mrs. FEINSTEIN. Mr. President, I rise today in support of the Export 
Administration Act of 2001 and urge its passage.
  Congress has not reauthorized the Export Administration Act on a 
permanent basis since 1990, and for close to a decade the export of 
dual-use goods--items with both civilian and possible military 
applications--have been governed in an ad hoc way by the President 
using Executive orders under the International Emergency Economic 
Powers Act and without a comprehensive regime in place to monitor 
exports.
  Such an approach creates obvious problems in trying to assure that 
the proper balance is struck between the need of U.S. businesses to be 
competitive in the international economy and the need to prevent 
sensitive technologies that have military applications from falling 
into the wrong hands.
  The Export Administration Act will allow the U.S. government to 
effectively focus attention and exert control over sensitive 
technologies that have military implications, improve the export 
control process, and enhance national security.
  The major provisions of the Export Administration Act of 2001 will:
  Give the President the power to establish and conduct export control 
policy, and direct the Secretary of Commerce to establish and maintain 
the Commerce Control List of items that could jeopardize U.S. national 
security and to oversee the licensing process for items on the Control 
list.
  Authorize the President to impose national security controls to 
restrict items that would contribute to the military potential of 
countries in a manner detrimental to U.S. national security, directing 
the Secretary of Commerce, with the concurrence of the national 
security agencies and departments, to identify items to be included on 
a National Security Control List. This strengthens the hand of the 
national security agencies in the export licensing process by giving 
them for the first time a formal procedure by which to be involved in 
this process.
  Provide specific control authority based on the end-use or end-user 
for any item that could contribute to the proliferation of weapons of 
mass destruction.
  Authorize the President to set aside ``foreign availability'' or 
``mass-market'' determinations in the interests of national security, 
and establish an Office of Technology Evaluation to gather, coordinate 
and analyze information necessary to make to these determinations.
  Establish procedures for the referral and processing of export 
license applications, and establish an interagency dispute resolution 
process to review all export license applications that are the subject 
of disagreement.
  Declare it U.S. policy to seek and participate in existing 
multilateral export control regimes that support U.S. national security 
interests, and to seek to negotiate and enter into additional 
multilateral agreements. Given the wide availability of some of these 
dual-use items, multilateral agreements are critical to assure that 
they do not fall into the wrong hands.
  Establish new criminal and civil penalties for knowing and willful 
violations of the export procedures.
  By streamlining and bringing transparency to the licensing process 
this legislation, then, strikes a good balance between assuring that 
the export licensing process is good for trade, the U.S. economy, and 
jobs, and national security concerns.
  This legislation is supported by the President and has been endorsed 
by the Secretary of Defense, by the Secretary of State, and by the 
President's National Security Adviser. It also has the support, I 
believe, of the majority of my colleagues.
  Mr. President, I urge the Senate to move forward with passage of the 
Export Administration Act.
  Mr. SPECTER. Mr. President, I think it is important to state my 
reasons for voting against S. 149, the Export Administration Act. I do 
so because I think there is too much deference to commercial interests 
at the expense of limiting exports which may threaten national 
security.
  I cast my vote late in the rollcall when there were 77 votes in favor 
of the bill, which eventually turned out to be an 85 to 14 vote, so 
that I knew the bill was going to pass by overwhelming numbers.
  Legislation on this subject is of great importance and is long 
overdue. I was tempted to vote in favor of the bill on the proposition 
that the best frequently is the enemy of the good. Had my vote been 
decisive so that it might have been a matter of having a bill which 
vastly improved the current situation, which is the absence of 
legislation, then I might have voted differently. I think the number of 
negative votes are important as a protest signal that this subject 
should be monitored closely and perhaps reviewed sooner rather than 
later.
  For example, my concerns about the elevation of commercial interests 
over potential national security risks are illustrated by the foreign 
availability and mass market status this Act provides controlled items. 
The foreign availability component of the act would make the U.S. 
Government unable to control the sale of items that are also 
manufactured by other countries. Such lack of control would allow U.S. 
firms to sell anthrax to Saddam Hussein because of anthrax's dual-use 
in vaccine production. Additionally, the mass-market status in this 
bill would enable export of controlled items without a license if the 
item were mass produced for different industrial uses. An example of 
this mass-market status would be glass and carbon fibers that can be 
used in the manufacture of both golf clubs and also ballistic missiles.
  These are only illustrations of problems which, I believe, should yet 
be corrected in conference or in later legislation.

[[Page 16533]]


  Mr. JOHNSON. I am very pleased that S. 149, the Export Administration 
Act of 2001, passed the U.S. Senate by such an overwhelming bipartisan 
vote of 85-14. This important law reforms our export controls of dual-
use items to reflect the vast geopolitical, technological and 
commercial changes that have occurred since the old law was enacted 
back in 1979. While we must remain ever-vigilant to protect our nation 
from security threats, we must at the same time recognize that our 
security depends in large measure on a vibrant economy, and in 
particular on our ability to continue innovating in the high technology 
sector. Ensuring that American producers have the ability to 
participate in the global marketplace is critical to this effort.
  The hard work that contributed to the overwhelming support for S. 149 
cannot be overstated, and I was especially gratified by the spirit of 
cooperation that dominated the discussion. This bill, and the quality 
of its provisions, owe a great deal to the thoughtful participation of 
a variety of players on both sides of the aisle. In some cases, too 
many cooks spoil the broth. In this case, however, a variety of players 
made very thoughtful improvements to the bill. I extend my thanks and 
gratitude to the core group of sponsors, which included Senator Mike 
Enzi, Republican of Wyoming, Chairman Paul Sarbanes from Maryland, 
Senator Phil Gramm from Texas, and also to so many others contributed 
to an improved final product.
  In particular, I would be remiss in not mentioning the important and 
dedicated efforts of Senator Mark Dayton, my Democratic colleague from 
Minnesota. Senator Dayton and his staff worked tirelessly to ensure 
that S. 149 protects the interests of the agricultural community 
relative to export controls. While there are many legitimate reasons to 
restrict the export of certain items abroad, especially where the 
export of such items could pose a threat to America's national 
security, there is to my mind absolutely no acceptable logic for 
imposing restrictions on the export of food.
  The export of food can never pose a national security threat to this 
Nation, and Senator Dayton, along with his Republican colleague from 
Kansas Senator Pat Roberts, put together an amendment that eliminated 
the possibility that this government ever restrict the export of food 
for a purported national security threat. I look forward to continuing 
to work with Senator Dayton on agricultural issues, and I know that the 
farm community is grateful to the Senator for his work in this area. I 
also wish to commend Senator Dayton's staff, in particular Jack 
Danielson, Sarah Dahlin and Lani Kawamura.
  Mr. KYL. Mr. President, a consensus emerged during the 1990s with 
regard to the national security of the United States. That consensus 
was and remains that the proliferation of weapons of mass destruction--
nuclear, chemical and biological--and their means of delivery 
constitute the most important threat to our national security. There is 
also widespread acknowledgment that a number of rogue nations, and 
particularly China, represent the new national security challenge for 
the United States.
  Yet, this body, the U.S. Senate, is about to pass with overwhelming 
support a major piece of legislation that stands in direct 
contradiction to the objectives of U.S. national security policy--to 
limit the spread of weapons of mass destruction and their means of 
delivery.
  This is not hyperbole; it is a simple statement of fact. I 
acknowledge that the administration has endorsed S. 149. A campaign 
pledge has been kept. But the long-term ramifications of the vote we 
are about to take should not be underestimated. S. 149 received the 
strong opposition of the former chairmen, now ranking members, of each 
committee and subcommittee with responsibility for national security. 
It can in no way be considered to represent a prudent balance between 
commerce and national security. It is, in fact, heavily weighted in 
favor of the former, with scant regard for the latter.
  The list of exports with which we have traditionally been concerned, 
the Commerce Control List, has 2,400 items on it. It is important to 
note that exports of these items are licensed, not prohibited. Contrary 
to the rhetoric of some, it also is not the shopping list of someone 
making a Sunday trip to Radio Shack. It is, rather, a compilation of 
esoteric items that have military applications, including for the 
construction of nuclear weapons and ballistic and cruise missiles. The 
amount of commerce at issue is minuscule relative both to the amount of 
U.S. exports and to the size of the gross domestic product. 
Restrictions or limitations on the export of items on the Commerce 
Control List do not now, nor have they ever had a deleterious effect on 
the U.S. economy, or on U.S. competitiveness. They do, however, 
represent the regulatory manifestation of our national security 
requirements and the role our moral values should play in the conduct 
of foreign and trade policies.
  Some of us who oppose this bill support permanent normal trade 
relations with China. And, yet, we oppose this bill. We oppose it 
because it will, by design, open the door to the export without 
government oversight of the very items and technologies that contribute 
to the threats to our security that justifies a defense budget of over 
$300 billion per year. When we debate national missile defense over the 
months ahead, we should not hesitate to reflect on the connection 
between what we do here today, and what those of us who support missile 
defenses hope to do tomorrow.
  Mr. BINGAMAN. Mr. President, I rise today in strong support of S. 
149, the Export Administration Act of 2001. From my perspective, 
consideration of this legislation is long overdue. Congress has 
extended the Export Administration Act on a temporary basis since 1984, 
and in doing so has completely ignored the extraordinary changes in 
technology that have occurred in that timeframe. Current export control 
policy, formulated during the Cold War several decades ago, no longer 
fits either the current global context or our specific national 
security needs. It is time to bring U.S. law into conformity with 
international reality.
  Over the past year I have been involved in two high-level advisory 
panels that have carefully examined the existing U.S. export control 
regime. The first was a study group focusing on Enhancing Multilateral 
Export Controls for U.S. National Security, and was sponsored by the 
Henry L. Stimson Center and the Center for Strategic for International 
Studies. The second consisted of two study groups, one on Technology 
and Security in the 21st Century and one Computer Exports and National 
Security, sponsored entirely by the Center for Strategic for 
International Studies. Each of these groups concluded that existing 
export control policy and procedures are outdated, unsound, 
ineffective, unrealistic, and counterproductive. Taken as a whole, they 
impede coordination between the U.S. government agencies responsible 
for export control policy, they hinder our efforts to cooperate with 
our most important allies, they ignore the new threats and 
opportunities in the international system, they expend significant 
human and financial resources insulating easily available technologies, 
they limit the ability of our best companies to innovate and compete 
and, in the final analysis, they harm our military and commercial 
national security interests.
  The studies I have mentioned offered a range of extremely important 
policy recommendations, but fundamental to them are three important 
overarching conclusions, all of which are relevant to the debate at 
hand.
  The first conclusion is that globalization has resulted in what the 
Defense Science Board has previously called a ``leveling'' of access to 
technology and the capacity of the United States to obtain and control 
technologies critical to its national interest. This concept suggests 
that access to commercial technology is now universal, and its use for 
both commercial and military ends is largely unconstrained. Enabling 
technologies necessary for modern warfare, examples

[[Page 16534]]

being semiconductors, computer hardware and software, simulation and 
surveillance devices, advanced telecommunications, and so on, are 
available to nearly any country that wishes to access them, ally and 
adversary alike. The result of these changes is an export control 
regime that is, to quote the Defense Science Board, ``for all practical 
purposes ineffective at manipulating global access to dual-use 
technology and . . . only marginally more successful in the 
conventional weapons arena.'' This is the context within which we 
debate export control reform today, and these are the changes that the 
proposed legislation is trying to address.
  The second overarching conclusion is that is that we need to put 
higher fences around much smaller, but more critical, sets of 
technologies. Because access to advanced technology and technical 
capabilities have spread so widely and because research and development 
is now global in nature, it is time that we focus our efforts at export 
control on limited technologies that directly affect our national 
security. In particular, we should concentrate on protecting and 
developing the software and databases that sustain and strengthen our 
military superiority. The primary objective in the current export 
control regime is to prevent potential adversaries from obtaining 
technological components that would allow them to develop weapons 
systems and manage warfare in a more effective fashion. Unfortunately, 
this objective is still considered rational, this in spite of the 
radical changes that have occurred in the international political 
economic environment. Commercial computers that can be obtained online 
or through retail outlets can now perform the vast majority of 
battlefield applications. As a result, a coherent and compelling 
argument can be made that we need to concentrate on controlling the 
technologies that will allow advanced components to be integrated into 
effective systems. This should be one of our primary considerations as 
we reconsider export control, and this is one of the goals the proposed 
legislation is trying to achieve.
  The final overarching conclusion is that it is time that we begin 
creating a new international framework that will allow more effective 
export control between the United States and its allies. Changes in 
advanced technology and the global environment has undercut or weakened 
existing agreements, and we must begin creating a foundation upon which 
new cooperative mechanisms can be established. In the recent past, much 
of this required change has been blocked by the United States, the 
primary reason being that its export control system was based on 
measures, computer MTOPS being the most salient example, that are no 
longer relevant in the current international environment and are not 
adhered to by our allies. Regulatory reform in the United States must 
occur before new international frameworks can be established, and this 
is one of the goals the proposed legislation is trying to address.
  There are those among my colleagues who would argue that even if the 
international system has changed to this extent, even if globalization 
has changed the international equation, the United States has a moral 
obligation to limit access to certain key technologies for a specific 
group of countries. The example used most frequently on the Senate 
floor is China, but certainly other countries could be inserted in its 
place.
  Let me state here that I would not disagree that certain countries 
should be singled out as potential threats to the United States and 
technology limited to the extent that it is feasible to do so. But the 
proposed legislation accomplishes this objective. The arguments on the 
Senate floor that the proposed legislation somehow diminishes our 
capacity to control sensitive and critical technologies is specious at 
best. On the contrary, many levels of restrictions remain in place to 
protect U.S. national security interests. What the proposed legislation 
does do is provide the U.S. government with the flexibility and focus 
to address concerns over advanced technology and adapt to changes in 
the current international environment.
  It is time that we change our anachronistic system of export control. 
This legislation reflects several years of hard work on the part of my 
colleagues, and I believe it represents a balanced and strategic 
approach to the problems at hand. The legislation was voted out of the 
Banking Committee by a 19-1 vote. As the statements on the floor will 
attest, the legislation has the bi-partisan support of most of the 
Members of the Senate. President Bush supports it, as does all the 
relevant officials in his Administration. President Clinton supported 
it, as did all the relevant officials in his Administration. It is 
supported by a broad range of organizations, many of which are led by 
key officials from previous Democratic and Republican Administrations.
  However, with that said, I find it disappointing that the legislation 
has not addressed the important issue of U.S. commercial satellites and 
space-related component exports. The Defense Authorization Act for FY 
1999 moved responsibility for export licensing of these items from the 
Department of Commerce to the Department of State. By doing so, 
communications satellite and space-related items were placed on the 
U.S. Munitions List, effecting a crippling blow to the U.S. aerospace 
industry. It makes timely deliveries to overseas customers and our 
allies nearly impossible, and excludes commercial satellite sales from 
competitive rate financing offered by the Export-Import Bank. While our 
U.S. companies may find themselves hard-pressed to find institutions to 
provide reasonable financing for foreign customers, their competitors 
may not. Last year, the Aerospace Industries Association claimed 
satellite exports had fallen over 40 percent in the period from late 
1999 to early 2000, and the forecast was for the trend to get 
continually worse. I certainly hope this issue is addressed in the 
upcoming conference.
  We have examined the issue of export control many times over. It is 
time to recognize the importance of export control reform to the 
national interest of the United States and pass this legislation.
  Mr. LEAHY. Mr. President, I want to express my support for S. 149, 
the Export Administration Act of 2001. I want to commend Senators 
Sarbanes, Gramm, Johnson, and Enzi for crafting a balanced, bipartisan 
bill that brings long-overdue clarity to the regulation of dual-use 
exports. This bill removes several unnecessary restrictions on exports 
that only hinder international trade, puts in place a system to track 
and license those technologies that have the potential to impact 
national security, and establishes realistic penalties and sanctions 
for violations of these regulations.
  I am pleased that the managers of the bill have accepted the 
amendment that Senator Biden and I proposed that will place controls on 
the export of items that are used to perpetrate acts of torture. The 
``torture trade'' is a critical problem that has received too little 
attention from policymakers, the public, and the press. Too often, 
companies have exported items, apparently designed for security or 
crime control purposes, that are actually used to torture people by 
some of the most inhumane methods imaginable. Amnesty International 
reports that, over the past decade, more than 80 U.S. companies have 
been involved in the manufacture, marketing, and export of these types 
of items, like thumbscrews and electro-shock stun belts, which have 
been used to commit human rights abuses around the world.
  The Leahy-Biden amendment is a modest step to improve the 
transparency, oversight, and accountability associated with the trade 
in these items. It builds on existing regulations and requires a 
license, subject to the approval of the Secretary of Commerce and the 
concurrence of the Secretary of State, before such items can be 
exported. It also contains an annual reporting requirement to disclose 
the aggregate number of licenses to export these items that were 
granted during the previous year.
  This amendment is designed to make sure that certain goods and 
technologies are not used to commit acts of

[[Page 16535]]

torture and other human rights abuses. While our amendment moves us in 
the right direction, I recognize that more can and should be done. 
Representatives Hyde and Lantos have included an amendment in their 
version of the bill which contains additional protections that could be 
very helpful in curtailing the torture trade. I strongly urge the 
conferees to take a serious look at the Hyde-Lantos amendment when 
determining the final outcome of the Export Administration Act.
  Finally, I believe that the Administration should work with other 
nations to develop strict standards of export controls for these items. 
I understand that the European Union is in the process of doing this, 
and our government should encourage and support that effort.
  Mr. FEINGOLD. Mr. President, I will oppose the pending legislation to 
reauthorize the Export Administration Act. I agree with the bill's 
proponents and with the Administration that we should have a statutory 
export control process. I am concerned, however, that the process 
provided for in this legislation is far too relaxed and could be 
harmful to our national security--the very security that the EAA is 
supposed to protect.
  I commend the Senator from Tennessee, Mr. Thompson, and the Senator 
from Arizona, Mr. Kyl, for their leadership on this important issue.
  It is troubling that the debate on this important piece of national 
security legislation has revolved around what is good for American 
business rather than on what is necessary to protect the national 
security interests of this country.
  As a number of our colleagues have said during this debate, the 
purpose of the EAA is not to promote U.S. exports. The purpose of the 
EAA is to protect the national security of the United States, which may 
mean barring certain types of sensitive technology from being exported. 
I fear that this bill tips the scale dangerously in favor of expanded 
commerce at the expense of our national security.
  I disagree with the argument put forth by some during this debate 
that the foreign availability and mass market provisions included in 
this bill are key to ensuring that American companies can compete in 
the foreign market. Just because other countries choose to make a dual-
use product available to international buyers does not mean the United 
States should as well. We should do everything we can to stem the flow 
of potentially dangerous dual-use technology around the world. We 
should not use the questionable export decisions of other countries to 
justify selling products that could be used to harm our country.
  There is nothing wrong with having a deliberative process for 
considering applications to export dual-use technologies. I disagree 
with the contention that so many in the affected industries have 
advanced--that the licensing process puts them at a disadvantage 
because they have to wait for the licensing process to be completed 
before they can export the technology. This is not a race. And the 
object of the EAA is not to unduly delay the approval of export 
licenses. We should consider carefully each license application. I fear 
that this bill, and in particular its provisions regarding mass market 
and foreign availability determinations and the export of high 
performance computers, will have the practical effect of rendering our 
export control process meaningless.
  Supporters of this bill argue that American businesses need the 
relaxed controls included in this bill in order to compete in the 
international marketplace. That is not the case. The vast majority of 
export license applications submitted to the Department of Commerce are 
approved. The purpose is to ensure that sensitive technology does not 
fall into the wrong hands.
  Other countries look to the United States for guidance on such issues 
as export controls and non-proliferation efforts. If we relax controls 
on dual-use items because other countries are selling them, we are 
following, not leading. Just last week, the United States imposed 
sanctions on a Chinese company that transferred missile technology to 
Pakistan. The administration reportedly has told the Chinese Government 
that one of the conditions to having these sanctions lifted is for the 
Chinese to develop a system of export controls to regulate the transfer 
of sensitive technology. It is curious that the Senate is debating 
relaxing U.S. control of dual-use technology--a move the administration 
supports--at the same time the administration is calling on the Chinese 
Government to implement export controls.
  I think we have to examine closely all sides of this issue, and again 
I want to thank Senator Kyl and Senator thompson for the outstanding 
work they have done to bring concerns about this legislation to the 
fore.
  The fact is that there is a great deal of pressure from the super 
computer industry to pass this legislation. I don't say that to impugn 
the motives of any Member who supports this bill, because we are having 
an honest debate here about different points of view. But I do think 
it's important for the American people to understand who some of the 
strong supporters of this legislation are, so I would like to take a 
moment to Call the Bankroll on this issue.
  The computer industry has a huge stake in the passage of EAA. They 
want a relaxation of the export controls on supercomputers, and they 
are lobbying hard for their cause. And, as is usually the case, 
lobbying means donating big money, and that means donating soft money 
to the party committees. In this case, the computer industry gave $20.5 
million in soft money during the 2000 election cycle. The industry 
ranked seventh in overall donations in the last cycle, a meteoric rise 
for an industry that ranked 55th in donations a decade earlier. This is 
clearly an industry that has learned how to play the soft money game, 
and play it well.
  I'll just name three soft money donors in the industry who are 
pushing for passage of EAA:
  Unisys Corporation and its executives gave more than $142,000 in soft 
money in the 2000 election cycle;
  Sun Microsystems gave more than $24,000 in soft money during the last 
cycle; and
  United Technologies and its subsidiaries gave a whopping $338,300 in 
soft money in the 2000 election cycle.
  As I said, this is in no way a comprehensive list, since the industry 
gave more than $20 million in soft money during the last cycle. But I 
point out these donations now because they are relevant to this 
debate--and relevant to the way many Americans view this debate, and so 
many others like it here on the Senate floor.
  When wealthy interests are allowed to give an unlimited amount of 
money to a political party, it makes the American people question us 
and the work we do. And I can think of few issues where the public 
might be more disturbed by the potential influence of soft money than 
an issue like this one, where national and international security are 
at stake. Whether or not soft money clouds our own judgment, it clouds 
the public's judgement of each and every one of us.
  I want to reiterate my opposition to this legislation. We can and 
should do more to protect the national security interests of the United 
States.
  I will vote against this bill, and I urge my colleagues to do the 
same.
  Mr. BIDEN. Mr. President, it has been 16 years since the United 
States Congress last enacted re-authorizing legislation governing our 
controls on the export of dual-use technology, those items suited for 
both civilian and military uses. For much of the past 7 years, the 
President has been forced to exercise emergency powers to maintain 
dual-use export controls following the expiration of the 1979 Export 
Administration Act. This temporary exercise of authority has limited 
the penalties the Federal Government can enforce on export control 
violators and has opened up existing export controls to a series of 
legal challenges.
  It is high time, therefore, that the Senate act on S. 149, a bill to 
re-authorize the Export Administration Act. I look forward to the 
passage of this bill and the creation of a modern system of export 
controls.
  We owe this to U.S. companies, which deserve a rational and 
predictable

[[Page 16536]]

framework of export controls. We owe this to our friends and allies, 
who look to the U.S. export control system as a model in devising their 
own systems. And, most importantly, we owe this to our national 
security, we cannot rely forever on an ad hoc system that metes out 
insufficient penalties and is based on shaky legal ground.
  Export controls exist, first and foremost, for reasons of national 
security. The United States must not export items when the item or the 
end-user may contribute to the proliferation of weapons of mass 
destruction, strengthen the military capabilities of those who would 
oppose us, or otherwise endanger U.S. national security. A 
comprehensive export control system is just as important to preserving 
America's freedom and security as a strong military.
  But export controls also exist to facilitate the free trade of goods 
and services, an essential building block of our international economy. 
The future growth of our economy and a leading global role for U.S. 
industry require a vital export market.
  I think all of us can agree that national security considerations 
must always come first in devising export controls. We can all agree 
that such controls should not be so arbitrary as to stifle legitimate 
trade. We may differ, however, on where we draw the line in balancing 
these two opposing considerations.
  Export controls can also serve another purpose. They can help 
reaffirm America's global leadership on human rights. Let me take this 
opportunity to commend Senators Sarbanes and Enzi for accepting an 
amendment proposed by Senator Leahy and me in this regard. The 
managers' amendment to S. 149 will tighten the controls on the export 
of items expressly designed for torture or especially susceptible to 
use in torture.
  We are talking about items such as stun guns and shock batons, leg 
cuffs and restraint chairs. Yes, some of these items can have 
legitimate law enforcement uses and are in fact employed in a manner 
that does not abuse human rights. That is why this amendment would 
continue to allow their export, but make them subject to the licensing 
process and require the specific concurrence of the State Department as 
well as the approval of the Commerce Department.
  The items covered by this amendment are devices that governments 
around the world too often use in suppressing political dissidents and 
ethnic opposition. This amendment requires the U.S. government to 
license each and every export of such items. It will help ensure that 
the United States does not indirectly contribute to the torture of 
individuals by engaging in the unlicensed trade of items used for 
torture. It is my hope that the Commerce and State Departments, working 
together, will see to it that licensed exports of these items are 
permitted only to those countries whose governments carry unblemished 
human rights records.
  I once again thank Senators Sarbanes and Enzi for accepting this 
amendment, and especially Senator Leahy, who is once again a champion 
of human rights and with whom I am always delighted to work.
  During this debate, a group of Senators, led by my good friends 
Senator Thompson and Senator Kyl, has led an intense effort against S. 
149. They argue that this bill fundamentally favors commercial equities 
over our national security interests. They are skeptical that the 
Commerce Department, which is responsible for cultivating U.S. business 
interests around the world, can play an impartial role in weighing 
national security considerations.
  Truth be told, I have shared some of their concerns. That's why I am 
pleased that the floor managers have reached a compromise with Senators 
Thompson and Kyl. This compromise includes amendments to S. 149 to: 1. 
enhance the discretionary authority of the Commerce Department to deny 
export licenses to another country when it is blocking legitimate post-
shipment verifications of sensitive exports and 2. tighten the 
definition of foreign availability determinations which can exempt 
items from export controls. These changes to S. 149 approved today 
offer real improvements to this bill.
  I plan to vote for S. 149. On the whole, this bill takes the right 
steps to bring our export controls for dual-use technologies into the 
21st century. Is it a perfect bill? No. The House International 
Relations Committee, in marking up this bill last month, approved 
dozens of amendments, on a bipartisan basis. I would hope, therefore, 
to see further improvement of this bill in conference.
  But now is not the time for delay on S. 149. The Senate has a duty to 
pass this legislation and to restore stability and predictability to 
our export control system for sensitive dual-use technologies.
  Mr. WARNER. Mr. President, I rise today to address an issue that is 
critical to the national security of our Nation: the adequate control 
of the export of sensitive technologies. I have been active in this 
debate for the past 2 years, together with Senators Helms, Shelby, 
McCain, Thompson, and Kyl. We have worked with our colleagues on the 
Banking Committee, particularly Senators Gramm, Sarbanes, and Enzi, to 
craft a bill that protects our Nation's security, while at the same 
time allowing for appropriate commercial activity.
  In April, I reluctantly objected to the motion to proceed to S.149, 
the Export Administration Act. At that time, I thought it was premature 
for the Senate to consider this bill until we had received detailed 
information from the Administration on this issue. I believe the Senate 
is now in a position to act on this important legislation.
  I have tried for the past 2 years to work in a conscientious way with 
all parties to resolve the differences over this legislation. These 
differences have cut to the very essence of how the United States plans 
to protect its national security in an era of rapid globalization and 
proliferation of technology.
  My goal in this debate has been to strike the proper balance between 
national security and commercial interests. As we all know, the high 
tech industry in the United States is currently second to none. We must 
ensure our domestic industry remains competitive without limiting 
access to new markets. Considering the rate at which technology becomes 
obsolete, being the first to deliver a product to a market is crucial. 
And while we cannot completely abandon national security concerns in 
favor of industry, we must not unnecessarily hinder the ability of our 
high tech companies to compete on the world stage. That is what I 
believe we have accomplished with this bill.
  This is a complicated issue that cuts across the jurisdiction of six 
Senate Committees. Five Committee Chairmen with responsibility for 
national security matters in the U.S. Senate have continuously worked 
to improve this bill--myself as chairman of the Armed Services 
Committee, Senator Shelby of the Intelligence Committee, Senator 
Thompson of the Governmental Affairs Committee, Senator Helms of the 
Foreign Relations Committee, and Senator McCain of the Commerce 
Committee. In addition, Senator Kyl has been a leading participant in 
our discussions with the Banking Committee, the committee of primary 
jurisdiction.
  The higher penalties and increased enforcement authority, the 
authority to require enhanced controls on items that need to be 
controlled for national security reasons, the requirement for the 
Department of Commerce to notify the Department of Defense of all 
commodity classifications are examples of progress made on the national 
security front.
  I have great respect for the tireless efforts and dedication of my 
distinguished Banking committee colleagues, Senator Gramm and Senator 
Enzi, in creating the EAA of 2001. I thank them for meeting with me and 
others several times throughout the past two years to listen to our 
concerns with balancing national security matters with economic 
interests. I hope these concerns will remain a priority for all of us.
  In this year's version of the EAA, the Banking Committee has included 
additional national security protections at

[[Page 16537]]

the urging of the administration. As the debate on these issues has 
shown, there were concerns about the last administration's record in 
protecting some of our vital technology. A new administration is able 
to look at old problems with a fresh approach. It is in that context 
that the administration reviewed this bill at the request of myself, 
Senators McCain, Shelby, Thompson, Helms and Kyl. The National Security 
Advisor and three cabinet Secretaries were intimately involved in this 
review. As a result, the administration proposed a series of 
legislative changes that the Banking Committee has included in the bill 
that is before us.
  Once these changes were made and the administration was actively 
engaged on the issue, the question then became a technical matter of 
how the administration would implement the statute. When the Senators 
expressing concerns regarding this bill were briefed on the results of 
the administration's review, we were informed that an interagency 
agreement had been achieved on how the administration would enhance 
national security controls during the course of implementing the EAA. 
Under the administration's proposal, we were informed that some 
national security protection that we had sought in the past would be 
included in the executive order that implements S. 149. Thus began a 
dialogue with the administration to come up with a better understanding 
of how this bill would be implemented.
  My past concerns with earlier versions of EAA were based on concerns 
expressed by the Department of Defense. Last year, DOD provided the 
Senate Armed Services Committee with specific legislative changes that 
were necessary in their judgement to fix last year's EAA bill. This 
included addressing issues related to a national security carve-out or 
enhanced controls, commodity classifications, the enhanced 
proliferation control initiative, and deemed exports.
  The Bush administration shares the concerns of the previous 
administration but has chosen to pursue some needed changes 
administratively. In this regard, I ask unanimous consent that a copy 
of a letter I received from Secretary of Commerce Evans be made a part 
of the legislative record. This letter provides some insight into the 
administration's interpretation of the bill language and commits the 
administration to implementing, for example, a ``disciplined and 
transparent process for escalating and deciding disputes'' on commodity 
classifications.
  I am satisfied with the response that the administration has given me 
that they can work within the confines of this statute to protect 
national security. I trust that this administration will be able to do 
so. The Congress will, however, need to provide diligent oversight to 
ensure that this administration will conform to the high national 
security standards that they have set for themselves. When the EAA 
comes up for renewal in three years time, we may have to be more 
stringent in putting explicit national security protections in statute 
rather than leaving it to the discretion of the administration.
  I want to thank my colleagues on the Intelligence, Foreign Relations, 
Commerce and Governmental Affairs Committees. These Members have worked 
over the last two years to improve this bill and ensure that our 
national security interests are protected. I know the job isn't 
finished yet. It has just begun and I will stand with my colleagues to 
ensure that our export control process is designed and operated to 
ensure that weapons of mass destruction do not get into the wrong 
hands.
  It is time for the Congress to act on this bill. There is a need to 
reauthorize the EAA. The national security protections such as the 
national security carve out, increased penalties for export control 
violations, and greater visibility for the DOD over commodity 
classifications are positive steps. We need to lock in these 
improvements and work to ensure that nonproliferation concerns are 
protected and strengthened and that vital technology is protected. And 
we need to allow our domestic industry to compete in the world market 
without unnecessary and outmoded restrictions.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                        Secretary of Commerce,

                                    Washington, DC, July 31, 2001.
     Hon. John Warner,
     U.S. Senate,
     Washington, DC.
       Dear Senator Warner: In light of our mutual interest in the 
     Export Administration Act of 2001 (S. 149), I would like to 
     address several issues related to S. 149 that I understand 
     were raised by your staff in a recent discussion with 
     Administration officials.
       As you know, the Administration carefully reviewed S. 149. 
     As a result of that review, the Administration recommended a 
     number of amendments to the Senate Committee on Banking, 
     Housing and Urban Affairs which were incorporated into the 
     bill. Accordingly, the Administration strongly supports S. 
     149. We believe that the bill provides the proper framework 
     for regulating the export of sensitive items consistent with 
     our national security, foreign policy, and economic 
     interests. For your convenience, I have enclosed an analysis 
     that addresses in detail the issues raised by your staff.
       I also understand that your staff asked about the 
     Department's response to a recent report by the General 
     Accounting Office (GAO) regarding controls on exports to 
     Canada of items that could contribute to missile 
     proliferation. The Department will shortly issue a proposed 
     rule amending the licensing requirements applicable to 
     exports to Canada. This new rule will address the issue 
     raised by the GAO.
       I appreciate your continued interest in the Export 
     Administration Act of 2001. I look forward to working on the 
     passage of this bill to ensure that the protection of 
     national security is given the highest priority in the dual-
     use export control system process.
       If you have any further questions, please call me or Brenda 
     Becker, Assistant Secretary for Legislative and 
     Intergovernmental Affairs, at (202) 482-3663.
           Warm regards,
                                                  Donald L. Evans.
       Enclosure.
                                  ____


       Administration View on National Security Aspects of S. 149

       The Administration supports S. 149 because it sustains the 
     President's broad authority to protect national security. S. 
     149 actually provides greater authority for the President to 
     control dual-use exports than current law, the Export 
     Administration Act of 1979 (EAA). S. 149 significantly raises 
     the penalties for export control violations and contains 
     other provisions that enhance the U.S. government's ability 
     to enforce the law effectively. Higher penalties and 
     increased enforcement authority will deter those who might 
     otherwise endanger U.S. national security through illicit 
     exports.


       foreign availability/mass market and parts and components

       The bill does give exporters the right to ask the 
     government to determine whether items are foreign or mass 
     market available. However, the bill also gives the President 
     several ways to continue controls on such items, if 
     necessary, for national security reasons. In addition, S. 149 
     provides more authority than the existing law to require 
     enhanced controls on such parts and components as needed to 
     protect national security.


          role of department of defense and other departments

       The bill provides a significant role for the Department of 
     Defense in the licensing process, including:
       --giving the Secretary of Defense concurrence authority in 
     identifying items to be controlled for national security 
     reasons. This is a greater role than Defense has under 
     existing law because the scope of the national security 
     control list under the bill is significantly greater than 
     under current law.
       --requiring the Secretary of Commerce to refer all license 
     applications to the Secretaries of Defense and State for 
     their review and recommendations. The bill also authorizes 
     all reviewing departments, for the first time in statute, to 
     escalate a proposed licensing decision to the President.
       --requiring the Department of Commerce, for the first time 
     in statute, to notify the Department of Defense of all 
     commodity classification requests.
       --requiring the Department of Commerce, for the first time 
     in statute, to fully consider any intelligence information 
     relevant to a proposed export when considering a license 
     application.
       --enabling the President to continue the longstanding 
     procedure whereby the Office of Management and Budget ensures 
     the concurrence of the Departments of State and Defense, and 
     other agencies as appropriate, on regulations issued by 
     Commerce pursuant to the act. This procedure allows the 
     Departments of State and Defense to concur on regulations 
     affecting their interests without requiring concurrence on 
     regulations those departments may not wish to review.
       --continuing the President's authority to require a license 
     for transfers of controlled items to foreign nationals within 
     the United States and requiring State and Defense's 
     concurrence on such licenses.
       Regarding restrictions on the President's delegation of 
     authority, such restrictions are

[[Page 16538]]

     limited and apply only to those areas not appropriately 
     delegated to any one agency. Restricting decisionmaking 
     authority to the President, in these very limited 
     circumstances, ensures that all interests--including national 
     security--will be fully considered.
       As officials from the Departments of State and Defense 
     testified at the House International Relations Committee on 
     July 11, the provisions of S. 149 protect the President's 
     authority to safeguard U.S. national security.


                        proposed executive order

       Interagency review of export license applications is 
     conducted under Executive Order 12981, as amended. Under this 
     executive order, the Departments of Defense, State and Energy 
     have the right to review all license applications submitted 
     to the Department of Commerce. The only applications that 
     these departments do not review are those they choose not to, 
     such as applications to export crude oil.
       S. 149 partially codifies Executive Order 12981 and 
     provides the Administration the flexibility to structure an 
     appeals process that will preserve the existing authorities 
     of both the Departments of Defense and State. For example, 
     the current executive order establishes an assistant 
     secretary-level interagency working group to hear appeals of 
     decisions made at lower levels. This group already is an 
     integral part of the licensing process and the Administration 
     plans to keep it so. Any new executive order promulgated 
     after the passage of a new EAA would not alter Defense's 
     current ability to review and object to license applications.
       S. 149 also requires Commerce, for the first time in 
     statute, to notify Defense of all commodity classification 
     requests Commerce receives. The Administration has committed 
     to implement by executive order a process by which all these 
     commodity classification requests will be reviewed by 
     Defense, with a disciplined and transparent process for 
     escalating and deciding disputes. The Administration will 
     brief Congress about all of the processes provided for in S. 
     149 as they are implemented.

  Mr. SHELBY. Mr. President, I rise today in order to reiterate my 
concerns over the Export Administration Act of 2001.
  There is little doubt that this bill will pass. The writing is on the 
wall. However, with all due respect to the administration and to my 
colleagues on the Banking Committee, I have and will continue to oppose 
S. 149.
  Neither I nor Senators Thompson, Kyl, Helms or McCain desire to 
impede American business entities in their pursuit of new markets. I 
for one tend to agree with President Calvin Coolidge, who said that, 
``The chief business of the American people is business.'' Every 
Senator here today is an advocate for enhanced trade and for helping 
U.S. industry to export its goods and services. Exports bring 
prosperity to this Nation's companies and work to its citizens. If my 
advocacy for the U.S. technology industry were the sole basis upon 
which my decision on this legislation was to be based, I could easily 
change my past position and support passage of the Export 
Administration Act, or EAA as it is known. However, the other basis 
upon which the EAA should be measured is its effect upon the national 
security of the United States.
  Earlier this summer, I was inspired when I listened as one of my 
colleagues, who had not previously supported my position on the EAA, 
publicly and emphatically stated, and I paraphrase, that when it comes 
to the difficult question of promoting trade or preserving national 
security, we must err on the side of national security.
  That balance is the crux of this week's debate. We should not support 
a measure that could, as written, result in harm to Americans by 
technology developed and sold by Americans.
  The pending bill addresses the control of ``dual use'' technology, 
that is, technology that has both commercial and military applications. 
Most commonly, our current export controls entail a licensing process 
for the export of most dual use technologies. Rather than prohibit 
exports outright, we generally ensure that we can determine which 
countries are receiving technology and keep track of anomalies in 
exporting so that we can measure whether technology is being put to 
military use. The EAA also regulates which countries will be permitted 
to import U.S. dual-use technologies. Generally, U.S. companies are not 
permitted to export dual use products to countries like Iran and Iraq.
  This bill is an attempt to rewrite our export control laws to make 
them more rational. I too believe that this nation needs new export 
laws to meet today's trade realities. However, this effort must not 
open the floodgates for our dual use technology to be exported, without 
the ability for the U.S. Government to follow where that technology 
goes and its ultimate application.
  For an export control regime to function properly, it must provide 
for a balancing of the commercial benefits involved--which are 
generally obvious, easily-quantified, concentrated, and immediate--with 
the national security concerns, which are typically shrouded in 
secrecy, difficult to quantify, diffuse, and long-term in nature. In 
this equation, national security can easily get the short end of the 
stick.
  Not everything is shrouded in secrecy. In accordance with Section 721 
of the 1997 Intelligence Authorization Act, twice a year the Director 
of Central Intelligence submits a report on trends in the proliferation 
of weapons technologies. Part of the report is unclassified. The report 
identifies key suppliers of dual use missile, nuclear, and conventional 
arms technologies, as well as dual-use biotechnology and chemical 
technology. Nations such as China and Russia are identified as key 
suppliers. They export their technology to the likes of Iraq, Iran, 
Libya, Syria, Sudan, Pakistan and India. The report received last 
winter detailed a continuing and significant problem.
  Regarding Iran, the report states, and I quote:

       Tehran expanded its efforts to seek considerable dual use 
     biotechnical materials, equipment, and expertise from 
     abroad--primarily from entities in Russia and Western 
     Europe--ostensibly for civilian uses. We judge that this 
     equipment and know-how could be applied to Iran's biological 
     warfare program. Outside assistance is both important and 
     difficult to prevent, given the dual-use nature of the 
     materials, the equipment being sought, and the many 
     legitimate end uses for these items.

  Regarding Iraq, the report indicates that Saddam Hussein is utilizing 
all means to acquire dual-use technology. The report states:

       Iraq has attempted to purchase numerous dual-use items for, 
     or under the guise of, legitimate civilian use. This 
     equipment, in principle subject to UN scrutiny, also could be 
     diverted for weapons of mass destruction purposes. In 
     addition, Iraq appears to be installing or repairing dual-use 
     equipment at chemical weapons related facilities.

  With respect to India, ``India continues to rely on foreign 
assistance for key missile and dual-use technologies where it still 
lacks engineering or production expertise in ballistic missile 
development.'' The report goes on to cite Russia and Western Europe as 
the primary conduits of India's missile related technology.
  As stated in the Report, Pakistan received significant assistance 
from Communist China for its ballistic missile program in the early 
part of last year. As recently as this past weekend, the administration 
was forced to impose sanctions on the China Metallurgical Equipment 
Corporation for selling missile technology to Pakistan. The corporate 
entity in Pakistan which received the technology was also sanctioned. I 
know this has been and continues to be an issue of great concern to 
Senator Thompson. I commend him for his efforts to publicize Communist 
China's blatant disregard for its pledge not to support foreign nuclear 
missile programs.
  The report did contain one note of optimism, which I believe is also 
directly applicable to today's debate. Nations such as Libya and Iran 
continued to attempt to acquire needed materials for weapons of mass 
destruction in Western Europe. They had some success in the first half 
of 2000, but the CIA report states that, ``Increasingly rigorous and 
effective export controls and cooperation among supplier countries have 
led the other foreign WMD programs to look elsewhere for many 
controlled dual-use goods.'' The point is, that while we cannot stop 
all proliferation, a rigorous export control regime can be effective in 
diffusing the spread of potentially threatening dual-use technology.
  Mr. President, the problem is real. I believe it is a significant 
statement

[[Page 16539]]

when the Chairmen and now Ranking Members of the Senate Armed Services 
Committee, the Foreign Relations Committee, the Intelligence Committee, 
the Committee on Governmental Affairs and the Subcommittee on 
Technology, Terrorism and Government Information, have serious issues 
with the protections this legislation provides our national security. I 
am deeply disappointed that the new administration was not able to 
support reasonable amendments which would address the national security 
equities which we have highlighted. I am concerned that the interests 
of the high tech business community have replaced reasonable 
consideration of our dual use export control regime.
  Technologies which are exported today can and will have to be dealt 
with by this Nation's national security apparatus. Consequently, I urge 
my colleagues to support the amendments of Senators Thompson, Kyl, 
Helms, and others, which will strengthen S. 149 with respect to 
national security. They are only a handful of the changes which should 
be made to this bill but they will serve to give the Defense Department 
and the State Department a more level playing field in the export 
control process from which to protect national security.
  There is a proper balance between promoting business and preserving 
the national security. This bill does not strike that balance. As a 
conferee, I am hopeful that in conference, I can work with the members 
of the House, especially Chairman Hyde and continue these efforts to 
tilt the balance in favor of national security.
  Mr. President, I ask unanimous consent to print in the Record 
entitled ``Report to Congress on the Acquisition of Technology Relating 
to Weapons
of Mass Destruction and Advanced
Conventional Munitions, 1 January through 30 June 2000.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   Unclassified Report to Congress on the Acquisition of Technology 
   Relating to Weapons of Mass Destruction and Advanced Conventional 
               Munitions, 1 January Through 30 June 2000

       The Director of Central Intelligence (DCI) hereby submits 
     this report in response to a Congressionally directed action 
     in Section 721 of the FY 97 Intelligence Authorization Act, 
     which requires:
       ``(a) Not later than 6 months after the date of the 
     enactment of this Act, and every 6 months thereafter, the 
     Director of Central Intelligence shall submit to Congress a 
     report on
       (1) the acquisition by foreign countries during the 
     preceding 6 months of dual-use and other technology useful 
     for the development or production of weapons of mass 
     destruction (including nuclear weapons, chemical weapons, and 
     biological weapons) and advanced conventional munitions; and
       (2) trends in the acquisition of such technology by such 
     countries.''
       At the DCI's request, the DCI Nonproliferation Center (NPC) 
     drafted this report and coordinated it throughout the 
     Intelligence Community. As directed by Section 721, 
     subsection (b) of the Act, it is unclassified. As such, the 
     report does not present the details of the Intelligence 
     Community's assessments of weapons of mass destruction and 
     advanced conventional munitions programs that are available 
     in other classified reports and briefings for the Congress.


                         Acquisition by Country

       As required by Section 721 of the FY 97 Intelligence 
     Authorization Act, the following are summaries by country of 
     acquisition activities (solicitations, negotiations, 
     contracts, and deliveries) related to weapons of mass 
     destruction (WMD) and advanced conventional weapons (ACW) 
     that occurred from 1 January through 30 June 2000. We 
     excluded countries that already have substantial WMD 
     programs, such as China and Russia, as well as countries that 
     demonstrated little WMD acquisition activity of concern.
     Iran
       Iran remains one of the most active countries seeking to 
     acquire WMD and ACW technology from abroad. In doing so, 
     Tehran is attempting to develop an indigenous capability to 
     produce various types of weapons--chemical, biological, and 
     nuclear--and their delivery systems. During the reporting 
     period, the evidence indicates reflections of determined 
     Iranian efforts to acquire WMD-and ACW-related equipment, 
     materials, and technology focused primarily on entities in 
     Russia, China, North Korea, and Western Europe.
       Iran, a Chemical Weapons Convention (CWC) party, already 
     has manufactured and stockpiled several thousand tons of 
     chemical weapons, including blister, blood, and choking 
     agents, and the bombs and artillery shells for delivering 
     them. During the first half of 2000, Tehran continued to seek 
     production technology, training, expertise, equipment, and 
     chemicals that could be used as precursor agents in its 
     chemical warfare (CW) program from entities in Russia and 
     China.
       Tehran expanded its efforts to seek considerable dual-use 
     biotechnical materials, equipment, and expertise from 
     abroad--primarily from entities in Russia and Western 
     Europe--ostensibly for civilian uses. We judge that this 
     equipment and know-how could be applied to Iran's biological 
     warfare (BW) program. Iran probably began its offensive BW 
     program during the Iran-Iraq war, and it may have some 
     limited capability for BW deployment. Outside assistance is 
     both important and difficult to prevent, given the dual-use 
     nature of the materials, the equipment being sought, and the 
     many legitimate end uses for these items.
       Iran sought nuclear-related equipment, material, and 
     technical expertise from a variety of sources, especially in 
     Russia. Work continues on the construction of a 1,000-
     megawatt nuclear power reactor at Bushehr that will be 
     subject to International Atomic Energy Agency (IAEA) 
     safeguards. In addition, Russian entities continued to 
     interact with Iranian research centers on various activities. 
     These projects will help Iran augment its nuclear technology 
     infrastructure, which in turn would be useful in supporting 
     nuclear weapons research and development. The expertise and 
     technology gained, along with the commercial channels and 
     contacts established--even from cooperation that appears 
     strictly civilian in nature--could be used to advance Iran's 
     nuclear weapons research and development program.
       Beginning in January 1998, the Russian Government took a 
     number of steps to increase its oversight of entities 
     involved in dealings with Iran and other states of 
     proliferation concern. In 1999, it pushed a new export 
     control law through the Duma. Russian firms, however, faced 
     economic pressures to circumvent these controls and did so in 
     some cases. The Russian Government, moreover, failed to 
     enforce its export controls in some cases regarding Iran.
       China pledged in October 1997 not to engage in any new 
     nuclear cooperation with Iran but said it would complete 
     cooperation on two nuclear projects: a small research reactor 
     and a zirconium production facility at Esfahan that Iran will 
     use to produce cladding for reactor fuel. As a party to the 
     Nuclear Nonproliferation Treaty (NPT), Iran is required to 
     apply IAEA safeguards to nuclear fuel, but safeguards are not 
     required for the zirconium plant or its products.
       Iran claims that it is attempting to establish fuel-cycle 
     capabilities to support its civilian energy program. In that 
     guise, it seeks to obtain turnkey facilities, such as a 
     uranium conversion facility that, in fact, could be used in 
     any number of ways to support fissile material production 
     needed for a nuclear weapon. We suspect that Tehran most 
     likely is interested in acquiring foreign fissile material 
     and technology for weapons development as part of its overall 
     nuclear weapons program.
       During the first half of 2000, entities in Russia, North 
     Korea, and China continued to supply the largest amount of 
     ballistic missile--related goods, technology, and expertise 
     to Iran. Tehran is using this assistance to support current 
     production programs and to achieve its goal of becoming self-
     sufficient in the production of ballistic missiles. Iran 
     already is producing Scud short-range ballistic missiles 
     (SRBMs) and has built and publicly displayed prototypes for 
     the Shahab-3 medium-range ballistic missile (MRBM). In 
     addition, Iran's Defense Minister in 1999 publicly 
     acknowledged the development of a Shahab-4, originally 
     calling it a more capable ballistic missile than the Shahab-3 
     but later categorizing it as solely a space launch vehicle 
     with no military applications. Iran's Defense Minister also 
     has publicly mentioned a ``Shahab 5,'' although he said that 
     development had not yet begun. Such statements, made against 
     the backdrop of sustained cooperation with Russian, North 
     Korean, and Chinese entities, strongly suggest that Tehran 
     intends to develop a longer range ballistic missile 
     capability.
       Iran continues to acquire conventional weapons and 
     production technologies from Russia and China. During the 
     first half of 2000, Iran received five Mi-171 utility 
     helicopters from Russia under a 1999 contract, and it began 
     licensed production of Russian Konkurs (AT-5) antitank guided 
     missiles. Iran also claims to be producing a new manportable 
     surface-to-air missile knows as Misagh-1, which resembles 
     China's QW-1 MANPAD system. Tehran also has been able to keep 
     operational at least part of its existing fleet of Western-
     origin aircraft and helicopters supplied before the 1979 
     Iranian Revolution and continues to develop limited 
     capabilities to produce armor, artillery, tactical missiles, 
     munitions, and aircraft with foreign assistance.
     Iraq
       Since Operation Desert Fox in December 1998, Baghdad has 
     refused to allow United Nations' inspectors into Iraq as 
     required by Security Council Resolution 687. In spite of 
     ongoing UN efforts to establish a follow-on

[[Page 16540]]

     inspection regime comprising the UN Monitoring, Verification, 
     and Inspection Commission (UNMOVIC) and the IAEA's Iraq 
     Action Team, no UN inspections occurred during this reporting 
     period. Moreover, the automated video monitoring system 
     installed by the UN at known and suspect WMD facilities in 
     Iraq is no longer operating. Having lost this on-the-ground 
     access, it is more difficult for the UN or the US to 
     accurately assess the current state of Iraq's WMD programs.
       We do not have any direct evidence that Iraq has used the 
     period since Desert Fox to reconstitute its WMD programs, 
     although given its past behavior, this type of activity must 
     be regarded as likely. We assess that since the suspension of 
     UN inspections in December of 1998, Baghdad has had the 
     capability to reinitiate both its CW and BW programs within a 
     few weeks to months. Without an inspection monitoring 
     program, however, it is more difficult to determine if Iraq 
     has done so.
       Since the Gulf war, Iraq has rebuilt key portions of its 
     chemical production infrastructure for industrial and 
     commercial use, as well as its missile production facilities. 
     It has attempted to purchase numerous dual-use items for, or 
     under the guise of, legitimate civilian use. This equipment--
     in principle subject to UN scrutiny--also could be diverted 
     for WMD purposes. Since the suspension of UN inspections in 
     December 1998, the risk of diversion has increased. Following 
     Desert Fox, Baghdad again instituted a reconstruction effort 
     on those facilities destroyed by the US bombing, including 
     several critical missile production complexes and former 
     dual-use CW production facilities. In addition, Iraq appears 
     to be installing or repairing dual-use equipment at CW-
     related facilities. Some of these facilities could be 
     converted fairly quickly for production of CW agents.
       UNSCOM reported to the Security Council in December 1998 
     that Iraq also continued to withhold information related to 
     its CW program. For example, Baghdad seized from UNSCOM 
     inspectors an Air Force document discovered by UNSCOM that 
     indicated that Iraq had not consumed as many CW munitions 
     during the Iran-Iraq war in the 1980s as had been declared by 
     Baghdad. This discrepancy indicates that Iraq may have hidden 
     an additional 6,000 CW munitions.
       In 1995, Iraq admitted to having an offensive BW program 
     and submitted the first in a series of Full, Final, and 
     Complete Disclosures (FFCDs) that were supposed to reveal the 
     full scope of its BW program. According to UNSCOM, these 
     disclosures are incomplete and filled with inaccuracies. 
     Since the full scope and nature of Iraq's BW program was not 
     verified, UNSCOM assessed that Iraq continues to maintain a 
     knowledge base and industrial infrastructure that could be 
     used to produce quickly a large amount of BW agents at any 
     time, if needed.
       Iraq has continued working on its L-29 unmanned aerial 
     vehicle (UAV) program, which involves concerting L-29 jet 
     trainer aircraft originally acquired from Eastern Europe. It 
     is believed that Iraq may have been conducting flights of the 
     L-29, possibly to test system improvements or to train new 
     pilots. These refurbished trainer aircraft are believed to 
     have been modified for delivery of chemical or, more likely, 
     biological warfare agents.
       We believe that Iraq has probably continued low-level 
     theoretical R&D associated with its nuclear program. A 
     sufficient source of fissile material remains Iraq's most 
     significant obstacle to being able to produce a nuclear 
     weapon.
       Iraq continues to pursue development of SRBM systems that 
     are not prohibited by the United Nations and may be expanding 
     to longer range systems. Authorized pursuit of UN-permitted 
     missiles continues to allow Baghdad to develop technological 
     improvements and infrastructure that could be applied to a 
     longer-range missile program. We believe that development of 
     the liquid propellant Al-Samoud SRBM probably is maturing and 
     that a low-level operational capability could be achieved in 
     the near team. The solid-propellant missile development 
     program may now be receiving a higher priority, and 
     development of the Ababil-100 SRBM and possibly longer range 
     systems may be moving ahead rapidly. If economic sanctions 
     against Iraq were lifted, Baghdad probably would increase its 
     attempts to acquire missile-related items from foreign 
     sources, regardless of any future UN monitoring and 
     continuing restrictions on long-range ballistic missile 
     programs. Iraq probably retains a small, covert force of 
     Scud-type missiles.
     North Korea
       P'yongyang continues to acquire raw materials from out-of-
     country entitles needed for its WMD and ballistic missile 
     programs. During this time fame, North Korea continued 
     procurement of raw materials and components for its ballistic 
     missile programs from various foreign sources, especially 
     through firms in China. We assess the North Korea is capable 
     of producing and delivering via munitions a wide variety of 
     chemical and biological agents.
       During the first half of 2000, P'yongyang sought to procure 
     technology worldwide that could have applications in its 
     nuclear program, but we do not know of any procurement 
     directly linked to the nuclear weapons program. We assess 
     that North Korea has produced enough plutonium for at least 
     one, and possibly two, nuclear weapons. The United States and 
     North Korea are nearing completion on the joint project of 
     canning spent fuel from the Yongbyon complex for long-term 
     storage and ultimate shipment out of the North in accordance 
     with the 1994 Agreed Framework. That reacher fuel contains 
     enough plutonium for several more weapons.
       North Korea continues to seek conventional arms. It signed 
     a contract with Russia during this reporting period.
     Libya
       Libya has continued its efforts to obtain ballistic 
     missile-related equipment, materials, technology, and 
     expertise from foreign sources. Outside assistance is 
     critical to its ballistic missile development programs, and 
     the suspension of UN sanctions last year has allowed Tripoli 
     to expand its procurement effort. Libya's current capability 
     remains limited to its aging Scud B missiles, but with 
     continued foreign assistance it may achieve an MRBM 
     capability--a long-desired goal.
       Libya remains heavily dependent on foreign suppliers for 
     precursor chemicals and other key CW-related equipment. 
     Following the suspension of UN sanctions in April 1999, 
     Tripoli reestablished contacts with sources of expertise, 
     parts, and precursor chemicals abroad, primarily with Western 
     Europe. Libya still appears to have a goal of establishing an 
     offensive CW capability and an indigenous production 
     capability for weapons. Evidence suggests Libya also is 
     seeking to acquire the capability to develop and produce BW 
     agents.
       Libya continues to develop its nascent nuclear research and 
     development program but still requires significant foreign 
     assistance to advance to a nuclear weapons option. The 
     suspension of sanctions has accelerated the pace of 
     procurement efforts in Libya's drive to rejuvenate its 
     ostensibly civilian nuclear program. In early 2000, for 
     example, Tripoli and Moscow renewed talks on cooperation at 
     the Tajura Nuclear Research Center and discussed a potential 
     power reactor deal. Should such civil-sector work come to 
     fruition, Libya could gain opportunities to conduct weapons-
     related R&D.
       Following the suspension of UN sanctions, Libya has 
     negotiated deals--reported to be worth up to $100 million, 
     according to Russian press--with Russian firms for 
     conventional weapons, munitions, and upgrades and 
     refurbishment for its existing inventory of Soviet-era 
     weapons.
     Syria
       Syria sought CW-related precursors and expertise from 
     foreign sources during the reporting period. Damascus already 
     has a stockpile of the nerve agent sarin, and it would appear 
     that Syria is trying to develop more toxic and persistent 
     nerve agents. Syria remains dependent on foreign sources for 
     key elements of its CW program, including precursor chemicals 
     and key production equipment. It is highly probable that 
     Syria also is developing an offensive BW capability.
       We will continue to monitor the potential for Syria's 
     embryonic nuclear research and development program to expand.
       During the first half of 2000, Damascus continued work on 
     establishing a solid-propellant rocket motor development and 
     production capability with help from outside countries. 
     Foreign equipment and assistance to its liquid-propellant 
     missile program, primarily from North Korean entities, but 
     also from firms in Russia, have been and will continue to be 
     essential for Syria's effort. Damascus also continued its 
     efforts to assemble--probably with considerable North Korean 
     assistance--liquid fueled Scud C missiles.
       Syria continues to acquire ACW--mainly from Russia and 
     other FSU suppliers--although at a reduced level from the 
     early 1990s. During the past few years, Syria has received 
     Kornet-E (AT-14), Metis-M (AT-13), Konkurs (AT-5), and 
     Bastion-M (AT-10B) antitank guided missiles, RPG-29 rocket 
     launchers, and small arms, according to Russian press 
     reports. Damascus has expressed interest in acquiring Russian 
     Su-27 and MiG-29 fighters and air defense systems, but its 
     outstanding debt to Moscow and inability to fund large 
     purchases have hampered negotiations, according to press 
     reports.
     Sudan
       During the reporting period, Sudan sought to acquire a 
     variety of military equipment from various sources. Khartoum 
     is seeking older, less expensive weapons that nonetheless are 
     advanced compared with the capabilities of the weapons 
     possessed by its opponents and their supporters in 
     neighboring countries in the long-running civil war.
       In the WMD arena, Sudan has been developing the capability 
     to produce chemical weapons for many years. In this pursuit, 
     it has obtained help from entities in other countries, 
     principally Iraq. Given its history in developing chemical 
     weapons and its close relationship with Iraq, Sudan may be 
     interested in a BW program as well.
     India
       India continues its nuclear weapons development program, 
     for which its underground nuclear tests in May 1998 were a 
     significant

[[Page 16541]]

     milestone. The acquisition of foreign equipment could benefit 
     New Delhi in its efforts to develop and produce more 
     sophisticated nuclear weapons. India obtained some foreign 
     assistance for its civilian nuclear power program during the 
     first half of 2000, primarily from Russia.
       India continues to rely on foreign assistance for key 
     missile and dual-use technologies, where it still lacks 
     engineering or production expertise in ballistic missile 
     development. Entities in Russia and Western Europe remained 
     the primary conduits of missile-related technology transfers 
     during the first half of 2000. New Delhi Flight-tested three 
     short-range ballistic missiles between January and June 
     2000--the Prithvi-II in February and June, and the Dhanush in 
     April.
       India continues an across-the-board modernization of its 
     armed forces through ACW, mostly from Russia, although many 
     of its key programs have been plagued by delays. During the 
     reporting period, New Delhi continued negotiations with 
     Moscow for 310 T-90S main battle tanks Su-30 fighter aircraft 
     production, A-50 Airborne Early Warning and Control (AWACS) 
     aircraft, Tu-22M Backfire maritime strike bombers, and an 
     aircraft carrier, according to press reports. India also 
     continues to explore options for leasing or purchasing 
     several AWACS systems from other entities. India has also 
     received its first delivery of Russian Krasnopol laser-guided 
     artillery rounds to be used in its Swedish-build FH-77 155-mm 
     howitzers, negotiated the purchase of unmanned aerial 
     vehicles form Israel, and considered offers for jet trainer 
     aircraft from France and the United Kingdom.
     Pakistan
       Chinese entities continued to provide significant 
     assistance to Pakistan's ballistic missile program during the 
     first half of 2000. With Chinese assistance, Pakistan is 
     rapidly moving toward serial production of solid-propellant 
     SRBMs. Pakistan's development of the two-state Shaheen-II 
     MRBM also requires continued Chinese assistance. The impact 
     of North Korea's assistance throughout the reporting period 
     is less clear.
       Pakistan continued to acquire nuclear-related and dual-use 
     equipment and materials from various sources--principally in 
     Western Europe. Islamabad has a well-developed nuclear 
     weapons program, as evidence by its first nuclear weapons 
     tests in late May 1998. Acquisition of nuclear-related goods 
     form foreign sources will remain important if Pakistan 
     chooses to develop more advanced nuclear weapons. China, 
     which has provided extensive support in the past to 
     Islamabad's nuclear weapons and ballistic missile programs, 
     in May 1996 pledged that it would not provide assistance to 
     unsafeguarded nuclear facilities in any state, including 
     Pakistan. We cannot rule out, however, some continued 
     contacts between Chinese entities and entities involved in 
     Pakistan's nuclear weapons development.
       Pakistan continues to rely on China and France for its ACW 
     requirements. Pakistan received eight upgraded Mirage III/V 
     fighters from France and continued negotiations to purchase 
     an additional 50 F-7 fighters from China.
     Egypt
       Egypt continues its effort to develop and produce ballistic 
     missiles with the assistance of North Korea. This activity is 
     part of a long-running program of ballistic missile 
     cooperation between these two countries.


                             Key Suppliers

     Russia
       Despite overall improvements in Russia's economy, the 
     state-run defense and nuclear industries remain strapped for 
     funds, even as Moscow looks to them for badly needed foreign 
     exchange through exports. We remain very concerned about the 
     nonproliferation implications of such sales in several areas. 
     Monitoring Russian proliferation behavior, therefore, will 
     remain a very high priority.
       Russian entities during the reporting period continued to 
     supply a variety of ballistic missile-related goods and 
     technical know-how to countries such as Iran, India, China, 
     and Libya. Iran's earlier success in gaining technology and 
     materials from Russian entities accelerated Iranian 
     development of the Shahab-3 MRBM, which was first flight-
     tested in July 1998. Russian entities during the first six 
     months of 2000 have provided substantial missile-related 
     technology, training, and expertise to Iran that almost 
     certainly will continue to accelerate Iranian efforts to 
     develop new ballistic missile systems.
       Russia also remained a key supplier for civilian nuclear 
     programs in Iran, primarily focused on the Bushehr Nuclear 
     Power Plant project. With respect to Iran's nuclear 
     infrastructure, Russian assistance enhances Iran's ability to 
     support a nuclear weapons development effort. By its very 
     nature, even the transfer of civilian technology may be of 
     use in Iran's nuclear weapons program. We remain concerned 
     that Tehran is seeking more than a buildup of its civilian 
     infrastructure, and the Intelligence Community will be 
     closely monitoring the relationship with Moscow for any 
     direct assistance in support of a military program.
       In January, Russia's cabinet approved a draft cooperative 
     program with Syria that included civil use of nuclear power. 
     Broader access to Russian scientists could provide 
     opportunities to solicit fissile material production 
     expertise if Syria decided to pursue a nuclear weapons 
     option. In addition, Russia supplied India with material for 
     its civilian nuclear program during this reporting period. 
     President Putin in May amended the presidential decree on 
     nuclear exports to allow the export in exceptional cases of 
     nuclear materials, technology, and equipment to countries 
     that do not have full-scope IAEA safeguards, according to 
     press reports. The move could clear the way for expanding 
     nuclear exports to certain countries that do not have full-
     scope safeguards, such as India.
       During the first half of 2000, Russian entities remained a 
     significant source of dual-use biotechnology, chemicals, 
     production technology, and equipment for Iran. Russia's 
     biological and chemical expertise make it an attractive 
     target for Iranians seeking technical information and 
     training on BW- and CW-agent production processes.
       Russia continues to be a major supplier of conventional 
     arms. It is the primary source of ACW for China and India, it 
     continues to supply ACW to Iran and Syria, and it has 
     negotiated new contracts with Libya and North Korea, 
     according to press reports.
       The Russian Government's commitment, willingness, and 
     ability to curb proliferation-related transfers remain 
     uncertain. The export control bureaucracy was reorganized 
     again as part of President Putin's broader government 
     reorganization in May. The Federal Service for Currency and 
     Export Controls (VEK) was abolished and its functions assumed 
     by a new department in the Ministry of Economic Development 
     and Trade. VEK had been tasked with drafting the implementing 
     decrees for Russia's July 1999 export control law; the status 
     of these decrees is not known. Export enforcement continues 
     to need improvement. In February 2000, Sergey Ivanov, 
     Secretary of Russia's Security Council, said that during 
     1998-99 the government had obtained convictions for 
     unauthorized technology transfers in only three cases. The 
     Russian press has reported on cases where advanced equipment 
     is simply described as something else in the export 
     documentation and is exported. Enterprises sometimes falsely 
     declare goods just to avoid government taxes.
     North Korea
       Throughout the first half of 2000, North Korea continued to 
     export significant ballistic missile--related equipment and 
     missile components, materials, and technical expertise to 
     countries in the Middle East, South Asia, and North Africa. 
     P'yongyang attaches a high priority to the development and 
     sale of ballistic missiles, equipment, and related 
     technology. Exports of ballistic missiles and related 
     technology are one of the North's major sources of hard 
     currency, which fuel continued missile development and 
     production.
     China
       During this reporting period, the Chinese have continued to 
     take a very narrow interpretation of their bilateral 
     nonproliferation commitments with the United States. In the 
     case of missile-related transfers, Beijing has repeatedly 
     pledged not to sell Missile Technology Control Regime (MTCR) 
     Category I systems but has not recognized the regime's key 
     technology annex. China is not a member of the MTCR.
       Chinese missile-related technical assistance to Pakistan 
     continued to be substantial during this reporting period. 
     With Chinese assistance, Pakistan is rapidly moving toward 
     serial production of solid-propellant SRBMs. Pakistan's 
     development of the two-stage Shaheen-II MRBM also requires 
     continued Chinese assistance. In addition, firms in China 
     provided missile-related items, raw materials, and/or 
     assistance to several other countries of proliferation 
     concern--such as Iran, North Korea, and Libya.
       Chinese entities have provided extensive support in the 
     past to Pakistan's safeguarded and unsafeguarded nuclear 
     programs. In May 1996, Beijing pledged that it would not 
     provide assistance to unsafeguarded nuclear facilities. We 
     cannot rule out some continued contacts between Chinese 
     entities and entities associated with Pakistan's nuclear 
     weapons program. China's involvement with Pakistan will 
     continue to be monitored closely.
       With regard to Iran, China confirmed that work associated 
     with two remaining nuclear projects--a small research reactor 
     and a zirconium production facility--would continue until the 
     projects were completed. The intelligence Community will 
     continue to monitor carefully Chinese nuclear cooperation 
     with Iran.
       Prior to the reporting period, Chinese firms had supplied 
     CW-related production equipment and technology to Iran. The 
     US sanctions imposed in May 1997 on seven Chinese entities 
     for knowingly and materially contributing to Iran's CW 
     program remain in effect. Evidence during the current 
     reporting period shows Iran continues to seek such assistance 
     from Chinese entities, but it is unclear to what extent these 
     efforts have succeeded. In June 1998, China announced that it 
     had expanded its CWC-based chemical export controls to 
     include 10 of the 20 Australia

[[Page 16542]]

     Group chemicals not listed on the CWC schedules.
     Western Countries
       As was the case in 1998 and 1999, entities in Western 
     countries in 2000 were not as important as sources for WMD-
     related goods and materials as in past years. However, Iran 
     and Libya continue to recruit entities in Western Europe to 
     provide needed acquisitions for their WMD programs. 
     Increasingly rigorous and effective export controls and 
     cooperation among supplier countries have led the other 
     foreign WMD programs to look elsewhere for many controlled 
     dual-use goods. Machine tools, spare parts for dual-use 
     equipment, and widely available materials, scientific 
     equipment, and specialty metals were the most common items 
     sought. In addition, several Western countries announced 
     their willingness to negotiate ACW sales to Libya.


                                 Trends

       As in previous reports, countries determined to maintain 
     WMD and missile programs over the long term have been placing 
     significant emphasis on insulating their programs against 
     interdiction and disruption, as well as trying to reduce 
     their dependence on imports by developing indigenous 
     production capabilities. Although these capabilities may not 
     always be a good substitute for foreign imports--particularly 
     for more advanced technologies--in many cases they may prove 
     to be adequate. In addition, as their domestic capabilities 
     grow, traditional recipients of WMD and missile technology 
     could emerge as new suppliers of technology and expertise. 
     Many of these countries--such as India, Iran and Pakistan--do 
     not adhere to the export restraints embodied in such supplier 
     groups as the Nuclear Suppliers Group and the Missile 
     Technology Control Regime.
       Some countries of proliferation concern are continuing 
     efforts to develop indigenous designs for advanced 
     conventional weapons and expand production capabilities, 
     although most of these programs usually rely heavily on 
     foreign technical assistance. Many of these countries--unable 
     to obtain newer or more advanced arms--are pursuing upgrade 
     programs for existing inventories.

  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.

                          ____________________