[Congressional Record (Bound Edition), Volume 156 (2010), Part 12]
[Senate]
[Pages 16505-16509]
[From the U.S. Government Publishing Office, www.gpo.gov]




                EXECUTIVE REPORTS OF COMMITTEE--TREATIES

  The following executive reports of committee were submitted:

       By Mr. KERRY, from the Committee on Foreign Relations:

Treaty Doc. 110-7  Treaty with United Kingdom Concerning Defense Trade 
  Cooperation with 9 conditions, 7 understandings, and 3 declarations 
   (Ex. Rept. 111-5); and Treaty Doc. 110-10  Treaty with Australia 
       Concerning Defense Trade Cooperation with 8 conditions, 6 
          understandings, and 3 declarations (Ex. Rept. 111-5)

       The text of the committee-recommended resolutions of advice 
     and consent to ratification are as follows:

     [110-7:  Treaty with United Kingdom Concerning Defense Trade 
                              Cooperation]

       Resolved (two-thirds of the Senators present concurring 
     therein),
       Section 1. Senate Advice and Consent Subject to Conditions, 
     Understandings And Declarations.
       The Senate advises and consents to the ratification of the 
     Treaty Between the Government of the United States of America 
     and the Government of the United Kingdom of Great Britain and 
     Northern Ireland Concerning Defense Trade Cooperation, done 
     at Washington and London on June 21 and 26, 2007 (Treaty Doc. 
     110-7) (as defined in section 5 of this resolution), subject 
     to the conditions in section 2, the understandings in section 
     3 and the declarations in section 4.
       Section 2. Conditions.
       The Senate's advice and consent to the ratification of the 
     Treaty with the United Kingdom Concerning Defense Trade 
     Cooperation is subject to the following conditions, which 
     shall be binding upon the President:
       (1) United States preparation for treaty implementation.
       (A) At least 15 days before any exchange of notes pursuant 
     to Article 20 of the Treaty, the President shall submit to 
     the Congress a report--
       (i) describing steps taken to ensure that the Executive 
     branch and United States industry are prepared to comply with 
     Treaty requirements;
       (ii) analyzing the implications of the Treaty, and 
     especially of Article 3(3) of the Treaty, for the protection 
     of intellectual property rights of United States persons;
       (iii) explaining what steps the United States Government is 
     taking and will take to combat improper or illegal intangible 
     exports (i.e., exports as defined in part 120.17(a)(4) of 
     title 22, Code of Federal Regulations) under the Treaty; and
       (iv) setting forth the issues to be addressed in the 
     Management Plan called for by Section 12(3)(f) of the 
     Implementing Arrangement and the procedures that are expected 
     to be adopted in that Plan.
       (B) Before any exchange of notes pursuant to Article 20 of 
     the Treaty, the President shall submit to the Congress a 
     certification that changes to the International Traffic in 
     Arms Regulations (parts 120-130 of title 22, Code of Federal 
     Regulations) have been published in the Federal Register 
     pursuant to the Arms Export Control Act, as appropriate, that 
     would, upon entry into force of the Treaty,--
       (i) make clear the legal obligation for any person involved 
     in an Export, Re-export, Transfer, or Re-transfer under the 
     Treaty to comply with all requirements in the revised 
     International Traffic in Arms Regulations, including by 
     taking all reasonable steps to ensure the accuracy of 
     information received from a member of the Approved Community 
     that is party to an Export, Re-export, Transfer, or Re-
     transfer under the Treaty;
       (ii) make clear the legal obligation for Approved Community 
     members to comply with United States Government instructions 
     and requirements regarding United States Defense Articles 
     added to the list of exempt Defense Articles pursuant to 
     Article 3(2) of the Treaty;
       (iii) limit a person from being a member of the United 
     States Community, pursuant to Article 5(2) of the Treaty, if 
     that person is generally ineligible to export pursuant to 
     section 120.1(c) of title 22, Code of Federal Regulations; 
     and
       (iv) require any nongovernmental entity that ceases to be 
     included in the United States Community to comply with 
     instructions from authorized United States Government 
     officials and to open its records of transactions under the 
     Treaty to inspection by United States Government and, as 
     appropriate, authorized United Kingdom Government officials 
     pursuant to Article 12 of the Treaty.
       (C) Before any exchange of notes pursuant to Article 20 of 
     the Treaty, the President shall submit to the Congress--
       (i) a certification that appropriate mechanisms have been 
     established to identify, in connection with the process for 
     determining whether a nongovernmental entity is in the United 
     States Community pursuant to Article 5(2) of the Treaty, 
     persons who meet the criteria in section 38(g)(1) of the Arms 
     Export Control Act (22 U.S.C. 2778(g)(1));
       (ii) a certification that appropriate mechanisms have been 
     established to verify that nongovernmental entities in the 
     United States that Export pursuant to the Treaty are eligible 
     to export Defense Articles under United States law and 
     regulation as required by Article 5(2) of the Treaty;
       (iii) a certification that United States Department of 
     Homeland Security personnel at United States ports--
       (a) have prompt access to a State Department database 
     containing registered exporters, freight forwarders and 
     consignees, and watch lists regarding United States 
     companies; and
       (b) are prepared to prevent attempts to export pursuant to 
     the Treaty by United States persons who are not eligible to 
     export Defense Articles under United States law or 
     regulation, even if such person has registered with the 
     United States Government;
       (iv) a certification that the Secretary of Defense has 
     promulgated appropriate changes to the National Industrial 
     Security Program Operating Manual and to Regulation DoD 
     5200.1-R, ``Information Security Program,'' and has issued 
     guidance to industry regarding marking and other Treaty 
     compliance requirements; and
       (v) a certification that a capability has been established 
     to conduct post-shipment verification, end-use/end-user 
     monitoring and related security audits for Exports under the 
     Treaty, accompanied by a report setting forth the legal 
     authority, staffing and budget provided for this capability 
     and any further Executive branch or congressional action 
     recommended to ensure its effective implementation.
       (2) Treaty partner preparation for treaty implementation.
       Before any exchange of notes pursuant to Article 20 of the 
     Treaty, the President shall certify to Congress that the 
     Government of the United Kingdom has promulgated all 
     necessary regulatory changes, including:
       (A) changes to export control regulations, setting forth a 
     Treaty-specific Open General Export License (OGEL);
       (B) changes to the United Kingdom Security Policy Framework 
     and related security regulations for Government and United 
     Kingdom Industry; and

[[Page 16506]]

       (C) changes to the MOD Classified Material Release 
     Procedure (F680), to take account of Treaty Re-exports and 
     Re-transfers.
       (3) Joint operations, programs and projects.
       The Secretary of State shall keep the Committee on Foreign 
     Relations of the Senate and the Committee on Foreign Affairs 
     of the House of Representatives informed of the lists of 
     combined military and counter-terrorism operations developed 
     pursuant to Article 3(1)(a) of the Treaty; cooperative 
     security and defense research, development, production, and 
     support programs developed pursuant to Article 3(1)(b) of the 
     Treaty; and specific security and defense projects developed 
     pursuant to article 3(1)(c) of the Treaty.
       (4) Exempted defense articles.
       (A) The President may remove a Defense Article from the 
     list of Defense Articles exempt from the Scope of the Treaty, 
     if such removal is not barred by United States law, 30 days 
     after the President informs the Committee on Foreign 
     Relations of the Senate and the Committee on Foreign Affairs 
     of the House of Representatives of such proposed removal.
       (B) When a Defense Article is added to the list of Defense 
     Articles exempt from the Scope of the Treaty, the Secretary 
     of State shall provide a copy of the Federal Register Notice 
     delineating the policies and procedures that will govern the 
     control of such Defense Article, consistent with Section 4(7) 
     of the Implementing Arrangement, as well as an explanation of 
     the reasons for adopting those policies and procedures, to 
     the Committee on Foreign Relations of the Senate and the 
     Committee on Foreign Affairs of the House of Representatives 
     within five days of the issuance of such Notice.
       (5) Changes to the definition of the territory of the 
     United Kingdom.
       (A) The Secretary of State shall inform the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives within 15 days of the 
     initiation of consultations with the United Kingdom 
     concerning the inclusion of any additional territory or 
     territories in the definition of ``Territory of the United 
     Kingdom'' for the purposes of Article 1(8) of the Treaty, and 
     shall inform the Committees within 15 days of receipt through 
     diplomatic channels of notice that a territory or group of 
     territories has been added to the definition of ``Territory 
     of the United Kingdom'' for the purposes of Article 1(8) of 
     the Treaty.
       (B) The Secretary of State shall consult with the Committee 
     on Foreign Relations of the Senate and the Committee on 
     Foreign Affairs of the House of Representatives before 
     approving any addition to the United Kingdom Community of a 
     non-governmental entity or facility outside the territory of 
     England, Scotland, Wales, or Northern Ireland.
       (6) Approved community membership.
       (A) If sanctions are in effect against a person in the 
     United Kingdom Community pursuant to section 73(a)(2)(B) or 
     section 81 of the Arms Export Control Act (22 U.S.C. 
     2797b(a)(2)(B) or 2798), the United States shall raise the 
     matter pursuant to Article 4(2) of the Treaty and Section 
     7(9) of the Implementing Arrangement.
       (B) The Secretary of State shall inform the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives not later than 5 days 
     before the U.S. Government agrees to the initial inclusion in 
     the United Kingdom Community of a nongovernmental United 
     Kingdom entity, if the Department of State is aware that the 
     entity, or any one or more of its relevant senior officers or 
     officials:
       (i) Has been convicted of violating a statute cited in 
     paragraph 38(g)(1) of the Arms Export Control Act (22 U.S.C. 
     2778(g)(1)); or
       (ii) is, or would be if that person were a United States 
     person,
       (a) ineligible to contract with any agency of the U.S. 
     Government;
       (b) ineligible to receive a license or other form of 
     authorization to export from any agency of the U.S. 
     Government; or
       (c) ineligible to receive a license or any form of 
     authorization to import defense articles or defense services 
     from any agency of the U.S. Government.
       (C) The Secretary of State shall inform and consult with 
     the Committee on Foreign Relations of the Senate and the 
     Committee on Foreign Affairs of the House of Representatives 
     not later than 5 days after the United States Government 
     agrees to the continued inclusion in the United Kingdom 
     Community of a nongovernmental United Kingdom entity, if the 
     Department is aware that the entity, or any one or more of 
     its relevant senior officers or officials, raises one or more 
     of the concerns referred to in paragraph (B).
       (7) Transition policies and procedures.
       (A) No fewer than 15 days before formally establishing the 
     procedures called for in Section 5(5) of the Implementing 
     Arrangement, the President shall provide to the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives a report concerning 
     the policies and procedures developed to govern the 
     transition to the application of the Treaty, pursuant to 
     Article 3(3) of the Treaty, of Defense Articles acquired and 
     delivered under the Foreign Military Sales program.
       (B) No fewer than 15 days before formally establishing the 
     procedures called for in Section 8(2) of the Implementing 
     Arrangement, the President shall provide to the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives a report concerning 
     the policies and procedures developed to govern the members 
     of the United Kingdom Community wishing to transition to the 
     processes established under the Treaty, pursuant to Article 
     14(2) of the Treaty, from the requirements of a United States 
     Government export license or other authorization.
       (8) Congressional oversight.
       (A) The Secretary of State shall inform the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives promptly of any 
     report, consistent with Section 11(4)(b)(vi) of the 
     Implementing Arrangement, of a material violation of Treaty 
     requirements or procedures by a member of the Approved 
     Community.
       (B) The Department of State shall brief the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives regularly regarding 
     issues raised in the Management Board called for in Section 
     12(3) of the Implementing Arrangement, and the resolution of 
     such issues.
       (9) Annual report.
       Not later than March 31, 2011, and annually thereafter, the 
     President shall submit to Congress a report, which shall 
     cover all Treaty activities during the previous calendar 
     year. This report shall include:
       (A) a summary of the amount of Exports under the Treaty and 
     of Defense Articles transitioned into the Treaty, with an 
     analysis of how the Treaty is being used;
       (B) a list of all political contributions, gifts, 
     commissions and fees paid, or offered or agreed to be paid, 
     by any person in connection with Exports of Defense Articles 
     under the Treaty in order to solicit, promote, or otherwise 
     to secure the conclusion of such sales;
       (C) any action to remove from the United Kingdom Community 
     a nongovernmental entity or facility previously engaged in 
     activities under the Treaty, other than due to routine name 
     or address changes or mergers and acquisitions;
       (D) any concerns relating to infringement of intellectual 
     property rights that were raised to the President or an 
     Executive branch Department or Agency by Approved Community 
     members, and developments regarding any concerns that were 
     raised in previous years;
       (E) a description of any relevant investigation and each 
     prosecution pursued with respect to activities under the 
     Treaty, the results of such investigations or prosecutions 
     and of such investigations and prosecutions that continued 
     over from previous years, and any shortfalls in obtaining 
     prompt notification pursuant to Article 13(3) of the Treaty 
     or in cooperation between the Parties pursuant to Article 
     13(3) and (4) of the Treaty;
       (F) a description of any post-shipment verification, end-
     user/end-use monitoring, or other security activity related 
     to Treaty implementation conducted during the year, the 
     purposes of such activity and the results achieved; and
       (G) any Office of Inspector General activity bearing upon 
     Treaty implementation conducted during the year, any 
     resultant findings or recommendations, and any actions taken 
     in response to current or past findings or recommendations.
       Section 3. Understandings.
       The Senate's advice and consent to the ratification of the 
     Treaty with the United Kingdom Concerning Defense Trade 
     Cooperation is subject to the following understandings, which 
     shall be included in the instrument of ratification:
       (1) Meaning of the phrase ``identified in.''
       It is the understanding of the United States that the 
     phrase ``identified in'' in the Treaty shall be interpreted 
     as meaning ``identified pursuant to.''
       (2) Meaning of the word ``scope.''
       It is the understanding of the United States that the word 
     ``Scope'' in the Treaty shall be interpreted as meaning ``the 
     Treaty's coverage as identified in Article 3.''
       (3) Cooperative programs with exempt and non-exempt defense 
     articles.
       It is the understanding of the United States that if a 
     cooperative program is mutually determined, consistent with 
     Section 2(2)(e) of the Implementing Arrangement, to be within 
     the Scope of the Treaty pursuant to Article 3(1)(b) of the 
     Treaty despite involving Defense Articles that are exempt 
     from the Scope of the Treaty pursuant to Article 3(2) of the 
     Treaty, the exempt Defense Articles shall remain exempt from 
     the Scope of the Treaty and the Treaty shall apply only to 
     non-exempt Defense Articles required for the program.
       (4) Investigations and reports of alleged violations.
       It is the understanding of the United States that the words 
     ``as appropriate'' in Section 10(3)(f) of the Implementing 
     Arrangement do not detract in any way from the obligation in 
     Article 13(3) of the Treaty, that ``Each Party shall promptly 
     investigate all suspected violations and reports of alleged 
     violations of the procedures established pursuant to this 
     Treaty, and shall promptly inform the other Party of the 
     results of such investigations.''

[[Page 16507]]

       (5) Exempt defense articles.
       It is the understanding of the United States that if one 
     Party to the Treaty exempts a type of Defense Articles from 
     the scope of the Treaty pursuant to Article 3(2) of the 
     Treaty, then Defense Articles of that type will be treated as 
     exempt by both Parties to the Treaty.
       (6) Intermediate consignees.
       It is the understanding of the United States that any 
     intermediate consignee of an Export from the United States 
     under the Treaty must be a member of the Approved Community 
     or otherwise approved by the United States Government.
       (7) Scope of treaty exemption.
       The United States interprets the Treaty not to exempt any 
     person or entity from any United States statutory and 
     regulatory requirements, including any requirements of 
     licensing or authorization, other than those included in the 
     International Traffic in Arms Regulations, as modified or 
     amended. Accordingly, the United States interprets the term 
     `license or other written authorization' in Article 2 and the 
     term `licenses or other authorizations' in Article 6(1), as 
     these terms apply to the United States, and the term `prior 
     written authorization by the United States Government' in 
     Article 7, to refer only to such licenses, licensing 
     requirements, and other authorizations as are required or 
     issued by the United States pursuant to the International 
     Traffic in Arms Regulations, as modified or amended; and the 
     United States interprets the reference to `the applicable 
     licensing requirements and the implementing regulations of 
     the United States Arms Export Control Act' in Article 13(1) 
     to refer only to the applicable licensing requirements under 
     the International Traffic in Arms Regulations, as modified or 
     amended.
       Section 4. Declarations.
       The Senate's advice and consent to the ratification of the 
     Treaty with the United Kingdom Concerning Defense Trade 
     Cooperation is subject to the following declarations:
       (1) Self-execution.
       This Treaty is not self-executing in the United States, 
     notwithstanding the statement in the preamble to the 
     contrary.
       (2) Private rights.
       This Treaty does not confer private rights enforceable in 
     United States courts.
       (3) Intellectual property rights.
       No liability will be incurred by or attributed to the 
     United States Government in connection with any possible 
     infringement of privately owned patent or proprietary rights, 
     either domestic or foreign, by reason of the United States 
     Government's permitting Exports or Transfers or its approval 
     of Re-exports or Re-transfers under the Treaty.
       Section 5. Definitions.
       As used in this resolution:
       (1) The terms ``Treaty with the United Kingdom Concerning 
     Defense Trade Cooperation'' and ``Treaty'' mean the Treaty 
     between the Government of the United States of America and 
     the Government of the United Kingdom of Great Britain and 
     Northern Ireland Concerning Defense Trade Cooperation, done 
     at Washington and London on June 21 and 26, 2007.
       (2) The terms ``Implementing Arrangement Pursuant to the 
     Treaty'' and ``Implementing Arrangement'' mean the 
     Implementing Arrangement Pursuant to the Treaty between the 
     Government of the United States of America and the Government 
     of the United Kingdom of Great Britain and Northern Ireland 
     Concerning Defense Trade Cooperation, which was signed in 
     Washington on February 14, 2008.
       (3) The terms ``Defense Articles,'' ``Export,'' ``Re-
     export,'' ``Re-transfer,'' ``Transfer,'' ``Approved 
     Community,'' ``United States Community,'' ``United Kingdom 
     Community,'' and ``Territory of the United Kingdom'' have the 
     meanings given to them in Article 1 of the Treaty.
       (4) The terms ``Management Board'' and ``Management Plan'' 
     have the meanings given to them in Section 1 of the 
     Implementing Arrangement.
       (5) The terms ``person'' and ``foreign person'' have the 
     meaning given to them by section 38(g)(9) of the Arms Export 
     Control Act (22 U.S.C. 2778(g)(9)). The term ``U.S. person'' 
     has the meaning given to it by part 120.15 of title 22, Code 
     of Federal Regulations.

  [110-10  Treaty with Australia Concerning Defense Trade Cooperation]

       Resolved (two-thirds of the Senators present concurring 
     therein),
       Section 1. Senate Advice and Consent Subject to Conditions, 
     Understandings And Declarations.
       The Senate advises and consents to the ratification of the 
     Treaty Between the Government of the United States of America 
     and the Government of Australia Concerning Defense Trade 
     Cooperation, done at Sydney, September 5, 2007 (Treaty Doc. 
     110-10) (as defined in section 5 of this resolution), subject 
     to the conditions in section 2, the understandings in section 
     3 and the declarations in section 4.
       Section 2. Conditions.
       The Senate's advice and consent to the ratification of the 
     Treaty with Australia Concerning Defense Trade Cooperation is 
     subject to the following conditions, which shall be binding 
     upon the President:
       (1) United States preparation for treaty implementation.
       (A) At least 15 days before any exchange of notes pursuant 
     to Article 20 of the Treaty, the President shall submit to 
     the Congress a report--
       (i) describing steps taken to ensure that the Executive 
     branch and United States industry are prepared to comply with 
     Treaty requirements;
       (ii) analyzing the implications of the Treaty, and 
     especially of Article 3(3) of the Treaty, for the protection 
     of intellectual property rights of United States persons;
       (iii) explaining what steps the United States Government is 
     taking and will take to combat improper or illegal intangible 
     exports (i.e., exports as defined in part 120.17(a)(4) of 
     title 22, Code of Federal Regulations) under the Treaty; and
       (iv) setting forth the issues to be addressed in the 
     Management Plan called for by Section 12(3)(f) of the 
     Implementing Arrangement and the procedures that are expected 
     to be adopted in that Plan.
       (B) Before any exchange of notes pursuant to Article 20 of 
     the Treaty, the President shall submit to the Congress a 
     certification that changes to the International Traffic in 
     Arms Regulations (parts 120-130 of title 22, Code of Federal 
     Regulations) have been published in the Federal Register 
     pursuant to the Arms Export Control Act, as appropriate, that 
     would, upon entry into force of the Treaty,--
       (i) make clear the legal obligation for any person involved 
     in an Export, Re-export, Transfer, or Re-transfer under the 
     Treaty to comply with all requirements in the revised 
     International Traffic in Arms Regulations, including by 
     taking all reasonable steps to ensure the accuracy of 
     information received from a member of the Approved Community 
     that is party to an Export, Re-export, Transfer, or Re-
     transfer under the Treaty;
       (ii) make clear the legal obligation for Approved Community 
     members to comply with United States Government instructions 
     and requirements regarding United States Defense Articles 
     added to the list of exempt Defense Articles pursuant to 
     Article 3(2) of the Treaty;
       (iii) limit a person from being a member of the United 
     States Community, pursuant to Article 5(2) of the Treaty, if 
     that person is generally ineligible to export pursuant to 
     section 120.1(c) of title 22, Code of Federal Regulations; 
     and
       (iv) require any nongovernmental entity that ceases to be 
     included in the United States Community to comply with 
     instructions from authorized United States Government 
     officials and to open its records of transactions under the 
     Treaty to inspection by United States Government and, as 
     appropriate, authorized Australian Government officials 
     pursuant to Article 12 of the Treaty.
       (C) Before any exchange of notes pursuant to Article 20 of 
     the Treaty, the President shall submit to the Congress--
       (i) a certification that appropriate mechanisms have been 
     established to identify, in connection with the process for 
     determining whether a nongovernmental entity is in the United 
     States Community pursuant to Article 5(2) of the Treaty, 
     persons who meet the criteria in section 38(g)(1) of the Arms 
     Export Control Act (22 U.S.C. 2778(g)(1));
       (ii) a certification that appropriate mechanisms have been 
     established to verify that nongovernmental entities in the 
     United States that Export pursuant to the Treaty are eligible 
     to export Defense Articles under United States law and 
     regulation as required by Article 5(2) of the Treaty;
       (iii) a certification that United States Department of 
     Homeland Security personnel at United States ports--
       (a) have prompt access to a State Department database 
     containing registered exporters, freight forwarders and 
     consignees, and watch lists regarding United States 
     companies; and
       (b) are prepared to prevent attempts to export pursuant to 
     the Treaty by United States persons who are not eligible to 
     export Defense Articles under United States law or 
     regulation, even if such person has registered with the 
     United States Government;
       (iv) a certification that the Secretary of Defense has 
     promulgated appropriate changes to the National Industrial 
     Security Program Operating Manual and to Regulation DoD 
     5200.1-R, ``Information Security Program,'' and has issued 
     guidance to industry regarding marking and other Treaty 
     compliance requirements; and
       (v) a certification that a capability has been established 
     to conduct post-shipment verification, end-use/end-user 
     monitoring and related security audits for Exports under the 
     Treaty, accompanied by a report setting forth the legal 
     authority, staffing and budget provided for this capability 
     and any further Executive branch or congressional action 
     recommended to ensure its effective implementation.
       (2) Treaty partner preparation for treaty implementation.
       Before any exchange of notes pursuant to Article 20 of the 
     Treaty, the President shall certify to Congress that the 
     Government of Australia has--
       (A) enacted legislation to strengthen generally its 
     controls over defense and dual-use goods, including controls 
     over intangible transfers of controlled technology and 
     brokering of controlled goods, technology, and services, and 
     setting forth:

[[Page 16508]]

       (i) the criteria for entry into the Australian Community 
     and the conditions Australian Community members must abide by 
     to maintain membership, including personnel, information and 
     facilities security requirements;
       (ii) the record-keeping and notification and reporting 
     requirements under the Treaty;
       (iii) the handling, marking and classification requirements 
     for United States and Australian Defense Articles Exported or 
     Transferred under the Treaty;
       (iv) the requirements for Exports and Transfers of United 
     States Defense Articles outside the Approved Community or to 
     a third country;
       (v) the rules for handling United States Defense Articles 
     that are added to or removed from the list of items exempted 
     from Treaty application;
       (vi) the rules for transitioning into and out of the 
     Australian Community;
       (vii) auditing, monitoring and investigative powers for 
     Commonwealth officials and powers to allow Commonwealth 
     officials to perform post-shipment verifications and end-use/
     end-user monitoring; and (viii) offenses and penalties, and 
     administrative requirements, necessary for the enforcement of 
     the Treaty and its Implementing Arrangement; and
       (B) promulgated regulatory changes setting forth:
       (i) the criteria for entry into the Australian Community, 
     and terms for maintaining Australian Community membership;
       (ii) the criteria for individuals to become authorized to 
     access United States Defense Articles received pursuant to 
     the Treaty;
       (iii) benefits stemming from Australian Community 
     membership, including a framework for license-free trade with 
     the United States in classified or controlled items falling 
     within the scope of the Treaty;
       (iv) the conditions Australian Community members must abide 
     by to maintain membership, including:
       (a) record-keeping and notification requirements;
       (b) marking and classification requirements for defense 
     articles Exported or Transferred under the Treaty;
       (c) requirements for the Re-transfer to non-Approved 
     Community members and Re-export to a third country of defense 
     articles; and
       (d) maintaining security standards and measures articulated 
     in Defense protective security policy to protect defense 
     articles pursuant to the Treaty;
       (v) provisions to enforce the procedures established 
     pursuant to the Treaty, including auditing and monitoring 
     powers for Australian Department of Defence officials and 
     powers to allow Department of Defence officials to perform 
     post-shipment verifications and end-use/end-user monitoring;
       (vi) offenses and penalties, including administrative and 
     criminal penalties and suspension and termination from the 
     Australian Community, to enforce the provisions of the 
     Treaty; and
       (vii) requirements and standards for transition into or out 
     of the Australian Community and Treaty framework.
       (3) Joint operations, programs and projects.
       The Secretary of State shall keep the Committee on Foreign 
     Relations of the Senate and the Committee on Foreign Affairs 
     of the House of Representatives informed of the lists of 
     combined military and counter-terrorism operations developed 
     pursuant to Article 3(1)(a) of the Treaty; cooperative 
     security and defense research, development, production, and 
     support programs developed pursuant to Article 3(1)(b) of the 
     Treaty; and specific security and defense projects developed 
     pursuant to article 3(1)(c) of the Treaty.
       (4) Exempted defense articles.
       (A) The President may remove a Defense Article from the 
     list of Defense Articles exempt from the Scope of the Treaty, 
     if such removal is not barred by United States law, 30 days 
     after the President informs the Committee on Foreign 
     Relations of the Senate and the Committee on Foreign Affairs 
     of the House of Representatives of such proposed removal.
       (B) When a Defense Article is added to the list of Defense 
     Articles exempt from the Scope of the Treaty, the Secretary 
     of State shall provide a copy of the Federal Register Notice 
     delineating the policies and procedures that will govern the 
     control of such Defense Article, consistent with Section 4(7) 
     of the Implementing Arrangement, as well as an explanation of 
     the reasons for adopting those policies and procedures, to 
     the Committee on Foreign Relations of the Senate and the 
     Committee on Foreign Affairs of the House of Representatives 
     within five days of the issuance of such Notice.
       (5) Approved community membership.
       (A) If sanctions are in effect against a person in the 
     Australian Community pursuant to section 73(a)(2)(B) or 
     section 81 of the Arms Export Control Act (22 U.S.C. 
     2797b(a)(2)(B) or 2798), the United States shall raise the 
     matter pursuant to Article 4(2) of the Treaty and Section 
     6(9) of the Implementing Arrangement.
       (B) The Secretary of State shall inform the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives not later than 5 days 
     before the U.S. Government agrees to the initial inclusion in 
     the Australian Community of a nongovernmental Australian 
     entity, if the Department of State is aware that the entity, 
     or any one or more of its relevant senior officers or 
     officials:
       (i) Has been convicted of violating a statute cited in 
     paragraph 38(g)(1) of the Arms Export Control Act (22 U.S.C. 
     2778(g)(1)); or
       (ii) is, or would be if that person were a United States 
     person,
       (a) ineligible to contract with any agency of the U.S. 
     Government;
       (b) ineligible to receive a license or other form of 
     authorization to export from any agency of the U.S. 
     Government; or
       (c) ineligible to receive a license or any form of 
     authorization to import defense articles or defense services 
     from any agency of the U.S. Government.
       (C) The Secretary of State shall inform and consult with 
     the Committee on Foreign Relations of the Senate and the 
     Committee on Foreign Affairs of the House of Representatives 
     not later than 5 days after the United States Government 
     agrees to the continued inclusion in the Australian Community 
     of a nongovernmental Australian entity, if the Department is 
     aware that the entity, or any one or more of its relevant 
     senior officers or officials, raises one or more of the 
     concerns referred to in paragraph (B).
       (6) Transition policies and procedures.
       (A) No fewer than 15 days before formally establishing the 
     procedures called for in Section 5(5) of the Implementing 
     Arrangement, the President shall provide to the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives a report concerning 
     the policies and procedures developed to govern the 
     transition to the application of the Treaty, pursuant to 
     Article 3(3) of the Treaty, of Defense Articles acquired and 
     delivered under the Foreign Military Sales program.
       (B) No fewer than 15 days before formally establishing the 
     procedures called for in Section 7(2) of the Implementing 
     Arrangement, the President shall provide to the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives a report concerning 
     the policies and procedures developed to govern the members 
     of the Australian Community wishing to transition to the 
     processes established under the Treaty, pursuant to Article 
     14(2) of the Treaty, from the requirements of a United States 
     Government export license or other authorization.
       (7) Congressional oversight.
       (A) The Secretary of State shall inform the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives promptly of any 
     report, consistent with Section 11(6)(f) of the Implementing 
     Arrangement, of a material violation of Treaty requirements 
     or procedures by a member of the Approved Community.
       (B) The Department of State shall brief the Committee on 
     Foreign Relations of the Senate and the Committee on Foreign 
     Affairs of the House of Representatives regularly regarding 
     issues raised in the Management Board called for in Section 
     12(3) of the Implementing Arrangement, and the resolution of 
     such issues.
       (8) Annual report.
       Not later than March 31, 2011, and annually thereafter, the 
     President shall submit to Congress a report, which shall 
     cover all Treaty activities during the previous calendar 
     year. This report shall include:
       (A) a summary of the amount of Exports under the Treaty and 
     of Defense Articles transitioned into the Treaty, with an 
     analysis of how the Treaty is being used;
       (B) a list of all political contributions, gifts, 
     commissions and fees paid, or offered or agreed to be paid, 
     by any person in connection with Exports of Defense Articles 
     under the Treaty in order to solicit, promote, or otherwise 
     to secure the conclusion of such sales;
       (C) any action to remove from the Australian Community a 
     nongovernmental entity or facility previously engaged in 
     activities under the Treaty, other than due to routine name 
     or address changes or mergers and acquisitions;
       (D) any concerns relating to infringement of intellectual 
     property rights that were raised to the President or an 
     Executive branch Department or Agency by Approved Community 
     members, and developments regarding any concerns that were 
     raised in previous years;
       (E) a description of any relevant investigation and each 
     prosecution pursued with respect to activities under the 
     Treaty, the results of such investigations or prosecutions 
     and of such investigations and prosecutions that continued 
     over from previous years, and any shortfalls in obtaining 
     prompt notification pursuant to Article 13(3) of the Treaty 
     or in cooperation between the Parties pursuant to Article 
     13(3) and (4) of the Treaty;
       (F) a description of any post-shipment verification, end-
     user/end-use monitoring, or other security activity related 
     to Treaty implementation conducted during the year, the 
     purposes of such activity and the results achieved; and
       (G) any Office of Inspector General activity bearing upon 
     Treaty implementation conducted during the year, any 
     resultant findings or recommendations, and any actions

[[Page 16509]]

     taken in response to current or past findings or 
     recommendations.
       Section 3. Understandings.
       The Senate's advice and consent to the ratification of the 
     Treaty with Australia Concerning Defense Trade Cooperation is 
     subject to the following understandings, which shall be 
     included in the instrument of ratification:
       (1) Meaning of the phrase ``identified in.''
       It is the understanding of the United States that the 
     phrase ``identified in'' in the Treaty shall be interpreted 
     as meaning ``identified pursuant to.''
       (2) Cooperative programs with exempt and non-exempt defense 
     articles.
       It is the understanding of the United States that if a 
     cooperative program is mutually determined, consistent with 
     Section 2(2)(e) of the Implementing Arrangement, to be within 
     the Scope of the Treaty pursuant to Article 3(1)(b) of the 
     Treaty despite involving Defense Articles that are exempt 
     from the Scope of the Treaty pursuant to Article 3(2) of the 
     Treaty, the exempt Defense Articles shall remain exempt from 
     the Scope of the Treaty and the Treaty shall apply only to 
     non-exempt Defense Articles required for the program.
       (3) Investigations and reports of alleged violations.
       It is the understanding of the United States that the words 
     ``as appropriate'' in Section 10(3)(f) of the Implementing 
     Arrangement do not detract in any way from the obligation in 
     Article 13(3) of the Treaty, that ``Each Party shall promptly 
     investigate all suspected violations and reports of alleged 
     violations of the procedures established pursuant to this 
     Treaty, and shall promptly inform the other Party of the 
     results of such investigations.''
       (4) Exempt defense articles.
       It is the understanding of the United States that if one 
     Party to the Treaty exempts a type of Defense Articles from 
     the scope of the Treaty pursuant to Article 3(2) of the 
     Treaty, then Defense Articles of that type will be treated as 
     exempt by both Parties to the Treaty.
       (5) Intermediate consignees.
       It is the understanding of the United States that any 
     intermediate consignee of an Export from the United States 
     under the Treaty must be a member of the Approved Community 
     or otherwise approved by the United States Government.
       (6) Scope of treaty exemption.
       The United States interprets the Treaty not to exempt any 
     person or entity from any United States statutory and 
     regulatory requirements, including any requirements of 
     licensing or authorization, other than those included in the 
     International Traffic in Arms Regulations, as modified or 
     amended. Accordingly, the United States interprets the term 
     `license or other written authorization' in Article 2 and the 
     term `licenses or other authorizations' in Article 6(1), as 
     these terms apply to the United States, and the term `prior 
     written authorization by the United States Government' in 
     Article 7, to refer only to such licenses, licensing 
     requirements, and other authorizations as are required or 
     issued by the United States pursuant to the International 
     Traffic in Arms Regulations, as modified or amended; and the 
     United States interprets the reference to `the applicable 
     licensing requirements and the implementing regulations of 
     the United States Arms Export Control Act' in Article 13(1) 
     to refer only to the applicable licensing requirements under 
     the International Traffic in Arms Regulations, as modified or 
     amended.
       Section 4. Declarations.
       The Senate's advice and consent to the ratification of the 
     Treaty with Australia Concerning Defense Trade Cooperation is 
     subject to the following declarations:
       (1) Self-execution.
       This Treaty is not self-executing in the United States, 
     notwithstanding the statement in the preamble to the 
     contrary.
       (2) Private rights.
       This Treaty does not confer private rights enforceable in 
     United States courts.
       (3) Intellectual property rights.
       No liability will be incurred by or attributed to the 
     United States Government in connection with any possible 
     infringement of privately owned patent or proprietary rights, 
     either domestic or foreign, by reason of the United States 
     Government's permitting Exports or Transfers or its approval 
     of Re-exports or Re-transfers under the Treaty.
       Section 5. Definitions.
       As used in this resolution:
       (1) The terms ``Treaty with Australia Concerning Defense 
     Trade Cooperation'' and ``Treaty'' mean the Treaty between 
     the Government of the United States of America and the 
     Government of Australia Concerning Defense Trade Cooperation, 
     done at Sydney, September 5, 2007.
       (2) The terms ``Implementing Arrangement Pursuant to the 
     Treaty'' and ``Implementing Arrangement'' mean the 
     Implementing Arrangement Pursuant to the Treaty between the 
     Government of the United States of America and the Government 
     of Australia Concerning Defense Trade Cooperation, which was 
     signed in Washington on March 14, 2008.
       (3) The terms ``Defense Articles,'' ``Export,'' ``Re-
     export,'' ``Re-transfer,'' ``Transfer,'' ``Approved 
     Community,'' ``United States Community,'' ``Australian 
     Community,'' and ``Scope'' have the meanings given to them in 
     Article 1 of the Treaty.
       (4) The terms ``Management Board'' and ``Management Plan'' 
     have the meanings given to them in Section 1 of the 
     Implementing Arrangement.
       (5) The terms ``person'' and ``foreign person'' have the 
     meaning given to them by section 38(g)(9) of the Arms Export 
     Control Act (22 U.S.C. 2778(g)(9)). The term ``U.S. person'' 
     has the meaning given to it by part 120.15 of title 22, Code 
     of Federal Regulations.

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