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115th Congress } { Rept. 115-784
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
FOREIGN INVESTMENT RISK REVIEW MODERNIZATION ACT OF 2018
_______
June 26, 2018.--Ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 5841]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5841) to modernize and strengthen the Committee
on Foreign Investment in the United States to more effectively
guard against the risk to the national security of the United
States posed by certain types of foreign investment, and for
other purposes, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Foreign Investment
Risk Review Modernization Act of 2018''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--FINDINGS AND SENSE OF CONGRESS
Sec. 101. Findings and sense of Congress.
TITLE II--DEFINITIONS
Sec. 201. Definitions.
TITLE III--IMPROVEMENTS TO THE OPERATIONS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
Sec. 301. Inclusion of partnership and side agreements in notice.
Sec. 302. Declarations relating to certain covered transactions.
Sec. 303. Timing for reviews and investigations.
Sec. 304. Submission of certifications to Congress.
Sec. 305. Analysis by Director of National Intelligence.
Sec. 306. Information sharing.
Sec. 307. Action by the President.
Sec. 308. Factors to be considered.
Sec. 309. Mitigation and other actions by the Committee to address
national security risks.
Sec. 310. Certification of notices and information.
Sec. 311. Additional regulations.
TITLE IV--MODIFICATION OF ANNUAL REPORT
Sec. 401. Modification of annual report.
Sec. 402. Report on transactions with censorship implications.
TITLE V--RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH
Sec. 501. Centralization of certain Committee functions.
Sec. 502. CFIUS resource needs.
Sec. 503. Funding.
Sec. 504. CFIUS outreach.
TITLE VI--MISCELLANEOUS FIRRMA PROVISIONS
Sec. 601. Conforming amendment.
Sec. 602. Regulatory certainty for United States businesses.
TITLE VII--COMMON SENSE CREDIT UNION CAPITAL RELIEF
Sec. 701. Delay in effective date.
TITLE VIII--EXPORT CONTROL REFORM
Sec. 801. Short title.
Sec. 802. Definitions.
Subtitle A--Authority and Administration of Controls
Sec. 811. Short title.
Sec. 812. Statement of policy.
Sec. 813. Authority of the President.
Sec. 814. Additional authorities.
Sec. 815. Administration of export controls.
Sec. 816. Control lists.
Sec. 817. Licensing.
Sec. 818. Compliance assistance.
Sec. 819. Requirements to identify and control emerging, foundational,
and other critical technologies in export control regulations.
Sec. 820. Review relating to countries subject to comprehensive United
States arms embargo.
Sec. 821. Penalties.
Sec. 822. Enforcement.
Sec. 823. Administrative procedure.
Sec. 824. Annual report to Congress.
Sec. 825. Repeal.
Sec. 826. Effect on other Acts.
Sec. 827. Transition provisions.
Subtitle B--Anti-Boycott Act of 2018
Sec. 831. Short title.
Sec. 832. Statement of policy.
Sec. 833. Foreign boycotts.
Sec. 834. Enforcement.
Subtitle C--Sanctions Regarding Missile Proliferation and Chemical and
Biological Weapons Proliferation
Sec. 841. Missile proliferation control violations.
Sec. 842. Chemical and biological weapons proliferation sanctions.
Subtitle D--Administrative Authorities
Sec. 851. Under Secretary of Commerce for Industry and Security.
TITLE I--FINDINGS AND SENSE OF CONGRESS
SEC. 101. FINDINGS AND SENSE OF CONGRESS.
(a) Findings.--The Congress finds the following:
(1) According to a February 2016 report by the Department of
Commerce's International Trade Administration, 12 million
United States workers, equivalent to 8.5 percent of the labor
force, have jobs resulting from foreign investment, including
3.5 million jobs in the manufacturing sector alone.
(2) In 2016, new foreign direct investment in U.S.
manufacturing totaled $129.4 billion.
(3) The Department of Commerce's Bureau of Economic Analysis
concluded that in 2015, foreign-owned affiliates in the United
States--
(A) Contributed $894.5 billion in value added to the
U.S. economy;
(B) exported goods valued at $352.8 billion,
accounting for nearly a quarter of total U.S. goods
exports;
(C) undertook $56.7 billion in research and
development; and
(D) the seven largest investing countries, all of
which are United States allies - the United Kingdom,
Japan, Germany, France, Canada, Switzerland, and the
Netherlands - accounted for 72.1 percent of U.S.
affiliate value added and over 80 percent of
affiliates' R&D expenditures.
(4) According to the Government Accountability Office (GAO),
from 2011 to 2016, the number of transactions reviewed by the
Committee on Foreign Investment in the United States (CFIUS)
grew by 55 percent, while agency staff assigned to the reviews
increased by 11 percent.
(5) In light of staffing constraints at CFIUS, GAO has
cautioned against expanding CFIUS's authorities precipitously.
According to a February 2018 report (GAO-18-249), GAO noted:
``Officials from Treasury and other member agencies are aware
of pressures on their CFIUS staff given the current workload
and have expressed concerns about possible workload
increases.''. GAO concluded: ``Without attaining an
understanding of the staffing levels needed to address the
current and future CFIUS workload, particularly if legislative
changes to CFIUS's authorities further expand its workload,
CFIUS may be limited in its ability to fulfill its objectives
and address threats to the national security of the United
States.''.
(6) On March 30, 1954, Dwight David Eisenhower - five-star
general, Supreme Allied Commander, and 34th President of the
United States - in his ``Special Message to the Congress on
Foreign Economic Policy'', counseled: ``Great mutual advantages
to buyer and seller, to producer and consumer, to investor and
to the community where investment is made, accrue from high
levels of trade and investment.''. He continued: ``The internal
strength of the American economy has evolved from such a system
of mutual advantage. In the press of other problems and in the
haste to meet emergencies, this nation - and many other nations
of the free world - have all too often lost sight of this
central fact.''. President Eisenhower concluded: ``If we fail
in our trade policy, we may fail in all. Our domestic
employment, our standard of living, our security, and the
solidarity of the free world - all are involved.''.
(b) Sense of Congress.--It is the sense of Congress that--
(1) foreign investment provides substantial benefits to the
United States, including the promotion of economic growth,
productivity, innovation, competitiveness, and job creation,
thereby enhancing U.S. national security;
(2) maintaining the commitment of the United States to an
open investment policy encourages other countries to act
similarly and helps expand foreign markets for U.S. businesses;
(3) the Committee on Foreign Investment in the United States,
as a complement to domestic and multilateral export control
regimes, plays a critical role in protecting the national
security of the United States;
(4) in order to maintain the Committee's effectiveness and
guard against mission creep, CFIUS should remain narrowly
focused on confronting risks related to national security;
(5) it is essential that the member agencies of the Committee
are adequately resourced and able to hire appropriately
qualified individuals in a timely manner so that CFIUS may
promptly complete transaction reviews, identify and respond to
evolving national security risks, and enforce mitigation
agreements effectively;
(6) the President should carry out international outreach to
promote the benefits of foreign investment for global economic
growth, while also assisting United States partners to address
national security risks; and
(7) it is the policy of the United States to enthusiastically
welcome and support foreign investment, consistent with
national security considerations.
TITLE II--DEFINITIONS
SEC. 201. DEFINITIONS.
Section 721(a) of the Defense Production Act of 1950 (50 U.S.C.
4565(a)) is amended--
(1) by striking paragraphs (2), (3), and (4) and inserting
the following:
``(2) Control.--The term `control' means the power, direct or
indirect, whether or not exercised, to determine, direct, or
decide important matters affecting an entity, subject to
regulations prescribed by the Committee.
``(3) Covered transaction.--
``(A) In general.--The term `covered transaction'
means any transaction described in subparagraph (B) or
(C) that is proposed, pending, or completed on or after
the date of the enactment of the Foreign Investment
Risk Review Modernization Act of 2018.
``(B) Transactions described.--A transaction
described in this subparagraph is any of the following:
``(i) Any merger, acquisition, takeover, or
joint venture that is proposed or pending after
August 23, 1988, by or with any foreign person
that could result in foreign control of any
United States business.
``(ii) The purchase or lease by, or
concession to, a foreign person of private or
public real estate that--
``(I) is--
``(aa) located in the United
States and is, or is in close
proximity to, a United States
military installation; or
``(bb) itself, or is located
at and will function as part
of, an air or sea port;
``(II) is not a single housing unit,
as defined by the Bureau of the Census;
``(III) is not in an urbanized area,
as set forth by the Bureau of the
Census in its most recent census,
except as otherwise prescribed by the
Committee in regulations in
consultation with the Secretary of
Defense; and
``(IV) meets such other criteria as
the Committee prescribes by regulation.
``(iii) Any change in the rights that a
foreign person has with respect to a United
States business in which the foreign person has
an investment, if that change is likely to
result in foreign control of the United States
business.
``(iv) Any transaction or other device
entered into or employed for the purpose of
evading this section, subject to regulations
prescribed by the Committee.
``(C) Sensitive transactions involving countries of
special concern.--
``(i) In general.--A transaction described in
this subparagraph is any investment in an
unaffiliated United States business by a
foreign person that--
``(I) is--
``(aa) a national or a
government of, or a foreign
entity organized under the laws
of, a country of special
concern; or
``(bb) a foreign entity--
``(AA) over which
control is exercised or
exercisable by a
national or a
government of, or by a
foreign entity
organized under the
laws of, a country of
special concern; or
``(BB) in which the
government of a country
of special concern has
a substantial interest;
and
``(II) as a result of the
transaction, could obtain---
``(aa) sensitive personal
data, as defined by regulations
prescribed by the Committee, of
United States citizens, if such
data may be exploited in a
manner that threatens national
security; or
``(bb) influence over
substantive decisionmaking of
the United States business
regarding the use, development,
acquisition, or release of--
``(AA) sensitive
personal data of United
States citizens, as
described in item (aa);
or
``(BB) critical
technologies.
``(ii) Country of special concern.--For the
purposes of this subparagraph, the term
`country of special concern' means--
``(I) any foreign country that is
subject to export restrictions pursuant
to section 744.21 of title 15, Code of
Federal Regulations;
``(II) any country determined by the
Secretary of State to be a state
sponsor of terrorism; and
``(III) any country that--
``(aa) is subject to a United
States arms embargo, as
specified in list D:5 of
Country Group D in Supplement
No. 1 to part 740 of title 15,
Code of Federal Regulations;
and
``(bb) is specified in
regulations prescribed by the
Committee.
``(iii) Investment defined.--For the purposes
of this subparagraph, the term `investment'
means the acquisition of an equity interest,
including contingent equity interest, as
further defined in regulations prescribed by
the Committee.
``(iv) Unaffiliated united states business
defined.--For the purposes of this
subparagraph, with respect to an investment
described under clause (i), and as further
defined in regulations prescribed by the
Committee, the term `unaffiliated United States
business' means a United States business that
is not subject to the same ultimate ownership
of the foreign person undertaking the
investment.
``(v) Waiver.--The President may waive any
requirement of this subparagraph upon reporting
to the Committees on Financial Services and
Foreign Affairs of the House of Representatives
and the Committees on Banking, Housing, and
Urban Affairs and Foreign Relations of the
Senate that the waiver is important to the
national interest of the United States, with a
detailed explanation of the reasons therefor.
``(D) Exception for air carriers.--Subparagraph
(B)(iii) shall not apply to a change in the rights of a
person with respect to an investment involving an air
carrier, as defined in section 40102(a)(2) of title 49,
United States Code, that holds a certificate issued
under section 41102 of that title.
``(E) Transfers of certain assets pursuant to
bankruptcy proceedings or other defaults.--The
Committee shall prescribe regulations to clarify that
the term `covered transaction' includes any transaction
described in subparagraph (B) or (C) that arises
pursuant to a bankruptcy proceeding or other form of
default on debt.
``(4) Foreign government-controlled transaction.--The term
`foreign government-controlled transaction' means any covered
transaction that could result in control of a United States
business by--
``(A) a foreign government;
``(B) a person controlled by or acting on behalf of a
foreign government; or
``(C) a foreign company or entity of a country of
special concern (as defined under paragraph (3)(C)(ii))
domiciled or having its principal place of business in
a county of special concern that is a non-market
economy, except to the extent the Committee promulgates
regulations exempting any such company, entity, or
country from this presumption.'';
(2) by amending paragraph (7) to read as follows:
``(7) Critical technologies.--The term `critical
technologies' means--
``(A) defense articles or defense services covered by
the United States Munitions List (USML), which is set
forth in the International Traffic in Arms Regulations
(ITAR) (22 C.F.R. parts 120-130);
``(B) those items specified on the Commerce Control
List (CCL) set forth in Supplement No. 1 to part 774 of
the Export Administration Regulations (EAR) (15 C.F.R.
parts 730-774) that are controlled pursuant to
multilateral regimes (i.e. for reasons of national
security, chemical and biological weapons
proliferation, nuclear nonproliferation, or missile
technology), as well as those that are controlled for
reasons of regional stability or surreptitious
listening;
``(C) specially designed and prepared nuclear
equipment, parts and components, materials, software,
and technology specified in the Assistance to Foreign
Atomic Energy Activities regulations (10 C.F.R. part
810), and nuclear facilities, equipment, and material
specified in the Export and Import of Nuclear Equipment
and Material regulations (10 C.F.R. part 110);
``(D) select agents and toxins specified in the
Select Agents and Toxins regulations (7 C.F.R. part
331, 9 C.F.R. part 121, and 42 C.F.R. part 73); and
``(E) emerging, foundational, or other critical
technologies that are controlled pursuant to section
819 of the Foreign Investment Risk Review Modernization
Act of 2018.''; and
(3) by adding at the end the following:
``(9) Foreign person.--The term `foreign person' means--
``(A) any foreign national, foreign government, or
foreign entity; or
``(B) any entity over which control is exercised or
exercisable by a foreign national, foreign government,
or foreign entity.
``(10) Substantial interest.--The term `substantial interest'
has the meaning given to such term in regulations prescribed by
the Committee, but does not include a voting interest of less
than ten percent or ownership interests held or acquired solely
for the purpose of passive investment.
``(11) United states business.--The term `United States
business' means any entity, irrespective of the nationality of
the persons that control it, engaged in interstate commerce in
the United States, but only to the extent of its activities in
interstate commerce.''.
TITLE III--IMPROVEMENTS TO THE OPERATIONS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
SEC. 301. INCLUSION OF PARTNERSHIP AND SIDE AGREEMENTS IN NOTICE.
Section 721(b)(1)(C) of the Defense Production Act of 1950 (50 U.S.C.
4565(b)(1)(C)) is amended by adding at the end the following:
``(iv) Inclusion of partnership and side
agreements.--Subject to regulations prescribed
by the Committee, the Committee may require a
written notice submitted under clause (i) by a
party to a covered transaction to include a
copy of any partnership agreements, integration
agreements, or other side agreements relating
to the transaction.''.
SEC. 302. DECLARATIONS RELATING TO CERTAIN COVERED TRANSACTIONS.
(a) In General.--Section 721(b)(1)(C) of the Defense Production Act
of 1950 (50 U.S.C. 4565(b)(1)(C)), as amended by section 301, is
further amended by adding at the end the following:
``(v) Declarations with respect to certain
covered transactions.--
``(I) Voluntary declarations.--For
the purpose of expediting the review of
certain covered transactions that the
Committee determines are likely to pose
limited risk, the Committee may
prescribe regulations to permit parties
to the transaction to submit a
declaration with basic information
regarding the transaction, unless the
parties submit a written notice under
clause (i).
``(II) Mandatory declarations.--
``(aa) In general.--The
Committee shall prescribe
regulations to require the
parties to a covered
transaction to submit a
declaration described in
subclause (I) with respect to
the transaction if the
transaction involves an
investment that results in the
release of critical
technologies by an unaffiliated
United States business (as
defined under subsection
(a)(3)(C)(iii)) to a foreign
person in which a foreign
government has, directly or
indirectly, a substantial
interest.
``(bb) Submission of written
notice as an alternative.--
Parties to a covered
transaction for which a
declaration is required under
this clause may instead elect
to submit a written notice
under clause (i).
``(cc) Timing of
submission.--With respect to
the regulations described under
subclause (I), the Committee
may not require a declaration
to be submitted more than 30
days in advance of the
completion of the transaction.
``(III) Penalties.--The Committee may
impose a penalty pursuant to subsection
(h)(3)(A) with respect to a party that
fails to comply with this clause.
``(IV) Committee response to
declaration.--
``(aa) In general.--Upon
receiving a declaration under
this clause with respect to a
transaction, the Committee may,
at its discretion--
``(AA) request that
the parties to the
transaction file a
written notice under
clause (i), provided
that the Committee
includes an explanation
of the reasons for the
request;
``(BB) inform the
parties to the
transaction that the
Committee is not able
to complete action
under this section with
respect to the
transaction on the
basis of the
declaration and that
the parties may file a
written notice under
clause (i) to seek
written notification
from the Committee that
the Committee has
completed all action
under this section with
respect to the
transaction;
``(CC) initiate a
unilateral review of
the transaction under
subparagraph (D); or
``(DD) notify the
parties in writing that
the Committee has
completed all action
under this section with
respect to the
transaction.
``(bb) Timing.--The Committee
shall take action under item
(aa) within 15 days of
receiving a declaration under
this clause.
``(cc) Refiling of
declaration.--The Committee may
not request or recommend that a
declaration be withdrawn and
refiled, except to permit
parties to a transaction to
correct material errors or
omissions.
``(V) Regulations.--In prescribing
regulations establishing requirements
for declarations submitted under this
clause, the Committee shall ensure that
such declarations are submitted as
abbreviated notifications that do not
generally exceed 5 pages in length.
``(VI) Investment defined.--For the
purposes of this clause, the term
`investment' means the acquisition of
an equity interest, including
contingent equity interest, as further
defined in regulations prescribed by
the Committee.''.
(b) Stipulations Regarding Transactions.--Section 721(b)(1)(C) of the
Defense Production Act of 1950 (50 U.S.C. 4565(b)(1)(C)), as amended by
this section, is further amended by adding at the end the following:
``(vi) Stipulations regarding transactions.--
``(I) In general.--In a written
notice submitted under clause (i) or a
declaration submitted under clause (v)
with respect to a transaction, a party
to the transaction may--
``(aa) stipulate that the
transaction is a covered
transaction; and
``(bb) if the party
stipulates that the transaction
is a covered transaction under
item (aa), stipulate that the
transaction is a foreign
government-controlled
transaction.
``(II) Basis for stipulation.--A
written notice submitted under clause
(i) or a declaration submitted under
clause (v) that includes a stipulation
under subclause (I) shall include a
description of the basis for the
stipulation.''.
SEC. 303. TIMING FOR REVIEWS AND INVESTIGATIONS.
Section 721(b) of the Defense Production Act of 1950 (50 U.S.C.
4565(b)) is amended--
(1) in paragraph (2), by striking subparagraph (C) and
inserting the following:
``(C) Timing.--
``(i) In general.--Except as provided in
clause (ii), any investigation under
subparagraph (A) shall be completed before the
end of the 45-day period beginning on the date
on which the investigation commenced.
``(ii) Extension for extraordinary
circumstances.--
``(I) In general.--In extraordinary
circumstances (as defined by the
Committee in regulations), the
chairperson may, at the request of the
head of the lead agency, extend an
investigation under subparagraph (A)
for not more than one 15-day period.
``(II) Nondelegation.--The authority
of the chairperson and the head of the
lead agency referred to in subclause
(I) may not be delegated to any person
other than the Deputy Secretary of the
Treasury or the deputy head (or
equivalent thereof) of the lead agency,
as the case may be.
``(III) Notification to parties.--If
the Committee extends the deadline
under subclause (I) with respect to a
covered transaction, the Committee
shall notify the parties to the
transaction of the extension.''; and
(2) by adding at the end the following:
``(8) Tolling of deadlines during lapse in appropriations.--
Any deadline or time limitation under this subsection shall be
tolled during a lapse in appropriations.''.
SEC. 304. SUBMISSION OF CERTIFICATIONS TO CONGRESS.
Section 721(b)(3)(C) of the Defense Production Act of 1950 (50 U.S.C.
4565(b)(3)(C)) is amended--
(1) in clause (i), by amending subclause (II) to read as
follows:
``(II) a certification that all
relevant national security factors,
including factors enumerated in
subsection (f), have received full
consideration.''; and
(2) by adding at the end the following:
``(v) Authority to consolidate documents.--
Instead of transmitting a separate certified
notice or certified report under subparagraph
(A) or (B) with respect to each covered
transaction, the Committee may, on a monthly
basis, transmit such notices and reports in a
consolidated document to the Members of
Congress specified in clause (iii).''.
SEC. 305. ANALYSIS BY DIRECTOR OF NATIONAL INTELLIGENCE.
Section 721(b)(4) of the Defense Production Act of 1950 (50 U.S.C.
4565(b)(4)) is amended--
(1) by striking subparagraph (A) and inserting the following:
``(A) Analysis required.--
``(i) In general.--The Director of National
Intelligence shall expeditiously carry out a
thorough analysis of any threat to the national
security of the United States posed by any
covered transaction, which shall include the
identification of any recognized gaps in the
collection of intelligence relevant to the
analysis.
``(ii) Views of intelligence agencies.--The
Director shall seek and incorporate into the
analysis required by clause (i) the views of
all affected or appropriate intelligence
agencies with respect to the transaction.
``(iii) Updates.--At the request of the lead
agency, the Director shall update the analysis
conducted under clause (i) with respect to a
covered transaction with respect to which an
agreement was entered into under subsection
(l)(3)(A).
``(iv) Independence and objectivity.--The
Committee shall ensure that its processes under
this section preserve the ability of the
Director to conduct an analysis under clause
(i) that is independent, objective, and
consistent with all applicable directives,
policies, and analytic tradecraft standards of
the intelligence community.''.
(2) by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (D), and (E), respectively;
(3) by inserting after subparagraph (A) the following:
``(B) Basic threat information.--
``(i) In general.--The Director of National
Intelligence may provide the Committee with
basic information regarding any threat to the
national security of the United States posed by
a covered transaction described in clause (ii)
instead of conducting the analysis required by
subparagraph (A).
``(ii) Covered transaction described.--A
covered transaction is described in this clause
if--
``(I) the transaction is described in
subsection (a)(3)(B)(ii);
``(II) the Director of National
Intelligence has completed an analysis
pursuant to subparagraph (A) involving
each foreign person that is a party to
the transaction during the 12 months
preceding the review or investigation
of the transaction under this section;
or
``(III) the transaction otherwise
meets criteria agreed upon by the
Committee and the Director of National
Intelligence for purposes of this
subparagraph.'';
(4) by adding at the end the following:
``(F) Assessment of operational impact.--The Director
may provide to the Committee an assessment, separate
from the analyses under subparagraphs (A) and (B), of
any operational impact of a covered transaction on the
intelligence community and a description of any actions
that have been or will be taken to mitigate any such
impact.
``(G) Submission to congress.--The Committee shall
include the analysis required by subparagraph (A) with
respect to a covered transaction in the report required
under subsection (m)(1), subject to the requirements of
subsection (m)(5).''.
SEC. 306. INFORMATION SHARING.
Section 721(c) of the Defense Production Act of 1950 (50 U.S.C.
4565(c)) is amended--
(1) by striking ``Any information'' and inserting the
following:
``(1) In general.--Any information''; and
(2) by adding at the end the following:
``(2) Exception.--Paragraph (1) shall not prohibit the
disclosure of information or documentary material that the
party filing such information or material consented to be
disclosed to third parties.''.
SEC. 307. ACTION BY THE PRESIDENT.
(a) In General.--Section 721(d)(2) of the Defense Production Act of
1950 (50 U.S.C. 4565(d)(2)) is amended by striking ``not later than 15
days'' and all that follows and inserting the following: ``with respect
to a covered transaction not later than 15 days after the earlier of--
``(A) the date on which the investigation of the
transaction under subsection (b) is completed; or
``(B) the date on which the Committee otherwise
refers the transaction to the President under
subsection (l)(4).''.
(b) Civil Penalties.--Section 721(h)(3)(A) of the Defense Production
Act of 1950 (50 U.S.C. 4565(h)(3)(A)) is amended by striking
``including any mitigation'' and all that follows through ``subsection
(l)'' and inserting ``including any mitigation agreement entered into,
conditions imposed, or order issued pursuant to this section''.
SEC. 308. FACTORS TO BE CONSIDERED.
Section 721(f) of the Defense Production Act of 1950 (50 U.S.C.
4565(f)) is amended--
(1) in paragraph (3), by striking the comma at the end and
inserting the following: ``, including the availability of
human resources, products, technology, materials, and other
supplies and services;'';
(2) in paragraph (4), by striking ``proposed or pending'';
(3) by striking paragraph (5);
(4) by redesignating paragraphs (6), (7), (8), (9), (10), and
(11) as paragraphs (5), (6), (7), (8), (9), and (16),
respectively;
(5) in paragraph (9), as so redesignated, by striking ``and''
at the end;
(6) by inserting after paragraph (9), as so redesignated, the
following:
``(10) the degree to which the covered transaction is likely
to threaten the ability of the United States Government to
acquire or maintain the equipment and systems that are
necessary for defense, intelligence, or other national security
functions;
``(11) the potential national security-related effects of the
cumulative control of any one type of critical infrastructure,
energy asset, material, or critical technology by a foreign
person;
``(12) whether any foreign person that would acquire control
of a United States business as a result of the covered
transaction has a history of--
``(A) complying with United States laws and
regulations and prior adherence, if applicable, to any
agreement or condition, as described under (l)(1)(A);
and
``(B) adhering to contracts or other agreements with
entities of the United States Government;
``(13) the extent to which the covered transaction is likely
to release, either directly or indirectly, sensitive personal
data of United States citizens to a foreign person that may
exploit that information in a manner that threatens national
security;
``(14) whether the covered transaction is likely to
exacerbate cybersecurity vulnerabilities or is likely to result
in a foreign government gaining a significant new capability to
engage in malicious cyber-enabled activities against the United
States, including such activities designed to affect the
outcome of any election for Federal office;
``(15) whether the covered transaction is likely to expose
any information regarding sensitive national security matters
or sensitive procedures or operations of a Federal law
enforcement agency with national security responsibilities to a
foreign person not authorized to receive that information;
and''; and
(7) by adding at the end the following flush-left text:
``For purposes of this subsection, the phrase `the availability of
human resources' shall be construed to consider potential losses of
such availability resulting from reductions in the employment of United
States persons whose knowledge or skills are critical to national
security, including the continued production in the United States of
items that are likely to be acquired by the Department of Defense or
other Federal departments or agencies for the advancement of the
national security of the United States.''.
SEC. 309. MITIGATION AND OTHER ACTIONS BY THE COMMITTEE TO ADDRESS
NATIONAL SECURITY RISKS.
Section 721(l) of the Defense Production Act of 1950 (50 U.S.C.
4565(l)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) in the heading, by striking ``In
general'' and inserting ``Agreements and
conditions'';
(ii) by striking ``The Committee'' and
inserting the following:
``(i) In general.--The Committee'';
(iii) by adding at the end the following:
``(ii) Abandonment of transactions.--If a
party to a covered transaction has voluntarily
chosen to abandon the transaction, the
Committee or lead agency, as the case may be,
may negotiate, enter into or impose, and
enforce any agreement or condition with any
party to the covered transaction for purposes
of effectuating such abandonment and mitigating
any threat to the national security of the
United States that arises as a result of the
covered transaction.
``(iii) Agreements and conditions relating to
completed transactions.--The Committee or lead
agency, as the case may be, may negotiate,
enter into or impose, and enforce any agreement
or condition with any party to a completed
covered transaction in order to mitigate any
interim threat to the national security of the
United States that may arise as a result of the
covered transaction until such time that the
Committee has completed action pursuant to
subsection (b) or the President has taken
action pursuant to subsection (d) with respect
to the transaction.'';
(B) by amending subparagraph (B) to read as follows:
``(B) Treatment of outdated agreements or
conditions.--The chairperson and the head of any
applicable lead agency shall periodically review the
appropriateness of an agreement or condition described
under subparagraph (A) and terminate, phase out, or
otherwise amend any agreement or condition if a threat
no longer requires mitigation through the agreement or
condition.''; and
(C) by adding at the end the following:
``(C) Limitations.--An agreement may not be entered
into or condition imposed under subparagraph (A) with
respect to a covered transaction unless the Committee
determines that the agreement or condition resolves the
national security concerns posed by the transaction,
taking into consideration whether the agreement or
condition is reasonably calculated to--
``(i) be effective;
``(ii) allow for compliance with the terms of
the agreement or condition in an appropriately
verifiable way; and
``(iii) enable effective monitoring of
compliance with and enforcement of the terms of
the agreement or condition.
``(D) Jurisdiction.--The provisions of section 706(b)
shall apply to any mitigation agreement entered into or
condition imposed under subparagraph (A).''; and
(2) by adding at the end the following:
``(4) Referral to president.--The Committee may, at any time
during the review or investigation of a covered transaction
under subsection (b), complete the action of the Committee with
respect to the transaction and refer the transaction to the
President for action pursuant to subsection (d).
``(5) Risk-based analysis required.--
``(A) In general.--Any determination of the Committee
to refer a covered transaction to the President under
paragraph (4), to suspend a covered transaction under
paragraph (6), or to negotiate, enter into, impose, or
enforce any agreement or condition under paragraph
(1)(A) with respect to a covered transaction, shall be
based on a risk-based analysis, conducted by the
Committee, of the effects on the national security of
the United States of the covered transaction, which
shall include--
``(i) an assessment of the threat,
vulnerabilities, and consequences to national
security resulting from the transaction, as
these terms are defined or clarified in
guidance and regulations issued by the
Committee; and
``(ii) an identification of each relevant
factor described in subsection (f) that the
transaction may substantially implicate.
``(B) Compliance plans.--
``(i) In general.--In the case of a covered
transaction with respect to which an agreement
or condition is entered into under paragraph
(1)(A), the Committee or lead agency, as the
case may be, shall formulate, adhere to, and
keep updated a plan for monitoring compliance
with the agreement or condition.
``(ii) Elements.--Each plan required by
clause (i) with respect to an agreement or
condition entered into under paragraph (1)(A)
shall include an explanation of--
``(I) which member of the Committee
will have primary responsibility for
monitoring compliance with the
agreement or condition;
``(II) how compliance with the
agreement or condition will be
monitored;
``(III) how frequently compliance
reviews will be conducted;
``(IV) whether an independent entity
will be utilized under subparagraph (D)
to conduct compliance reviews; and
``(V) what actions will be taken if
the parties fail to cooperate regarding
monitoring compliance with the
agreement or condition.
``(C) Effect of lack of compliance.--If, at any time
after a mitigation agreement or condition is entered
into or imposed under paragraph (1)(A), the Committee
or lead agency, as the case may be, determines that a
party or parties to the agreement or condition are not
in compliance with the terms of the agreement or
condition, the Committee or lead agency may, in
addition to the authority of the Committee to impose
penalties pursuant to subsection (h)(3)(A) and to
unilaterally initiate a review of any covered
transaction under subsection (b)(1)(D)(iii)(I)--
``(i) negotiate a plan of action for the
party or parties to remediate the lack of
compliance, with failure to abide by the plan
or otherwise remediate the lack of compliance
serving as the basis for the Committee to find
a material breach of the agreement or
condition;
``(ii) require that the party or parties
submit any covered transaction initiated after
the date of the determination of noncompliance
and before the date that is 5 years after the
date of the determination to the Committee for
review under subsection (b); or
``(iii) seek injunctive relief.
``(D) Use of independent entities to monitor
compliance.--If the parties to an agreement or
condition entered into under paragraph (1)(A) enter
into a contract with an independent entity from outside
the United States Government for the purpose of
monitoring compliance with the agreement or condition,
the Committee shall take such action as is necessary to
prevent any significant conflict of interest from
arising with respect to the entity and the parties to
the transaction.
``(E) Successors and assigns.--Any agreement or
condition entered or imposed under paragraph (1)(A)
shall be considered binding on all successors and
assigns, unless and until the agreement or condition
terminates on its own terms or is otherwise terminated
by the Committee in the Committee's sole discretion.
``(F) Additional compliance measures.--Subject to
subparagraphs (A) through (D), the Committee shall
develop and agree upon methods for evaluating
compliance with any agreement entered into or condition
imposed with respect to a covered transaction that will
allow the Committee to adequately ensure compliance
without unnecessarily diverting Committee resources
from assessing any new covered transaction for which a
written notice under clause (i) of subsection (b)(1)(C)
has been filed or for which a declaration has been
submitted under clause (v) of subsection (b)(1)(C), and
if necessary, reaching a mitigation agreement with or
imposing a condition on a party to such covered
transaction or any covered transaction for which a
review has been reopened for any reason.
``(6) Suspension of transactions.--The Committee, acting
through the chairperson, may suspend a proposed or pending
covered transaction that may pose a risk to the national
security of the United States for such time as the covered
transaction is under review or investigation under subsection
(b).''.
SEC. 310. CERTIFICATION OF NOTICES AND INFORMATION.
Section 721(n) of the Defense Production Act of 1950 (50 U.S.C.
4565(n)) is amended--
(1) by redesignating paragraphs (1) and (2) as subparagraphs
(A) and (B), respectively, and by moving such subparagraphs, as
so redesignated, 2 ems to the right;
(2) by striking ``Each notice'' and inserting the following:
``(1) In general.--Each notice''; and
(3) by adding at the end the following:
``(2) Effect of failure to submit.--The Committee may not
complete a review under this section of a covered transaction
and may recommend to the President that the President suspend
or prohibit the transaction or require divestment under
subsection (d) if the Committee determines that a party to the
transaction has--
``(A) failed to submit a statement required by
paragraph (1); or
``(B) included false or misleading information in a
notice or information described in paragraph (1) or
omitted material information from such notice or
information.
``(3) Applicability of law on fraud and false statements.--
The Committee shall prescribe regulations expressly providing
for the application of section 1001 of title 18, United States
Code, to all information provided to the Committee under this
section by any party to a covered transaction.''.
SEC. 311. ADDITIONAL REGULATIONS.
Section 721(h)(3) of the Defense Production Act of 1950 (50 U.S.C.
4565(h)(3)) is amended--
(1) in subparagraph (B)(ii), by striking ``and'' at the end;
(2) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(D) provide that in connection with any national
security review or investigation of a covered
transaction conducted by the Committee, the Committee
should--
``(i) consider the factors described in
paragraphs (2) and (3) of subsection (f); and
``(ii) as appropriate, require parties to
provide the information necessary to consider
such factors.''.
TITLE IV--MODIFICATION OF ANNUAL REPORT
SEC. 401. MODIFICATION OF ANNUAL REPORT.
Section 721(m) of the Defense Production Act of 1950 (50 U.S.C.
4565(m)) is amended--
(1) in paragraph (2), by amending subparagraph (A) to read as
follows:
``(A) A list of all notices filed and all reviews or
investigations of covered transactions completed during
the period, with--
``(i) a description of the outcome of each
review or investigation, including whether an
agreement was entered into or condition was
imposed under subsection (l)(3)(A) with respect
to the transaction being reviewed or
investigated, and whether the President took
any action under this section with respect to
that transaction;
``(ii) the nature of the business activities
or products of the United States business with
which the transaction was entered into or
intended to be entered into; and
``(iii) information about any withdrawal from
the process.'';
(2) in paragraph (3)--
(A) by striking ``critical technologies'' and all
that follows through ``In order to assist'' and
inserting ``critical technologies.--In order to
assist'';
(B) by striking subparagraph (B); and
(C) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively, and by moving
such subparagraphs, as so redesignated, 2 ems to the
left; and
(3) by adding at the end the following:
``(4) Additional contents of report.--Each annual report
required under paragraph (1) shall contain the following
additional information:
``(A) Statistics on compliance reviews conducted and
actions taken by the Committee under subsection (l)(6),
including subparagraph (D) of that subsection (l)(6),
during that period and a description of any actions
taken by the Committee to impose penalties or initiate
a unilateral review pursuant to subsection
(b)(1)(D)(iii)(I).
``(B) Cumulative and trend information on the number
of declarations filed under subsection (b)(1)(C)(v),
the actions taken by the Committee in response to
declarations, the business sectors involved in the
declarations which have been made, and the countries
involved in such declarations.
``(C) The number of new hires made since the
preceding report through the authorities described
under subsection (q), along with summary statistics,
position titles, and associated pay grades for such
hires and a summary of such hires' responsibilities in
administering this section.
``(5) Classification; availability of report.--
``(A) Classification.--All appropriate portions of
the annual report required by paragraph (1) may be
classified.
``(B) Public availability of unclassified version.--
An unclassified version of the report required by
paragraph (1), as appropriate and consistent with
safeguarding national security and privacy, shall be
made available to the public. Information regarding
trade secrets or business confidential information may
be included in the classified version and may not be
made available to the public in the unclassified
version.
``(C) Exceptions to freedom of information act.--The
exceptions to subsection (a) of section 552 of title 5,
United States Code, provided for under subsection (b)
of that section shall apply with respect to the report
required by paragraph (1).''.
SEC. 402. REPORT ON TRANSACTIONS WITH CENSORSHIP IMPLICATIONS.
Not later than one year from the date of enactment of this Act, the
Committee on Foreign Investment in the United States shall issue a
report to the Congress, appropriate portions of which may be
classified, on investments by foreign persons into the entertainment
and information sectors of the United States, which shall include
analysis of the extent to which such investments have resulted in or
could result in direct or indirect censorship, including self-
censorship, within the United States.
TITLE V--RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH
SEC. 501. CENTRALIZATION OF CERTAIN COMMITTEE FUNCTIONS.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565) is
amended by adding at the end the following:
``(o) Centralization of Certain Committee Functions.--
``(1) In general.--The chairperson, in consultation with the
Committee, may centralize certain functions of the Committee
within the Department of the Treasury for the purpose of
enhancing interagency coordination and collaboration in
carrying out the functions of the Committee under this section.
``(2) Rule of construction.--Nothing in this subsection shall
be construed as limiting the authority of any department or
agency represented on the Committee to represent its own
interests before the Committee.''.
SEC. 502. CFIUS RESOURCE NEEDS.
(a) Unified Budget Request.--Section 721 of the Defense Production
Act of 1950 (50 U.S.C. 4565), as amended by section 501, is further
amended by adding at the end the following:
``(p) Unified Budget Request; Annual Spending Plan.--
``(1) Unified budget request.--
``(A) In general.--The President may include, in the
budget of the Department of the Treasury for a fiscal
year (as submitted to Congress with the budget of the
President under section 1105(a) of title 31, United
States Code), a unified request for funding of all
operations under this section conducted by all of the
departments and agencies represented on the Committee.
``(B) Form of budget request.--A unified request
under subparagraph (A) shall be detailed and include
the amounts and staffing levels requested for each
department or agency represented on the Committee to
carry out the functions of that department or agency
under this section.
``(2) Annual spending plan.--Not later than 90 days following
the date of enactment of this subsection, and annually
thereafter, the chairperson of the Committee shall transmit to
the Committees on Appropriations and Financial Services of the
House of Representatives and the Committees on Appropriations
and Banking, Housing, and Urban Affairs of the Senate a
detailed spending plan to expeditiously meet the requirements
of subsections (b), (l), and (m), including estimated
expenditures and staffing levels required by operations of the
Committee for not less than the following fiscal year at each
of the Committee's member agencies.
``(3) Waiver.--The chairperson may waive the reporting
requirement under paragraph (2) with respect to a fiscal year
for which a unified budget request described under paragraph
(1) has been submitted.''.
(b) Special Hiring Authority.--Section 721 of the Defense Production
Act of 1950 (50 U.S.C. 4565), as amended by subsection (a), is further
amended by adding at the end the following:
``(q) Special Hiring Authority.--The heads of the departments and
agencies represented on the Committee may appoint, without regard to
the provisions of sections 3309 through 3318 of title 5, United States
Code, candidates directly to positions in the competitive service (as
defined in section 2102 of that title) in their respective departments
and agencies to administer this section.''.
(c) Testimony Required.--Section 721 of the Defense Production Act of
1950 (50 U.S.C. 4565), as amended by subsection (d), is further amended
by adding at the end the following:
``(r) Testimony.--
``(1) In general.--After submitting the unified budget
request described under subsection (p)(1), or the spending plan
described under subsection (p)(2), as the case may be, but not
later than March 31 of each year, the chairperson, or the
chairperson's designee, shall appear before the Committee on
Financial Services of the House of Representatives and present
testimony on--
``(A) anticipated resources necessary for operations
of the Committee in the following fiscal year at each
of the Committee's member agencies;
``(B) the adequacy of appropriations for the
Committee in the current and the previous fiscal year
to--
``(i) ensure that thorough reviews and
investigations are completed as expeditiously
as possible;
``(ii) monitor and enforce mitigation
agreements; and
``(iii) identify covered transactions for
which a notice under clause (i) of subsection
(b)(1)(C) or a declaration under clause (v) of
subsection (b)(1)(C) was not submitted to the
Committee; and
``(C) management efforts to strengthen the ability of
the Committee to meet the requirements of this section.
``(2) Sunset.--This subsection shall have no force or effect
on the date that is five years following the date of enactment
of the Foreign Investment Risk Review Modernization Act of
2018.''.
SEC. 503. FUNDING.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565),
as amended by section 602, is further amended by adding at the end the
following:
``(t) Funding.--
``(1) Establishment of fund.--There is established in the
Treasury of the United States a fund, to be known as the
`Committee on Foreign Investment in the United States Fund' (in
this subsection referred to as the `Fund'), to be administered
by the chairperson.
``(2) Authorization of appropriations for the committee.--
There are authorized to be appropriated to the Fund such sums
as may be necessary to perform the functions of the Committee.
``(3) Filing fees.--
``(A) In general.--The Committee may assess and
collect a fee in an amount determined by the Committee
in regulations, without regard to section 9701 of title
31, United States Code, and subject to subparagraph
(B), with respect to each covered transaction for which
a written notice is submitted to the Committee under
subsection (b)(1)(C)(i) or a declaration is submitted
to the Committee under subsection (b)(1)(C)(v).
``(B) Determination of amount of fee.--
``(i) In general.--The amount of the fee to
be assessed under subparagraph (A) with respect
to a covered transaction--
``(I) may not exceed an amount equal
to the lesser of--
``(aa) 1 percent of the value
of the transaction; or
``(bb) $300,000, as such
amount is adjusted annually for
inflation pursuant to
regulations prescribed by the
Committee; and
``(II) shall be determined by the
Committee after taking into
consideration--
``(aa) the effect of the fee
on small business concerns (as
defined in section 3 of the
Small Business Act (15 U.S.C.
632));
``(bb) the expenses of the
Committee associated with
conducting activities under
this section;
``(cc) the effect of the fee
on foreign investment;
``(dd) the unified budget
request or annual spending
plan, as appropriate, described
in section 502 of the Foreign
Investment Risk Review
Modernization Act of 2018; and
``(ee) such other matters as
the Committee considers
appropriate.
``(ii) Updates.--The Committee shall
periodically reconsider and adjust the amount
of the fee to be assessed under subparagraph
(A) with respect to a covered transaction to
ensure that the amount of the fee remains
appropriate.
``(C) Deposit and availability of fees.--
Notwithstanding section 3302 of title 31, United States
Code, fees collected under subparagraph (A) shall--
``(i) be deposited into the Fund for use in
carrying out activities under this section;
``(ii) to the extent and in the amounts
provided in advance in appropriations Acts, be
available to the chairperson;
``(iii) remain available until expended; and
``(iv) be in addition to any appropriations
made available to the members of the Committee.
``(4) Transfer of funds.--To the extent provided in advance
in appropriations Acts, the chairperson may transfer any
amounts in the Fund to any other department or agency
represented on the Committee for the purpose of addressing
emerging needs in carrying out activities under this section.
Amounts so transferred shall be in addition to any other
amounts available to that department or agency for that
purpose.''.
SEC. 504. CFIUS OUTREACH.
Not later than 180 days after the date of enactment of this Act, and
every year thereafter for five years, the chairperson of the Committee
on Foreign Investment in the United States (``CFIUS''), or the
chairperson's designee, shall brief the Committee on Financial Services
of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate on activities of CFIUS undertaken in
order to--
(1) educate the business community, with a particular focus
on the technology sector and other sectors of importance to
national security, on the goals and operations of CFIUS; and
(2) disseminate to the governments of United States allies
best practices of CFIUS that--
(A) strengthen national security reviews of relevant
investment transactions;
(B) expedite such reviews when appropriate; and
(C) promote openness to foreign investment,
consistent with national security considerations.
TITLE VI--MISCELLANEOUS FIRRMA PROVISIONS
SEC. 601. CONFORMING AMENDMENT.
Section 721(d)(4)(A) of the Defense Production Act of 1950 (50 U.S.C.
4565(d)(4)(A)) is amended by striking ``the foreign interest exercising
control'' and inserting ``a foreign person that would acquire an
interest in a United States business or its assets as a result of the
covered transaction''.
SEC. 602. REGULATORY CERTAINTY FOR UNITED STATES BUSINESSES.
Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565),
as amended by section 502, is further amended by adding at the end the
following:
``(s) Regulatory Certainty for United States Businesses.--With
respect to mitigating a national security risk that results from a
foreign person's investment in, or joint venture with, a United States
business, a member agency of the Committee may not prescribe or
implement regulations to require divestment by, or of, the United
States business, unless--
``(1) the regulations are prescribed under this section or
pursuant to authorities of the President under the
International Emergency Economic Powers Act; or
``(2) the President reports to Congress in writing that the
regulations--
``(A) are, wherever applicable, consistent with
regulations prescribed under this section, including
any such regulations pertaining to--
``(i) foreign control or influence over a
United States business;
``(ii) the identification of emerging,
foundational, or other critical technologies;
and
``(iii) confidentiality requirements with
respect to information and documentary material
regarding United States businesses; and
``(B) in the case of regulations prescribed or
finalized following the effective date of this
subsection, were prescribed in consultation with the
chairperson of the Committee and with the head of any
member agency determined by the President to be
affected by the regulations.''.
TITLE VII--COMMON SENSE CREDIT UNION CAPITAL RELIEF
SEC. 701. DELAY IN EFFECTIVE DATE.
Notwithstanding any effective date set forth in the rule issued by
the National Credit Union Administration titled ``Risk-Based Capital''
(published at 80 Fed. Reg. 66626 (October 29, 2015)), such final rule
shall take effect on January 1, 2021.
TITLE VIII--EXPORT CONTROL REFORM
SEC. 801. SHORT TITLE.
This title may be cited as the ``Export Control Reform Act of 2018''.
SEC. 802. DEFINITIONS.
In this title:
(1) Controlled.--The term ``controlled'' means the export,
reexport, or transfer of an item subject to the jurisdiction of
the United States under subtitle A.
(2) Dual-use.--The term ``dual-use'', with respect to an
item, means the item has civilian applications and military,
terrorism, weapons of mass destruction, or law-enforcement-
related applications.
(3) Export.--The term ``export'', with respect to an item
subject to controls under subtitle A, includes--
(A) the shipment or transmission of the item out of
the United States, including the sending or taking of
the item out of the United States, in any manner; and
(B) the release or transfer of technology or source
code relating to the item to a foreign person in the
United States.
(4) Export administration regulations.--The term ``Export
Administration Regulations'' means--
(A) the Export Administration Regulations as
promulgated, maintained, and amended under the
authority of the International Emergency Economic
Powers Act and codified, as of the date of the
enactment of this Act, in subchapter C of chapter VII
of title 15, Code of Federal Regulations; or
(B) regulations that are promulgated, maintained, and
amended under the authority of subtitle A on or after
the date of the enactment of this Act.
(5) Foreign person.--The term ``foreign person'' means a
person that is not a United States person.
(6) Item.--The term ``item'' means a commodity, software, or
technology.
(7) Person.--The term ``person'' means--
(A) a natural person;
(B) a corporation, business association, partnership,
society, trust, financial institution, insurer,
underwriter, guarantor, and any other business
organization, any other nongovernmental entity,
organization, or group, or any government or agency
thereof; and
(C) any successor to any entity described in
subparagraph (B).
(8) Reexport.--The term ``reexport'', with respect to an item
subject to controls under subtitle A, includes--
(A) the shipment or transmission of the item from a
foreign country to another foreign country, including
the sending or taking of the item from the foreign
country to the other foreign country, in any manner;
and
(B) the release or transfer of technology or source
code relating to the item to a foreign person outside
the United States.
(9) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Commerce.
(10) Technology.--The term ``technology'' includes
foundational information and information and know-how necessary
for the development (at all stages prior to serial production),
production, use, operation, installation, maintenance, repair,
overhaul or refurbishing of an item.
(11) Transfer.--The term ``transfer'', with respect to an
item subject to controls under title I, means a change in the
end-use or end user of the item within the same foreign
country.
(12) United states.--The term ``United States'' means the
several States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana Islands,
American Samoa, Guam, the United States Virgin Islands, and any
other territory or possession of the United States.
(13) United states person.--The term ``United States person''
means--
(A) for purposes of subtitles A and C--
(i) any individual who is a citizen or
national of the United States or who is an
individual described in subparagraph (B) of
section 274B(a)(3) of the Immigration and
Nationality Act (8 U.S.C. 1324b(a)(3));
(ii) a corporation or other legal entity
which is organized under the laws of the United
States, any State or territory thereof, or the
District of Columbia; and
(iii) any person in the United States; and
(B) for purposes of subtitle B, any United States
resident or national (other than an individual resident
outside the United States and employed by other than a
United States person), any domestic concern (including
any permanent domestic establishment of any foreign
concern) and any foreign subsidiary or affiliate
(including any permanent foreign establishment) of any
domestic concern which is controlled in fact by such
domestic concern, as determined under regulations by
the Secretary.
(14) Weapons of mass destruction.--The term ``weapons of mass
destruction'' means nuclear, radiological, chemical, and
biological weapons and delivery systems for such weapons.
Subtitle A--Authority and Administration of Controls
SEC. 811. SHORT TITLE.
This subtitle may be cited as the ``Export Controls Act of 2018''.
SEC. 812. STATEMENT OF POLICY.
The following is the policy of the United States:
(1) The national security and foreign policy of the United
States require that the export, reexport, and transfer of
items, and specific activities of United States persons,
wherever located, be controlled for the following purposes:
(A) To control the release of items for use in--
(i) the proliferation of weapons of mass
destruction or of conventional weapons;
(ii) the acquisition of destabilizing numbers
or types of conventional weapons;
(iii) acts of terrorism;
(iv) military programs that could pose a
threat to the security of the United States or
its allies; or
(v) activities undertaken specifically to
cause significant interference with or
disruption of critical infrastructure.
(B) To preserve the qualitative military superiority
of the United States.
(C) To strengthen the United States industrial base.
(D) To carry out the foreign policy of the United
States, including the protection of human rights and
the promotion of democracy.
(E) To carry out obligations and commitments under
international agreements and arrangements, including
multilateral export control regimes.
(F) To facilitate military interoperability between
the United States and its North Atlantic Treaty
Organization (NATO) and other close allies.
(G) To ensure national security controls are tailored
to focus on those core technologies and other items
that are capable of being used to pose a serious
national security threat to the United States.
(2) The national security of the United States requires that
the United States maintain its leadership in the science,
technology, engineering, and manufacturing sectors, including
foundational technology that is essential to innovation. Such
leadership requires that United States persons are competitive
in global markets. The impact of the implementation of this
subtitle on such leadership and competitiveness must be
evaluated on an ongoing basis and applied in imposing controls
under sections 813 and 814 to avoid negatively affecting such
leadership.
(3) The national security and foreign policy of the United
States require that the United States participate in
multilateral organizations and agreements regarding export
controls on items that are consistent with the policy of the
United States, and take all the necessary steps to secure the
adoption and consistent enforcement, by the governments of such
countries, of export controls on items that are consistent with
such policy.
(4) Export controls should be fully coordinated with the
multilateral export control regimes. Export controls that are
multilateral are most effective, and should be tailored to
focus on those core technologies and other items that are
capable of being used to pose a serious national security
threat to the United States and its allies.
(5) Export controls applied unilaterally to items widely
available from foreign sources generally are less effective in
preventing end-users from acquiring those items.
(6) The effective administration of export controls requires
a clear understanding both inside and outside the United States
Government of which technologies and other items are controlled
and an efficient process should be created to update the
controls, such as by removing and adding technologies and other
items.
(7) The export control system must ensure that it is
transparent, predictable, and timely, has the flexibility to be
adapted to address new threats in the future, and allows
seamless access to and sharing of export control information
among all relevant United States national security and foreign
policy agencies.
(8) Implementation and enforcement of United States export
controls require robust capabilities in monitoring,
intelligence, and investigation, appropriate penalties for
violations, and the ability to swiftly interdict unapproved
transfers.
(9) Export controls should be balanced with United States
counterterrorism, information security, and cyber-security
policies to ensure the ability to export, reexport, and
transfer technology and other items in support of
counterterrorism, critical infrastructure, and other homeland
security priorities, while effectively preventing malicious
cyber terrorists from obtaining items that threaten the United
States and its interests, including the protection of and
safety of United States citizens abroad.
(10) Export controls complement and are a critical element of
the national security policies underlying the laws and
regulations governing foreign direct investment in the United
States, including controlling the transfer of critical
technologies to certain foreign persons. Thus, the President,
in close coordination with the Department of Commerce, the
Department of Defense, the Department of State, the Department
of Energy, and other agencies responsible for export controls,
should have a regular and robust process to identify the
emerging and other types of critical technologies of concern
and regulate their release to foreign persons as warranted
regardless of the nature of the underlying transaction. Such
identification efforts should draw upon the resources and
expertise of all relevant parts of the United States
Government, industry, and academia. These efforts should be in
addition to traditional efforts to modernize and update the
lists of controlled items under the multilateral export control
regimes.
(11) The authority under this subtitle may be exercised only
in furtherance of all of the objectives set forth in paragraphs
(1) through (10).
SEC. 813. AUTHORITY OF THE PRESIDENT.
(a) Authority.--In order to carry out the policy set forth in
paragraphs (1) through (10) of section 812, the President shall
control--
(1) the export, reexport, and transfer of items subject to
the jurisdiction of the United States, whether by United States
persons or by foreign persons; and
(2) the activities of United States persons, wherever
located, relating to specific--
(A) nuclear explosive devices;
(B) missiles;
(C) chemical or biological weapons;
(D) whole plants for chemical weapons precursors;
(E) foreign maritime nuclear projects; and
(F) foreign military intelligence services.
(b) Requirements.--In exercising authority under this subtitle, the
President shall impose controls to achieve the following objectives:
(1) To regulate the export, reexport, and transfer of items
described in subsection (a)(1) of United States persons or
foreign persons.
(2) To regulate the activities described in subsection (a)(2)
of United States persons, wherever located.
(3) To secure the cooperation of other governments and
multilateral organizations to impose control systems that are
consistent, to the extent possible, with the controls imposed
under subsection (a).
(4) To maintain the leadership of the United States in
science, engineering, technology research and development,
manufacturing, and foundational technology that is essential to
innovation.
(5) To protect United States technological advances by
prohibiting unauthorized technology transfers to foreign
persons in the United States or outside the United States,
particularly with respect to countries that may pose a
significant threat to the national security of the United
States.
(6) To enhance the viability of commercial firms, academic
institutions, and research establishments, and maintain the
skilled workforce of such firms, institutions, and
establishments, that are necessary to preserving the leadership
of the United States described in paragraph (4).
(7) To strengthen the United States industrial base, both
with respect to current and future defense requirements.
(8) To enforce the controls through means such as
regulations, requirements for compliance, lists of controlled
items, lists of foreign persons who threaten the national
security or foreign policy of the United States, and guidance
in a form that facilitates compliance by United States persons
and foreign persons, in particular academic institutions,
scientific and research establishments, and small- and medium-
sized businesses.
(c) Application of Controls.--The President shall impose controls
over the export, reexport, or transfer of items for purposes of the
objectives described in subsections (b)(1) or (b)(2) without regard to
the nature of the underlying transaction or any circumstances
pertaining to the activity, including whether such export, reexport, or
transfer occurs pursuant to a purchase order or other contract
requirement, voluntary decision, inter-company arrangement, marketing
effort, or during a joint venture, joint development agreement, or
similar collaborative agreement.
SEC. 814. ADDITIONAL AUTHORITIES.
(a) In General.--In carrying out this subtitle, the President shall--
(1) establish and maintain lists published by the Secretary
of items that are controlled under this subtitle;
(2) establish and maintain lists published by the Secretary
of foreign persons and end-uses that are determined to be a
threat to the national security and foreign policy of the
United States pursuant to the policy set forth in section
812(1)(A);
(3) prohibit unauthorized exports, reexports, and transfers
of controlled items, including to foreign persons in the United
States or outside the United States;
(4) restrict exports, reexports, and transfers of any
controlled items to any foreign person or end-use listed under
paragraph (2);
(5) require licenses or other authorizations, as appropriate,
for exports, reexports, and transfers of controlled items,
including imposing conditions or restrictions on United States
persons and foreign persons with respect to such licenses or
other authorizations;
(6) establish a process by which a license applicant may
request an assessment to determine whether a foreign item is
comparable in quality to an item controlled under this
subtitle, and is available in sufficient quantities to render
the United States export control of that item or the denial of
a license ineffective, including a mechanism to address that
disparity;
(7) require measures for compliance with the export controls
established under this subtitle;
(8) require and obtain such information from United States
persons and foreign persons as is necessary to carry out this
subtitle;
(9) require, as appropriate, advance notice before an item is
exported, reexported, or transferred, as an alternative to
requiring a license;
(10) require, to the extent feasible, identification of items
subject to controls under this subtitle in order to facilitate
the enforcement of such controls;
(11) inspect, search, detain, seize, or impose temporary
denial orders with respect to items, in any form, that are
subject to controls under this subtitle, or conveyances on
which it is believed that there are items that have been, are
being, or are about to be exported, reexported, or transferred
in violation of this subtitle;
(12) monitor shipments, or other means of transfer;
(13) keep the public fully apprised of changes in policy,
regulations, and procedures established under this subtitle;
(14) appoint technical advisory committees in accordance with
the Federal Advisory Committee Act;
(15) create, as warranted, exceptions to licensing
requirements in order to further the objectives of this
subtitle;
(16) establish and maintain processes to inform persons,
either individually by specific notice or through amendment to
any regulation or order issued under this subtitle, that a
license from the Bureau of Industry and Security of the
Department of Commerce is required to export; and
(17) undertake any other action as is necessary to carry out
this subtitle that is not otherwise prohibited by law.
(b) Relationship to IEEPA.--The authority under this subtitle may not
be used to regulate or prohibit under this subtitle the export,
reexport, or transfer of any item that may not be regulated or
prohibited under section 203(b) of the International Emergency Economic
Powers Act (50 U.S.C. 1702(b)), except to the extent the President has
made a determination necessary to impose controls under subparagraph
(A), (B), or (C) of paragraph (2) of such section.
(c) Countries Supporting International Terrorism.--
(1) License requirement.--
(A) In general.--A license shall be required for the
export, reexport, or transfer of items to a country if
the Secretary of State has made the following
determinations:
(i) The government of such country has
repeatedly provided support for acts of
international terrorism.
(ii) The export, reexport, or transfer of
such items could make a significant
contribution to the military potential of such
country, including its military logistics
capability, or could enhance the ability of
such country to support acts of international
terrorism.
(B) Determination under other provisions of law.--A
determination of the Secretary of State under section
620A of the Foreign Assistance Act of 1961 (22 U.S.C.
2371), section 40 of the Arms Export Control Act (22
U.S.C. 2780), or any other provision of law that the
government of a country described in subparagraph (A)
has repeatedly provided support for acts of
international terrorism shall be deemed to be a
determination with respect to such government for
purposes of clause (i) of subparagraph (A).
(2) Notification to congress.--The Secretary of State or the
Secretary of Commerce shall notify the Committee on Foreign
Affairs of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs and the Committee on
Foreign Relations of the Senate at least 30 days before issuing
any license required by paragraph (1).
(3) Publication in federal register.--Each determination of
the Secretary of State under paragraph (1)(A) shall be
published in the Federal Register, except that the Secretary of
State may exclude confidential information and trade secrets
contained in such determination.
(4) Rescission of determination.--A determination of the
Secretary of State under paragraph (1)(A) may not be rescinded
unless the President submits to the Speaker of the House of
Representatives, the chairman of the Committee on Foreign
Affairs, and the chairman of the Committee on Banking, Housing,
and Urban Affairs and the chairman of the Committee on Foreign
Relations of the Senate--
(A) before the proposed rescission would take effect,
a report certifying that--
(i) there has been a fundamental change in
the leadership and policies of the government
of the country concerned;
(ii) that government is not supporting acts
of international terrorism; and
(iii) that government has provided assurances
that it will not support acts of international
terrorism in the future; or
(B) at least 90 days before the proposed rescission
would take effect, a report justifying the rescission
and certifying that--
(i) the government concerned has not provided
any support for acts international terrorism
during the preceding 24-month period; and
(ii) the government concerned has provided
assurances that it will not support acts of
international terrorism in the future.
(5) Disapproval of rescission.--No rescission under paragraph
(4)(B) of a determination under paragraph (1)(A) with respect
to the government of a country may be made if Congress, within
90 days after receipt of a report under paragraph (4)(B),
enacts a joint resolution described in subsection (f)(2) of
section 40 of the Arms Export Control Act with respect to a
rescission under subsection (f)(1) of such section with respect
to the government of such country.
(6) Notification and briefing.--Not later than--
(A) ten days after initiating a review of the
activities of the government of the country concerned
within the 24-month period referred to in paragraph
(4)(B)(i), the Secretary of State shall notify the
Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate of such initiation; and
(B) 20 days after the notification described in
paragraph (1), the Secretary of State shall brief the
congressional committees described in paragraph (1) on
the status of such review.
(7) Contents of notification of license.--The Secretary of
State shall include in the notification required by paragraph
(2)--
(A) a detailed description of the items to be
offered, including a brief description of the
capabilities of any item for which a license to export,
reexport, or transfer the items is sought;
(B) the reasons why the foreign country, person, or
entity to which the export, reexport, or transfer is
proposed to be made has requested the items under the
export, reexport, or transfer, and a description of the
manner in which such country, person, or entity intends
to use such items;
(C) the reasons why the proposed export, reexport, or
transfer is in the national interest of the United
States;
(D) an analysis of the impact of the proposed export,
reexport, or transfer on the military capabilities of
the foreign country, person, or entity to which such
transfer would be made;
(E) an analysis of the manner in which the proposed
export, reexport, or transfer would affect the relative
military strengths of countries in the region to which
the items that are the subject of such export,
reexport, or transfer would be delivered and whether
other countries in the region have comparable kinds and
amounts of items; and
(F) an analysis of the impact of the proposed export,
reexport, or transfer on the relations of the United
States with the countries in the region to which the
items that are the subject of such export, reexport, or
transfer would be delivered.
(d) Enhanced Controls.--
(1) In general.--In furtherance of section 813(a), the
President shall, except to the extent authorized by a statute
or regulation administered by a Federal department or agency
other than the Department of Commerce, require a United States
person, wherever located, to apply for and receive a license
from the Department of Commerce for--
(A) the export, reexport, or transfer of items
described in paragraph (2), including items that are
not subject to control under this subtitle; and
(B) other activities that may support the design,
development, production, use, operation, installation,
maintenance, repair, overhaul, or refurbishing of, or
for the performance of services relating to, any such
items.
(2) Items described.--The items described in this paragraph
include--
(A) nuclear explosive devices;
(B) missiles;
(C) chemical or biological weapons;
(D) whole plants for chemical weapons precursors; and
(E) foreign maritime nuclear projects that would pose
a risk to the national security or foreign policy of
the United States.
(e) Additional Prohibitions.--The Secretary may inform United States
persons, either individually by specific notice or through amendment to
any regulation or order issued under this subtitle, that a license from
the Bureau of Industry and Security of the Department of Commerce is
required to engage in any activity if the activity involves the types
of movement, service, or support described in subsection (d). The
absence of any such notification does not excuse the United States
person from compliance with the license requirements of subsection (d),
or any regulation or order issued under this subtitle.
(f) License Review Standards.--The Secretary shall deny an
application to engage in any activity described in subsection (d) if
the activity would make a material contribution to any of the items
described in subsection (d)(2).
SEC. 815. ADMINISTRATION OF EXPORT CONTROLS.
(a) In General.--The President shall delegate to the Secretary of
Commerce, the Secretary of Defense, the Secretary of State, the
Secretary of Energy, and, as appropriate, the Director of National
Intelligence and the heads of other appropriate Federal departments and
agencies, the authority to carry out the purposes set forth in
subsection (b).
(b) Purposes.--
(1) In general.--The purpose of the delegations of authority
pursuant to subsection (a) are--
(A) to advise the President with respect to--
(i) identifying specific threats to the
national security and foreign policy that the
authority of this subtitle may be used to
address; and
(ii) exercising the authority under this
subtitle to implement policies, regulations,
procedures, and actions that are necessary to
effectively counteract those threats;
(B) to review and approve--
(i) criteria for including items on, and
removing such an item from, a list of
controlled items established under this
subtitle;
(ii) an interagency procedure for compiling
and amending any list described in clause (i);
(iii) criteria for including a person on a
list of persons to whom exports, reexports, and
transfers of items are prohibited or restricted
under this subtitle;
(iv) standards for compliance by persons
subject to controls under this subtitle; and
(v) policies and procedures for the end-use
monitoring of exports, reexports, and transfers
of items controlled under this subtitle;
(C) to obtain independent evaluations, including from
Inspectors General of the relevant departments or
agencies, on a periodic basis on the effectiveness of
the implementation of this subtitle in carrying out the
policy set forth in section 812; and
(D) to benefit from the inherent equities,
experience, and capabilities of the Federal officials
described in subsection (a), including--
(i) the views of the Department of Defense
with respect to the national security
implications of a particular control or
decision;
(ii) the views of the Department of State
with respect to the foreign policy implications
of a particular control or decision;
(iii) the views of the Department of Energy
with respect to the implications for nuclear
proliferation of a particular control or
decision; and
(iv) the views of the Department of Commerce
with respect to the administration of an
efficient, coherent, reliable, enforceable, and
predictable export control system, and the
resolution of competing views or policy
objectives described in section 812.
(2) Authority to seek information.--The Federal officials
described in subsection (a) may, in carrying out the purposes
set forth in paragraph (1), seek information and advice from
experts who are not officers or employees of the Federal
Government.
(3) Transmittal and implementation of evaluations.--The
results of the independent evaluations conducted pursuant to
paragraph (1)(C) shall be transmitted to the President and the
Congress, in classified form if necessary. Subject to the
delegation of authority by the President, the Federal officials
described in subsection (a) shall determine, direct, and ensure
that improvements recommended in the evaluations are
implemented.
(c) Sense of Congress.--It is the sense of Congress that the
administration of export controls under this subtitle should be
consistent with the procedures relating to export license applications
described in Executive Order 12981 (1995).
SEC. 816. CONTROL LISTS.
The President shall, pursuant to the delegation of authority in
section 815, ensure that--
(1) a process is established for regular interagency review
of each list established under section 814(a)(1), that pursuant
to such review the Secretary regularly updates such lists to
ensure that new items (including emerging critical
technologies) are appropriately controlled, and that the level
of control of items on the lists are adjusted as conditions
change;
(2) information and expertise are obtained from officers and
employees from relevant Federal departments, agencies, and
offices and persons outside the Federal Government who have
technical expertise, with respect to the characteristics of the
items considered for each list established under section
814(a)(1) and the effect of controlling the items on addressing
the policy set forth in section 812;
(3) each list established under section 814(a)(1)
appropriately identifies each entry that has been included by
virtue of the participation of the United States in a
multilateral regime, organization, or group the purpose of
which is consistent with and supports the policy of the United
States under this subtitle relating to the control of exports,
reexports, and transfers of items; and
(4) each list established under section 814(a)(1) is
published by the Secretary in a form that facilitates
compliance with it and related requirements, particularly by
small- and medium-sized businesses, and academic institutions.
SEC. 817. LICENSING.
(a) In General.--The President shall, pursuant to the delegation of
authority in section 815, establish a procedure for the Department of
Commerce to license or otherwise authorize the export, reexport, and
transfer of items controlled under this subtitle in order to carry out
the policy set forth in section 812 and the requirements set forth in
section 813(b). The procedure shall ensure that--
(1) license applications, other requests for authorization,
and related dispute resolution procedures are considered and
decisions made with the participation of appropriate
departments, agencies, and offices that have delegated
functions under this subtitle; and
(2) licensing decisions are made in an expeditious manner,
with transparency to applicants on the status of license and
other authorization processing and the reason for denying any
license or request for authorization.
(b) Sense of Congress.--It is the sense of Congress that the
President should make best efforts to ensure that an accurate,
consistent, and timely evaluation and processing of licenses or other
requests for authorization to export, reexport, or transfer items
controlled under this subtitle is accomplished within 30 days from the
date of such license request.
(c) Fees.--No fee may be charged in connection with the submission,
processing, or consideration of any application for a license or other
authorization or other request made in connection with any regulation
in effect under the authority of this subtitle.
SEC. 818. COMPLIANCE ASSISTANCE.
(a) System for Seeking Assistance.--The President may authorize the
Secretary to establish a system to provide United States persons with
assistance in complying with this subtitle, which may include a
mechanism for providing information, in classified form as appropriate,
who are potential customers, suppliers, or business partners with
respect to items controlled under this subtitle, in order to further
ensure the prevention of the export, reexport, or transfer of items
that may pose a threat to the national security or foreign policy of
the United States.
(b) Security Clearances.--In order to carry out subsection (a), the
President may issue appropriate security clearances to persons
described in that subsection who are responsible for complying with
this subtitle.
(c) Assistance for Certain Businesses.--
(1) In general.--Not later than 120 days after the date of
the enactment of this Act, the President shall develop and
submit to Congress a plan to assist small- and medium-sized
United States in export licensing and other processes under
this subtitle.
(2) Contents.--The plan shall include, among other things,
arrangements for the Department of Commerce to provide
counseling to businesses described in paragraph (1) on filing
applications and identifying items controlled under this
subtitle, as well as proposals for seminars and conferences to
educate such businesses on export controls, licensing
procedures, and related obligations.
SEC. 819. REQUIREMENTS TO IDENTIFY AND CONTROL EMERGING, FOUNDATIONAL,
AND OTHER CRITICAL TECHNOLOGIES IN EXPORT CONTROL
REGULATIONS.
(a) In General.--The President shall establish and, in coordination
with the Secretary, the Secretary of Defense, the Secretary of Energy,
the Secretary of State, and the heads of other departments as
appropriate, lead a regular, ongoing interagency process to identify
the following:
(1) Emerging, foundational, or other critical technologies
that are essential to the national security of the United
States and that are not--
(A) identified in any list of items controlled for
export under United States law or regulations; or
(B) hereafter separately identified in any law or
regulation under the authority of a department or
agency responsible for administering United States
export controls.
(2) Other technologies that are not identified in any list of
items controlled for export under United States law or
regulations that are essential to the national security of the
United States.
(3) Subject to subsections (c) and (d), the President shall
require the relevant export control authority to publish
proposed regulations for public comment, including, as
appropriate, interim final rules, that would control such
emerging, foundational, or other critical technologies
identified pursuant to this subsection and control the release
of each such technology to destinations, end uses, or end users
as determined by the President.
(b) Requirements.--The interagency process required under subsection
(a) shall--
(1) be informed by multiple sources of information, including
industry, academia, other open source and classified
information and transactions reviewed by the Committee on
Foreign Investment in the United States;
(2) take into account the foreign development or availability
of such emerging, foundational, and other critical technologies
and the impact the controls established in subsection (c) may
have on the development of the technology in the United States;
and
(3) the Secretary, the Secretary of Defense, the Secretary of
Energy, and the Secretary of State, and the heads of other
departments as appropriate, shall consider relevant information
provided by the Director of National Intelligence.
(c) Commerce Controls.--
(1) In general.--The Secretary is authorized to establish
controls, as appropriate, on technologies identified through
the interagency process required under subsection (a) and
subject to the Export Administration Regulations, including by
publishing additional regulations.
(2) Levels of control.--
(A) In general.--The Secretary, in coordination with
the Secretary of Defense, the Secretary of State, and
the heads of other departments as appropriate, is
authorized to develop and apply levels of control,
including the requirements for a license or other
authorization, to export, reexport, or transfer such
technologies.
(B) Requirements.--In developing and applying the
levels of control for such technologies, the
Secretary--
(i) shall take into account--
(I) whether a country is subject to a
United States arms embargo or is
otherwise subject to United States
sanctions;
(II) potential end users and end
uses; and
(III) the threat to the national
security and foreign policy of the
United States;
(ii) shall, at a minimum, require a license
to export, reexport, or transfer such
technologies to a country that is subject to a
comprehensive United States arms embargo; and
(iii) may provide for appropriate license
exceptions for the export, reexport, or
transfer of such technologies.
(C) License applications submitted pursuant to
subparagraph (B)(ii).--For license applications
submitted pursuant to subparagraph (B)(ii), the
Secretary may, with respect to any joint venture, joint
development agreement, or similar collaborative
arrangement, require the applicant to identify, in
addition to the foreign participant directly involved
in the collaborative arrangement, any foreign person
with significant ownership interest in the direct
foreign participant.
(3) Review of license applications.--
(A) In general.--The procedures set forth in
Executive Order 12981 (1995) (as amended) or any
successor Executive order, shall apply to the review of
applications for licenses to export, reexport, or
transfer technologies identified through the
interagency process required under subsection (a)
submitted to the Department of Commerce pursuant to
paragraph (2).
(B) Other information.--In addition to the procedures
described in subparagraph (A), the review of
applications for such licenses shall take into account
information provided by the Director of National
Intelligence regarding any threat to the national
security of the United States posed by the proposed
export, reexport, or transfer of such technologies.
(d) Multilateral Controls.--
(1) In general.--The Secretary of State, in consultation with
the Secretary and the Secretary of Defense and heads of other
departments as appropriate, shall propose to the relevant
multilateral export control regimes in the following year that
technologies identified through the interagency process
required under subsection (a) be added to the list of
technologies controlled by such regimes.
(2) Review of continued unilateral export controls.--The
Secretary, with respect to those items on the Commerce Control
List maintained under part 774 of title 15, Code of Federal
Regulations, and in consultation with the Secretary of Defense
and the Secretary of State, and the Secretary of State, with
respect to those items on the United States Munitions List and
in consultation with the Secretary of Defense and the heads of
other departments as appropriate, shall determine whether
national security concerns warrant continued unilateral export
controls over technologies proposed for multilateral control
under paragraph (1) if the relevant multilateral export control
regime does not agree to list such technologies on its control
list within three years of a proposal by the United States.
(e) Report.--The Secretary, the Secretary of State, and the Secretary
of Energy, as appropriate, shall submit to the Committee on Foreign
Investment in the United States on a semiannual basis a report on
updates of any key actions taken pursuant to this section.
(f) Rule of Construction.--Nothing in this section should be
construed to alter or limit--
(1) the authority of the President and the Secretary of State
to designate those items that are considered to be defense
articles or defense services for purposes of the Arms Export
Control Act (22 U.S.C. 2751 et seq.) or any other relevant law,
and to regulate such items; or
(2) the authority of the President under the Atomic Energy
Act of 1954, the Nuclear Non-Proliferation Act of 1978, the
Energy Reorganization Act of 1974, this title, or any other
relevant law.
(g) Sense of Congress.--It is the sense of the Congress that the
President should request in the annual budget of the President
submitted under section 1105(a) of title 31, United States Code,
sufficient resources to enable the relevant departments and agencies to
effectively implement this section.
SEC. 820. REVIEW RELATING TO COUNTRIES SUBJECT TO COMPREHENSIVE UNITED
STATES ARMS EMBARGO.
Not later than 180 days after the date of the enactment of this Act,
the Secretary, the Secretary of Defense, the Secretary of Energy, the
Secretary of State, and the heads of other departments as appropriate,
shall conduct a review of--
(1) section 744.21 of title 15, Code of Federal Regulations,
including to assess whether the current and anticipated risks
of direct or indirect diversion, such as from policies and
practices that effectively obscure distinctions between civil
and military end-users and end-uses, require that the scope of
control under such section should be expanded to apply to
exports, reexports, or transfers for military end uses and
military end users in countries that are subject to a
comprehensive United States arms embargo; and
(2) entries on the Commerce Control List maintained under
part 774 of title 15, Code of Federal Regulations, that do not
impose license requirements for exports, reexports, or
transfers to countries subject to a comprehensive United States
arms embargo.
SEC. 821. PENALTIES.
(a) Unlawful Acts.--
(1) In general.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of this subtitle or of any regulation, order,
license, or other authorization issued under this subtitle,
including any of the unlawful acts described in paragraph (2).
(2) Specific unlawful acts.--The unlawful acts described in
this paragraph are the following:
(A) No person may engage in any conduct prohibited by
or contrary to, or refrain from engaging in any conduct
required by this subtitle, the Export Administration
Regulations, or any order, license or authorization
issued thereunder.
(B) No person may cause or aid, abet, counsel,
command, induce, procure, permit, or approve the doing
of any act prohibited, or the omission of any act
required by this subtitle, the Export Administration
Regulations, or any order, license or authorization
issued thereunder.
(C) No person may solicit or attempt a violation of
this subtitle, the Export Administration Regulations,
or any order, license or authorization issued
thereunder.
(D) No person may conspire or act in concert with one
or more other persons in any manner or for any purpose
to bring about or to do any act that constitutes a
violation of this subtitle, the Export Administration
Regulations, or any order, license or authorization
issued thereunder.
(E) No person may order, buy, remove, conceal, store,
use, sell, loan, dispose of, transfer, transport,
finance, forward, or otherwise service, in whole or in
part, or conduct negotiations to facilitate such
activities for, any item exported or to be exported
from the United States, or that is otherwise subject to
the Export Administration Regulations, with knowledge
that a violation of this subtitle, the Export
Administration Regulations, or any order, license or
authorization issued thereunder, has occurred, is about
to occur, or is intended to occur in connection with
the item unless valid authorization is obtained
therefor.
(F) No person may make any false or misleading
representation, statement, or certification, or falsify
or conceal any material fact, either directly to the
Department of Commerce, or an official of any other
United States agency, or indirectly through any other
person--
(i) in the course of an investigation or
other action subject to the Export
Administration Regulations;
(ii) in connection with the preparation,
submission, issuance, use, or maintenance of
any export control document or any report filed
or required to be filed pursuant to the Export
Administration Regulations; or
(iii) for the purpose of or in connection
with effecting any export, reexport, or
transfer of an item subject to the Export
Administration Regulations or a service or
other activity of a United States person
described in section 814.
(G) No person may engage in any transaction or take
any other action with intent to evade the provisions of
this subtitle, the Export Administration Regulations,
or any order, license, or authorization issued
thereunder.
(H) No person may fail or refuse to comply with any
reporting or recordkeeping requirements of the Export
Administration Regulations or of any order, license, or
authorization issued thereunder.
(I) Except as specifically authorized in the Export
Administration Regulations or in writing by the
Department of Commerce, no person may alter any
license, authorization, export control document, or
order issued under the Export Administration
Regulations.
(J) No person may take any action that is prohibited
by a denial order issued by the Department of Commerce
to prevent imminent violations of this subtitle, the
Export Administration Regulations, or any order,
license or authorization issued thereunder.
(3) Additional requirements.--For purposes of subparagraph
(G), any representation, statement, or certification made by
any person shall be deemed to be continuing in effect. Each
person who has made a representation, statement, or
certification to the Department of Commerce relating to any
order, license, or other authorization issued under this
subtitle shall notify the Department of Commerce, in writing,
of any change of any material fact or intention from that
previously represented, stated, or certified, immediately upon
receipt of any information that would lead a reasonably prudent
person to know that a change of material fact or intention had
occurred or may occur in the future.
(b) Criminal Penalty.--A person who willfully commits, willfully
attempts to commit, or willfully conspires to commit, or aids and abets
in the commission of, an unlawful act described in subsection (a)--
(1) shall be fined not more than $1,000,000; and
(2) in the case of the individual, shall be imprisoned for
not more than 20 years, or both.
(c) Civil Penalties.--
(1) Authority.--The President may impose the following civil
penalties on a person for each violation by that person of this
subtitle or any regulation, order, or license issued under this
subtitle, for each violation:
(A) A fine of not more than $300,000 or an amount
that is twice the value of the transaction that is the
basis of the violation with respect to which the
penalty is imposed, whichever is greater.
(B) Revocation of a license issued under this
subtitle to the person.
(C) A prohibition on the person's ability to export,
reexport, or transfer any items, whether or not subject
to controls under this subtitle.
(2) Procedures.--Any civil penalty under this subsection may
be imposed only after notice and opportunity for an agency
hearing on the record in accordance with sections 554 through
557 of title 5, United States Code.
(3) Standards for levels of civil penalty.--The Secretary may
by regulation provide standards for establishing levels of
civil penalty under this subsection based upon factors such as
the seriousness of the violation, the culpability of the
violator, and such mitigating factors as the violator's record
of cooperation with the Government in disclosing the violation.
(d) Criminal Forfeiture of Property Interest and Proceeds.--
(1) Forfeiture.--Any person who is convicted under subsection
(b) of a violation of a control imposed under section 813 (or
any regulation, order, or license issued with respect to such
control) shall, in addition to any other penalty, forfeit to
the United States--
(A) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in the tangible items that were the subject of the
violation;
(B) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in tangible property that was used in the
violation; and
(C) any of that person's property constituting, or
derived from, any proceeds obtained directly or
indirectly as a result of the violation.
(2) Procedures.--The procedures in any forfeiture under this
subsection, and the duties and authority of the courts of the
United States and the Attorney General with respect to any
forfeiture action under this subsection or with respect to any
property that may be subject to forfeiture under this
subsection, shall be governed by the provisions of section 1963
of title 18, United States Code.
(e) Prior Convictions.--
(1) License bar.--
(A) In general.--The Secretary may--
(i) deny the eligibility of any person
convicted of a criminal violation described in
subparagraph (B) to export, reexport, or
transfer outside the United States any item,
whether or not subject to controls under this
subtitle, for a period of up to 10 years
beginning on the date of the conviction; and
(ii) revoke any license or other
authorization to export, reexport, or transfer
items that was issued under this subtitle and
in which such person has an interest at the
time of the conviction.
(B) Violations.--The violations referred to in
subparagraph (A) are any criminal violations of, or
criminal attempt or conspiracy to violate--
(i) this subtitle (or any regulation,
license, or order issued under this subtitle);
(ii) any regulation, license, or order issued
under the International Emergency Economic
Powers Act;
(iii) section 371, 554, 793, 794, or 798 of
title 18, United States Code;
(iv) section 1001 of title 18, United States
Code;
(v) section 4(b) of the Internal Security Act
of 1950 (50 U.S.C. 783(b)); or
(vi) section 38 of the Arms Export Control
Act (22 U.S.C. 2778).
(2) Application to other parties.--The Secretary may exercise
the authority under paragraph (1) with respect to any person
related, through affiliation, ownership, control, position of
responsibility, or other connection in the conduct of trade or
business, to any person convicted of any violation of law set
forth in paragraph (1), upon a showing of such relationship
with the convicted party, and subject to the procedures set
forth in subsection (c)(2).
(f) Other Authorities.--Nothing in subsection (c), (d), or (e)
limits--
(1) the availability of other administrative or judicial
remedies with respect to violations of this subtitle, or any
regulation, order, license or other authorization issued under
this subtitle;
(2) the authority to compromise and settle administrative
proceedings brought with respect to violations of this
subtitle, or any regulation, order, license, or other
authorization issued under this subtitle; or
(3) the authority to compromise, remit or mitigate seizures
and forfeitures pursuant to section 1(b) of title VI of the Act
of June 15, 1917 (22 U.S.C. 401(b)).
SEC. 822. ENFORCEMENT.
(a) Authorities.--In order to enforce this subtitle, the President
shall delegate to the heads of other appropriate Federal departments
and agencies the authority to--
(1) issue regulations, orders, and guidelines;
(2) require, inspect, and obtain books, records, and any
other information from any person subject to the provisions of
this subtitle;
(3) administer oaths or affirmations and by subpoena require
any person to appear and testify or to appear and produce
books, records, and other writings, or both;
(4) conduct investigations (including undercover) in the
United States and in other countries using all applicable laws
of the United States, including intercepting any wire, oral,
and electronic communications, conducting electronic
surveillance, using pen registers and trap and trace devices,
and carrying out acquisitions, to the extent authorized under
chapters 119, 121, and 206 of title 18, United States Code;
(5) inspect, search, detain, seize, or issue temporary denial
orders with respect to items, in any form, that are subject to
controls under this subtitle, or conveyances on which it is
believed that there are items that have been, are being, or are
about to be exported, reexported, or transferred in violation
of this subtitle, or any regulations, order, license, or other
authorization issued thereunder;
(6) carry firearms;
(7) conduct prelicense inspections and post-shipment
verifications; and
(8) execute warrants and make arrests.
(b) Enforcement of Subpoenas.--In the case of contumacy by, or
refusal to obey a subpoena issued to, any person under subsection
(a)(3), a district court of the United States, after notice to such
person and a hearing, shall have jurisdiction to issue an order
requiring such person to appear and give testimony or to appear and
produce books, records, and other writings, regardless of format, that
are the subject of the subpoena. Any failure to obey such order of the
court may be punished by such court as a contempt thereof.
(c) Best Practice Guidelines.--
(1) In general.--The Secretary, in consultation with the
heads of other appropriate Federal agencies, should publish and
update ``best practices'' guidelines to assist persons in
developing and implementing, on a voluntary basis, effective
export control programs in compliance with the regulations
issued under this subtitle.
(2) Export compliance program.--The implementation by a
person of an effective export compliance program and a high
quality overall export compliance effort by a person should
ordinarily be given weight as mitigating factors in a civil
penalty action against the person under this subtitle.
(d) Reference to Enforcement.--For purposes of this section, a
reference to the enforcement of, or a violation of, this subtitle
includes a reference to the enforcement or a violation of any
regulation, order, license or other authorization issued pursuant to
this subtitle.
(e) Immunity.--A person shall not be excused from complying with any
requirements under this section because of the person's privilege
against self-incrimination, but the immunity provisions of section 6002
of title 18, United States Code, shall apply with respect to any
individual who specifically claims such privilege.
(f) Confidentiality of Information.--
(1) Exemptions from disclosure.--
(A) In general.--Information obtained under this
subtitle may be withheld from disclosure only to the
extent permitted by statute, except that information
described in subparagraph (B) shall be withheld from
public disclosure and shall not be subject to
disclosure under section 552(b)(3) of title 5, United
States Code, unless the release of such information is
determined by the Secretary to be in the national
interest.
(B) Information described.--Information described in
this subparagraph is information submitted or obtained
in connection with an application for a license or
other authorization to export, reexport, or transfer
items, engage in other activities, a recordkeeping or
reporting requirement, enforcement activity, or other
operations under this subtitle, including--
(i) the license application, license, or
other authorization itself;
(ii) classification or advisory opinion
requests, and the response thereto;
(iii) license determinations, and information
pertaining thereto;
(iv) information or evidence obtained in the
course of any investigation; and
(v) information obtained or furnished in
connection with any international agreement,
treaty, or other obligation.
(2) Information to the congress and GAO.--
(A) In general.--Nothing in this section shall be
construed as authorizing the withholding of information
from the Congress or from the Government Accountability
Office.
(B) Availability to the congress.--
(i) In general.--Any information obtained at
any time under any provision of the Export
Administration Act of 1979 (as in effect on the
day before the date of the enactment of this
Act and as continued in effect pursuant to the
International Emergency Economic Powers Act),
under the Export Administration Regulations, or
under this subtitle, including any report or
license application required under any such
provision, shall be made available to a
committee or subcommittee of Congress of
appropriate jurisdiction, upon the request of
the chairman or ranking minority member of such
committee or subcommittee.
(ii) Prohibition on further disclosure.--No
such committee or subcommittee, or member
thereof, may disclose any information made
available under clause (i), that is submitted
on a confidential basis unless the full
committee determines that the withholding of
that information is contrary to the national
interest.
(C) Availability to GAO.--
(i) In general.--Information described in
clause (i) of subparagraph (B) shall be subject
to the limitations contained in section 716 of
title 31, United States Code.
(ii) Prohibition on further disclosure.--An
officer or employee of the Government
Accountability Office may not disclose, except
to the Congress in accordance with this
paragraph, any such information that is
submitted on a confidential basis or from which
any individual can be identified.
(3) Information sharing.--
(A) In general.--Any Federal official described in
section 815(a) who obtains information that is relevant
to the enforcement of this subtitle, including
information pertaining to any investigation, shall
furnish such information to each appropriate
department, agency, or office with enforcement
responsibilities under this section to the extent
consistent with the protection of intelligence,
counterintelligence, and law enforcement sources,
methods, and activities.
(B) Exceptions.--The provisions of this paragraph
shall not apply to information subject to the
restrictions set forth in section 9 of title 13, United
States Code, and return information, as defined in
subsection (b) of section 6103 of the Internal Revenue
Code of 1986 (26 U.S.C. 6103(b)), may be disclosed only
as authorized by that section.
(C) Exchange of information.--The President shall
ensure that the heads of departments, agencies, and
offices with enforcement authorities under this
subtitle, consistent with protection of law enforcement
and its sources and methods--
(i) exchange any licensing and enforcement
information with one another that is necessary
to facilitate enforcement efforts under this
section; and
(ii) consult on a regular basis with one
another and with the head of other departments,
agencies, and offices that obtain information
subject to this paragraph, in order to
facilitate the exchange of such information.
(D) Information sharing with federal agencies.--
Licensing or enforcement information obtained under
this subtitle may be shared with heads of departments,
agencies, and offices that do not have enforcement
authorities under this subtitle on a case-by-case basis
at the discretion of the President. Such information
may be shared only when the President makes a
determination that the sharing of this information is
in the national interest.
(g) Reporting Requirements.--In the administration of this section,
reporting requirements shall be designed to reduce the cost of
reporting, recordkeeping, and documentation to the extent consistent
with effective enforcement and compilation of useful trade statistics.
Reporting, recordkeeping, and documentation requirements shall be
periodically reviewed and revised in the light of developments in the
field of information technology.
(h) Civil Forfeiture.--
(1) In general.--Any tangible items seized under subsection
(a) by designated officers or employees shall be subject to
forfeiture to the United States in accordance with applicable
law, except that property seized shall be returned if the
property owner is not found guilty of a civil or criminal
violation under section 819.
(2) Procedures.--Any seizure or forfeiture under this
subsection shall be carried out in accordance with the
procedures set forth in section 981 of title 18, United States
Code.
SEC. 823. ADMINISTRATIVE PROCEDURE.
(a) In General.--The functions exercised under this subtitle shall
not be subject to sections 551, 553 through 559, and 701 through 706 of
title 5, United States Code.
(b) Administrative Law Judges.--The Secretary is authorized to
appoint an administrative law judge, and may designate administrative
law judges from other Federal agencies who are provided pursuant to a
legally authorized interagency agreement with the Department of
Commerce, and consistent with the provisions of section 3105 of title
5, United States Code.
(c) Amendments to Regulations.--The President shall notify in advance
the Committee on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Foreign Affairs of the House of Representatives of any
proposed amendments to the Export Administration Regulations with an
explanation of the intent and rationale of such amendments.
SEC. 824. ANNUAL REPORT TO CONGRESS.
(a) In General.--The President shall submit to Congress, by December
31 of each year, a report on the implementation of this subtitle during
the preceding fiscal year. The report shall include a review of--
(1) the effect of controls imposed under this subtitle on
exports, reexports, and transfers of items in addressing
threats to the national security or foreign policy of the
United States, including a description of licensing processing
times;
(2) the impact of such controls on the scientific and
technological leadership of the United States;
(3) the consistency with such controls of export controls
imposed by other countries;
(4) efforts to provide exporters with compliance assistance,
including specific actions to assist small- and medium-sized
businesses;
(5) a summary of regulatory changes from the prior fiscal
year;
(6) a summary of export enforcement actions, including of
actions taken to implement end-use monitoring of dual-use,
military, and other items subject to the Export Administration
Regulations;
(7) a summary of approved license applications to proscribed
persons;
(8) efforts undertaken within the previous year to comply
with the requirements of section 819, including any critical
technologies identified under such section and how or whether
such critical technologies were controlled for export; and
(9) a summary of industrial base assessments conducted during
the previous year by the Department of Commerce, including with
respect to counterfeit electronics, foundational technologies,
and other research and analysis of critical technologies and
industrial capabilities of key defense-related sectors.
(b) Form.--The report required under subsection (a) shall be
submitted in unclassified form, but may contain a classified annex.
SEC. 825. REPEAL.
(a) In General.--The Export Administration Act of 1979 (50 U.S.C.
App. 2401 et seq.) (as continued in effect pursuant to the
International Emergency Economic Powers Act) is repealed.
(b) Implementation.--The President shall implement the amendment made
by subsection (a) by exercising the authorities of the President under
the International Emergency Economic Powers Act (50 U.S.C. 1701 et
seq.).
SEC. 826. EFFECT ON OTHER ACTS.
(a) In General.--Except as otherwise provided in this subtitle,
nothing contained in this subtitle shall be construed to modify,
repeal, supersede, or otherwise affect the provisions of any other laws
authorizing control over exports, reexports, or transfers of any item,
or activities of United States persons subject to the Export
Administration Regulations.
(b) Coordination of Controls.--
(1) In general.--The authority granted to the President under
this subtitle shall be exercised in such manner so as to
achieve effective coordination with all export control and
sanctions authorities exercised by Federal departments and
agencies delegated with authority under this subtitle,
particularly the Department of State, the Department of the
Treasury, and the Department of Energy.
(2) Sense of congress.--It is the sense of Congress that in
order to achieve effective coordination described in paragraph
(1), such Federal departments and agencies--
(A) should continuously work to create enforceable
regulations with respect to the export, reexport, and
transfer by United States and foreign persons of
commodities, software, technology, and services to
various end uses and end users for foreign policy and
national security reasons;
(B) should regularly work to reduce complexity in the
system, including complexity caused merely by the
existence of structural, definitional, and other non-
policy based differences between and among different
export control and sanctions systems; and
(C) should coordinate controls on items exported,
reexported, or transferred in connection with a foreign
military sale under chapter 2 of the Arms Export
Control Act or a commercial sale under section 38 of
the Arms Export Control Act to reduce as much
unnecessary administrative burden as possible that is a
result of differences between the exercise of those two
authorities.
(c) Nonproliferation Controls.--Nothing in this subtitle shall be
construed to supersede the procedures published by the President
pursuant to section 309(c) of the Nuclear Non-Proliferation Act of
1978.
SEC. 827. TRANSITION PROVISIONS.
(a) In General.--All delegations, rules, regulations, orders,
determinations, licenses, or other forms of administrative action that
have been made, issued, conducted, or allowed to become effective under
the Export Administration Act of 1979 (as in effect on the day before
the date of the enactment of this Act and as continued in effect
pursuant to the International Emergency Economic Powers Act), or the
Export Administration Regulations, and are in effect as of the date of
the enactment of this Act, shall continue in effect according to their
terms until modified, superseded, set aside, or revoked under the
authority of this subtitle.
(b) Administrative and Judicial Proceedings.--This subtitle shall not
affect any administrative or judicial proceedings commenced, or any
applications for licenses made, under the Export Administration Act of
1979 (as in effect on the day before the date of the enactment of this
Act and as continued in effect pursuant to the International Emergency
Economic Powers Act), or the Export Administration Regulations.
(c) Certain Determinations and References.--
(1) State sponsors of terrorism.--Any determination that was
made under section 6(j) of the Export Administration Act of
1979 (as in effect on the day before the date of the enactment
of this Act and as continued in effect pursuant to the
International Emergency Economic Powers Act) shall continue in
effect as if the determination had been made under section
814(c) of this Act.
(2) Reference.--Any reference in any other provision of law
to a country the government of which the Secretary of State has
determined, for purposes of section 6(j) of the Export
Administration Act of 1979 (as in effect on the day before the
date of the enactment of this Act and as continued in effect
pursuant to the International Emergency Economic Powers Act),
is a government that has repeatedly provided support for acts
of international terrorism shall be deemed to refer to a
country the government of which the Secretary of State has
determined, for purposes of section 814(c), is a government
that has repeatedly provided support for acts of international
terrorism.
Subtitle B--Anti-Boycott Act of 2018
SEC. 831. SHORT TITLE.
This subtitle may be cited as the ``Anti-Boycott Act of 2018''.
SEC. 832. STATEMENT OF POLICY.
Congress declares it is the policy of the United States--
(1) to oppose restrictive trade practices or boycotts
fostered or imposed by any foreign country against other
countries friendly to the United States or against any United
States person;
(2) to encourage and, in specified cases, require United
States persons engaged in the export of goods or technology or
other information to refuse to take actions, including
furnishing information or entering into or implementing
agreements, which have the effect of furthering or supporting
the restrictive trade practices or boycotts fostered or imposed
by any foreign country against any United States person; and
(3) to foster international cooperation and the development
of international rules and institutions to assure reasonable
access to world supplies.
SEC. 833. FOREIGN BOYCOTTS.
(a) Prohibitions and Exceptions.--
(1) Prohibitions.--For the purpose of implementing the
policies set forth in section 832, the President shall issue
regulations prohibiting any United States person, with respect
to that person's activities in the interstate or foreign
commerce of the United States, from taking or knowingly
agreeing to take any of the following actions with intent to
comply with, further, or support any boycott fostered or
imposed by any foreign country, against a country which is
friendly to the United States and which is not itself the
object of any form of boycott pursuant to United States law or
regulation:
(A) Refusing, or requiring any other person to
refuse, to do business with or in the boycotted
country, with any business concern organized under the
laws of the boycotted country, with any national or
resident of the boycotted country, or with any other
person, pursuant to an agreement with, a requirement
of, or a request from or on behalf of the boycotting
country. The mere absence of a business relationship
with or in the boycotted country with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person, does not indicate
the existence of the intent required to establish a
violation of regulations issued to carry out this
subparagraph.
(B) Refusing, or requiring any other person to
refuse, to employ or otherwise discriminating against
any United States person on the basis of race,
religion, sex, or national origin of that person or of
any owner, officer, director, or employee of such
person.
(C) Furnishing information with respect to the race,
religion, sex, or national origin of any United States
person or of any owner, officer, director, or employee
of such person.
(D) Furnishing information, or requesting the
furnishing of information, about whether any person
has, has had, or proposes to have any business
relationship (including a relationship by way of sale,
purchase, legal or commercial representation, shipping
or other transport, insurance, investment, or supply)
with or in the boycotted country, with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person which is known or
believed to be restricted from having any business
relationship with or in the boycotting country. Nothing
in this subparagraph shall prohibit the furnishing of
normal business information in a commercial context as
defined by the Secretary.
(E) Furnishing information about whether any person
is a member of, has made contributions to, or is
otherwise associated with or involved in the activities
of any charitable or fraternal organization which
supports the boycotted country.
(F) Paying, honoring, confirming, or otherwise
implementing a letter of credit which contains any
condition or requirement compliance with which is
prohibited by regulations issued pursuant to this
paragraph, and no United States person shall, as a
result of the application of this paragraph, be
obligated to pay or otherwise honor or implement such
letter of credit.
(2) Exceptions.--Regulations issued pursuant to paragraph (1)
shall provide exceptions for--
(A) complying or agreeing to comply with
requirements--
(i) prohibiting the import of goods or
services from the boycotted country or goods
produced or services provided by any business
concern organized under the laws of the
boycotted country or by nationals or residents
of the boycotted country; or
(ii) prohibiting the shipment of goods to the
boycotting country on a carrier of the
boycotted country, or by a route other than
that prescribed by the boycotting country or
the recipient of the shipment;
(B) complying or agreeing to comply with import and
shipping document requirements with respect to the
country of origin, the name of the carrier and route of
shipment, the name of the supplier of the shipment or
the name of the provider of other services, except that
no information knowingly furnished or conveyed in
response to such requirements may be stated in
negative, blacklisting, or similar exclusionary terms,
other than with respect to carriers or route of
shipment as may be permitted by such regulations in
order to comply with precautionary requirements
protecting against war risks and confiscation;
(C) complying or agreeing to comply in the normal
course of business with the unilateral and specific
selection by a boycotting country, or national or
resident thereof, of carriers, insurers, suppliers of
services to be performed within the boycotting country
or specific goods which, in the normal course of
business, are identifiable by source when imported into
the boycotting country;
(D) complying or agreeing to comply with export
requirements of the boycotting country relating to
shipments or transshipments of exports to the boycotted
country, to any business concern of or organized under
the laws of the boycotted country, or to any national
or resident of the boycotted country;
(E) compliance by an individual or agreement by an
individual to comply with the immigration or passport
requirements of any country with respect to such
individual or any member of such individual's family or
with requests for information regarding requirements of
employment of such individual within the boycotting
country; and
(F) compliance by a United States person resident in
a foreign country or agreement by such person to comply
with the laws of that country with respect to his
activities exclusively therein, and such regulations
may contain exceptions for such resident complying with
the laws or regulations of that foreign country
governing imports into such country of trademarked,
trade named, or similarly specifically identifiable
products, or components of products for his own use,
including the performance of contractual services
within that country, as may be defined by such
regulations.
(3) Special rules.--Regulations issued pursuant to paragraphs
(2)(C) and (2)(F) shall not provide exceptions from paragraphs
(1)(B) and (1)(C).
(4) Rule of construction.--Nothing in this subsection may be
construed to supersede or limit the operation of the antitrust
or civil rights laws of the United States.
(5) Application.--This section shall apply to any transaction
or activity undertaken, by or through a United States person or
any other person, with intent to evade the provisions of this
section as implemented by the regulations issued pursuant to
this subsection, and such regulations shall expressly provide
that the exceptions set forth in paragraph (2) shall not permit
activities or agreements (expressed or implied by a course of
conduct, including a pattern of responses) otherwise
prohibited, which are not within the intent of such exceptions.
(b) Foreign Policy Controls.--
(1) In general.--In addition to the regulations issued
pursuant to subsection (a), regulations issued under subtitle A
to carry out the policies set forth in section 812(1)(D) shall
implement the policies set forth in this section.
(2) Requirements.--Such regulations shall require that any
United States person receiving a request for the furnishing of
information, the entering into or implementing of agreements,
or the taking of any other action referred to in subsection (a)
shall report that fact to the Secretary, together with such
other information concerning such request as the Secretary may
require for such action as the Secretary considers appropriate
for carrying out the policies of that section. Such person
shall also report to the Secretary whether such person intends
to comply and whether such person has complied with such
request. Any report filed pursuant to this paragraph shall be
made available promptly for public inspection and copying,
except that information regarding the quantity, description,
and value of any goods or technology to which such report
relates may be kept confidential if the Secretary determines
that disclosure thereof would place the United States person
involved at a competitive disadvantage. The Secretary shall
periodically transmit summaries of the information contained in
such reports to the Secretary of State for such action as the
Secretary of State, in consultation with the Secretary,
considers appropriate for carrying out the policies set forth
in section 832.
(c) Preemption.--The provisions of this section and the regulations
issued pursuant thereto shall preempt any law, rule, or regulation of
any of the several States or the District of Columbia, or any of the
territories or possessions of the United States, or of any governmental
subdivision thereof, which law, rule, or regulation pertains to
participation in, compliance with, implementation of, or the furnishing
of information regarding restrictive trade practices or boycotts
fostered or imposed by foreign countries against other countries
friendly to the United States.
SEC. 834. ENFORCEMENT.
(a) Criminal Penalty.--A person who willfully commits, willfully
attempts to commit, or willfully conspires to commit, or aids or abets
in the commission of, an unlawful act section 833--
(1) shall, upon conviction, be fined not more than
$1,000,000; or
(2) if a natural person, may be imprisoned for not more than
20 years, or both.
(b) Civil Penalties.--The President may impose the following civil
penalties on a person who violates section 833 or any regulation issued
under this subtitle:
(1) A fine of not more than $300,000 or an amount that is
twice the value of the transaction that is the basis of the
violation with respect to which the penalty is imposed,
whichever is greater.
(2) Revocation of a license issued under title I to the
person.
(3) A prohibition on the person's ability to export,
reexport, or transfer any items controlled under subtitle A.
(c) Procedures.--Any civil penalty or administrative sanction
(including any suspension or revocation of authority to export) under
this section may be imposed only after notice and opportunity for an
agency hearing on the record in accordance with sections 554 through
557 of title 5, United States Code, and shall be subject to judicial
review in accordance with chapter 7 of such title.
(d) Standards for Levels of Civil Penalty.--The President may by
regulation provide standards for establishing levels of civil penalty
under this section based upon factors such as the seriousness of the
violation, the culpability of the violator, and the violator's record
of cooperation with the Government in disclosing the violation.
Subtitle C--Sanctions Regarding Missile Proliferation and Chemical and
Biological Weapons Proliferation
SEC. 841. MISSILE PROLIFERATION CONTROL VIOLATIONS.
(a) Violations by United States Persons.--
(1) Sanctions.--
(A) Sanctionable activity.--The President shall
impose the applicable sanctions described in
subparagraph (B) if the President determines that a
United States person knowingly--
(i) exports, reexports, or transfers of any
item on the MTCR Annex, in violation of the
provisions of section 38 (22 U.S.C. 2778) or
chapter 7 of the Arms Export Control Act,
subtitle A, or any regulations or orders issued
under any such provisions; or
(ii) conspires to or attempts to engage in
such export, reexport, or transfer.
(B) Sanctions.--The sanctions that apply to a United
States person under subparagraph (A) are the following:
(i) If the item on the MTCR Annex involved in
the export, reexport, or transfer is missile
equipment or technology within category II of
the MTCR Annex, then the President shall deny
to such United States person, for a period of 2
years, licenses for the transfer of missile
equipment or technology controlled under
subtitle A.
(ii) If the item on the MTCR Annex involved
in the export, reexport, or transfer is missile
equipment or technology within category I of
the MTCR Annex, then the President shall deny
to such United States person, for a period of
not less than 2 years, all licenses for items
the transfer of which is controlled under
subtitle A.
(2) Discretionary sanctions.--In the case of any
determination referred to in paragraph (1), the President may
pursue any other appropriate penalties under section 820.
(3) Waiver.--The President may waive the imposition of
sanctions under paragraph (1) on a person with respect to a
product or service if the President certifies to the Congress
that--
(A) the product or service is essential to the
national security of the United States; and
(B) such person is a sole source supplier of the
product or service, the product or service is not
available from any alternative reliable supplier, and
the need for the product or service cannot be met in a
timely manner by improved manufacturing processes or
technological developments.
(b) Transfers of Missile Equipment or Technology by Foreign
Persons.--
(1) Sanctions.--
(A) Sanctionable activity.--Subject to paragraphs (3)
through (7), the President shall impose the applicable
sanctions under subparagraph (B) on a foreign person if
the President--
(i) determines that a foreign person
knowingly--
(I) exports, reexports, or transfers
any MTCR equipment or technology that
contributes to the design, development,
or production of missiles in a country
that is not an MTCR adherent and would
be, if it were United States-origin
equipment or technology, subject to the
jurisdiction of the United States under
subtitle A;
(II) conspires to or attempts to
engage in such export, reexport, or
transfer; or
(III) facilitates such export,
reexport, or transfer by any other
person; or
(ii) has made a determination with respect to
the foreign person under section 73(a) of the
Arms Export Control Act.
(B) Sanctions.--The sanctions that apply to a foreign
person under subparagraph (A) are the following:
(i) If the item involved in the export,
reexport, or transfer is within category II of
the MTCR Annex, then the President shall deny,
for a period of 2 years, licenses for the
transfer to such foreign person of missile
equipment or technology the transfer of which
is controlled under subtitle A.
(ii) If the item involved in the export,
reexport, or transfer is within category I of
the MTCR Annex, then the President shall deny,
for a period of not less than 2 years, licenses
for the transfer to such foreign person of
items the transfer of which is controlled under
subtitle A.
(2) Inapplicability with respect to MTCR adherents.--
Paragraph (1) does not apply with respect to--
(A) any export, reexport, or transfer that is
authorized by the laws of an MTCR adherent, if such
authorization is not obtained by misrepresentation or
fraud; or
(B) any export, reexport, or transfer of an item to
an end user in a country that is an MTCR adherent.
(3) Effect of enforcement actions by MTCR adherents.--
Sanctions set forth in paragraph (1) may not be imposed under
this subsection on a person with respect to acts described in
such paragraph or, if such sanctions are in effect against a
person on account of such acts, such sanctions shall be
terminated, if an MTCR adherent is taking judicial or other
enforcement action against that person with respect to such
acts, or that person has been found by the government of an
MTCR adherent to be innocent of wrongdoing with respect to such
acts.
(4) Waiver and report to congress.--
(A) Waiver authority.--The President may waive the
application of paragraph (1) to a foreign person if the
President determines that such waiver is essential to
the national security of the United States.
(B) Notification and report to congress.--In the
event that the President decides to apply the waiver
described in subparagraph (A), the President shall so
notify the appropriate congressional committees not
less than 20 working days before issuing the waiver.
Such notification shall include a report fully
articulating the rationale and circumstances which led
the President to apply the waiver.
(5) Additional waiver.--The President may waive the
imposition of sanctions under paragraph (1) on a person with
respect to a product or service if the President certifies to
the appropriate congressional committees that--
(A) the product or service is essential to the
national security of the United States; and
(B) such person is a sole source supplier of the
product or service, the product or service is not
available from any alternative reliable supplier, and
the need for the product or service cannot be met in a
timely manner by improved manufacturing processes or
technological developments.
(6) Exceptions.--The President shall not apply the sanction
under this subsection prohibiting the importation of the
products of a foreign person--
(A) in the case of procurement of defense articles or
defense services--
(i) under existing contracts or subcontracts,
including the exercise of options for
production quantities to satisfy requirements
essential to the national security of the
United States;
(ii) if the President determines that the
person to which the sanctions would be applied
is a sole source supplier of the defense
articles or defense services, that the defense
articles or defense services are essential to
the national security of the United States, and
that alternative sources are not readily or
reasonably available; or
(iii) if the President determines that such
articles or services are essential to the
national security of the United States under
defense coproduction agreements or NATO
Programs of Cooperation;
(B) to products or services provided under contracts
entered into before the date on which the President
publishes his intention to impose the sanctions; or
(C) to--
(i) spare parts;
(ii) component parts, but not finished
products, essential to United States products
or production;
(iii) routine services and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available; or
(iv) information and technology essential to
United States products or production.
(c) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on Foreign Relations and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(2) Defense articles; defense services.--The terms ``defense
articles'' and ``defense services'' mean those items on the
United States Munitions List as defined in section 47(7) of the
Arms Export Control Act (22 U.S.C. 2794 note).
(3) Missile.--The term ``missile'' means a category I system
as defined in the MTCR Annex.
(4) Missile technology control regime; mtcr.--The term
``Missile Technology Control Regime'' or ``MTCR'' means the
policy statement, between the United States, the United
Kingdom, the Federal Republic of Germany, France, Italy,
Canada, and Japan, announced on April 16, 1987, to restrict
sensitive missile-relevant transfers based on the MTCR Annex,
and any amendments thereto.
(5) MTCR adherent.--The term ``MTCR adherent'' means a
country that participates in the MTCR or that, pursuant to an
international understanding to which the United States is a
party, controls MTCR equipment or technology in accordance with
the criteria and standards set forth in the MTCR.
(6) MTCR annex.--The term ``MTCR Annex'' means the Guidelines
and Equipment and Technology Annex of the MTCR, and any
amendments thereto.
(7) Missile equipment or technology; mtcr equipment or
technology.--The terms ``missile equipment or technology'' and
``MTCR equipment or technology'' mean those items listed in
category I or category II of the MTCR Annex.
SEC. 842. CHEMICAL AND BIOLOGICAL WEAPONS PROLIFERATION SANCTIONS.
(a) Imposition of Sanctions.--
(1) Determination by the president.--Except as provided in
subsection (b)(2), the President shall impose the sanction
described in subsection (c) if the President determines that a
foreign person has knowingly and materially contributed--
(A) through the export from the United States of any
item that is subject to the jurisdiction of the United
States under this subtitle; or
(B) through the export from any other country of any
item that would be, if they were United States goods or
technology, subject to the jurisdiction of the United
States under this subtitle,
to the efforts by any foreign country, project, or entity
described in paragraph (2) to use, develop, produce, stockpile,
or otherwise acquire chemical or biological weapons.
(2) Countries, projects, or entities receiving assistance.--
Paragraph (1) applies in the case of--
(A) any foreign country that the President determines
has, at any time after January 1, 1980--
(i) used chemical or biological weapons in
violation of international law;
(ii) used lethal chemical or biological
weapons against its own nationals; or
(iii) made substantial preparations to engage
in the activities described in clause (i) or
(ii);
(B) any foreign country whose government is
determined for purposes of section 914(c) to be a
government that has repeatedly provided support for
acts of international terrorism; or
(C) any other foreign country, project, or entity
designated by the President for purposes of this
section.
(3) Persons against which sanctions are to be imposed.--A
sanction shall be imposed pursuant to paragraph (1) on--
(A) the foreign person with respect to which the
President makes the determination described in that
paragraph;
(B) any successor entity to that foreign person; and
(C) any foreign person that is a parent, subsidiary,
or affiliate of that foreign person if that parent,
subsidiary, or affiliate knowingly assisted in the
activities which were the basis of that determination.
(b) Consultations With and Actions by Foreign Government of
Jurisdiction.--
(1) Consultations.--If the President makes the determinations
described in subsection (a)(1) with respect to a foreign
person, the Congress urges the President to initiate
consultations immediately with the government with primary
jurisdiction over that foreign person with respect to the
imposition of a sanction pursuant to this section.
(2) Actions by government of jurisdiction.--In order to
pursue such consultations with that government, the President
may delay imposition of a sanction pursuant to this section for
a period of up to 90 days. Following such consultations, the
President shall impose the sanction unless the President
determines and certifies to the appropriate congressional
committees that the Government has taken specific and effective
actions, including appropriate penalties, to terminate the
involvement of the foreign person in the activities described
in subsection (a)(1). The President may delay imposition of the
sanction for an additional period of up to 90 days if the
President determines and certifies to the Congress that the
government is in the process of taking the actions described in
the preceding sentence.
(3) Report to congress.--The President shall report to the
appropriate congressional committees, not later than 90 days
after making a determination under subsection (a)(1), on the
status of consultations with the appropriate government under
this subsection, and the basis for any determination under
paragraph (2) of this subsection that such government has taken
specific corrective actions.
(c) Sanction.--
(1) Description of sanction.--The sanction to be imposed
pursuant to subsection (a)(1) is, except as provided that the
United States Government shall not procure, or enter into any
contract for the procurement of, any goods or services from any
person described in subsection (a)(3).
(2) Exceptions.--The President shall not be required to apply
or maintain a sanction under this section--
(A) in the case of procurement of defense articles or
defense services--
(i) under existing contracts or subcontracts,
including the exercise of options for
production quantities to satisfy United States
operational military requirements;
(ii) if the President determines that the
person or other entity to which the sanctions
would otherwise be applied is a sole source
supplier of the defense articles or defense
services, that the defense articles or defense
services are essential, and that alternative
sources are not readily or reasonably
available; or
(iii) if the President determines that such
articles or services are essential to the
national security under defense coproduction
agreements;
(B) to products or services provided under contracts
entered into before the date on which the President
publishes his intention to impose sanctions;
(C) to--
(i) spare parts;
(ii) component parts, but not finished
products, essential to United States products
or production; or
(iii) routine servicing and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available;
(D) to information and technology essential to United
States products or production; or
(E) to medical or other humanitarian items.
(d) Termination of Sanctions.--A sanction imposed pursuant to this
section shall apply for a period of at least 12 months following the
imposition of one sanction and shall cease to apply thereafter only if
the President determines and certifies to the appropriate congressional
committees that reliable information indicates that the foreign person
with respect to which the determination was made under subsection
(a)(1) has ceased to aid or abet any foreign government, project, or
entity in its efforts to acquire chemical or biological weapons
capability as described in that subsection.
(e) Waiver.--
(1) Criterion for waiver.--The President may waive the
application of any sanction imposed on any person pursuant to
this section if the President determines and certifies to the
appropriate congressional committees that such waiver is
important to the national security interests of the United
States.
(2) Notification of and report to congress.--If the President
decides to exercise the waiver authority provided in paragraph
(1), the President shall so notify the appropriate
congressional committees not less than 20 days before the
waiver takes effect. Such notification shall include a report
fully articulating the rationale and circumstances which led
the President to exercise the waiver authority.
(f) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House of
Representatives; and
(B) the Committee on Foreign Relations and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(2) Defense articles; defense services.--The terms ``defense
articles'' and ``defense services'' mean those items on the
United States Munitions List or are otherwise controlled under
the Arms Export Control Act.
Subtitle D--Administrative Authorities
SEC. 851. UNDER SECRETARY OF COMMERCE FOR INDUSTRY AND SECURITY.
(a) Appointment.--
(1) In general.--The President shall appoint, by and with the
advice and consent of the Senate, an Under Secretary of
Commerce for Industry and Security who shall carry out all the
functions of the Secretary under this title and such other
provisions of law that relate to the implementation of the
dual-use export system.
(2) Assistant secretaries of commerce.--The President shall
appoint, by and with the advice and consent of the Senate, two
Assistant Secretaries of Commerce to assist the Under Secretary
in carrying out the functions described in paragraph (1).
(b) Delegation.--
(1) To secretary.--The President shall continue the
delegation of functions to the Secretary to administer and
enforce the export control system authorized by this title that
were delegated to the Secretary as of the day before the date
of the enactment of this Act.
(2) To bureau of industry and security.--The Secretary shall
further delegate implementation of the authorities set forth in
this title to the Bureau of Industry and Security within the
Department of Commerce.
Purpose and Summary
On May 16, 2018, Rep. Pittenger introduced H.R. 5841, the
``Foreign Investment Risk Review Modernization Act of 2018''
(FIRRMA). This legislation would modernize the Committee on
Foreign Investment in the United States (CFIUS), codify an
interagency process to identify emerging technologies essential
for United States national security, and establish a statutory
basis for export controls involving certain commercial and
military items.
Since its last statutory update under the Foreign
Investment and National Security Act of 2007 (P.L. 110-49),
CFIUS has encountered increased risks and operational
challenges as foreign investment transactions have grown in
number and complexity. H.R. 5841 seeks to address these new
challenges.
In particular, FIRRMA would permit CFIUS to review
sensitive non-controlling investments involving countries of
special concern, including China, Russia, Venezuela, and state
sponsors of terrorism. In addition, the bill includes certain
real estate purchases or leases in close proximity to military
installations, or at air and sea ports, under the definition of
covered transactions. FIRRMA also establishes an ongoing
interagency review of emerging and foundational technologies
that are essential for national security so that their transfer
to foreign persons is appropriately restricted.
In response to a Government Accountability Office report
(GAO-18-249), this legislation would further require the
Department of the Treasury to report on CFIUS resource needs at
each member agency in order to better ensure that CFIUS is
adequately funded to meet its national security objectives.
Background and Need for Legislation
Background
Originally formed under a 1975 executive order to monitor
U.S. policy on foreign direct investments, the Committee on
Foreign Investment in the United States (CFIUS) is an
interagency committee chaired by Treasury that consists of the
executive branch agencies that deal with national security or
intelligence. In 1988, as part of the Omnibus Trade Act,
Congress expanded the role of CFIUS by enacting the Exon-Florio
amendment to the Defense Production Act. The Exon-Florio
amendment authorized the President to suspend or prohibit
foreign acquisitions of U.S. businesses if the foreign
controlling interest might threaten national security. The
President delegated this authority to CFIUS.
The Exon-Florio amendment established a four-step process
for exercising this authority: (1) voluntary notice by the
companies; (2) a 30-day review to identify national security
concerns; (3) an optional 45-day investigation to determine
whether national security concerns required more extensive
mitigation efforts or a recommendation to the President for
possible denial; and (4) potentially, a Presidential decision
to suspend or prohibit an acquisition that raised national
security concerns.
Most CFIUS reviews are routine. Either the panel finds no
objection to the purchase, or the companies involved agree to
mitigation procedures ranging from changes in the sales
agreement to divestiture of a division or operating unit.
Alternatively, a transaction can be withdrawn when it is clear
the President would block it.
In 2006, however, controversy arose over a Dubai company's
acquisition of a number of U.S. port-operating authorities,
which prompted the Financial Services Committee to undertake a
major reform of CFIUS. These reforms became part of the Foreign
Investment and National Security Act of 2007 (FINSA). That act
generally left the CFIUS review process intact, but clarified
and specified some timelines for the scrutiny of acquisitions.
The legislation also required that senior Senate-confirmed
officials from the appropriate member agencies of CFIUS certify
to Congress that they did not object to a transaction that
CFIUS ``approved.'' The legislation also gave Congress greater
oversight over CFIUS and expanded the definition of ``national
security'' to include issues relating to homeland security.
Perspectives on the current state of CFIUS
As the size, complexity, and volume of cross-border
transactions being undertaken in the last few years have
increased, a variety of factors have contributed to concerns
that the vital strategic lead the United States seeks to
maintain over competitor countries such as China may be
eroding. China is flexing its military muscle, creating
security concerns throughout East Asia. Its increasingly
hardline leadership also seeks to graduate from being a value-
adding low-cost assembly platform to an innovator and
technological powerhouse. The unambiguous ``civil-military
integration'' China's leaders have articulated adds to concerns
that even relatively modest technology transfers to China may,
in aggregate, help narrow or erase the U.S. lead in microchips,
biotechnology, pharmaceuticals, artificial intelligence,
quantum computing, and other technologies that may form the
building blocks for both military and economic leadership
throughout the 21st Century.
As a result, both Presidents Obama and Trump took action to
deny proposed U.S. investments by Chinese companies, including
the December 2016 blocking of Fujian Grand Chip Investment
Fund's acquisition of Aixtron; the breakup in January 2018 of a
proposal that involved a Chinese purchase of MoneyGram; as well
as the March 2018 blocking of Broadcom's purchase of Qualcomm,
which was linked to concerns over Chinese advances in 5G
technologies. These actions by CFIUS demonstrated its increased
scrutiny of Chinese investments, as well as its broad
interpretation of authorities under current law.
At the same time, witnesses at the Financial Services
Committee's hearings have testified that the United States
needs continued influxes of foreign direct investment (FDI) to
fuel the research and development, capital equipment, and
expansion needed to keep the economy healthy, which itself is
an element of national security. This calls for thoughtfully
and appropriately updating CFIUS's jurisdiction rather than
carte blanche delegation of additional powers.
The impact on the U.S. economy of continued strong FDI is
immense. As Nancy McLernon, president and CEO of the
Organization for International Investment, testified at a
December 2017 Committee hearing, she said: ``[B]etween 2010 and
2014, two thirds of all new manufacturing jobs that were
created can be attributed to FDI. Across the country, U.S.
workers at FDI companies earn 24 percent higher compensation
than the economy-wide average. In addition, these companies
engage in high levels of research and development (R&D),
accounting for 16 percent of all R&D performed by U.S.
companies. They also make extensive capital investments in new
facilities and equipment totaling nearly $100 billion dollars
annually and produce 23 percent of U.S. exports--that's nearly
a billion dollars of exports every single day. Further,
international companies fuel local growth by purchasing
hundreds of billions of dollars in goods and services from
local U.S. suppliers--creating huge opportunities for America's
small businesses.''
As former Deputy Treasury Secretary Robert M. Kimmitt said
at the same hearing, ``Any analysis of foreign direct
investment (FDI) should begin by recognizing its important
contribution to the US economy. . . . [Former] Treasury
Secretary Baker described foreign investment as America's
economic `ace in the hole,' because such investment represented
a foreign company's strong vote of confidence in the U.S.
market and American workers. . . . If we want to continue to
grow well-paying FDI jobs in the United States, we must send a
clear message that we are open to investment.''
Concerns were raised in Committee hearings that excessive
and indiscriminate tightening of CFIUS filters may force some
of this needed investment overseas, not because it presents a
threat to national security, but because stiffer scrutiny,
especially without added resources, would drag out an already
long CFIUS process. Additionally, some witnesses argued that
language in the original FIRRMA proposal, introduced as H.R.
4311 on November 8, 2017, might make it difficult for
multinationals to export research from a U.S. laboratory it
owns to a foreign subsidiary of the same company, or may make
it difficult for U.S. subsidiaries of foreign companies to
compete for the company's investment dollars.
Rod Hunter, a former special assistant to the President and
senior director at the National Security Council, testified
that, while CFIUS needs to be updated, the country's export
control process should be the principal tool for stopping the
exfiltration of critical technology. CFIUS would be an
``ineffective substitute,'' he said, and could create something
of a parallel export control system. Mr. Hunter further noted,
``Imposing such a regime on U.S. technology businesses would be
burdensome and could undermine U.S. innovation. Uncertainty
around CFIUS determinations could encourage investment in
research and development to move offshore, beyond the scope of
the bureaucratic review process. This in turn could undermine
the U.S. innovation and technological development so essential
for our defense industrial base and economy more broadly.''
CFIUS enhancements under H.R. 5841
FIRRMA would extend CFIUS jurisdiction to certain sensitive
investments involving ``countries of special concern,'' which
include countries subject to certain export restrictions as
well as those classified by the Secretary of State as state
sponsors of terrorism. At the time of reporting H.R. 5841 to
the House for its consideration, the countries of special
concern designation applied to China, Russia, Venezuela, and
Iran, among others. Since countries of special concern are
defined in H.R. 5841 by reference to existing country lists
that are updated by the federal government over time, such
countries would also change for the purposes of CFIUS,
reflecting future threats as they emerge.
H.R. 5841 adopts a targeted approach in order to devote
CFIUS's limited resources to those countries that pose the
greatest risk with respect to foreign investment. The
legislation does not apply new jurisdiction to all countries
with the possibility of later exemptions (commonly referred to
as a ``country white list''). Such an approach would dilute the
attention CFIUS could devote to the most pressing risks, create
unnecessary diplomatic tensions with United States allies, and,
as proposed in other legislation, may also permit Chinese and
Russian actors, among others, to escape appropriate CFIUS
scrutiny by routing investments through white-listed countries.
As a result, a white list would likely undermine rather than
enhance national security, and is therefore not part of H.R.
5841 as reported.
H.R. 5841 further tailors CFIUS's jurisdiction in order to
address the transfer of nonpublic technical information and
decision-making influence to a subset of non-controlling
investors involved with countries of special concern. Unlike
other proposals, H.R. 5841 targets these transfers
specifically; it does not permit regulators to create new
categories of United States businesses as candidates for
blanket scrutiny. For instance, FIRRMA refers to decision-
making regarding the use, development, acquisition, or release
of critical technologies instead of encompassing all decision-
making over a so-called ``critical technology company.'' FIRRMA
also excludes the term ``critical infrastructure company,''
which has been proposed elsewhere and could sweep up thousands
of United States businesses with little or no relation to
national security, or even to critical infrastructure.
While H.R. 5841 requires certain mandatory declarations for
transactions resulting in the release of critical technologies
to foreign persons in which a foreign government has a
substantial interest, the bill does not permit CFIUS to mandate
additional declarations based on industries and economic
sectors. Such discretion could facilitate an ill-advised
industrial policy with no demonstrable link to national
security. Another proposal would have based mandatory
declarations on the foreign share of ownership in United States
businesses, without a clear link to national security risks.
Such a policy was excluded from H.R. 5841.
FIRRMA appropriately expands CFIUS's jurisdiction to
include real estate purchases or leases near United States
military installations. This provision is designed to confront
the problem of ``encroachment,'' where foreign persons could
use real estate near testing ranges and other facilities for
the purpose of collecting intelligence. It is not intended to
capture real estate transactions where there is no risk of
foreign surveillance. The provision also clarifies that
investments in port property that is unconnected to the
takeover of a United States business may be reviewed by CFIUS.
Finally, H.R. 5841 does not include proposals to expand
CFIUS jurisdiction to the outbound ``contribution of
intellectual property and associated services'' to foreign
persons via joint ventures, a policy reflected in earlier
drafts of FIRRMA. Such transfers are already overseen by the
U.S. export controls regime, which has substantial experience
and expertise in assessing those transfers where CFIUS has
none.
As multiple stakeholders, including former CFIUS officials
from Republican and Democratic administrations, expressed
during Committee consideration of CFIUS reforms, adding to
CFIUS's jurisdiction in this way would have overwhelmed CFIUS
and threatened its ability to effectively execute its existing
mandate, thereby putting national security at risk. Such a
policy would have also undermined export controls' ongoing
mission to identify and restrict the release of dual-use
technologies; and it would have incentivized innovators to
pursue research and development outside the United States, thus
harming national security profoundly. H.R. 5841 therefore does
not provide for expanding CFIUS's remit in this way. Instead,
FIRRMA establishes an ongoing interagency process to more
effectively identify and control emerging technologies that are
essential to the national security of the United States.
Hearings
The Subcommittee on Monetary Policy and Trade held the
following hearings examining matters related to H.R. 5841:
``Examining the Operations of the Committee
on Foreign Investment in the United States (CFIUS),''
December 14, 2017;
``Evaluating CFIUS: Challenges Posed by a
Changing Global Economy,'' January 9, 2018;
``Evaluating CFIUS: Administration
Perspectives,'' March 15, 2018;
``H.R. 4311, the Foreign Investment Risk
Review Modernization Act of 2017,'' April 12, 2018.
Committee Consideration
The Committee on Financial Services met in open session on
May 22, 2018 and ordered H.R. 5841 to be reported favorably to
the House as amended by a recorded vote of 53 yeas to 0 nays
(recorded vote no. FC-176), a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. An
amendment offered by Mr. Green was not agreed to by a recorded
vote of 20 yeas to 32 nays (Record vote no. FC-175). A motion
by Chairman Hensarling to report the bill favorably to the
House as amended was agreed to by a recorded vote of 53 yeas to
0 nays (Record vote no. FC-176), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that
funding is authorized to meet reasonable expenses of the
Committee on Foreign Investment in the United States, with the
goal of 1) thoroughly undertaking CFIUS action on declarations,
reviews, and investigations as expeditiously as possible; 2)
promptly submitting required reports to Congress; and 3)
staffing CFIUS in order to effectively scrutinize covered
transactions, as defined in H.R. 5841, particularly those
involving countries of special concern.
New Budget Authority, Entitlement Authority, and Tax Expenditures
The Committee has not received an estimate of new budget
authority contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to Sec.
402 of the Congressional Budget Act of 1974. In compliance with
clause 3(c)(2) of rule XIII of the Rules of the House, the
Committee opines that H.R. 5841 will not establish any new
budget or entitlement authority or create any tax expenditures.
Congressional Budget Office Estimates
The cost estimate prepared by the Director of the
Congressional Budget Office pursuant to Sec. 402 of the
Congressional Budget Act of 1974 was not submitted timely to
the Committee.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
H.R. 5841 mandates declarations of no more than 5 pages in
length for certain covered transactions involving the release
of critical technologies to a foreign investor in which a
foreign government has a substantial interest. The Committee
has determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee requires CFIUS to prescribe regulations
regarding mandatory declarations regarding certain covered
transactions involving the release of critical technologies to
a foreign person in which a foreign government has a
substantial interest.
Section-by-Section Analysis of the Legislation
TITLE I: FINDINGS AND SENSE OF CONGRESS
Sec. 101: Findings and Sense of Congress
Congressional findings highlight how foreign investment
benefits the U.S. economy, helps create millions of American
jobs, strengthens economic cooperation with U.S. allies, and
supports research and development (R&D).
The findings cite a Government Accountability Office
analysis (GAO-18-249) which shows that staffing for the
Committee on Foreign Investment in the United States (CFIUS)
has not kept pace with CFIUS's increased workload, leading GAO
to caution that overly burdensome legislative changes may limit
CFIUS's ability to address national security threats.
The Sense of Congress expresses continued strong support
for foreign investment, calls for CFIUS to complement export
controls and remain narrowly focused on national security, and
notes the importance of adequate resources for CFIUS.
TITLE II: DEFINITIONS
Sec. 201: Definitions
This section codifies terms as they already operate under
CFIUS's existing regulations, including ``control,'' ``foreign
government-controlled transaction,'' and ``United States
business.''
Section 201 modifies the definition of ``covered
transactions'' to explicitly include:
the purchase or lease by, or concession to,
a foreign person of private or public real estate that
1) is in close proximity to a U.S. military
installation, or 2) is an air or sea port, or could be
used to function as a port, provided that the real
estate is not a ``single housing unit'' or in an ``
urbanized area,'' as classified by the Bureau of the
Census;
any change in a foreign investor's rights
that is likely to result in foreign control of a U.S.
business;
any transaction or other device employed for
the purpose of evading CFIUS.
Sensitive Transactions Involving Countries of Special
Concern: This section permits CFIUS to review a non-controlling
investment if the foreign investor is:
A national or a government of a ``country of
special concern;''
A foreign entity organized under the laws of
a country of special concern;
A foreign entity controlled by either of the
above; or
A foreign entity in which a government of a
country of special concern has a substantial interest;
and
The investment would allow that foreign person to obtain:
Sensitive personal data of U.S. citizens
that could be exploited in a manner that threatens
national security; or
Influence over the use, development,
acquisition, or release of 1) such personal data; or 2)
critical technologies.
A country of special concern includes:
Any foreign country subject to certain
export restrictions on military end-use items (China,
Russia, and Venezuela);
Any state sponsor of terrorism (Iran, North
Korea, Syria, and Sudan); and
And country that is subject to a U.S. arms
embargo and named as a country of special concern in
CFIUS regulations.
Critical Technologies: Under this section, the definition
of critical technologies codifies existing CFIUS regulations,
which define critical technologies as controlled technologies
on the U.S. Munitions List and the Commerce Control List, as
well as controlled nuclear equipment and toxins. FIRRMA 2018
also specifies that ``emerging technologies'' qualify as
critical technologies if they have been controlled and made
public following the interagency process described in Section
819.
TITLE III: IMPROVEMENTS TO THE OPERATIONS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
Sec. 301: Inclusion of partnership and side agreements in notice
This section allows CFIUS to require partnership and side
agreements to be submitted with a written notice.
Sec. 302: Declarations relating to certain covered transactions
Under this section, CFIUS shall require short declarations
of five pages or less--commonly referred to as ``light
filings''--for covered transactions that result in the release
of critical technologies by a U.S. business to a foreign person
in which a foreign government has a substantial interest. The
term ``substantial interest'' would be defined by regulations,
but does not include a voting interest of less than 10 percent,
or ownership interests held solely for passive investment
purposes.
CFIUS may also allow voluntary light filings for the
purpose of expediting the review of covered transaction deemed
to be of limited risk.
Parties to a covered transaction may submit a written
notice, as already provided for under current law, in lieu of a
light filing.
CFIUS may require a light filing to be submitted prior to
the completion of a transaction, but not more than 30 days in
advance.
CFIUS may impose penalties with respect to a party that
fails to comply with the light filing requirement.
Committee Response to a Declaration (Light Filing): In
response to a light filing, CFIUS may 1) request that a written
notice be submitted; 2) inform the parties to a transaction
that CFIUS is unable to complete action, but that parties may
file a written notice to receive a written notification that
action has been completed; 3) initiate a unilateral review of
the transaction; or 3) notify the parties that it has completed
all action with respect to the transaction.
CFIUS must take action on a light filing within 15 days of
receiving it, and may not request or recommend that it be
withdrawn and refiled except to permit the correction of
material errors or omissions.
Sec. 303: Timing for reviews and investigations
This section allows for deadlines to be tolled during a
lapse in appropriations, and allows for one 15-day extension to
CFIUS's investigation phase in the case of ``extraordinary
circumstances.''
Sec. 304: Submission of certifications to Congress
This section requires CFIUS's notifications to Congress to
include a certification that all relevant national security
factors have been considered by the Committee during its
review. Section 304 also permits Treasury to batch
certifications and submit them to Congress monthly.
Sec. 305: Analysis by Director of National Intelligence
Sec. 305 requires the Director of National Intelligence to
carry out an analysis of any national security threat posed by
a covered transaction, and describes procedures for completing
a basic threat assessment with respect to certain real estate
transactions.
Sec. 306: Information sharing
CFIUS may disclose information that a party to a
transaction has consented to be disclosed.
Sec. 307: Action by the President
This section clarifies that the President shall take action
not later than 15 days after the end of an investigation (as
prescribed under current law) or 15 days after CFIUS has
referred a transaction to the President.
Sec. 308: Factors to be considered
Sec. 307 adds the following discretionary factors that may
be considered by CFIUS during its reviews:
The degree to which a covered transaction
threatens the United States' ability to acquire or
maintain equipment and systems that are necessary for
national security purposes;
The potential security-related effects of
the cumulative control of any one type of critical
infrastructure, energy asset, material, or critical
technology by a foreign person or government;
Whether a foreign investor has a history of
complying with U.S. laws;
The extent to which a covered transaction is
likely to expose sensitive personal data of U.S.
citizens in a manner that threatens national security;
Whether the transaction is likely to
exacerbate cybersecurity vulnerabilities; and
Whether the transaction is likely to expose
information regarding sensitive national security
matters or law enforcement operations.
Sec. 309: Mitigation and other actions by the Committee to address
national security risks
This section largely codifies existing CFIUS practice when
designing agreements to mitigate a national security threat by
requiring CFIUS to ensure that such agreements are effective
and adhered to. It also requires the CFIUS Chairperson
(Secretary of the Treasury) and head of a lead agency to
periodically review the appropriateness of mitigation
agreements, and terminate, phase out, or otherwise amend them
if they are no longer required to mitigate a threat.
Sec. 310: Certification of notices and information
CFIUS may not complete a review, and may recommend that the
President suspend or prohibit a transaction, if a party to a
transaction fails to submit a certification that a written
notice is accurate and complete, or includes false or
misleading information. This section applies penalties for
false statements contained in 18 U.S.C. Sec. 1001.
TITLE IV: MODIFICATION OF ANNUAL REPORT
Sec. 401: Modification of annual report
This section contains requirements for the CFIUS annual
report, which shall describe the outcome of reviews and
investigations, and include statistics on compliance reviews
and light filings. The annual report would also include the
number of new hires made under CFIUS's special hiring
authority, and allow for appropriate classification of report
sections.
TITLE V: RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH
Sec. 501: Centralization of certain committee functions
The CFIUS Chairperson (Secretary of the Treasury) may
centralize CFIUS functions at Treasury in order to better
coordinate CFIUS operations.
Sec. 502: CFIUS Resource needs
The President may include in the budget for Treasury a
unified request for CFIUS operations across all member
agencies. This request shall include staffing levels required
to carry out CFIUS functions at each member agency.
Alternatively, CFIUS must submit an annual spending plan to
Congress with this information in each of the five years
following enactment. House testimony by the CFIUS chairperson
or the chairperson's designee would be required to explain
CFIUS's anticipated resource needs and the adequacy of existing
resources.
The heads of CFIUS agencies are exempted from certain
competitive service hiring requirements in order to directly
fill positions.
Sec. 503: CFIUS outreach
From FY19 through FY23, CFIUS's chairperson, or the
chairperson's designee, would be required to brief the House
Financial Services Committee and Senate Banking Committee on
outreach activities that inform the business community of its
activities, with a particular focus on the technology sector
and other sectors of importance to national security.
TITLE VI: MISCELLANEOUS PROVISIONS
Sec. 601-602: Conforming amendment and regulatory certainty for U.S.
businesses
These sections make a conforming amendment and clarify that
a member agency of CFIUS may not prescribe or implement
regulations to require divestment by or of a U.S. business as
mitigation for a national security risk, unless the President
reports that such regulations are consistent with those
prescribed under CFIUS's authorizing statute.
TITLE VII: COMMON SENSE CREDIT UNION CAPITAL RELIEF
Sec. 701: Delay effective date
Delays the effective date of the National Credit Union
Administration's ``Risk-Based Capital'' rule until January 1,
2021.
TITLE VIII: EXPORT CONTROL REFORM
Subtitle A--Authority and administration of controls
This subtitle requires the President to establish controls
over the export of certain ``dual-use'' and military items in
order to advance the foreign policy and national security of
the United States. The administration of those controls would
be delegated to the Secretary of Commerce, Secretary of
Defense, Secretary of State, the Director of National
Intelligences, and other appropriate Federal agencies. Subject
to interagency review, the Department of Commerce would be
delegated with authority to issue licenses and other
authorization for exports. Consistent with existing law, this
title provides authority to impose criminal and civil penalties
for export control violations. It also provides robust
authority to enforce such controls, including the ability to
stop unapproved transfers. The title establishes strong
Congressional oversight of these controls. The title also
repeals the Export Administration Act of 1979 (EAA) and
includes transition provisions to ensure that rules and
regulations established under the EAA, or otherwise enforced
through emergency decree, shall remain in effect unless changed
or revoked under the new authority established by this title.
Section 801. Short Title. This section establishes the
short title for title VIII as the ``Export Control Reform Act
of 2018.''
Section 802. Definitions. This section includes definitions
for the Export Control title.
Section 811. This establishes the short title for subtitle
A as the ``Export Controls Act of 2018.''
Section 812. Statement of Policy. This section describes
the purposes of U.S. export controls authorized by this Act.
Section 813. Authority of the President. This section
requires that the President establish controls over the export,
reexport, and transfer of ``dual-use'' and certain military
items, as well as establish controls over discrete activities
relating to the proliferation of weapons of mass destruction
and their means of delivery.
Section 814. Additional Authorities. Section 814(a)
requires the President to establish lists of controlled items,
as well as lists of foreign persons and end-uses determined to
be a threat to the United States. Section 104(a) also states
that the President shall:
prohibit or restrict certain exports;
require licenses or other authorization for
exports of controlled items and create, as appropriate,
exceptions to licensing requirements;
establish measures for compliance,
information gathering, and the prevention of
unauthorized exports;
keep the public fully informed of changes in
policy and appoint technical advisory committees; and
undertake any other action necessary to
implement this authority not otherwise prohibited by
law.
Section 814(b) states that the authority under this title
may not generally be used to regulate any postal, telegraphic,
telephonic, or other personal communication that does not
involve a transfer of anything of value.
Section 814(c) strengthens Congressional oversight over
rescission of a country's designation as a State Sponsor of
Terrorism. This section would increase the period of time the
Congress would have to review any such proposed rescission from
45 days to 90 days, increasing the period of time a country
must refrain from supporting terrorism before the President
could remove such a designation from 6 months to 2 years, as
well as requiring the President to notify the Congress when the
Administration initiates a review of a country's designation
and, 20 days later, brief the Congress on the status of that
review.
Section 814(d) establishes a license requirement for
certain activities primarily relating to the proliferation of
weapons of mass destruction. Section 104(e) establishes
specific notice requirement with respect to those licensed
activities. Section 104(f) establishes strict license review
standards for activities representing a proliferation concern.
Section 815. Administration of Export Controls. This
section requires the President to delegate the administration
of dual-use export controls to the Secretary of Commerce, the
Secretary of Defense, the Secretary of State, the Director of
National Intelligence, and the heads of other appropriate
Federal Departments and agencies. A sense of Congress is added
that such delegation should be consistent with the delegation
of authority and export licensing practices established under
Executive Order 12981.
Section 816. Control Lists. Section 106 requires that the
President establish a regular interagency review of each list
of controlled items. In accordance with such review, the
Secretary of Commerce is required to regularly update such
lists to ensure that new items are appropriately controlled,
with such controls adjusted as conditions change. Each list of
controlled items shall be published in a form that facilitates
compliance with it, particularly by small and medium-sized
businesses, and academic institutions.
Section 817. Licensing. This section requires the President
to establish a procedure by which the Department of Commerce
shall issue licenses or other authorization for the export,
reexport, or transfer of items controlled under this title. It
also states that no fee may be charged in connection with
license applications for controlled items.
Section 818. Compliance Assistance. This section authorizes
the President to establish procedures to encourage closer
collaboration between the public and private sectors in
identifying proliferation or other export-control risks to U.S.
national security.
Section 819. Requirements to Identify and Control Emerging,
Foundational, and other Critical Technologies in Export Control
Regulations. This section requires the President to establish
an interagency process to identify emerging, foundational, and
other critical technologies that are not identified in any U.S.
or multilateral export control list, but nonetheless could be
essential to U.S. national security.
Section 820. Review Relating to Countries Subject to a
Comprehensive U.S. Arms Embargo. This would require the
Secretaries of Commerce, Defense, Energy, State, and the heads
of other departments as appropriate, to conduct a review of
U.S. dual-use licensing policy toward countries subject to a
comprehensive U.S. arms embargo.
Section 821. Penalties. This section defines what acts are
unlawful under this title. Consistent with current law, this
section also establishes criminal and civil penalties for
export control violations, well as authority and procedures for
criminal forfeiture. It also authorizes the President to
establish a basis for denying the eligibility of persons
convicted of a criminal violation to export, as well as to
revoke any license or other authorization from such person.
Section 822. Enforcement. This section provides broad
authority to the President, as delegated to appropriate Federal
departments and agencies, to enforce U.S. export controls
established under this title. Such measures should include the
publication of best practices guidelines to assist industry in
compliance with U.S. export controls. This section also
includes provisions for protection of confidentiality of
information relating to license applications, with exceptions
relating to transmission of such information to the Congress
and General Accountability Office.
Section 823. Administrative Procedure. This section
provides that regulations relating to U.S. dual-use export
controls shall not be subject to several administrative
procedures as defined in title 5 of the United States Code.
Section 824. Annual Report to Congress. This section
requires the President to report annually to Congress on the
implementation of these authorities. The report shall be
unclassified but may contain a classified annex.
Section 825. Repeal. This section repeals the Export
Administration Act of 1979.
Section 826. Effect on Other Acts. This section clarifies
that except as otherwise provided in this title, nothing
contained in this title shall be construed to impact any
current U.S. export control laws. It also details Congressional
expectations about the importance of close coordination of
controls between Executive Branch agencies delegated with such
responsibility.
Section 827. Transition Provisions. This section provides
that all delegations of authority, rules, regulations, orders,
determinations, licenses or other forms of administrative
action that were made under the Export Administration Act, the
International Emergency Economic Powers Act, or the Export
Administration Regulations, and are in effect as of the date of
enactment of this Act, shall continue in effect unless
otherwise changed under the authority of this title. These
transition provisions also apply to administrative and judicial
proceedings, as well as determinations relating to state
sponsors of terrorism.
Subtitle B--Anti-boycott Provisions
This title incorporates the existing anti-boycott
provisions from the expired Export Administration Act of 1979.
These provisions discourage, and in some circumstances,
prohibit U.S. companies from furthering or supporting the
boycott of Israel sponsored by the Arab League, or certain
other countries, including complying with certain requests for
information designed to verify compliance with the boycott.
Section 831. Short Title. This title may be cited as the
``Anti-boycott Act of 2018.''
Section 832. Statement of Policy. This section states that
it is the policy of the United States to oppose restrictive
trade practices or boycotts imposed by foreign countries
against other countries friendly to the United States or
against any U.S. person.
Section 833. Foreign Boycott. This section requires the
President to issue regulations prohibiting any U.S. person,
with respect to that person's activities in the interstate or
foreign commerce of the United States, from taking or knowingly
agreeing to take certain actions with intent to comply with,
further, or support any foreign boycott against a country that
is friendly to the U.S. that is also contrary to U.S. law or
policy. Certain exceptions to this general prohibition also
apply. It further provides that these anti-boycott restrictions
shall also be enforced through foreign policy controls
authorized under title I. This section imposes certain
reporting requirements on U.S. persons who receive requests to
implement restrictive anti-boycott measures. And it provides
that this provision preempts other state and local laws
regarding compliance with foreign boycotts.
Section 834. Enforcement. Consistent with existing law,
this section provides for the imposition of criminal and civil
penalties on a person who violates section 203 or any related
regulation. Such penalties may only be imposed after notice and
opportunity for a hearing in accordance with applicable
sections of title 5, United States Code, and shall be subject
to judicial review.
Subtitle C--Sanctions on ballistic missiles and chemical and biological
weapons proliferation
In general, this title carries over sanctions from the
expired Export Administration Act against U.S. persons and
foreign persons who engage in commercial transactions that
violate missile proliferation, chemical and biological weapons
controls.
Section 841. Missile Proliferation Control Violations. This
section imposes sanctions against U.S. persons and foreign
persons who engage in commercial transactions that violate
missile proliferation controls. The section requires sanctions
against any U.S. citizen whom the President determines to be
engaged in exporting, transferring, conspiring to export or
transfer, or facilitating an export or transfer of, any
equipment or technology identified by the Missile Technology
Control Regime Annex. The section further requires sanctions
against any foreign person whom the President determines to be
engaged in conduct that contributes to the design, development,
or production of missiles in a country that is not an MTCR
adherent. The President may also prohibit importation into the
U.S. of products produced by the foreign person. With notice to
Congress, the President may also waive the imposition of the
sanctions authorized in this section.
Section 842. Chemical and Biological Weapons Proliferation
Sanctions. This section authorizes the President to apply
procurement and import sanctions against foreign persons that
he determines knowingly contribute to the use, development,
production, stockpile, or acquisition of chemical or biological
weapons by exporting goods or technology from the United States
or any other country. If certain conditions are met, the
President may delay the imposition of sanctions for up to 180
days or utilize certain foreign policy and national security
exceptions. The President may terminate the sanctions after 12
months if he determines and certifies to Congress that the
sanctioned person no longer engages in such activity. The
President may waive the application of a sanction after a year
of its imposition, if he determines it is in U.S. national
security interests to do so. Not less than 20 days before a
national security waiver is issued, the President must notify
Congress with a full explanation of the rationale for waiving
the sanction.
Subtitle D--Administrative Authorities
This title and section 851 continues current delegations to
the Secretary of Commerce and to the Bureau of Industry and
Security, establishes and Under Secretary of Commerce to
implement the dual-use export system, and requires the
appointment of two Assistant Secretaries of Commerce to assist
the Secretary in carrying out these export control functions.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
DEFENSE PRODUCTION ACT OF 1950
* * * * * * *
TITLE VII--GENERAL PROVISIONS
* * * * * * *
authority to review certain mergers, acquisitions, and takeovers
Sec. 721. (a) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Committee; chairperson.--The terms ``Committee''
and ``chairperson'' mean the Committee on Foreign
Investment in the United States and the chairperson
thereof, respectively.
[(2) Control.--The term ``control'' has the meaning
given to such term in regulations which the Committee
shall prescribe.
[(3) Covered transaction.--The term ``covered
transaction'' means any merger, acquisition, or
takeover that is proposed or pending after August 23,
1988, by or with any foreign person which could result
in foreign control of any person engaged in interstate
commerce in the United States.
[(4) Foreign government-controlled transaction.--The
term ``foreign government-controlled transaction''
means any covered transaction that could result in the
control of any person engaged in interstate commerce in
the United States by a foreign government or an entity
controlled by or acting on behalf of a foreign
government.]
(2) Control.--The term ``control'' means the power,
direct or indirect, whether or not exercised, to
determine, direct, or decide important matters
affecting an entity, subject to regulations prescribed
by the Committee.
(3) Covered transaction.--
(A) In general.--The term ``covered
transaction'' means any transaction described
in subparagraph (B) or (C) that is proposed,
pending, or completed on or after the date of
the enactment of the Foreign Investment Risk
Review Modernization Act of 2018.
(B) Transactions described.--A transaction
described in this subparagraph is any of the
following:
(i) Any merger, acquisition,
takeover, or joint venture that is
proposed or pending after August 23,
1988, by or with any foreign person
that could result in foreign control of
any United States business.
(ii) The purchase or lease by, or
concession to, a foreign person of
private or public real estate that--
(I) is--
(aa) located in the
United States and is,
or is in close
proximity to, a United
States military
installation; or
(bb) itself, or is
located at and will
function as part of, an
air or sea port;
(II) is not a single housing
unit, as defined by the Bureau
of the Census;
(III) is not in an urbanized
area, as set forth by the
Bureau of the Census in its
most recent census, except as
otherwise prescribed by the
Committee in regulations in
consultation with the Secretary
of Defense; and
(IV) meets such other
criteria as the Committee
prescribes by regulation.
(iii) Any change in the rights that a
foreign person has with respect to a
United States business in which the
foreign person has an investment, if
that change is likely to result in
foreign control of the United States
business.
(iv) Any transaction or other device
entered into or employed for the
purpose of evading this section,
subject to regulations prescribed by
the Committee.
(C) Sensitive transactions involving
countries of special concern.--
(i) In general.--A transaction
described in this subparagraph is any
investment in an unaffiliated United
States business by a foreign person
that--
(I) is--
(aa) a national or a
government of, or a
foreign entity
organized under the
laws of, a country of
special concern; or
(bb) a foreign
entity--
(AA) over
which control
is exercised or
exercisable by
a national or a
government of,
or by a foreign
entity
organized under
the laws of, a
country of
special
concern; or
(BB) in which
the government
of a country of
special concern
has a
substantial
interest; and
(II) as a result of the
transaction, could obtain---
(aa) sensitive
personal data, as
defined by regulations
prescribed by the
Committee, of United
States citizens, if
such data may be
exploited in a manner
that threatens national
security; or
(bb) influence over
substantive
decisionmaking of the
United States business
regarding the use,
development,
acquisition, or release
of--
(AA)
sensitive
personal data
of United
States
citizens, as
described in
item (aa); or
(BB) critical
technologies.
(ii) Country of special concern.--For
the purposes of this subparagraph, the
term ``country of special concern''
means--
(I) any foreign country that
is subject to export
restrictions pursuant to
section 744.21 of title 15,
Code of Federal Regulations;
(II) any country determined
by the Secretary of State to be
a state sponsor of terrorism;
and
(III) any country that--
(aa) is subject to a
United States arms
embargo, as specified
in list D:5 of Country
Group D in Supplement
No. 1 to part 740 of
title 15, Code of
Federal Regulations;
and
(bb) is specified in
regulations prescribed
by the Committee.
(iii) Investment defined.--For the
purposes of this subparagraph, the term
``investment'' means the acquisition of
an equity interest, including
contingent equity interest, as further
defined in regulations prescribed by
the Committee.
(iv) Unaffiliated united states
business defined.--For the purposes of
this subparagraph, with respect to an
investment described under clause (i),
and as further defined in regulations
prescribed by the Committee, the term
``unaffiliated United States business''
means a United States business that is
not subject to the same ultimate
ownership of the foreign person
undertaking the investment.
(v) Waiver.--The President may waive
any requirement of this subparagraph
upon reporting to the Committees on
Financial Services and Foreign Affairs
of the House of Representatives and the
Committees on Banking, Housing, and
Urban Affairs and Foreign Relations of
the Senate that the waiver is important
to the national interest of the United
States, with a detailed explanation of
the reasons therefor.
(D) Exception for air carriers.--Subparagraph
(B)(iii) shall not apply to a change in the
rights of a person with respect to an
investment involving an air carrier, as defined
in section 40102(a)(2) of title 49, United
States Code, that holds a certificate issued
under section 41102 of that title.
(E) Transfers of certain assets pursuant to
bankruptcy proceedings or other defaults.--The
Committee shall prescribe regulations to
clarify that the term ``covered transaction''
includes any transaction described in
subparagraph (B) or (C) that arises pursuant to
a bankruptcy proceeding or other form of
default on debt.
(4) Foreign government-controlled transaction.--The
term ``foreign government-controlled transaction''
means any covered transaction that could result in
control of a United States business by--
(A) a foreign government;
(B) a person controlled by or acting on
behalf of a foreign government; or
(C) a foreign company or entity of a country
of special concern (as defined under paragraph
(3)(C)(ii)) domiciled or having its principal
place of business in a county of special
concern that is a non-market economy, except to
the extent the Committee promulgates
regulations exempting any such company, entity,
or country from this presumption.
(5) Clarification.--The term ``national security''
shall be construed so as to include those issues
relating to ``homeland security'', including its
application to critical infrastructure.
(6) Critical infrastructure.--The term ``critical
infrastructure'' means, subject to rules issued under
this section, systems and assets, whether physical or
virtual, so vital to the United States that the
incapacity or destruction of such systems or assets
would have a debilitating impact on national security.
[(7) Critical technologies.--The term ``critical
technologies'' means critical technology, critical
components, or critical technology items essential to
national defense, identified pursuant to this section,
subject to regulations issued at the direction of the
President, in accordance with subsection (h).]
(7) Critical technologies.--The term ``critical
technologies'' means--
(A) defense articles or defense services
covered by the United States Munitions List
(USML), which is set forth in the International
Traffic in Arms Regulations (ITAR) (22 C.F.R.
parts 120-130);
(B) those items specified on the Commerce
Control List (CCL) set forth in Supplement No.
1 to part 774 of the Export Administration
Regulations (EAR) (15 C.F.R. parts 730-774)
that are controlled pursuant to multilateral
regimes (i.e. for reasons of national security,
chemical and biological weapons proliferation,
nuclear nonproliferation, or missile
technology), as well as those that are
controlled for reasons of regional stability or
surreptitious listening;
(C) specially designed and prepared nuclear
equipment, parts and components, materials,
software, and technology specified in the
Assistance to Foreign Atomic Energy Activities
regulations (10 C.F.R. part 810), and nuclear
facilities, equipment, and material specified
in the Export and Import of Nuclear Equipment
and Material regulations (10 C.F.R. part 110);
(D) select agents and toxins specified in the
Select Agents and Toxins regulations (7 C.F.R.
part 331, 9 C.F.R. part 121, and 42 C.F.R. part
73); and
(E) emerging, foundational, or other critical
technologies that are controlled pursuant to
section 819 of the Foreign Investment Risk
Review Modernization Act of 2018.
(8) Lead agency.--The term ``lead agency'' means the
agency, or agencies, designated as the lead agency or
agencies pursuant to subsection (k)(5) for the review
of a transaction.
(9) Foreign person.--The term ``foreign person''
means--
(A) any foreign national, foreign government,
or foreign entity; or
(B) any entity over which control is
exercised or exercisable by a foreign national,
foreign government, or foreign entity.
(10) Substantial interest.--The term ``substantial
interest'' has the meaning given to such term in
regulations prescribed by the Committee, but does not
include a voting interest of less than ten percent or
ownership interests held or acquired solely for the
purpose of passive investment.
(11) United states business.--The term ``United
States business'' means any entity, irrespective of the
nationality of the persons that control it, engaged in
interstate commerce in the United States, but only to
the extent of its activities in interstate commerce.
(b) National Security Reviews and Investigations.--
(1) National security reviews.--
(A) In general.--Upon receiving written
notification under subparagraph (C) of any
covered transaction, or pursuant to a
unilateral notification initiated under
subparagraph (D) with respect to any covered
transaction, the President, acting through the
Committee--
(i) shall review the covered
transaction to determine the effects of
the transaction on the national
security of the United States; and
(ii) shall consider the factors
specified in subsection (f) for such
purpose, as appropriate.
(B) Control by foreign government.--If the
Committee determines that the covered
transaction is a foreign government-controlled
transaction, the Committee shall conduct an
investigation of the transaction under
paragraph (2).
(C) Written notice.--
(i) In general.--Any party or parties
to any covered transaction may initiate
a review of the transaction under this
paragraph by submitting a written
notice of the transaction to the
Chairperson of the Committee.
(ii) Withdrawal of notice.--No
covered transaction for which a notice
was submitted under clause (i) may be
withdrawn from review, unless a written
request for such withdrawal is
submitted to the Committee by any party
to the transaction and approved by the
Committee.
(iii) Continuing discussions.--A
request for withdrawal under clause
(ii) shall not be construed to preclude
any party to the covered transaction
from continuing informal discussions
with the Committee or any member
thereof regarding possible resubmission
for review pursuant to this paragraph.
(iv) Inclusion of partnership and
side agreements.--Subject to
regulations prescribed by the
Committee, the Committee may require a
written notice submitted under clause
(i) by a party to a covered transaction
to include a copy of any partnership
agreements, integration agreements, or
other side agreements relating to the
transaction.
(v) Declarations with respect to
certain covered transactions.--
(I) Voluntary declarations.--
For the purpose of expediting
the review of certain covered
transactions that the Committee
determines are likely to pose
limited risk, the Committee may
prescribe regulations to permit
parties to the transaction to
submit a declaration with basic
information regarding the
transaction, unless the parties
submit a written notice under
clause (i).
(II) Mandatory
declarations.--
(aa) In general.--The
Committee shall
prescribe regulations
to require the parties
to a covered
transaction to submit a
declaration described
in subclause (I) with
respect to the
transaction if the
transaction involves an
investment that results
in the release of
critical technologies
by an unaffiliated
United States business
(as defined under
subsection
(a)(3)(C)(iii)) to a
foreign person in which
a foreign government
has, directly or
indirectly, a
substantial interest.
(bb) Submission of
written notice as an
alternative.--Parties
to a covered
transaction for which a
declaration is required
under this clause may
instead elect to submit
a written notice under
clause (i).
(cc) Timing of
submission.--With
respect to the
regulations described
under subclause (I),
the Committee may not
require a declaration
to be submitted more
than 30 days in advance
of the completion of
the transaction.
(III) Penalties.--The
Committee may impose a penalty
pursuant to subsection
(h)(3)(A) with respect to a
party that fails to comply with
this clause.
(IV) Committee response to
declaration.--
(aa) In general.--
Upon receiving a
declaration under this
clause with respect to
a transaction, the
Committee may, at its
discretion--
(AA) request
that the
parties to the
transaction
file a written
notice under
clause (i),
provided that
the Committee
includes an
explanation of
the reasons for
the request;
(BB) inform
the parties to
the transaction
that the
Committee is
not able to
complete action
under this
section with
respect to the
transaction on
the basis of
the declaration
and that the
parties may
file a written
notice under
clause (i) to
seek written
notification
from the
Committee that
the Committee
has completed
all action
under this
section with
respect to the
transaction;
(CC) initiate
a unilateral
review of the
transaction
under
subparagraph
(D); or
(DD) notify
the parties in
writing that
the Committee
has completed
all action
under this
section with
respect to the
transaction.
(bb) Timing.--The
Committee shall take
action under item (aa)
within 15 days of
receiving a declaration
under this clause.
(cc) Refiling of
declaration.--The
Committee may not
request or recommend
that a declaration be
withdrawn and refiled,
except to permit
parties to a
transaction to correct
material errors or
omissions.
(V) Regulations.--In
prescribing regulations
establishing requirements for
declarations submitted under
this clause, the Committee
shall ensure that such
declarations are submitted as
abbreviated notifications that
do not generally exceed 5 pages
in length.
(VI) Investment defined.--For
the purposes of this clause,
the term ``investment'' means
the acquisition of an equity
interest, including contingent
equity interest, as further
defined in regulations
prescribed by the Committee.
(vi) Stipulations regarding
transactions.--
(I) In general.--In a written
notice submitted under clause
(i) or a declaration submitted
under clause (v) with respect
to a transaction, a party to
the transaction may--
(aa) stipulate that
the transaction is a
covered transaction;
and
(bb) if the party
stipulates that the
transaction is a
covered transaction
under item (aa),
stipulate that the
transaction is a
foreign government-
controlled transaction.
(II) Basis for stipulation.--
A written notice submitted
under clause (i) or a
declaration submitted under
clause (v) that includes a
stipulation under subclause (I)
shall include a description of
the basis for the stipulation.
(D) Unilateral initiation of review.--Subject
to subparagraph (F), the President or the
Committee may initiate a review under
subparagraph (A) of--
(i) any covered transaction;
(ii) any covered transaction that has
previously been reviewed or
investigated under this section, if any
party to the transaction submitted
false or misleading material
information to the Committee in
connection with the review or
investigation or omitted material
information, including material
documents, from information submitted
to the Committee; or
(iii) any covered transaction that
has previously been reviewed or
investigated under this section, if--
(I) any party to the
transaction or the entity
resulting from consummation of
the transaction intentionally
materially breaches a
mitigation agreement or
condition described in
subsection (l)(1)(A);
(II) such breach is certified
to the Committee by the lead
department or agency monitoring
and enforcing such agreement or
condition as an intentional
material breach; and
(III) the Committee
determines that there are no
other remedies or enforcement
tools available to address such
breach.
(E) Timing.--Any review under this paragraph
shall be completed before the end of the 30-day
period beginning on the date of the acceptance
of written notice under subparagraph (C) by the
chairperson, or beginning on the date of the
initiation of the review in accordance with
subparagraph (D), as applicable.
(F) Limit on delegation of certain
authority.--The authority of the Committee to
initiate a review under subparagraph (D) may
not be delegated to any person, other than the
Deputy Secretary or an appropriate Under
Secretary of the department or agency
represented on the Committee.
(2) National security investigations.--
(A) In general.--In each case described in
subparagraph (B), the Committee shall
immediately conduct an investigation of the
effects of a covered transaction on the
national security of the United States, and
take any necessary actions in connection with
the transaction to protect the national
security of the United States.
(B) Applicability.--Subparagraph (A) shall
apply in each case in which--
(i) a review of a covered transaction
under paragraph (1) results in a
determination that--
(I) the transaction threatens
to impair the national security
of the United States and that
threat has not been mitigated
during or prior to the review
of a covered transaction under
paragraph (1);
(II) the transaction is a
foreign government-controlled
transaction; or
(III) the transaction would
result in control of any
critical infrastructure of or
within the United States by or
on behalf of any foreign
person, if the Committee
determines that the transaction
could impair national security,
and that such impairment to
national security has not been
mitigated by assurances
provided or renewed with the
approval of the Committee, as
described in subsection (l),
during the review period under
paragraph (1); or
(ii) the lead agency recommends, and
the Committee concurs, that an
investigation be undertaken.
[(C) Timing.--Any investigation under
subparagraph (A) shall be completed before the
end of the 45-day period beginning on the date
on which the investigation commenced.]
(C) Timing.--
(i) In general.--Except as provided
in clause (ii), any investigation under
subparagraph (A) shall be completed
before the end of the 45-day period
beginning on the date on which the
investigation commenced.
(ii) Extension for extraordinary
circumstances.--
(I) In general.--In
extraordinary circumstances (as
defined by the Committee in
regulations), the chairperson
may, at the request of the head
of the lead agency, extend an
investigation under
subparagraph (A) for not more
than one 15-day period.
(II) Nondelegation.--The
authority of the chairperson
and the head of the lead agency
referred to in subclause (I)
may not be delegated to any
person other than the Deputy
Secretary of the Treasury or
the deputy head (or equivalent
thereof) of the lead agency, as
the case may be.
(III) Notification to
parties.--If the Committee
extends the deadline under
subclause (I) with respect to a
covered transaction, the
Committee shall notify the
parties to the transaction of
the extension.
(D) Exception.--
(i) In general.--Notwithstanding
subparagraph (B)(i), an investigation
of a foreign government-controlled
transaction described in subclause (II)
of subparagraph (B)(i) or a transaction
involving critical infrastructure
described in subclause (III) of
subparagraph (B)(i) shall not be
required under this paragraph, if the
Secretary of the Treasury and the head
of the lead agency jointly determine,
on the basis of the review of the
transaction under paragraph (1), that
the transaction will not impair the
national security of the United States.
(ii) Nondelegation.--The authority of
the Secretary or the head of an agency
referred to in clause (i) may not be
delegated to any person, other than the
Deputy Secretary of the Treasury or the
deputy head (or the equivalent thereof)
of the lead agency, respectively.
(E) Guidance on certain transactions with
national security implications.--The
Chairperson shall, not later than 180 days
after the effective date of the Foreign
Investment and National Security Act of 2007,
publish in the Federal Register guidance on the
types of transactions that the Committee has
reviewed and that have presented national
security considerations, including transactions
that may constitute covered transactions that
would result in control of critical
infrastructure relating to United States
national security by a foreign government or an
entity controlled by or acting on behalf of a
foreign government.
(3) Certifications to congress.--
(A) Certified notice at completion of
review.--Upon completion of a review under
subsection (b) that concludes action under this
section, the chairperson and the head of the
lead agency shall transmit a certified notice
to the members of Congress specified in
subparagraph (C)(iii).
(B) Certified report at completion of
investigation.--As soon as is practicable after
completion of an investigation under subsection
(b) that concludes action under this section,
the chairperson and the head of the lead agency
shall transmit to the members of Congress
specified in subparagraph (C)(iii) a certified
written report (consistent with the
requirements of subsection (c)) on the results
of the investigation, unless the matter under
investigation has been sent to the President
for decision.
(C) Certification procedures.--
(i) In general.--Each certified
notice and report required under
subparagraphs (A) and (B),
respectively, shall be submitted to the
members of Congress specified in clause
(iii), and shall include--
(I) a description of the
actions taken by the Committee
with respect to the
transaction; and
[(II) identification of the
determinative factors
considered under subsection
(f).]
(II) a certification that all
relevant national security
factors, including factors
enumerated in subsection (f),
have received full
consideration.
(ii) Content of certification.--Each
certified notice and report required
under subparagraphs (A) and (B),
respectively, shall be signed by the
chairperson and the head of the lead
agency, and shall state that, in the
determination of the Committee, there
are no unresolved national security
concerns with the transaction that is
the subject of the notice or report.
(iii) Members of congress.--Each
certified notice and report required
under subparagraphs (A) and (B),
respectively, shall be transmitted--
(I) to the Majority Leader
and the Minority Leader of the
Senate;
(II) to the chair and ranking
member of the Committee on
Banking, Housing, and Urban
Affairs of the Senate and of
any committee of the Senate
having oversight over the lead
agency;
(III) to the Speaker and the
Minority Leader of the House of
Representatives;
(IV) to the chair and ranking
member of the Committee on
Financial Services of the House
of Representatives and of any
committee of the House of
Representatives having
oversight over the lead agency;
and
(V) with respect to covered
transactions involving critical
infrastructure, to the members
of the Senate from the State in
which the principal place of
business of the acquired United
States person is located, and
the member from the
Congressional District in which
such principal place of
business is located.
(iv) Signatures; limit on
delegation.--
(I) In general.--Each
certified notice and report
required under subparagraphs
(A) and (B), respectively,
shall be signed by the
chairperson and the head of the
lead agency, which signature
requirement may only be
delegated in accordance with
subclause (II).
(II) Limitation on delegation
of certifications.--The
chairperson and the head of the
lead agency may delegate the
signature requirement under
subclause (I)--
(aa) only to an
appropriate employee of
the Department of the
Treasury (in the case
of the Secretary of the
Treasury) or to an
appropriate employee of
the lead agency (in the
case of the lead
agency) who was
appointed by the
President, by and with
the advice and consent
of the Senate, with
respect to any notice
provided under
paragraph (1) following
the completion of a
review under this
section; or
(bb) only to a Deputy
Secretary of the
Treasury (in the case
of the Secretary of the
Treasury) or a person
serving in the Deputy
position or the
equivalent thereof at
the lead agency (in the
case of the lead
agency), with respect
to any report provided
under subparagraph (B)
following an
investigation under
this section.
(v) Authority to consolidate
documents.--Instead of transmitting a
separate certified notice or certified
report under subparagraph (A) or (B)
with respect to each covered
transaction, the Committee may, on a
monthly basis, transmit such notices
and reports in a consolidated document
to the Members of Congress specified in
clause (iii).
(4) Analysis by director of national intelligence.--
[(A) In general.--The Director of National
Intelligence shall expeditiously carry out a
thorough analysis of any threat to the national
security of the United States posed by any
covered transaction. The Director of National
Intelligence shall also seek and incorporate
the views of all affected or appropriate
intelligence agencies with respect to the
transaction.]
(A) Analysis required.--
(i) In general.--The Director of
National Intelligence shall
expeditiously carry out a thorough
analysis of any threat to the national
security of the United States posed by
any covered transaction, which shall
include the identification of any
recognized gaps in the collection of
intelligence relevant to the analysis.
(ii) Views of intelligence
agencies.--The Director shall seek and
incorporate into the analysis required
by clause (i) the views of all affected
or appropriate intelligence agencies
with respect to the transaction.
(iii) Updates.--At the request of the
lead agency, the Director shall update
the analysis conducted under clause (i)
with respect to a covered transaction
with respect to which an agreement was
entered into under subsection
(l)(3)(A).
(iv) Independence and objectivity.--
The Committee shall ensure that its
processes under this section preserve
the ability of the Director to conduct
an analysis under clause (i) that is
independent, objective, and consistent
with all applicable directives,
policies, and analytic tradecraft
standards of the intelligence
community.
(B) Basic threat information.--
(i) In general.--The Director of
National Intelligence may provide the
Committee with basic information
regarding any threat to the national
security of the United States posed by
a covered transaction described in
clause (ii) instead of conducting the
analysis required by subparagraph (A).
(ii) Covered transaction described.--
A covered transaction is described in
this clause if--
(I) the transaction is
described in subsection
(a)(3)(B)(ii);
(II) the Director of National
Intelligence has completed an
analysis pursuant to
subparagraph (A) involving each
foreign person that is a party
to the transaction during the
12 months preceding the review
or investigation of the
transaction under this section;
or
(III) the transaction
otherwise meets criteria agreed
upon by the Committee and the
Director of National
Intelligence for purposes of
this subparagraph.
[(B)] (C) Timing.--The analysis required
under subparagraph (A) shall be provided by the
Director of National Intelligence to the
Committee not later than 20 days after the date
on which notice of the transaction is accepted
by the Committee under paragraph (1)(C), but
such analysis may be supplemented or amended,
as the Director considers necessary or
appropriate, or upon a request for additional
information by the Committee. The Director may
begin the analysis at any time prior to
acceptance of the notice, in accordance with
otherwise applicable law.
[(C)] (D) Interaction with intelligence
community.--The Director of National
Intelligence shall ensure that the intelligence
community remains engaged in the collection,
analysis, and dissemination to the Committee of
any additional relevant information that may
become available during the course of any
investigation conducted under subsection (b)
with respect to a transaction.
[(D)] (E) Independent role of director.--The
Director of National Intelligence shall be a
nonvoting, ex officio member of the Committee,
and shall be provided with all notices received
by the Committee under paragraph (1)(C)
regarding covered transactions, but shall serve
no policy role on the Committee, other than to
provide analysis under subparagraphs (A) and
(C) in connection with a covered transaction.
(F) Assessment of operational impact.--The
Director may provide to the Committee an
assessment, separate from the analyses under
subparagraphs (A) and (B), of any operational
impact of a covered transaction on the
intelligence community and a description of any
actions that have been or will be taken to
mitigate any such impact.
(G) Submission to congress.--The Committee
shall include the analysis required by
subparagraph (A) with respect to a covered
transaction in the report required under
subsection (m)(1), subject to the requirements
of subsection (m)(5).
(5) Submission of additional information.--No
provision of this subsection shall be construed as
prohibiting any party to a covered transaction from
submitting additional information concerning the
transaction, including any proposed restructuring of
the transaction or any modifications to any agreements
in connection with the transaction, while any review or
investigation of the transaction is ongoing.
(6) Notice of results to parties.--The Committee
shall notify the parties to a covered transaction of
the results of a review or investigation under this
section, promptly upon completion of all action under
this section.
(7) Regulations.--Regulations prescribed under this
section shall include standard procedures for--
(A) submitting any notice of a covered
transaction to the Committee;
(B) submitting a request to withdraw a
covered transaction from review;
(C) resubmitting a notice of a covered
transaction that was previously withdrawn from
review; and
(D) providing notice of the results of a
review or investigation to the parties to the
covered transaction, upon completion of all
action under this section.
(8) Tolling of deadlines during lapse in
appropriations.--Any deadline or time limitation under
this subsection shall be tolled during a lapse in
appropriations.
(c) Confidentiality of Information.--[Any information]
(1) In general._Any information or documentary
material filed with the President or the President's
designee pursuant to this section shall be exempt from
disclosure under section 552 of title 5, United States
Code, and no such information or documentary material
may be made public, except as may be relevant to any
administrative or judicial action or proceeding.
Nothing in this subsection shall be construed to
prevent disclosure to either House of Congress or to
any duly authorized committee or subcommittee of the
Congress.
(2) Exception.--Paragraph (1) shall not prohibit the
disclosure of information or documentary material that
the party filing such information or material consented
to be disclosed to third parties.
(d) Action by the President.--
(1) In general.--Subject to paragraph (4), the
President may take such action for such time as the
President considers appropriate to suspend or prohibit
any covered transaction that threatens to impair the
national security of the United States.
(2) Announcement by the president.--The President
shall announce the decision on whether or not to take
action pursuant to paragraph (1) [not later than 15
days after the date on which an investigation described
in subsection (b) is completed.] with respect to a
covered transaction not later than 15 days after the
earlier of--
(A) the date on which the investigation of
the transaction under subsection (b) is
completed; or
(B) the date on which the Committee otherwise
refers the transaction to the President under
subsection (l)(4).
(3) Enforcement.--The President may direct the
Attorney General of the United States to seek
appropriate relief, including divestment relief, in the
district courts of the United States, in order to
implement and enforce this subsection.
(4) Findings of the president.--The President may
exercise the authority conferred by paragraph (1), only
if the President finds that--
(A) there is credible evidence that leads the
President to believe that [the foreign interest
exercising control] a foreign person that would
acquire an interest in a United States business
or its assets as a result of the covered
transaction might take action that threatens to
impair the national security; and
(B) provisions of law, other than this
section and the International Emergency
Economic Powers Act, do not, in the judgment of
the President, provide adequate and appropriate
authority for the President to protect the
national security in the matter before the
President.
(5) Factors to be considered.--For purposes of
determining whether to take action under paragraph (1),
the President shall consider, among other factors each
of the factors described in subsection (f), as
appropriate.
(e) Actions and Findings Nonreviewable.--The actions of the
President under paragraph (1) of subsection (d) and the
findings of the President under paragraph (4) of subsection (d)
shall not be subject to judicial review.
(f) Factors To Be Considered.--For purposes of this section,
the President or the President's designee may, taking into
account the requirements of national security, consider--
(1) domestic production needed for projected national
defense requirements,
(2) the capability and capacity of domestic
industries to meet national defense requirements,
including the availability of human resources,
products, technology, materials, and other supplies and
services,
(3) the control of domestic industries and commercial
activity by foreign citizens as it affects the
capability and capacity of the United States to meet
the requirements of national security[,], including the
availability of human resources, products, technology,
materials, and other supplies and services;
(4) the potential effects of the [proposed or
pending] transaction on sales of military goods,
equipment, or technology to any country--
(A) identified by the Secretary of State--
(i) under section 6(j) of the Export
Administration Act of 1979, as a
country that supports terrorism;
(ii) under section 6(l) of the Export
Administration Act of 1979, as a
country of concern regarding missile
proliferation; or
(iii) under section 6(m) of the
Export Administration Act of 1979, as a
country of concern regarding the
proliferation of chemical and
biological weapons;
(B) identified by the Secretary of Defense as
posing a potential regional military threat to
the interests of the United States; or
(C) listed under section 309(c) of the
Nuclear Non-Proliferation Act of 1978 on the
``Nuclear Non-Proliferation-Special Country
List'' (15 C.F.R. Part 778, Supplement No. 4)
or any successor list;
[(5) the potential effects of the proposed or pending
transaction on United States international
technological leadership in areas affecting United
States national security;
[(6)] (5) the potential national security-related
effects on United States critical infrastructure,
including major energy assets;
[(7)] (6) the potential national security-related
effects on United States critical technologies;
[(8)] (7) whether the covered transaction is a
foreign government-controlled transaction, as
determined under subsection (b)(1)(B);
[(9)] (8) as appropriate, and particularly with
respect to transactions requiring an investigation
under subsection (b)(1)(B), a review of the current
assessment of--
(A) the adherence of the subject country to
nonproliferation control regimes, including
treaties and multilateral supply guidelines,
which shall draw on, but not be limited to, the
annual report on ``Adherence to and Compliance
with Arms Control, Nonproliferation and
Disarmament Agreements and Commitments''
required by section 403 of the Arms Control and
Disarmament Act;
(B) the relationship of such country with the
United States, specifically on its record on
cooperating in counter-terrorism efforts, which
shall draw on, but not be limited to, the
report of the President to Congress under
section 7120 of the Intelligence Reform and
Terrorism Prevention Act of 2004; and
(C) the potential for transshipment or
diversion of technologies with military
applications, including an analysis of national
export control laws and regulations;
[(10)] (9) the long-term projection of United States
requirements for sources of energy and other critical
resources and material; [and]
(10) the degree to which the covered transaction is
likely to threaten the ability of the United States
Government to acquire or maintain the equipment and
systems that are necessary for defense, intelligence,
or other national security functions;
(11) the potential national security-related effects
of the cumulative control of any one type of critical
infrastructure, energy asset, material, or critical
technology by a foreign person;
(12) whether any foreign person that would acquire
control of a United States business as a result of the
covered transaction has a history of--
(A) complying with United States laws and
regulations and prior adherence, if applicable,
to any agreement or condition, as described
under (l)(1)(A); and
(B) adhering to contracts or other agreements
with entities of the United States Government;
(13) the extent to which the covered transaction is
likely to release, either directly or indirectly,
sensitive personal data of United States citizens to a
foreign person that may exploit that information in a
manner that threatens national security;
(14) whether the covered transaction is likely to
exacerbate cybersecurity vulnerabilities or is likely
to result in a foreign government gaining a significant
new capability to engage in malicious cyber-enabled
activities against the United States, including such
activities designed to affect the outcome of any
election for Federal office;
(15) whether the covered transaction is likely to
expose any information regarding sensitive national
security matters or sensitive procedures or operations
of a Federal law enforcement agency with national
security responsibilities to a foreign person not
authorized to receive that information; and
[(11)] (16) such other factors as the President or
the Committee may determine to be appropriate,
generally or in connection with a specific review or
investigation.
For purposes of this subsection, the phrase ``the availability
of human resources'' shall be construed to consider potential
losses of such availability resulting from reductions in the
employment of United States persons whose knowledge or skills
are critical to national security, including the continued
production in the United States of items that are likely to be
acquired by the Department of Defense or other Federal
departments or agencies for the advancement of the national
security of the United States.
(g) Additional Information to Congress; Confidentiality.--
(1) Briefing requirement on request.--The Committee
shall, upon request from any Member of Congress
specified in subsection (b)(3)(C)(iii), promptly
provide briefings on a covered transaction for which
all action has concluded under this section, or on
compliance with a mitigation agreement or condition
imposed with respect to such transaction, on a
classified basis, if deemed necessary by the
sensitivity of the information. Briefings under this
paragraph may be provided to the congressional staff of
such a Member of Congress having appropriate security
clearance.
(2) Application of confidentiality provisions.--
(A) In general.--The disclosure of
information under this subsection shall be
consistent with the requirements of subsection
(c). Members of Congress and staff of either
House of Congress or any committee of Congress,
shall be subject to the same limitations on
disclosure of information as are applicable
under subsection (c).
(B) Proprietary information.--Proprietary
information which can be associated with a
particular party to a covered transaction shall
be furnished in accordance with subparagraph
(A) only to a committee of Congress, and only
when the committee provides assurances of
confidentiality, unless such party otherwise
consents in writing to such disclosure.
(h) Regulations.--
(1) In general.--The President shall direct, subject
to notice and comment, the issuance of regulations to
carry out this section.
(2) Effective date.--Regulations issued under this
section shall become effective not later than 180 days
after the effective date of the Foreign Investment and
National Security Act of 2007.
(3) Content.--Regulations issued under this
subsection shall--
(A) provide for the imposition of civil
penalties for any violation of this section,
[including any mitigation agreement entered
into or conditions imposed pursuant to
subsection (l)] including any mitigation
agreement entered into, conditions imposed, or
order issued pursuant to this section;
(B) to the extent possible--
(i) minimize paperwork burdens; and
(ii) coordinate reporting
requirements under this section with
reporting requirements under any other
provision of Federal law; [and]
(C) provide for an appropriate role for the
Secretary of Labor with respect to mitigation
agreements[.]; and
(D) provide that in connection with any
national security review or investigation of a
covered transaction conducted by the Committee,
the Committee should--
(i) consider the factors described in
paragraphs (2) and (3) of subsection
(f); and
(ii) as appropriate, require parties
to provide the information necessary to
consider such factors.
(i) Effect on Other Law.--No provision of this section shall
be construed as altering or affecting any other authority,
process, regulation, investigation, enforcement measure, or
review provided by or established under any other provision of
Federal law, including the International Emergency Economic
Powers Act, or any other authority of the President or the
Congress under the Constitution of the United States.
(j) Technology Risk Assessments.--In any case in which an
assessment of the risk of diversion of defense critical
technology is performed by a designee of the President, a copy
of such assessment shall be provided to any other designee of
the President responsible for reviewing or investigating a
merger, acquisition, or takeover under this section.
(k) Committee on Foreign Investment in the United States.--
(1) Establishment.--The Committee on Foreign
Investment in the United States, established pursuant
to Executive Order No. 11858, shall be a multi agency
committee to carry out this section and such other
assignments as the President may designate.
(2) Membership.--The Committee shall be comprised of
the following members or the designee of any such
member:
(A) The Secretary of the Treasury.
(B) The Secretary of Homeland Security.
(C) The Secretary of Commerce.
(D) The Secretary of Defense.
(E) The Secretary of State.
(F) The Attorney General of the United
States.
(G) The Secretary of Energy.
(H) The Secretary of Labor (nonvoting, ex
officio).
(I) The Director of National Intelligence
(nonvoting, ex officio).
(J) The heads of any other executive
department, agency, or office, as the President
determines appropriate, generally or on a case-
by-case basis.
(3) Chairperson.--The Secretary of the Treasury shall
serve as the chairperson of the Committee.
(4) Assistant secretary for the department of the
treasury.--There shall be established an additional
position of Assistant Secretary of the Treasury, who
shall be appointed by the President, by and with the
advice and consent of the Senate. The Assistant
Secretary appointed under this paragraph shall report
directly to the Undersecretary of the Treasury for
International Affairs. The duties of the Assistant
Secretary shall include duties related to the Committee
on Foreign Investment in the United States, as
delegated by the Secretary of the Treasury under this
section.
(5) Designation of lead agency.--The Secretary of the
Treasury shall designate, as appropriate, a member or
members of the Committee to be the lead agency or
agencies on behalf of the Committee--
(A) for each covered transaction, and for
negotiating any mitigation agreements or other
conditions necessary to protect national
security; and
(B) for all matters related to the monitoring
of the completed transaction, to ensure
compliance with such agreements or conditions
and with this section.
(6) Other members.--The chairperson shall consult
with the heads of such other Federal departments,
agencies, and independent establishments in any review
or investigation under subsection (a), as the
chairperson determines to be appropriate, on the basis
of the facts and circumstances of the covered
transaction under review or investigation (or the
designee of any such department or agency head).
(7) Meetings.--The Committee shall meet upon the
direction of the President or upon the call of the
chairperson, without regard to section 552b of title 5,
United States Code (if otherwise applicable).
(l) Mitigation, Tracking, and Postconsummation Monitoring and
Enforcement.--
(1) Mitigation.--
(A) [In general] Agreements and
conditions.--[The Committee]
(i) In general._The Committee or a
lead agency may, on behalf of the
Committee, negotiate, enter into or
impose, and enforce any agreement or
condition with any party to the covered
transaction in order to mitigate any
threat to the national security of the
United States that arises as a result
of the covered transaction.
(ii) Abandonment of transactions.--If
a party to a covered transaction has
voluntarily chosen to abandon the
transaction, the Committee or lead
agency, as the case may be, may
negotiate, enter into or impose, and
enforce any agreement or condition with
any party to the covered transaction
for purposes of effectuating such
abandonment and mitigating any threat
to the national security of the United
States that arises as a result of the
covered transaction.
(iii) Agreements and conditions
relating to completed transactions.--
The Committee or lead agency, as the
case may be, may negotiate, enter into
or impose, and enforce any agreement or
condition with any party to a completed
covered transaction in order to
mitigate any interim threat to the
national security of the United States
that may arise as a result of the
covered transaction until such time
that the Committee has completed action
pursuant to subsection (b) or the
President has taken action pursuant to
subsection (d) with respect to the
transaction.
[(B) Risk-based analysis required.--Any
agreement entered into or condition imposed
under subparagraph (A) shall be based on a
risk-based analysis, conducted by the
Committee, of the threat to national security
of the covered transaction.]
(B) Treatment of outdated agreements or
conditions.--The chairperson and the head of
any applicable lead agency shall periodically
review the appropriateness of an agreement or
condition described under subparagraph (A) and
terminate, phase out, or otherwise amend any
agreement or condition if a threat no longer
requires mitigation through the agreement or
condition.
(C) Limitations.--An agreement may not be
entered into or condition imposed under
subparagraph (A) with respect to a covered
transaction unless the Committee determines
that the agreement or condition resolves the
national security concerns posed by the
transaction, taking into consideration whether
the agreement or condition is reasonably
calculated to--
(i) be effective;
(ii) allow for compliance with the
terms of the agreement or condition in
an appropriately verifiable way; and
(iii) enable effective monitoring of
compliance with and enforcement of the
terms of the agreement or condition.
(D) Jurisdiction.--The provisions of section
706(b) shall apply to any mitigation agreement
entered into or condition imposed under
subparagraph (A).
(2) Tracking authority for withdrawn notices.--
(A) In general.--If any written notice of a
covered transaction that was submitted to the
Committee under this section is withdrawn
before any review or investigation by the
Committee under subsection (b) is completed,
the Committee shall establish, as appropriate--
(i) interim protections to address
specific concerns with such transaction
that have been raised in connection
with any such review or investigation
pending any resubmission of any written
notice under this section with respect
to such transaction and further action
by the President under this section;
(ii) specific time frames for
resubmitting any such written notice;
and
(iii) a process for tracking any
actions that may be taken by any party
to the transaction, in connection with
the transaction, before the notice
referred to in clause (ii) is
resubmitted.
(B) Designation of agency.--The lead agency,
other than any entity of the intelligence
community (as defined in the National Security
Act of 1947), shall, on behalf of the
Committee, ensure that the requirements of
subparagraph (A) with respect to any covered
transaction that is subject to such
subparagraph are met.
(3) Negotiation, modification, monitoring, and
enforcement.--
(A) Designation of lead agency.--The lead
agency shall negotiate, modify, monitor, and
enforce, on behalf of the Committee, any
agreement entered into or condition imposed
under paragraph (1) with respect to a covered
transaction, based on the expertise with and
knowledge of the issues related to such
transaction on the part of the designated
department or agency. Nothing in this paragraph
shall prohibit other departments or agencies in
assisting the lead agency in carrying out the
purposes of this paragraph.
(B) Reporting by designated agency.--
(i) Modification reports.--The lead
agency in connection with any agreement
entered into or condition imposed with
respect to a covered transaction
shall--
(I) provide periodic reports
to the Committee on any
material modification to any
such agreement or condition
imposed with respect to the
transaction; and
(II) ensure that any material
modification to any such
agreement or condition is
reported to the Director of
National Intelligence, the
Attorney General of the United
States, and any other Federal
department or agency that may
have a material interest in
such modification.
(ii) Compliance.--The Committee shall
develop and agree upon methods for
evaluating compliance with any
agreement entered into or condition
imposed with respect to a covered
transaction that will allow the
Committee to adequately assure
compliance, without--
(I) unnecessarily diverting
Committee resources from
assessing any new covered
transaction for which a written
notice has been filed pursuant
to subsection (b)(1)(C), and if
necessary, reaching a
mitigation agreement with or
imposing a condition on a party
to such covered transaction or
any covered transaction for
which a review has been
reopened for any reason; or
(II) placing unnecessary
burdens on a party to a covered
transaction.
(4) Referral to president.--The Committee may, at any
time during the review or investigation of a covered
transaction under subsection (b), complete the action
of the Committee with respect to the transaction and
refer the transaction to the President for action
pursuant to subsection (d).
(5) Risk-based analysis required.--
(A) In general.--Any determination of the
Committee to refer a covered transaction to the
President under paragraph (4), to suspend a
covered transaction under paragraph (6), or to
negotiate, enter into, impose, or enforce any
agreement or condition under paragraph (1)(A)
with respect to a covered transaction, shall be
based on a risk-based analysis, conducted by
the Committee, of the effects on the national
security of the United States of the covered
transaction, which shall include--
(i) an assessment of the threat,
vulnerabilities, and consequences to
national security resulting from the
transaction, as these terms are defined
or clarified in guidance and
regulations issued by the Committee;
and
(ii) an identification of each
relevant factor described in subsection
(f) that the transaction may
substantially implicate.
(B) Compliance plans.--
(i) In general.--In the case of a
covered transaction with respect to
which an agreement or condition is
entered into under paragraph (1)(A),
the Committee or lead agency, as the
case may be, shall formulate, adhere
to, and keep updated a plan for
monitoring compliance with the
agreement or condition.
(ii) Elements.--Each plan required by
clause (i) with respect to an agreement
or condition entered into under
paragraph (1)(A) shall include an
explanation of--
(I) which member of the
Committee will have primary
responsibility for monitoring
compliance with the agreement
or condition;
(II) how compliance with the
agreement or condition will be
monitored;
(III) how frequently
compliance reviews will be
conducted;
(IV) whether an independent
entity will be utilized under
subparagraph (D) to conduct
compliance reviews; and
(V) what actions will be
taken if the parties fail to
cooperate regarding monitoring
compliance with the agreement
or condition.
(C) Effect of lack of compliance.--If, at any
time after a mitigation agreement or condition
is entered into or imposed under paragraph
(1)(A), the Committee or lead agency, as the
case may be, determines that a party or parties
to the agreement or condition are not in
compliance with the terms of the agreement or
condition, the Committee or lead agency may, in
addition to the authority of the Committee to
impose penalties pursuant to subsection
(h)(3)(A) and to unilaterally initiate a review
of any covered transaction under subsection
(b)(1)(D)(iii)(I)--
(i) negotiate a plan of action for
the party or parties to remediate the
lack of compliance, with failure to
abide by the plan or otherwise
remediate the lack of compliance
serving as the basis for the Committee
to find a material breach of the
agreement or condition;
(ii) require that the party or
parties submit any covered transaction
initiated after the date of the
determination of noncompliance and
before the date that is 5 years after
the date of the determination to the
Committee for review under subsection
(b); or
(iii) seek injunctive relief.
(D) Use of independent entities to monitor
compliance.--If the parties to an agreement or
condition entered into under paragraph (1)(A)
enter into a contract with an independent
entity from outside the United States
Government for the purpose of monitoring
compliance with the agreement or condition, the
Committee shall take such action as is
necessary to prevent any significant conflict
of interest from arising with respect to the
entity and the parties to the transaction.
(E) Successors and assigns.--Any agreement or
condition entered or imposed under paragraph
(1)(A) shall be considered binding on all
successors and assigns, unless and until the
agreement or condition terminates on its own
terms or is otherwise terminated by the
Committee in the Committee's sole discretion.
(F) Additional compliance measures.--Subject
to subparagraphs (A) through (D), the Committee
shall develop and agree upon methods for
evaluating compliance with any agreement
entered into or condition imposed with respect
to a covered transaction that will allow the
Committee to adequately ensure compliance
without unnecessarily diverting Committee
resources from assessing any new covered
transaction for which a written notice under
clause (i) of subsection (b)(1)(C) has been
filed or for which a declaration has been
submitted under clause (v) of subsection
(b)(1)(C), and if necessary, reaching a
mitigation agreement with or imposing a
condition on a party to such covered
transaction or any covered transaction for
which a review has been reopened for any
reason.
(6) Suspension of transactions.--The Committee,
acting through the chairperson, may suspend a proposed
or pending covered transaction that may pose a risk to
the national security of the United States for such
time as the covered transaction is under review or
investigation under subsection (b).
(m) Annual Report to Congress.--
(1) In general.--The chairperson shall transmit a
report to the chairman and ranking member of the
committee of jurisdiction in the Senate and the House
of Representatives, before July 31 of each year on all
of the reviews and investigations of covered
transactions completed under subsection (b) during the
12-month period covered by the report.
(2) Contents of report relating to covered
transactions.--The annual report under paragraph (1)
shall contain the following information, with respect
to each covered transaction, for the reporting period:
[(A) A list of all notices filed and all
reviews or investigations completed during the
period, with basic information on each party to
the transaction, the nature of the business
activities or products of all pertinent
persons, along with information about any
withdrawal from the process, and any decision
or action by the President under this section.]
(A) A list of all notices filed and all
reviews or investigations of covered
transactions completed during the period,
with--
(i) a description of the outcome of
each review or investigation, including
whether an agreement was entered into
or condition was imposed under
subsection (l)(3)(A) with respect to
the transaction being reviewed or
investigated, and whether the President
took any action under this section with
respect to that transaction;
(ii) the nature of the business
activities or products of the United
States business with which the
transaction was entered into or
intended to be entered into; and
(iii) information about any
withdrawal from the process.
(B) Specific, cumulative, and, as
appropriate, trend information on the numbers
of filings, investigations, withdrawals, and
decisions or actions by the President under
this section.
(C) Cumulative and, as appropriate, trend
information on the business sectors involved in
the filings which have been made, and the
countries from which the investments have
originated.
(D) Information on whether companies that
withdrew notices to the Committee in accordance
with subsection (b)(1)(C)(ii) have later
refiled such notices, or, alternatively,
abandoned the transaction.
(E) The types of security arrangements and
conditions the Committee has used to mitigate
national security concerns about a transaction,
including a discussion of the methods that the
Committee and any lead agency are using to
determine compliance with such arrangements or
conditions.
(F) A detailed discussion of all perceived
adverse effects of covered transactions on the
national security or critical infrastructure of
the United States that the Committee will take
into account in its deliberations during the
period before delivery of the next report, to
the extent possible.
(3) Contents of report relating to [critical
technologies.--]
[(A) In general.--In order to assist]
critical technologies._In order to assist
Congress in its oversight responsibilities with
respect to this section, the President and such
agencies as the President shall designate shall
include in the annual report submitted under
paragraph (1)--
[(i)] (A) an evaluation of whether there is
credible evidence of a coordinated strategy by
1 or more countries or companies to acquire
United States companies involved in research,
development, or production of critical
technologies for which the United States is a
leading producer; and
[(ii)] (B) an evaluation of whether there are
industrial espionage activities directed or
directly assisted by foreign governments
against private United States companies aimed
at obtaining commercial secrets related to
critical technologies.
[(B) Release of unclassified study.--All
appropriate portions of the annual report under
paragraph (1) may be classified. An
unclassified version of the report, as
appropriate, consistent with safeguarding
national security and privacy, shall be made
available to the public.]
(4) Additional contents of report.--Each annual
report required under paragraph (1) shall contain the
following additional information:
(A) Statistics on compliance reviews
conducted and actions taken by the Committee
under subsection (l)(6), including subparagraph
(D) of that subsection (l)(6), during that
period and a description of any actions taken
by the Committee to impose penalties or
initiate a unilateral review pursuant to
subsection (b)(1)(D)(iii)(I).
(B) Cumulative and trend information on the
number of declarations filed under subsection
(b)(1)(C)(v), the actions taken by the
Committee in response to declarations, the
business sectors involved in the declarations
which have been made, and the countries
involved in such declarations.
(C) The number of new hires made since the
preceding report through the authorities
described under subsection (q), along with
summary statistics, position titles, and
associated pay grades for such hires and a
summary of such hires' responsibilities in
administering this section.
(5) Classification; availability of report.--
(A) Classification.--All appropriate portions
of the annual report required by paragraph (1)
may be classified.
(B) Public availability of unclassified
version.--An unclassified version of the report
required by paragraph (1), as appropriate and
consistent with safeguarding national security
and privacy, shall be made available to the
public. Information regarding trade secrets or
business confidential information may be
included in the classified version and may not
be made available to the public in the
unclassified version.
(C) Exceptions to freedom of information
act.--The exceptions to subsection (a) of
section 552 of title 5, United States Code,
provided for under subsection (b) of that
section shall apply with respect to the report
required by paragraph (1).
(n) Certification of Notices and Assurances.--[Each notice]
(1) In general._Each notice, and any followup
information, submitted under this section and
regulations prescribed under this section to the
President or the Committee by a party to a covered
transaction, and any information submitted by any such
party in connection with any action for which a report
is required pursuant to paragraph (3)(B) of subsection
(l), with respect to the implementation of any
mitigation agreement or condition described in
paragraph (1)(A) of subsection (l), or any material
change in circumstances, shall be accompanied by a
written statement by the chief executive officer or the
designee of the person required to submit such notice
or information certifying that, to the best of the
knowledge and belief of that person--
[(1)] (A) the notice or information submitted
fully complies with the requirements of this
section or such regulation, agreement, or
condition; and
[(2)] (B) the notice or information is
accurate and complete in all material respects.
(2) Effect of failure to submit.--The Committee may
not complete a review under this section of a covered
transaction and may recommend to the President that the
President suspend or prohibit the transaction or
require divestment under subsection (d) if the
Committee determines that a party to the transaction
has--
(A) failed to submit a statement required by
paragraph (1); or
(B) included false or misleading information
in a notice or information described in
paragraph (1) or omitted material information
from such notice or information.
(3) Applicability of law on fraud and false
statements.--The Committee shall prescribe regulations
expressly providing for the application of section 1001
of title 18, United States Code, to all information
provided to the Committee under this section by any
party to a covered transaction.
(o) Centralization of Certain Committee Functions.--
(1) In general.--The chairperson, in consultation
with the Committee, may centralize certain functions of
the Committee within the Department of the Treasury for
the purpose of enhancing interagency coordination and
collaboration in carrying out the functions of the
Committee under this section.
(2) Rule of construction.--Nothing in this subsection
shall be construed as limiting the authority of any
department or agency represented on the Committee to
represent its own interests before the Committee.
(p) Unified Budget Request; Annual Spending Plan.--
(1) Unified budget request.--
(A) In general.--The President may include,
in the budget of the Department of the Treasury
for a fiscal year (as submitted to Congress
with the budget of the President under section
1105(a) of title 31, United States Code), a
unified request for funding of all operations
under this section conducted by all of the
departments and agencies represented on the
Committee.
(B) Form of budget request.--A unified
request under subparagraph (A) shall be
detailed and include the amounts and staffing
levels requested for each department or agency
represented on the Committee to carry out the
functions of that department or agency under
this section.
(2) Annual spending plan.--Not later than 90 days
following the date of enactment of this subsection, and
annually thereafter, the chairperson of the Committee
shall transmit to the Committees on Appropriations and
Financial Services of the House of Representatives and
the Committees on Appropriations and Banking, Housing,
and Urban Affairs of the Senate a detailed spending
plan to expeditiously meet the requirements of
subsections (b), (l), and (m), including estimated
expenditures and staffing levels required by operations
of the Committee for not less than the following fiscal
year at each of the Committee's member agencies.
(3) Waiver.--The chairperson may waive the reporting
requirement under paragraph (2) with respect to a
fiscal year for which a unified budget request
described under paragraph (1) has been submitted.
(q) Special Hiring Authority.--The heads of the departments
and agencies represented on the Committee may appoint, without
regard to the provisions of sections 3309 through 3318 of title
5, United States Code, candidates directly to positions in the
competitive service (as defined in section 2102 of that title)
in their respective departments and agencies to administer this
section.
(r) Testimony.--
(1) In general.--After submitting the unified budget
request described under subsection (p)(1), or the
spending plan described under subsection (p)(2), as the
case may be, but not later than March 31 of each year,
the chairperson, or the chairperson's designee, shall
appear before the Committee on Financial Services of
the House of Representatives and present testimony on--
(A) anticipated resources necessary for
operations of the Committee in the following
fiscal year at each of the Committee's member
agencies;
(B) the adequacy of appropriations for the
Committee in the current and the previous
fiscal year to--
(i) ensure that thorough reviews and
investigations are completed as
expeditiously as possible;
(ii) monitor and enforce mitigation
agreements; and
(iii) identify covered transactions
for which a notice under clause (i) of
subsection (b)(1)(C) or a declaration
under clause (v) of subsection
(b)(1)(C) was not submitted to the
Committee; and
(C) management efforts to strengthen the
ability of the Committee to meet the
requirements of this section.
(2) Sunset.--This subsection shall have no force or
effect on the date that is five years following the
date of enactment of the Foreign Investment Risk Review
Modernization Act of 2018.
(s) Regulatory Certainty for United States Businesses.--With
respect to mitigating a national security risk that results
from a foreign person's investment in, or joint venture with, a
United States business, a member agency of the Committee may
not prescribe or implement regulations to require divestment
by, or of, the United States business, unless--
(1) the regulations are prescribed under this section
or pursuant to authorities of the President under the
International Emergency Economic Powers Act; or
(2) the President reports to Congress in writing that
the regulations--
(A) are, wherever applicable, consistent with
regulations prescribed under this section,
including any such regulations pertaining to--
(i) foreign control or influence over
a United States business;
(ii) the identification of emerging,
foundational, or other critical
technologies; and
(iii) confidentiality requirements
with respect to information and
documentary material regarding United
States businesses; and
(B) in the case of regulations prescribed or
finalized following the effective date of this
subsection, were prescribed in consultation
with the chairperson of the Committee and with
the head of any member agency determined by the
President to be affected by the regulations.
(t) Funding.--
(1) Establishment of fund.--There is established in
the Treasury of the United States a fund, to be known
as the ``Committee on Foreign Investment in the United
States Fund'' (in this subsection referred to as the
``Fund''), to be administered by the chairperson.
(2) Authorization of appropriations for the
committee.--There are authorized to be appropriated to
the Fund such sums as may be necessary to perform the
functions of the Committee.
(3) Filing fees.--
(A) In general.--The Committee may assess and
collect a fee in an amount determined by the
Committee in regulations, without regard to
section 9701 of title 31, United States Code,
and subject to subparagraph (B), with respect
to each covered transaction for which a written
notice is submitted to the Committee under
subsection (b)(1)(C)(i) or a declaration is
submitted to the Committee under subsection
(b)(1)(C)(v).
(B) Determination of amount of fee.--
(i) In general.--The amount of the
fee to be assessed under subparagraph
(A) with respect to a covered
transaction--
(I) may not exceed an amount
equal to the lesser of--
(aa) 1 percent of the
value of the
transaction; or
(bb) $300,000, as
such amount is adjusted
annually for inflation
pursuant to regulations
prescribed by the
Committee; and
(II) shall be determined by
the Committee after taking into
consideration--
(aa) the effect of
the fee on small
business concerns (as
defined in section 3 of
the Small Business Act
(15 U.S.C. 632));
(bb) the expenses of
the Committee
associated with
conducting activities
under this section;
(cc) the effect of
the fee on foreign
investment;
(dd) the unified
budget request or
annual spending plan,
as appropriate,
described in section
502 of the Foreign
Investment Risk Review
Modernization Act of
2018; and
(ee) such other
matters as the
Committee considers
appropriate.
(ii) Updates.--The Committee shall
periodically reconsider and adjust the
amount of the fee to be assessed under
subparagraph (A) with respect to a
covered transaction to ensure that the
amount of the fee remains appropriate.
(C) Deposit and availability of fees.--
Notwithstanding section 3302 of title 31,
United States Code, fees collected under
subparagraph (A) shall--
(i) be deposited into the Fund for
use in carrying out activities under
this section;
(ii) to the extent and in the amounts
provided in advance in appropriations
Acts, be available to the chairperson;
(iii) remain available until
expended; and
(iv) be in addition to any
appropriations made available to the
members of the Committee.
(4) Transfer of funds.--To the extent provided in
advance in appropriations Acts, the chairperson may
transfer any amounts in the Fund to any other
department or agency represented on the Committee for
the purpose of addressing emerging needs in carrying
out activities under this section. Amounts so
transferred shall be in addition to any other amounts
available to that department or agency for that
purpose.
* * * * * * *
----------
EXPORT ADMINISTRATION ACT OF 1979
short title
[Section 1. This Act may be cited as the ``Export
Administration Act of 1979''.]
[findings
[Sec. 2. The Congress makes the following findings:
[(1) The ability of the United States citizens to
engage in international commerce is a fundamental
concern of United States policy.
[(2) Exports contribute significantly to the economic
well-being of the United States and the stability of
the world economy by increasing employment and
production in the United States, and by earning foreign
exchange, thereby contributing favorably to the trade
balance. The restriction of exports from the United
States can have serious adverse effects on the balance
of payments and on domestic employment, particularly
when restrictions applied by the United States are more
extensive than those imposed by other countries.
[(3) It is important for the national interest of the
United States that both the private sector and the
Federal Government place a high priority on exports,
consistent with the economic, security, and foreign
policy objectives of the United States.
[(4) The availability of certain materials at home
and abroad varies so that the quantity and composition
of United States exports and their distribution among
importing countries may affect the welfare of the
domestic economy and may have an important bearing upon
fulfillment of the foreign policy of the United States.
[(5) Exports of goods or technology without regard to
whether they make a significant contribution to the
military potential of individual countries or
combinations of countries may adversely affect the
national security of the United States.
[(6) Uncertainty of export control policy can inhibit
the efforts of United States business and work to the
detriment of the overall attempt to improve the trade
balance of the United States.
[(7) Unreasonable restrictions on access to world
supplies can cause worldwide political and economic
instability, interfere with free international trade,
and retard the growth and development of nations.
[(8) It is important that the administration of
export controls imposed for national security purposes
give special emphasis to the need to control exports of
technology (and goods which contribute significantly to
the transfer of such technology) which could make a
significant contribution to the military potential of
any country or combination of countries which would be
detrimental to the national security of the United
States.
[(9) Minimization of restrictions on exports of
agricultural commodities and products is of critical
importance to the maintenance of a sound agricultural
sector, to a positive contribution to the balance of
payments, to reducing the level of Federal expenditures
for agricultural support programs, and to United States
cooperation in efforts to eliminate malnutrition and
world hunger.
[(10) It is important that the administration of
export controls imposed for foreign policy purposes
give special emphasis to the need to control exports of
goods and substances hazardous to the public health and
the environment which are banned or severely restricted
for use in the United States, and which, if exported,
could affect the international reputation of the United
States as a responsible trading partner.
[(11) Availability to controlled countries of goods
and technology from foreign sources is a fundamental
concern of the United States and should be eliminated
through negotiations and other appropriate means
whenever possible.
[(12) Excessive dependence of the United States, its
allies, or countries sharing common strategic
objectives with the United States, on energy and other
critical resources from potential adversaries can be
harmful to the mutual and individual security of all
those countries.
[declaration of policy
[Sec. 3. The Congress makes the following declarations:
[(1) It is the policy of the United States to
minimize uncertainties in export control policy and to
encourage trade with all countries with which the
United States has diplomatic or trading relations,
except those countries with which such trade has been
determined by the President to be against the national
interest.
[(2) It is the policy of the United States to use
export controls only after full consideration of the
impact on the economy of the United States and only to
the extent necessary--
[(A) to restrict the export of goods and
technology which would make a significant
contribution to the military potential of any
other country or combination of countries which
would prove detrimental to the national
security of the United States;
[(B) to restrict the export of goods and
technology where necessary to further
significantly the foreign policy of the United
States or to fulfill its declared international
obligations; and
[(C) to restrict the export of goods where
necessary to protect the domestic economy from
the excessive drain of scarce materials and to
reduce the serious inflationary impact of
foreign demand.
[(3) It is the policy of the United States (A) to
apply any necessary controls to the maximum extent
possible in cooperation with all nations, and (B) to
encourage observance of a uniform export control policy
by all nations with which the United States has defense
treaty commitments or common strategic objectives.
[(4) It is the policy of the United States to use its
economic resources and trade potential to further the
sound growth and stability of its economy as well as to
further its national security and foreign policy
objectives.
[(5) It is the policy of the United States--
[(A) to oppose restrictive trade practices or
boycotts fostered or imposed by foreign
countries against other countries friendly to
the United States or against any United States
person;
[(B) to encourage and, in specified cases,
require United States persons engaged in the
export of goods or technology or other
information to refuse to take actions,
including furnishing information or entering
into or implementing agreements, which have the
effect of furthering or supporting the
restrictive trade practices or boycotts
fostered or imposed by any foreign country
against a country friendly to the United States
or against any United States person; and
[(C) to foster international cooperation and
the development of international rules and
institutions to assure reasonable access to
world supplies.
[(6) It is the policy of the United States that the
desirability of subjecting, or continuing to subject,
particular goods or technology or other information to
United States export controls should be subjected to
review by and consultation with representatives of
appropriate United States Government agencies and
private industry.
[(7) It is the policy of the United States to use
export controls, including license fees, to secure the
removal by foreign countries of restrictions on access
to supplies where such restrictions have or may have a
serious domestic inflationary impact, have caused or
may cause a serious domestic shortage, or have been
imposed for purposes of influencing the foreign policy
of the United States. In effecting this policy, the
President shall make reasonable and prompt efforts to
secure the removal or reduction of such restrictions,
policies, or actions through international cooperation
and agreement before imposing export controls. No
action taken in fulfillment of the policy set forth in
this paragraph shall apply to the export of medicine or
medical supplies.
[(8) It is the policy of the United States to use
export controls to encourage other countries to take
immediate steps to prevent the use of their territories
or resources to aid, encourage, or give sanctuary to
those persons involved in directing, supporting, or
participating in acts of international terrorism. To
achieve this objective, the President shall make
reasonable and prompt efforts to secure the removal or
reduction of such assistance to international
terrorists through international cooperation and
agreement before imposing export controls.
[(9) It is the policy of the United States to
cooperate with other countries with which the United
States has defense treaty commitments or common
strategic objectives in restricting the export of goods
and technology which would make a significant
contribution to the military potential of any country
or combination of countries which would prove
detrimental to the security of the United States and of
those countries with which the United States has
defense treaty commitments, or common strategic
objectives, and to encourage other friendly countries
to cooperate in restricting the sale of goods and
technology that can harm the security of the United
States.
[(10) It is the policy of the United States that
export trade by United States citizens be given a high
priority and not be controlled except when such
controls (A) are necessary to further fundamental
national security, foreign policy, or short supply
objectives, (B) will clearly further such objectives,
and (C) are administered consistent with basic
standards of due process.
[(11) It is the policy of the United States to
minimize restrictions on the export of agricultural
commodities and products.
[(12) It is the policy of the United States to
sustain vigorous scientific enterprise. To do so
involves sustaining the ability of scientists and other
scholars freely to communicate research findings, in
accordance with applicable provisions of law, by means
of publication, teaching, conferences, and other forms
of scholarly exchange.
[(13) It is the policy of the United States to
control the export of goods and substances banned or
severely restricted for use in the United States in
order to foster public health and safety and to prevent
injury to the foreign policy of the United States as
well as to the credibility of the United States as a
responsible trading partner.
[(14) It is the policy of the United States to
cooperate with countries which are allies of the United
States and countries which share common strategic
objectives with the United States in minimizing
dependence on imports of energy and other critial
resources from potential adversaries and in developing
alternative supplies of such resources in order to
minimize strategic threats posed by excessive hard
currency earnings derived from such resource exports by
countries with policies adverse to the security
interests of the United States.
[general provisions
[Sec. 4. (a) Types of Licenses.--Under such conditions as may
be imposed by the Secretary which are consistent with the
provisions of this Act, the Secretary may require any of the
following types of export licenses:
[(1) A validated license, authorizing a specific
export, issued pursuant to an application by the
exporter.
[(2) Validated licenses authorizing multiple exports,
issued pursuant to an application by the exporter, in
lieu of an individual validated license for each such
export, including, but not limited to, the following:
[(A) A distribution license, authorizing
exports of goods to approved distributors or
users of the goods in countries other than
controlled countries, except that the Secretary
may establish a type of distribution license
appropriate for consignees in the People's
Republic of China. The Secretary shall grant
the distribution license primarily on the basis
of the reliability of the applicant and foreign
consignees with respect to the prevention of
diversion of goods to controlled countries. The
Secretary shall have the responsibility of
determining, with the assistance of all
appropriate agencies, the reliability of
applicants and their immediate consignees. The
Secretary's determination shall be based on
appropriate investigations of each applicant
and periodic reviews of licensees and their
compliance with the terms of licenses issued
under this Act. Factors such as the applicant's
products or volume of business, or the
consignees' geographic location, sales
distribution area, or degree of foreign
ownership, which may be relevant with respect
to individual cases, shall not be determinative
in creating categories or general criteria for
the denial of applications or withdrawal of a
distribution license.
[(B) A comprehensive operations license,
authorizing exports and reexports of technology
and related goods, including items from the
list of militarily critical technologies
developed pursuant to section 5(d) of this Act
which are included on the control list in
accordance with that section, from a domestic
concern to and among its foreign subsidiaries,
affiliates, joint venturers, and licensees that
have long-term, contractually defined relations
with the exporter, are located in countries
other than controlled countries (except the
People's Republic of China), and are approved
by the Secretary. The Secretary shall grant the
license to manufacturing, laboratory, or
related operations on the basis of approval of
the exporter's systems of control, including
internal proprietary controls, applicable to
the technology and related goods to be exported
rather than approval of individual export
transactions. The Secretary and the
Commissioner of Customs, consistent with their
authorities under section 12(a) of this Act,
and with the assistance of all appropriate
agencies, shall periodically, but not less
frequently than annually, perform audits of
licensing procedures under this subparagraph in
order to assure the integrity and effectiveness
of those procedures.
[(C) A project license, authorizing exports
of goods or technology for a specified
activity.
[(D) A service supply license, authorizing
exports of spare or replacement parts for goods
previously exported.
[(3) A general license, authorizing exports, without
application by the exporter.
[(4) Such other licenses as may assist in the
effective and efficient implementation of this Act.
[(b) Control List.--The Secretary shall establish and
maintain a list (hereinafter in this Act referred to as the
``control list'') stating license requirements (other than for
general licenses) for exports of goods and technology under
this Act.
[(c) Foreign Availability.--In accordance with the provisions
of this Act, the President shall not impose export controls for
foreign policy or national security purposes on the export from
the United Staes of goods or technology which he determines are
available without restriction from sources outside the United
States in sufficient quantities and comparable in quality to
those produced in the United States, so as to render the
controls ineffective in achieving their purposes unless the
President determines that adequate evidence has been presented
to him demonstrating that the absence of such controls would
prove detrimental to the foreign policy or national security of
the United States. In complying with the provisions of this
subsection, the President shall give strong emphasis to
bilateral or multilateral negotiations to eliminate foreign
availability. The Secretary and the Secretary of Defense shall
cooperate in gathering information relating to foreign
availability, including the establishment and maintenance of a
jointly operated computer system.
[(d) Right of Export.--No authority or permission to export
may be required under this Act, or under regulations issued
under this Act, except to carry out the policies set forth in
section 3 of this Act.
[(e) Delegation of Authority.--The President may delegate the
power, authority, and discretion conferred upon him by this Act
to such departments, agencies, or officials of the Government
as he may consider appropriate, except that no authority under
this Act may be delegated to, or exercised by, any official of
any department or agency the head of which is not appointed by
the President, by and with the advice and consent of the
Senate. The President may not delegate or transfer his power,
authority, and discretion to overrule or modify any
recommendation or decision made by the Secretary, the Secretary
of Defense, or the Secretary of State pursuant to the
provisions of this Act.
[(f) Notification of the Public; Consultation With
Business.--The Secretary shall keep the public fully apprised
of changes in export control policy and procedures instituted
in conformity with this Act with a view to encouraging trade.
The Secretary shall meet regularly with representatives of a
broad spectrum of enterprises, labor organizations, and
citizens interested in or affected by export controls, in order
to obtain their views on United States export control policy
and the foreign availability of goods and technology.
[(g) Fees.--No fee may be charged in connection with the
submission or processing of an export license application.
[national security controls
[Sec. 5. (a) Authority.--(1) In order to carry out the policy
set forth in section 3(2)(A) of this Act, the President may, in
accordance with the provisions of this section, prohibit or
curtail the export of any goods or technology subject to the
jurisdiction of the United States or exported by any person
subject to the jurisdiction of the United States. The authority
contained in this subsection includes the authority to prohibit
or curtail the transfer of goods or technology within the
United States to embassies and affiliates of controlled
countries. For purposes of the preceding sentence, the term
``affiliates'' includes both governmental entities and
commercial entities that are controlled in fact by controlled
countries. The authority contained in this subsection shall be
exercised by the Secretary, in consultation with the Secretary
of Defense, and such other departments and agencies as the
Secretary considers appropriate, and shall be implemented by
means of export licenses described in section 4(a) of this Act.
[(2) Whenever the Secretary makes any revision with respect
to any goods or technology, or with respect to the countries or
destinations, affected by export controls imposed under this
section, the Secretary shall publish in the Federal Register a
notice of such revision and shall specify in such notice that
the revision relates to controls imposed under the authority
contained in this section.
[(3) In issuing regulations to carry out this section,
particular attention shall be given to the difficulty of
devising effective safeguards to prevent a country that poses a
threat to the security of the United States from diverting
critical technologies to military use, the difficulty of
devising effective safeguards to protect critical goods, and
the need to take the effective measures to prevent the reexport
of critical technologies from other countries to countries that
pose a threat to the security of the United States.
[(4)(A) No authority or permission may be required under this
section to reexport any goods or technology subject to the
jurisdiction of the United States to any country which
maintains export controls on such goods or technology
cooperatively with the United States pursuant to the agreement
of the group known as the Coordinating Committee, or pursuant
to an agreement described in subsection (k) of this section.
The Secretary may require any person reexporting any goods or
technology under this subparagraph to notify the Secretary of
such reexports.
[(B) Notwithstanding subparagraph (A), the Secretary may
require authority or permission to reexport the following:
[(i) supercomputers;
[(ii) goods or technology for sensitive nuclear uses
(as defined by the Secretary);
[(iii) devices for surreptitious interception of wire
or oral communications; and
[(iv) goods or technology intended for such end users
as the Secretary may specify by regulation.
[(5)(A) Except as provided in subparagraph (B), no authority
or permission may be required under this section to reexport
any goods or technology subject to the jurisdiction of the
United States from any country when the goods or technology to
be reexported are incorporated in another good and--
[(i) the value of the controlled United States
content of that other good is 25 percent or less of the
total value of the good; or
[(ii) the export of the goods or technology to a
controlled country would require only notification of
the participating governments of the Coordinating
Committee.
For purposes of this paragraph, the ``controlled United States
content'' of a good means those goods or technology subject to
the jurisdiction of the United States which are incorporated in
the good, if the export of those goods or technology from the
United States to a country, at the time that the good is
exported to that country, would require a validated license.
[(B) The Secretary may by regulation provide that
subparagraph (A) does not apply to the reexport of a
supercomputer which contains goods or technology subject to the
jurisdiction of the United States.
[(6) Not later than 90 days after the date of the enactment
of this paragraph, the Secretary shall issue regulations to
carry out paragraphs (4) and (5). Such regulations shall define
the term ``supercomputer'' for purposes of those paragraphs.
[(b) Policy Toward Individual Countries.--(1) In
administering export controls for national security purposes
under this section, the President shall establish as a list of
controlled countries those countries set forth in section
620(f) of the Foreign Assistance Act of 1961, except that the
President may add any country to or remove any country from
such list of controlled countries if he determines that the
export of goods or technology to such country would or would
not (as the case may be) make a significant contribution to the
military potential of such country or a combination of
countries which would prove detrimental to the national
security of the United States. In determining whether a country
is added to or removed from the list of controlled countries,
the President shall take into account--
[(A) the extent to which the country's policies are
adverse to the national security interests of the
United States;
[(B) the country's Communist or non-Communist status;
[(C) the present and potential relationship of the
country with the United States;
[(D) the present and potential relationship of the
country with countries friendly or hostile to the
United States;
[(E) the country's nuclear weapons capability and the
country's compliance record with respect to
multilateral nuclear weapons agreements to which the
United States is a party; and
[(F) such other factors as the President considers
appropriate.
Nothing in the preceding sentence shall be interpreted to limit
the authority of the President provided in this Act to prohibit
or curtail the export of any goods or technology to any country
to which exports are controlled for national security purposes
other than countries on the list of controlled countries
specified in this paragraph. The President shall review not
less frequently than every three years in the case of controls
maintained cooperatively with other nations, and annually in
the case of all other controls, United States policy toward
individual countries to determine whether such policy is
appropriate in light of the factors set forth in this
paragraph.
[(2)(A) Except as provided in subparagraph (B), no authority
or permission may be required under this section to export
goods or technology to a country which maintains export
controls on such goods or technology cooperatively with the
United States pursuant to the agreement of the group known as
the Coordinating Committee or pursuant to an agreement
described in subsection (k) of this section, if the export of
such goods or technology to the People's Republic of China or a
controlled country on the date of the enactment of the Export
Enhancement Act of 1988 would require only notification of the
participating governments of the Coordinating Committee.
[(B)(i) The Secretary may require a license for the export of
goods or technology described in subparagraph (A) to such end
users as the Secretary may specify by regulation.
[(ii) The Secretary may require any person exporting goods or
technology under this paragraph to notify the Secretary of
those exports.
[(C) The Secretary shall, within 3 months after the date of
the enactment of the Export Enhancement Act of 1988, determine
which countries referred to in subparagraph (A) are
implementing an effective export control system consistent with
principles agreed to in the Coordinating Committee, including
the following:
[(i) national laws providing appropriate civil and
criminal penalties and statutes of limitations
sufficient to deter potential violations;
[(ii) a program to evaluate export license
applications that includes sufficient technical
expertise to assess the licensing status of exports and
ensure the reliability of end-users;
[(iii) an enforcement mechanism that provides
authority for trained enforcement officers to
investigate and prevent illegal exports;
[(iv) a system of export control documentation to
verify the movement of goods and technology; and
[(v) procedures for the coordination and exchange of
information concerning violations of the agreement of
the Coordinating Committee.
The Secretary shall, at least once each year, review the
determinations made under the preceding sentence with respect
to all countries referred to in subparagraph (A). The Secretary
may, as appropriate, add countries to, or remove countries
from, the list of countries that are implementing an effective
export control system in accordance with this subparagraph. No
authority or permission to export may be required for the
export of goods or technology to a country on such list.
[(3)(A) No authority or permission may be required under this
section to export to any country, other than a controlled
country, any goods or technology if the export of the goods or
technology to controlled countries would require only
notification of the participating governments of the
Coordinating Committee.
[(B) The Secretary may require any person exporting any goods
or technology under subparagraph (A) to notify the Secretary of
those exports.
[(c) Control List.--(1) The Secretary shall establish and
maintain, as part of the control list, a list of all goods and
technology subject to export controls under this section. Such
goods and technology shall be clearly identified as being
subject to controls under this section.
[(2) The Secretary of Defense and other appropriate
departments and agencies shall identify goods and technology
for inclusion on the list referred to in paragraph (1). Those
items which the Secretary and the Secretary of Defense concur
shall be subject to export controls under this section shall
comprise such list. If the Secretary and the Secretary of
Defense are unable to concur on such items, as determined by
the Secretary, the Secretary of Defense may, within 20 days
after receiving notification of the Secretary's determination,
refer the matter to the President for resolution. The Secretary
of Defense shall notify the Secretary of any such referral. The
President shall, not later than 20 days after such referral,
notify the Secretary of his determination with respect to the
inclusion of such items on the list. Failure of the Secretary
of Defense to notify the President or the Secretary, or failure
of the President to notify the Secretary, in accordance with
this paragraph, shall be deemed by the Secretary to constitute
concurrence in the implementation of the actions proposed by
the Secretary regarding the inclusion of such items on the
list.
[(3) The Secretary shall conduct partial reviews of the list
established pursuant to this subsection at least once each
calendar quarter in order to carry out the policy set forth in
section 3(2)(A) of this Act and the provisions of this section,
and shall promptly make such revisions of the list as may be
necessary after each such review. Before beginning each
quarterly review, the Secretary shall publish notice of that
review in the Federal Register. The Secretary shall provide a
30-day period during each review for comment and the submission
of data, with or without oral presentation, by interested
Government agencies and other affected or potentially affected
parties. After consultation with appropriate Government
agencies, the Secretary shall make a determination of any
revisions in the list within 30 days after the end of the
review period. The concurrence or approval of any other
department or agency is not required before any such revision
is made. The Secretary shall publish in the Federal Register
any revisions in the list, with an explanation of the reasons
for the revisions. The Secretary shall use the data developed
from each review in formulating United States proposals
relating to multilateral export controls in the group known as
the Coordinating Committee. The Secretary shall further assess,
as part of each review, the availability from sources outside
the United States of goods and technology comparable to those
subject to export controls imposed under this section. All
goods and technology on the list shall be reviewed at least
once each year. The provisions of this paragraph apply to
revisions of the list which consist of removing items from the
list or making changes in categories of, or other
specifications in, items on the list.
[(4) The appropriate technical advisory committee appointed
under subsection (h) of this section shall be consulted by the
Secretary with respect to changes, pursuant to paragraph (2) or
(3), in the list established pursuant to this subsection, and
such technical advisory committee may submit recommendations to
the Secretary with respect to such changes. The Secretary shall
consider the recommendations of the technical advisory
committee and shall inform the committee of the disposition of
its recommendations.
[(5)(A) Not later than 6 months after the date of the
enactment of this paragraph, the following shall no longer be
subject to export controls under this section:
[(i) All goods or technology the export of which to
controlled countries on the date of the enactment of
the Export Enhancement Act of 1988 would require only
notification of the participating governments of the
Coordinating Committee, except for those goods or
technology on which the Coordinating Committee agrees
to maintain such notification requirement.
[(ii) All medical instruments and equipment, subject
to the provisions of subsection (m) of this section.
[(B) The Secretary shall submit to the Congress annually a
report setting forth the goods and technology from which export
controls have been removed under this paragraph.''.
[(6)(A) Notwithstanding subsection (f) or (h)(6) of this
section, any export control imposed under this section which is
maintained unilaterally by the United States shall expire 6
months after the date of the enactment of this paragraph, or 6
months after the export control is imposed, whichever date is
later, except that--
[(i) any such export controls on those goods or
technology for which a determination of the Secretary
that there is no foreign availability has been made
under subsection (f) or (h)(6) of this section before
the end of the applicable 6-month period and is in
effect may be renewed for periods of not more than 6
months each, and
[(ii) any such export controls on those goods or
technology with respect to which the President, by the
end of the applicable 6-month period, is actively
pursuing negotiations with other countries to achieve
multilateral export controls on those goods or
technology may be renewed for 2 periods of not more
than 6 months each.
[(B) Export controls on goods or technology described in
clause (i) or (ii) of subparagraph (A) may be renewed only if,
before each renewal, the President submits to the Congress a
report setting forth all the controls being renewed and stating
the specific reasons for such renewal.
[(7) Notwithstanding any other provision of this subsection,
after 1 year has elapsed since the last review in the Federal
Register on any item within a category on the control list the
export of which to the People's Republic of China would require
only notification of the members of the group known as the
Coordinating Committee, an export license applicant may file an
allegation with the Secretary that such item has not been so
reviewed within such 1-year period. Within 90 days after
receipt of such allegation, the Secretary--
[(A) shall determine the truth of the allegation;
[(B) shall, if the allegation is confirmed, commence
and complete the review of the item; and
[(C) shall, pursuant to such review, submit a finding
for publication in the Federal Register.
In such finding, the Secretary shall identify those goods or
technology which shall remain on the control list and those
goods or technology which shall be removed from the control
list. If such review and submission for publication are not
completed within that 90-day period, the goods or technology
encompassed by such item shall immediately be removed from the
control list.
[(d) Militarily Critical Technologies.--(1) The Secretary, in
consultation with the Secretary of Defense, shall review and
revise the list established pursuant to subsection (c), as
prescribed in paragraph (3) of such subsection, for the purpose
of insuring that export controls imposed under this section
cover and (to the maximum extent consistent with the purposes
of this Act) are limited to militarily critical goods and
technologies and the mechanisms through which such goods and
technologies may be effectively transferred.
[(2) The Secretary of Defense shall bear primary
responsibility for developing a list of militarily critical
technologies. In developing such list, primary emphasis shall
be given to--
[(A) arrays of design and manufacturing know-how,
[(B) keystone manufacturing, inspection, and test
equipment,
[(C) goods accompanied by sophisticated operation,
application, or maintenance know-how; and
[(D) keystone equipment with would reveal or give
insight into the design and manufacture of a United
States military system,
which are not possessed by, or available in fact from sources
outside the United States to, controlled countries and which,
if exported, would permit a significant advance in a military
system of any such country.
[(3) The list referred to in paragraph (2) shall be
sufficiently specific to guide the determinations of any
official exercising export licensing responsibilities under
this Act.
[(4) The Secretary and the Secretary of Defense shall
integrate items on the list of militarily critical technologies
into the control list in accordance with the requirements of
subsection (c) of this section. The integration of items on the
list of militarily critical technologies into the control list
shall proceed with all deliberate speed. Any disagreement
between the Secretary and the Secretary of Defense regarding
the integration of an item on the list of militarily critical
technologies into the control list shall be resolved by the
President. Except in the case of a good or technology for which
a validated license may be required under subsection (f)(4) or
(h)(6) of this section, a good or technology shall be included
on the control list only if the Secretary finds that controlled
countries do not possess that good or technology, or a
functionally equivalent good or technology, and the good or
technology or functionally equivalent good or technology, is
not available in fact to a controlled country from sources
outside the United States in sufficient quantity and of
comparable quality so that the requirement of a validated
license for the export of such good or technology is or would
be ineffective in achieving the purpose set forth in subsection
(a) of this section. The Secretary and the Secretary of Defense
shall jointly submit a report to the Congress, not later than 1
year after the date of the enactment of the Export
Administration Amendments Act of 1985, on actions taken to
carry out this paragraph. For the purposes of this paragraph,
assessment of whether a good or technology is functionally
equivalent shall include consideration of the factors described
in subsection (f)(3) of this section.
[(5) The Secretary of Defense shall establish a procedure for
reviewing the goods and technology on the list of militarily
critical technologies on an ongoing basis for the purpose of
removing from the list of militarily critical technologies any
goods or technology that are no longer militarily critical. The
Secretary of Defense may add to the list of militarily critical
technologies and good or technology that the Secrtary of
Defense determines is militarily critical, consistent with the
provisions of paragraph (2) of this subsection. If the
Secretary and the Secretary of Defense disagree as to whether
any change in the list of militarily critical technologies by
the addition or removal of a good or technology should also be
made in the control list, consistent with the provisions of the
fourth sentence of paragraph (4) of this subsection, the
President shall resolve the disagreement.
[(6) The establishment of adequate export controls for
militarily critical technology and keystone equipment shall be
accompanied by suitable reductions in the controls on the
products of that technology and equipment.
[(7) The Secretary of Defense shall, not later than 1 year
after the date of the enactment of the Export Administration
Amendments Act of 1985, report to the Congress on efforts by
the Department of Defense to assess the impact that the
transfer of goods or technology on the list of militarily
critical technologies to controlled countries has had or will
have on the military capabilities of those countries.
[(e) Export Licenses.--(1) The Congress finds that the
effectiveness and efficiency of the process of making export
licensing determinations under this section is severely
hampered by the large volumne of validated export license
applications required to be submitted under this Act.
Accordingly, it is the intent of Congress in this subsection to
encourage the use of the multiple validated export licenses
described in section 4(a)(2) of this Act in lieu of individual
validated licenses.
[(2) To the maximum extent practicable, consistent with the
national security of the United States, the Secretary shall
require a validated license under this section for the export
of goods or technology only if--
[(A) the export of such goods or technology is
restricted pursuant to a multilateral agreement, formal
or informal, to which the United States is a party and,
under the terms of such multilateral agreement, such
export requires the specific approval of the parties to
such multilateral agreement;
[(B) with respect to such goods or technology, other
nations do not possess capabilities comparable to those
possessed by the United States; or
[(C) the United States is seeking the agreement of
other suppliers to apply comparable controls to such
goods or technology and, in the judgment of the
Secretary, United States export controls on such goods
or technology, by means of such license, are necessary
pending the conclusion of such agreement.
[(3) The Secretary, subject to the provisions of subsection
(l) of this section, shall not require an individual validated
export license for replacement parts which are exported to
replace on a one-for-one basis parts that were in a good that
has been lawfully exported from the United States.
[(4) The Secretary shall periodically review the procedures
with respect to the multiple validated export licenses, taking
appropriate action to increase their utilization by reducing
qualification requirements or lowering minimum thresholds, to
combine procedures which overlap, and to eliminate those
procedures which appear to be of marginal utility.
[(5) The export of goods subject to export controls under
this section shall be eligible, at the discretion of the
Secretary, for a distribution license and other licenses
authorizing multiple exports of goods, in accordance with
section 4(a)(2) of this Act. The export of technology and
related goods subject to export controls under this section
shall be eligible for a comprehensive operations license in
accordance with section 4(a)(2)(B) of this Act.
[(6) Any application for a license for the export to the
People's Republic of China of any good on which export controls
are in effect under this section, without regard to the
technical specifications of the good, for the purpose of
demonstration or exhibition at a trade show shall carry a
presumption of approval if--
[(A) the United States exporter retains title to the
good during the entire period in which the good is in
the People's Republic of China; and
[(B) the exporter removes the good from the People's
Republic of China no later than at the conclusion of
the trade show.
[(f) Foreign Availability.--
[(1) Foreign availability to controlled countries.--
(A) The Secretary, in consultation with the Secretary
of Defense and other appropriate Government agencies
and with appropriate technical advisory committees
established pursuant to subsection (h) of this section,
shall review, on a continuing basis, the availability
to controlled countries, from sources outside the
United States, including countries which participate
with the United States in multilateral export controls,
of any goods or technology the export of which requires
a validated license under this section. In any case in
which the Secretary determines, in accordance with
procedures and criteria which the Secretary shall by
regulation establish, that any such goods or technology
are available in fact to controlled countries from such
sources in sufficient quantity and of comparable
quality so that the requirement of a validated license
for the export of such goods or technology is or would
be ineffective in achieving the purpose set forth in
subsection (a) of this section, the Secretary may not,
after the determination is made, require a validated
license for the export of such goods or technology
during the period of such foreign availability, unless
the President determines that the absence of export
controls under this section on the goods or technology
would prove detrimental to the national security of the
United States. In any case in which the President
determines under this paragraph that export controls
under this section must be maintained notwithstanding
foreign availability, the Secretary shall publish that
determination, together with a concise statement of its
basis and the estimated economic impact of the
decision.
[(B) The Secretary shall approve any application for
a validated license which is required under this
section for the export of any goods or technology to a
controlled country and which meets all other
requirements for such an application, if the Secretary
determines that such goods or technology will, if the
license is denied, be available in fact to such country
from sources outside the United States, including
countries which participate with the United States in
multilateral export controls, in sufficient quantity
and of comparable quality so that denial of the license
would be ineffective in achieving the purpose set forth
in subsection (a) of this section, unless the President
determines that approving the license application would
prove detrimental to the national security of the
United States. In any case in which the Secretary makes
a determination of foreign availability under this
subparagraph with respect to any goods or technology,
the Secretary shall determine whether a determination
of foreign availability under subparagraph (A) with
respect to such goods or technology is warranted.
[(2) Foreign availability to other than controlled
countries.--(A) The Secretary shall review, on a
continuing basis, the availability to countries other
than controlled countries, from sources outside the
United States, of any goods or technology the export of
which requires a validated license under this section.
If the Secretary determines, in accordance with
procedures which the Secretary shall establish, that
any goods or technology in sufficient quantity and of
comparable quality are available in fact from sources
outside the United States (other than availability
under license from a country which maintains export
controls on such goods or technology cooperatively with
the United States pursuant to the agreement of the
group known as the Coordinating Committee or pursuant
to an agreement described in subsection (k) of this
section), the Secretary may not, after the
determination is made and during the period of such
foreign availability, require a validated license for
the export of such goods or technology to any country
(other than a controlled country) to which the country
from which the goods or technology is available does
not place controls on the export of such goods or
technology. The requirement with respect to a validated
license in the preceding sentence shall not apply if
the President determines that the absence of export
controls under this section on the goods or technology
would prove detrimental to the national security of the
United States. In any case in which the President
determines under this paragraph that export controls
under this section must be maintained notwithstanding
foreign availability, the Secretary shall publish that
determination, together with a concise statement of its
basis and the estimated economic impact of the
decision.
[(B) The Secretary shall approve any application for
a validated license which is required under this
section for the export of any goods or technology to a
country (other than a controlled country) and which
meets all other requirements for such an application,
if the Secretary determines that such goods or
technology are available from foreign sources to that
country under the criteria established in subparagraph
(A), unless the President determines that approving the
license application would prove detrimental to the
national security of the United States. In any case in
which the Secretary makes a determination of foreign
availability under this subparagraph with respect to
any goods or technology, the Secretary shall determine
whether a determination of foreign availability under
subparagraph (A) with respect to such goods or
technology is warranted.
[(3) Procedures for making determinations.--(A) The
Secretary shall make a foreign availability
determination under paragraph (1) or (2) on the
Secretary's own initiative or upon receipt of an
allegation from an export license applicant that such
availability exists. In making any such determination,
the Secretary shall accept the representations of
applicants made in writing and supported by reasonable
evidence, unless such representations are contradicted
by reliable evidence, including scientific or physical
examination, expert opinion based upon adequate factual
information, or intelligence information. In making
determinations of foreign availability, the Secretary
may consider such factors as cost, reliability, the
availability and reliability of spare parts and the
cost and quality thereof, maintenance programs,
durability, quality of end products produced by the
item proposed for export, and scale of production. For
purposes of this subparagraph, ``evidence'' may include
such items as foreign manufacturers' catalogues,
brochures, or operations or maintenance manuals,
articles from reputable trade publications,
photographs, and depositions based upon eyewitness
accounts.
[(B) In a case in which an allegation is received
from an export license applicant, the Secretary shall,
upon receipt of the allegation, submit for publication
in the Federal Register notice of such receipt. Within
4 months after receipt of the allegation, the Secretary
shall determine whether the foreign availability
exists, and shall so notify the applicant. If the
Secretary has determined that the foreign availability
exists, the Secretary shall, upon making such
determination, submit the determination for review to
other departments and agencies as the Secretary
considers appropriate. The Secretary's determination of
foreign availability does not require the concurrence
or approval of any official, department, or agency to
which such a determination is submitted. Not later than
1 month after the Secretary makes the determination,
the Secretary shall respond in writing to the applicant
and submit for publication in the Federal Register,
that--
[(i) the foreign availability does exist
and--
[(I) the requirement of a validated
license has been removed,
[(II) the President has determined
that export controls under this section
must be maintained notwithstanding the
foreign availability and the applicable
steps are being taken under paragraph
(4), or
[(III) in the case of a foreign
availability determination under
paragraph (1), the foreign availability
determination will be submitted to a
multilateral review process in
accordance with the agreement of the
Coordinating Committee for a period of
not more than 4 months beginning on the
date of the publication; or
[(ii) the foreign availability does not
exist.
In any case in which the submission for publication is
not made within the time period specified in the
preceding sentence, the Secretary may not thereafter
require a license for the export of the goods or
technology with respect to which the foreign
availability allegation was made. In the case of a
foreign availability determination under paragraph (1)
to which clause (i)(III) applies, no license for such
export may be required after the end of the 9-month
period beginning on the date on which the allegation is
received.
[(4) Negotiations to eliminate foreign
availability.--(A) In any case in which export controls
are maintained under this section notwithstanding
foreign availability, on account of a determination by
the President that the absence of the controls would
prove detrimental to the national security of the
United States, the President shall actively pursue
negotiations with the governments of the appropriate
foreign countries for the purpose of eliminating such
availability. No later than the commencement of such
negotiations, the President shall notify in writing the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Foreign Affairs of the
House of Representatives that he has begun such
negotiations and why he believes it is important to
national security that export controls on the goods or
technology involved be maintained.
[(B) If, within 6 months after the President's
determination that export controls be maintained, the
foreign availability has not been eliminated, the
Secretary may not, after the end of that 6-month
period, require a validated license for the export of
the goods or technology involved. The President may
extend the 6-month period described in the preceding
sentence for an additional period of 12 months if the
President certifies to the Congress that the
negotiations involved are progressing and that the
absence of the export controls involved would prove
detrimental to the national security of the United
States. Whenever the President has reason to believe
that goods or technology subject to export controls for
national security purposes by the United States may
become available from other countries to controlled
countries and that such availability can be prevented
or eliminated by means of negotiations with such other
countries, the President shall promptly initiate
negotiations with the governments of such other
countries to prevent such foreign availability.
[(C) After an agreement is reached with a country
pursuant to negotiations under this paragraph to
eliminate or prevent foreign availability of goods or
technology, the Secretary may not require a validated
license for the export of such goods or technology to
that country.
[(5) Expedited licenses for items available to
countries other than controlled countries.--(A) In any
case in which the Secretary finds that any goods or
technology from foreign sources is of similar quality
to goods or technology the export of which requires a
validated license under this section and is available
to a country other than a controlled country without
effective restrictions, the Secretary shall designate
such goods or technology as eligible for export to such
country under this paragraph.
[(B) In the case of goods or technology designated
under subparagraph (A), then 20 working days after the
date of formal filing with the Secretary of an
individual validated license application for the export
of those goods or technology to an eligible country, a
license for the transaction specified in the
application shall become valid and effective and the
goods or technology are authorized for export pursuant
to such license unless the license has been denied by
the Secretary on account of an inappropriate end user.
The Secretary may extend the 20-day period provided in
the preceding sentence for an additional period of 15
days if the Secretary requires additional time to
consider the application and so notifies the applicant.
[(C) The Secretary may make a foreign availability
determination under subparagraph (A) on the Secretary's
own initiative, upon receipt of an allegation from an
export license applicant that such availability exists,
or upon the submission of a certification by a
technical advisory committee of appropriate
jurisdiction that such availability exists. Upon
receipt of such an allegation or certification, the
Secretary shall publish notice of such allegation or
certification in the Federal Register and shall make
the foreign availability determination within 30 days
after such receipt and publish the determination in the
Federal Register. In the case of the failure of the
Secretary to make and publish such determination within
that 30-day period, the goods or technology involved
shall be deemed to be designated as eligible for export
to the country or countries involved, for purposes of
subparagraph (B).
[(D) The provisions of paragraphs (1), (2), (3), and
(4) do not apply with respect to determinations of
foreign availability under this paragraph.
[(6) Office of foreign availability.--The Secretary
shall establish in the Department of Commerce an Office
of Foreign Availability, which shall be under the
direction of the Under Secretary of Commerce for Export
Administration. The Office shall be responsible for
gathering and analyzing all the necessary information
in order for the Secretary to make determinations of
foreign availability under this Act. The Secretary
shall make available to the Committee on Foreign
Affairs of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate at the end of each 6-month period during a
fiscal year information on the operations of the
Office, and on improvements in the Government's ability
to assess foreign availability, during that 6-month
period, including information on the training of
personnel, the use of computers, and the use of
Commercial Service Officers of the United States and
Foreign Commercial Service. Such information shall also
include a description of representative determinations
made under this Act during that 6-month period that
foreign availability did or did not exist (as the case
may be), together with an explanation of such
determinations.
[(7) Sharing of information.--Each department or
agency of the United States, including any intelligence
agency, and all contractors with any such department or
agency, shall, upon the request of the Secretary and
consistent with the protection of intelligence sources
and methods, furnish information to the Office of
Foreign Availability concerning foreign availability of
goods and technology subject to export controls under
this Act. Each such department or agency shall allow
the Office of Foreign Availability access to any
information from a laboratory or other facility within
such department or agency.
[(8) Removal of controls on less sophisticated goods
or technology.--In any case in which Secretary may not,
pursuant to paragraph (1), (2), (3), or (4) of this
subsection or paragraph (6) of subsection (h) of this
section, require a validated license for the export of
goods or technology, then the Secretary may not require
a validated license for the export of any similar goods
or technology whose function, technological approach,
performance thresholds, and other attributes that form
the basis for export controls under this section do not
exceed the technical parameters of the goods or
technology from which the validated license requirement
is removed under the applicable paragraph.
[(9) Notice of all foreign availability
assessments.--Whenever the Secretary undertakes a
foreign availability assessment under this subsection
or subsection (h)(6), the Secretary shall publish
notice of such assessment in the Federal Register.
[(10) Availability defined.--For purposes of this
subsection and subsections (f) and (h), the term
``available in fact to controlled countries'' includes
production or availability of any goods or technology
in any country--
[(A) from which the goods or technology is
not restricted for export to any controlled
country; or
[(B) in which such export restrictions are
determined by the Secretary to be ineffective.
For purposes of subparagraph (B), the mere inclusion of
goods or technology on a list of goods or technology
subject to bilateral or multilateral national security
export controls shall not alone constitute credible
evidence that a country provides an effective means of
controlling the export of such goods or technology to
controlled countries.
[(g) Indexing.--(1) In order to ensure that requirements for
validated licenses and other licenses authorizing multiple
exports are periodically removed as goods or technology subject
to such requirements becomes obsolete with respect to the
national security of the United States, regulations issued by
the Secretary may, where appropriate, provide for annual
increases in the performance levels of goods or technology
subject to any such licensing requirement. The regulations
issued by the Secretary shall establish as one criterion for
the removal of goods or technology from such license
requirements the anticipated needs of the military of
controlled countries. Any such goods or technology which no
longer meets the performance levels established by the
regulations shall be removed from the list established pursuant
to subsection (c) of this section unless, under such exceptions
and under such procedures as the Secretary shall prescribe, any
other department or agency of the United States objects to such
removal and the Secretary determines, on the basis of such
objection, that the goods or technology shall not be removed
from the list. The Secretary shall also consider, where
appropriate, removing site visitation requirements for goods
and technology which are removed from the list unless
objections described in this subsection are raised.
[(2)(A) In carrying out this subsection, the Secretary shall
conduct annual reviews of the performance levels of goods or
technology--
[(i) which are eligible for export under a
distribution license,
[(ii) below which exports to the People's Republic of
China require only notification of the governments
participating in the group known as the Coordinating
Committee, and
[(iii) below which no authority or permission to
export may be required under subsection (b)(2) or
(b)(3) of this section.
The Secretary shall make appropriate adjustments to such
performance levels based on these reviews.
[(B) In any case in which the Secretary receives a request
which--
[(i) is to revise the qualification requirements or
minimum thresholds of any goods eligible for export
under a distribution license, and
[(ii) is made by an exporter of such goods,
representatives of an industry which produces such
goods, or a technical advisory committee established
under subsection (h) of this section,
the Secretary, after consulting with other appropriate
Government agencies and technical advisory committees
established under subsection (h) of this section, shall
determine whether to make such revision, or some other
appropriate revision, in such qualification requirements or
minimum thresholds. In making this determination, the Secretary
shall take into account the availability of the goods from
sources outside the United States. The Secretary shall make a
determination on a request made under this subparagraph within
90 days after the date on which the request is filed. If the
Secretary's determination pursuant to such a request is to make
a revision, such revision shall be implemented within 120 days
after the date on which the request is filed and shall be
published in the Federal Register.
[(h) Technical Advisory Committees.--(1) Upon written request
by representatives of a substantial segment of any industry
which produces any goods or technology subject to export
controls under this section or being considered for such
controls because of their significance to the national security
of the United States, the Secretary shall appoint a technical
advisory committee for any such goods or technology which the
Secretary determines are difficult to evaluate because of
questions concerning technical matters, worldwide availability,
and actual utilization of production and technology, or
licensing procedures. Each such committee shall consist of
representatives of United States industry and Government,
including the Departments of Commerce, Defense, and State, the
intelligence community, and, in the discretion of the
Secretary, other Government departments and agencies. No person
serving on any such committee who is a representative of
industry shall serve on such committee for more than four
consecutive years.
[(2) Technical advisory committees established under
paragraph (1) shall advise and assist the Secretary, the
Secretary of Defense, and any other department, agency, or
official of the Government of the United States to which the
President delegates authority under this Act, with respect to
actions designed to carry out the policy set forth in section
3(2)(A) of this Act. Such committees, where they have expertise
in such matters, shall be consulted with respect to questions
involving (A) technical matters, (B) worldwide availability and
actual utilization of production technology, (C) licensing
procedures which affect the level of export controls applicable
to any goods or technology, (D) revisions of the control list
(as provided in subsection (c)(4)), including proposed
revisions of multilateral controls in which the United States
participates, (E) the issuance of regulations, and (F) any
other questions relating to actions designed to carry out the
policy set forth in section 3(2)(A) of this Act. Nothing in
this subsection shall prevent the Secretary or the Secretary of
Defense from consulting, at any time, with any person
representing industry or the general public, regardless of
whether such person is a member of a technical advisory
committee. Members of the public shall be given a reasonable
opportunity, pursuant to regulations prescribed by the
Secretary, to present evidence to such committees.
[(3) Upon request of any member of any such committee, the
Secretary may, if the Secretary determines it appropriate,
reimburse such member for travel, subsistence, and other
necessary expenses incurred by such member in connection with
the duties of such member.
[(4) Each such committee shall elect a chairman, and shall
meet at least every three months at the call of the chairman,
unless the chairman determines, in consultation with the other
members of the committee, that such a meeting is not necessary
to achieve the purposes of this subsection. Each such committee
shall be terminated after a period of 2 years, unless extended
by the Secretary for additional periods of 2 years. The
Secretary shall consult each such committee with respect to
such termination or extension of that committee.
[(5) To facilitate the work of the technical advisory
committees, the Secretary, in conjunction with other
departments and agencies participating in the administration of
this Act, shall disclose to each such committee adequate
information, consistent with national security, pertaining to
the reasons for the export controls which are in effect or
contemplated for the goods or technology with respect to which
that committee furnishes advice.
[(6) Whenever a technical advisory committee certifies to the
Secretary that goods or technology with respect to which such
committee was appointed have become available in fact, to
controlled countries, from sources outside the United States,
including countries which participate with the United States in
multilateral export controls, in sufficient quantity and of
comparable quality so that requiring a validated license for
the export of such goods or technology would be ineffective in
achieving the purpose set forth in subsection (a) of this
section, the technical advisory committee shall submit that
certification to the Congress at the same time the
certification is made to the Secretary, together with the
documentation for the certification. The Secretary shall
investigate the foreign availability so certified and, not
later than 90 days after the certification is made, shall
submit a report to the technical advisory committee and the
Congress stating that--
[(A) the Secretary has removed the requirement of a
validated license for the export of the goods or
technology, on account of the foreign availability,
[(B) the Secretary has recommended to the President
that negotiations be conducted to eliminate the foreign
availability, or
[(C) the Secretary has determined on the basis of the
investigation that the foreign availability does not
exist.
To the extent necessary, the report may be submitted on a
classified basis. In any case in which the Secretary has
recommended to the President that negotiations be conducted to
eliminate the foreign availability, the President shall
actively pursue such negotiations with the governments of the
appropriate foreign countries. If, within 6 months after the
Secretary submits such report to the Congress, the foreign
availability has not been eliminated, the Secretary may not,
after the end of that 6-month period, require a validated
license for the export of the goods or technology involved. The
President may extend the 6-month period described in the
preceding sentence for an additional period of 12 months if the
President certifies to the Congress that the negotiations
involved are progressing and that the absence of the export
control involved would prove detrimental to the national
security of the United States. After an agreement is reached
with a country pursuant to negotiations under this paragraph to
eliminate foreign availability of goods or technology, the
Secretary may not require a validated license for the export of
such goods or technology to that country.
[(i) Multilateral Export Controls.--Recognizing the
ineffectiveness of unilateral controls and the importance of
uniform enforcement measures to the effectiveness of
multilateral controls, the President shall enter into
negotiations with the governments participating in the group
known as the Coordinating Committee (hereinafter in this
subsection referred to as the ``Committee'') with a view toward
accomplishing the following objectives:
[(1) Enhanced public understanding of the Committee's
purpose and procedures, including publication of the
list of items controlled for export by agreement of the
Committee, together with all notes, understandings, and
other aspects of such agreement of the Committee, and
all changes thereto.
[(2) Periodic meetings of high-level representatives
of participating governments for the purpose of
coordinating export control policies and issuing policy
guidance to the Committee.
[(3) Strengthened legal basis for each government's
export control system, including, as appropriate,
increased penalties and statutes of limitations.
[(4) Harmonization of export control documentation by
the participating governments to verify the movement of
goods and technology subject to controls by the
Committee.
[(5) Improved procedures for coordination and
exchange of information concerning violations of the
agreement of the Committee.
[(6) Procedures for effective implementation of the
agreement through uniform and consistent
interpretations of export controls agreed to by the
governments participating in the Committee.
[(7) Coordination of national licensing and
enforcement efforts by governments participating in the
Committee, including sufficient technical expertise to
assess the licensing status of exports and to ensure
end-use verification.
[(8) More effective procedures for enforcing export
controls, including adequate training, resources, and
authority for enforcement officers to investigate and
prevent illegal exports.
[(9) Agreement to provide adequate resources to
enhance the functioning of individual national export
control systems and of the Committee.
[(10) Improved enforcement and compliance with the
agreement through elimination of unnecessary export
controls and maintenance of an effective control list.
[(11) Agreement to enhance cooperation among members
of the Committee in obtaining the agreement of
governments outside the Committee to restrict the
export of goods and technology on the International
Control List, to establish an ongoing mechanism in the
Committee to coordinate planning and implementation of
export control measures related to such agreements, and
to remove items from the International Control List if
such items continue to be available to controlled
countries or if the control of the items no longer
serves the common strategic objectives of the members
of the Committee.
For purposes of reviews of the International Control List, the
President may include as advisors of the United States
delegation to the Committee representatives of industry who are
knowledgeable with respect to the items being reviewed.
[(j) Commercial Agreements With Certain Countries.--(1) Any
United States firm, enterprise, or other nongovernmental entity
which enters into an agreement with any agency of the
government of a controlled country, that calls for the
encouragement of technical cooperation and that is intended to
result in the export from the United States to the other party
of unpublished technical data of United States origin, shall
report to the Secretary the agreement with such agency in
sufficient detail.
[(2) The provisions of paragraph (1) shall not apply to
colleges, universities, or other educational institutions.
[(k) Negotiations With Other Countries.--The Secretary of
State in consultation with the Secretary of Defense, the
Secretary of Commerce, and the heads of other appropriate
departments and agencies, shall be responsible for conducting
negotiations with other countries, including those countries
not participating in the group known as the Coordinating
Committee, regarding their cooperation in restricting the
export of goods and technology in order to carry out the policy
set forth in section 3(9) of this Act, as authorized by
subsection (a) of this section, including negotiations with
respect to which goods and technology should be subject to
multilaterally agreed export restrictions and what conditions
should apply for exceptions from those restrictions. In cases
where such negotiations produce agreements on export
restrictions comparable in practice to those maintained by the
Coordinating Committee, the Secretary shall treat exports,
whether by individual or multiple licenses, to countries party
to such agreements in the same manner as exports to members of
the Coordinating Committee are treated, including the same
manner as exports are treated under subsection (b)(2) of this
section and section 10(o) of this Act.
[(l) Diversion of Controlled Goods or Technology.--(1)
Whenever there is reliable evidence, as determined by the
Secretary, that goods or technology which were exported subject
to national security controls under this section to a
controlled country have been diverted to an unauthorized use or
consignee in violation of the conditions of an export license,
the Secretary for as long as that diversion continues--
[(A) shall deny all further exports, to or by the
party or parties responsible for that diversion or who
conspired in that diversion, of any goods or technology
subject to national security controls under this
section, regardless of whether such goods or technology
are available from sources outside the United States;
and
[(B) may take such additional actions under this Act
with respect to the party or parties referred to in
subparagraph (A) as the Secretary determines are
appropriate in the circumstances to deter the further
unauthorized use of the previously exported goods or
technology.
[(2) As used in this subsection, the term ``unauthorized
use'' means the use of United States goods or technology in the
design, production, or maintenance of any item on the United
States Munitions List, or the military use of any item on the
International Control List of the Coordinating Committee.
[(m) Goods Containing Controlled Parts and Components.--
Export controls may not be imposed under this section, or under
any other provision of law, on a good solely on the basis that
the good contains parts or components subject to export
controls under this section if such parts or components--
[(1) are essential to the functioning of the good,
[(2) are customarily included in sales of the good in
countries other than controlled countries, and
[(3) comprise 25 percent or less of the total value
of the good,
unless the good itself, if exported, would by virtue of the
functional characteristics of the good as a whole make a
significant contribution to the military potential of a
controlled country which would prove detrimental to the
national security of the United States.
[(n) Security Measures.--The Secretary and the Commissioner
of Customs, consistent with their authorities under section
12(a) of this Act, and in consultation with the Director of the
Federal Bureau of Investigation, shall provide advice and
technical assistance to persons engaged in the manufacture or
handling of goods or technology subject to export controls
under this section to develop security systems to prevent
violations or evasions of those export controls.
[(o) Recordkeeping.--The Secretary, the Secretary of Defense,
and any other department or agency consulted in connection with
a license application under this Act or a revision of a list of
goods or technology subject to export controls under this Act,
shall make and keep records of their respective advice,
recommendations, or decisions in connection with any such
license application or revision, including the factual and
analytical basis of the advice, recommendations, or decisions.
[(p) National Security Control Office.--To assist in carrying
out the policy and other authorities and responsibilities of
the Secretary of Defense under this section, there is
established in the Department of Defense a National Security
Control Office under the direction of the Under Secretary of
Defense Policy. The Secretary of Defense may delegate to that
office such of those authorities and responsibilities, together
with such ancillary functions, as the Secretary of Defense
considers appropriate.
[(q) Exclusion for Agricultural Commodities.--This section
does not authorize export controls on agricultural commodities,
including fats, oils, and animal hides and skins.
[foreign policy controls
[Sec. 6. (a) Authority.--(1) In order to carry out the policy
set forth in paragraph (2)(B), (7), (8), or (13) of section 3
of this Act, the President may prohibit or curtail the
exportation of any goods, technology, or other information
subject to the jurisdiction of the United States or exported by
any person subject to the jurisdiction of the United States, to
the extent necessary to further significantly the foreign
policy of the United States or to fulfill its declared
international obligations. The authority granted by this
subsection shall be exercised by the Secretary, in consultation
with the Secretary of State, the Secretary of Defense, the
Secretary of Agriculture, the Secretary of the Treasury, the
United States Trade Representative, and such other departments
and agencies as the Secretary considers appropriate, and shall
be implemented by means of export licenses issued by the
Secretary.
[(2) Any export control imposed under this section shall
apply to any transaction or activity undertaken with the intent
to evade that export control, even if that export control would
not otherwise apply to that transaction or activity.
[(3) Export controls maintained for foreign policy purposes
shall expire on December 31, 1979, or one year after
imposition, whichever is later, unless extended by the
President in accordance with subsections (b) and (f). Any such
extension and any subsequent extension shall not be for a
period of more than a year.
[(4) Whenever the Secretary denies any export license under
this subsection, the Secretary shall specify in the notice to
the applicant of the denial of such license that the license
was denied under the authority contained in this subsection,
and the reasons for such denial, with reference to the criteria
set forth in subsection (b) of this section. The Secretary
shall also include in such notice what, if any, modifications
in or restrictions on the goods or technology for which the
license was sought would allow such export to be compatible
with controls implemented under this section, or the Secretary
shall indicate in such notice which officers and employees of
the Department of Commerce who are familiar with the
application will be made reasonably available to the applicant
for consultation with regard to such modifications or
restrictions, if appropriate.
[(5) In accordance with the provisions of section 10 of this
Act, the Secretary of State shall have the right to review any
export license application under this section which the
Secretary of State requests to review.
[(6) Before imposing, expanding, or extending export controls
under this section on exports to a country which can use goods,
technology, or information available from foreign sources and
so incur little or no economic costs as a result of the
controls, the President should, through diplomatic means,
employ alternatives to export controls which offer
opportunities of distinguishing the United States from, and
expressing the displeasure of the United States with, the
specific actions of that country in response to which the
controls are proposed. Such alternatives include private
discussions with foreign leaders, public statements in
situations where private diplomacy is unavailable or not
effective, withdrawal of ambassadors, and reduction of the size
of the diplomatic staff that the country involved is permitted
to have in the United States.
[(b) Criteria.--(1) Subject to paragraph (2) of this
subsection, the President may impose, extend, or expand export
controls under this section only if the President determines
that--
[(A) such controls are likely to achieve the intended
foreign policy purpose, in light of other factors,
including the availability from other countries of the
goods or technology proposed for such controls, and
that foreign policy purpose cannot be achieved through
negotiations or other alternative means;
[(B) the proposed controls are compatible with the
foreign policy objectives of the United States and with
overall United States policy toward the country to
which exports are to be subject to the proposed
controls;
[(C) the reaction of other countries to the
imposition, extension, or expansion of such export
controls by the United States is not likely to render
the controls ineffective in achieving the intended
foreign policy purpose or to be counterproductive to
United States foreign policy interests;
[(D) the effect of the proposed controls on the
export performance of the United States, the
competitive position of the United States in the
international economy, the international reputation of
the United States as a supplier of goods and
technology, or on the economic well-being of individual
United States companies and their employees and
communities does not exceed the benefit to United
States foreign policy objectives; and
[(E) the United States has the ability to enforce the
proposed controls effectively.
[(2) With respect to those export controls in effect under
this section on the date of the enactment of the Export
Administration Amendments Act of 1985, the President, in
determining whether to extend those controls, as required by
subsection (a)(3) of this section, shall consider the criteria
set forth in paragraph (1) of this subsection and shall
consider the foreign policy consequences of modifying the
export controls.
[(c) Consultation With Industry.--The Secretary in every
possible instance shall consult with and seek advice from
affected United States industries and appropriate advisory
committees established under section 135 of the Trade Act of
1974 before imposing any export control under this section.
Such consultation and advice shall be with respect to the
criteria set forth in subsection (b)(1) and such other matters
as the Secretary considers appropriate.
[(d) Consultation With Other Countries.--When imposing export
controls under this section, the President shall, at the
earliest appropriate opportunity, consult with the countries
with which the United States maintains export controls
cooperatively, and with such other countries as the President
considers appropriate, with respect to the criteria set forth
in subsection (b)(1) and such other matters as the President
considers appropriate.
[(e) Alternative Means.--Before resorting to the imposition
of export controls under this section, the President shall
determine that reasonable efforts have been made to achieve the
purposes of the controls through negotiations or other
alternative means.
[(f) Consultation With the Congress.--(1) The president may
impose or expand export controls under this section, or extend
such controls as required by subsection (a)(3) of this section,
only after consultation with the Congress, including the
Committee on Foreign Affairs of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate.
[(2) The President may not impose, expand, or extend export
controls under this section until the President has submitted
to the Congress a report--
[(A) specifying the purpose of the controls;
[(B) specifying the determinations of the President
(or, in the case of those export controls described in
subsection (b)(2), the considerations of the President)
with respect to each of the criteria set forth in
subsection (b)(1), the bases for such determinations
(or considerations), and any possible adverse foreign
policy consequences of the controls;
[(C) describing the nature, the subjects, and the
results of, or the plans for, the consultation with
industry pursuant to subsection (c) and with other
countries pursuant to subsection (d);
[(D) specifying the nature and results of any
alternative means attempted under subsection (e), or
the reasons for imposing, expanding, or extending the
controls without attempting any such alternative means;
and
[(E) describing the availability from other countries
of goods or technology comparable to the goods or
technology subject to the proposed export controls, and
describing the nature and results of the efforts made
pursuant to subsection (h) to secure the cooperation of
foreign governments in controlling the foreign
availability of such comparable goods or technology.
Such report shall also indicate how such controls will further
significantly the foreign policy of the United States or will
further its declared international obligations.
[(3) To the extent necessary to further the effectiveness of
the export controls portions of a report required by paragraph
(2) may be submitted to the Congress on a classified basis, and
shall be subject to the provisions of section 12(c) of this
Act.
[(4) In the case of export controls under this section which
prohibit or curtail the export of any agricultural commodity, a
report submitted pursuant to paragraph (2) shall be deemed to
be the report required by section 7(g)(3)(A) of this Act.
[(5) In addition to any written report required, under this
section, the Secretary, not less frequently than annually,
shall present in oral testimony before the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committe on Foreign Affairs of the House of Representatives a
report on policies and actions taken by the Government to carry
out the provisions of this section.
[(g) Exclusion for Medicine and Medical Supplies and for
Certain Food Exports.--This section does not authorize export
controls on medicine or medical supplies. This section also
does not authorize export controls on donations of goods
(including, but not limited to, food, educational materials,
seeds and hand tools, medicines and medical supplies, water
resources equipment, clothing and shelter materials, and basic
household supplies) that are intended to meet basic human
needs. Before export controls on food are imposed, expanded, or
extended under this section, the Secretary shall notify the
Secretary of State in the case of export controls applicable
with respect to any developed country and shall notify the
Administrator of the Agency for International Development in
the case of export controls applicable with respect to any
developing country. The Secretary of State with respect to
developed countries, and the Administrator with respect to
developing countries, shall determine whether the proposed
export control on food would cause measurable malnutrition and
shall inform the Secretary of that determination. If the
Secretary is informed that the proposed export controls on food
would cause measurable malnutrition, then those controls may
not be imposed, expanded, or extended, as the case may be,
unless the President determines that those controls are
necessary to protect the national security interest of the
United States, or unless the President determines that
arrangements are insufficient to ensure that the food will
reach those most in need. Each such determination by the
Secretary of State or the Administrator of the Agency for
International Development, and any such determination by the
President, shall be reported to the Congress, together with a
statement of the reasons for that determination. It is the
intent of Congress that the President not impose export
controls under this section on any goods or technology if he
determines that the principal effect of the export of such
goods or technology would be to help meet basic human needs.
The subsection shall not be construed to prohibit the President
from imposing restrictions on the export of medicine or medical
supplies or of food under the International Emergency Economic
Powers Act. This subsection shall not apply to any export
control on medicine, medical supplies, or food, except for
donations, which is in effect on the date of the enactment of
the Export Administration Amendments Act of 1985.
Notwithstanding the proceding provisions of this subsection,
the President may impose export controls under this section on
medicine, medical supplies, food, and donations of goods in
order to carry out the policy set forth in paragraph (13) of
section 3 of this Act.
[(h) Foreign Availability.--(1) In applying export controls
under this section, the President shall take all feasible steps
to initiate and conclude negotiations with appropriate foreign
governments for the purpose of securing the cooperation of such
foreign governments in controlling the export to countries and
consigness to which the United States export controls apply of
any goods or technology comparable to goods or technology
controlled under this section.
[(2) Before extending any export control pursuant to
subsection (a)(3) of this section, the President shall evaluate
the results of his actions under paragraph (1) of this
subsection and shall include the results of that evaluation in
his report to the Congress pursuant to subsection (f) of this
section.
[(3) If, within 6 months after the date on which export
controls under this section are imposed or expanded, or within
6 months after the date of the enactment of the Export
Administration Amendments Act of 1985 in the case of export
controls in effect on such date of enactment, the President's
efforts under paragraph (1) are not successful in securing the
cooperation of foreign governments described in paragraph (1)
with respect to those export controls, the Secretary shall
thereafter take into account the foreign availability of the
goods or technology subject to the export controls. If the
Secretary affirmatively determines that a good or technology
subject to the export controls is available in sufficient
quantity and comparable quality from sources outside the United
States to countries subject to the export controls so that
denial of an export license would be ineffective in achieving
purposes of the controls, then the Secretary shall, during the
period of such foreign availability, approve any license
application which is required for the export of the good or
technology and which meets all requirements for such a license.
The Secretary shall remove the good or technology from the list
established pursuant to subsection (1) of this section if the
Secretary determines that such action is appropriate.
[(4) In making a determination of foreign availability under
paragraph (3) of this subsection, the Secretary shall follow
the procedures set forth in section 5(f)(3) of this Act.
[(i) International Obligations.--The provisions of
subsections (b), (c), (d), (e), (g), and (h) shall not apply in
any case in which the President exercises the authority
contained in this section to impose export controls, or to
approve or deny export license applications, in order to
fulfill obligations of the United States pursuant to treaties
to which the United States is a party or pursuant to other
international agreements.
[(j) Countries Supporting International Terrorism.--(1) A
validated license shall be required for the export of goods or
technology to a country if the Secretary of State has made the
following determinations:
[(A) The government of such country has repeatedly
provided support for acts of international terrorism.
[(B) The export of such goods or technology could
make a significant contribution to the military
potential of such country, including its military
logistics capability, or could enhance the ability of
such country to support acts of international
terrorism.
[(2) The Secretary and the Secretary of State shall notify
the Committee on Foreign Affairs of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs and the Committee on Foreign Relations of the
Senate at least 30 days before issuing any validated license
required by paragraph (1).
[(3) Each determination of the Secretary of State under
paragraph (1)(A), including each determination in effect on the
date of the enactment of the Antiterrorism and Arms Export
Amendments Act of 1989, shall be published in the Federal
Register.
[(4) A determination made by the Secretary of State under
paragraph (1)(A) may not be rescinded unless the President
submits to the Speaker of the House of Representatives and the
chairman of the Committee on Banking, Housing, and Urban
Affairs and the chairman of the Committee on Foreign Relations
of the Senate--
[(A) before the proposed rescission would take
effect, a report certifying that--
[(i) there has been a fundamental change in
the leadership and policies of the government
of the country concerned;
[(ii) that government is not supporting acts
of international terrorism; and
[(iii) that government has provided
assurances that it will not support acts of
international terrorism in the future; or
[(B) at least 45 days before the proposed rescission
would take effect, a report justifying the rescission
and certifying that--
[(i) the government concerned has not
provided any support for international
terrorism during the preceding 6-month period;
and
[(ii) the government concerned has provided
assurances that it will not support acts of
international terrorism in the future.
[(5)(A) As used in paragraph (1), the term
``repeatedly provided support for acts of international
terrorism'' shall include the recurring use of any part
of the territory of the country as a sanctuary for
terrorists or terrorist organizations.
[(B) In this paragraph--
[(i) the term ``territory of a country''
means the land, waters, and airspace of the
country; and
[(ii) the term ``sanctuary'' means an area in
the territory of a country--
[(I) that is used by a terrorist or
terrorist organization--
[(aa) to carry out terrorist
activities, including training,
financing, and recruitment; or
[(bb) as a transit point; and
[(II) the government of which
expressly consents to, or with
knowledge, allows, tolerates, or
disregards such use of its territory.
[(6) The Secretary and the Secretary of State shall
include in the notification required by paragraph (2)--
[(A) a detailed description of the goods or
services to be offered, including a brief
description of the capabilities of any article
for which a license to export is sought;
[(B) the reasons why the foreign country or
international organization to which the export
or transfer is proposed to be made needs the
goods or services which are the subject of such
export or transfer and a description of the
manner in which such country or organization
intends to use such articles, services, or
design and construction services;
[(C) the reasons why the proposed export or
transfer is in the national interest of the
United States;
[(D) an analysis of the impact of the
proposed export or transfer on the military
capabilities of the foreign country or
international organization to which such export
or transfer would be made;
[(E) an analysis of the manner in which the
proposed export would affect the relative
military strengths of countries in the region
to which the goods or services which are the
subject of such export would be delivered and
whether other countries in the region have
comparable kinds and amounts of articles,
services, or design and construction services;
and
[(F) an analysis of the impact of the
proposed export or transfer on the United
States relations with the countries in the
region to which the goods or services which are
the subject of such export would be delivered.
[(k) Negotiations With Other Countries.--
[(1) Countries participating in certain agreements.--
The Secretary of State, in consultation with the
Secretary, the Secretary of Defense, and the heads of
other appropriate departments and agencies, shall be
responsible for conducting negotiations with those
countries participating in the groups known as the
Coordinating Committee, the Missile Technology Control
Regime, the Australia Group, and the Nuclear Suppliers'
Group, regarding their cooperation in restricting the
export of goods and technology in order to carry out--
[(A) the policy set forth in section 3(2)(B)
of this Act, and
[(B) United States policy opposing the
proliferation of chemical, biological, nuclear,
and other weapons and their delivery systems,
and effectively restricting the export of dual
use components of such weapons and their
delivery systems, in accordance with this
subsection and subsections (a) and (l).
Such negotiations shall cover, among other issues,
which goods and technology should be subject to
multilaterally agreed export restrictions, and the
implementation of the restrictions consistent with the
principles identified in section 5(b)(2)(C) of this
Act.
[(2) Other countries.--The Secretary of State, in
consultation with the Secretary, the Secretary of
Defense, and the heads of other appropriate departments
and agencies, shall be responsible for conducting
negotiations with countries and groups of countries not
referred to in paragraph (1) regarding their
cooperation in restricting the export of goods and
technology consistent with purposes set forth in
paragraph (1). In cases where such negotiations produce
agreements on export restrictions that the Secretary,
in consultation with the Secretary of State and the
Secretary of Defense, determines to be consistent with
the principles identified in section 5(b)(2)(C) of this
Act, the Secretary may treat exports, whether by
individual or multiple licenses, to countries party to
such agreements in the same manner as exports are
treated to countries that are MTCR adherents.
[(3) Review of determinations.--The Secretary shall
annually review any determination under paragraph (2)
with respect to a country. For each such country which
the Secretary determines is not meeting the
requirements of an effective export control system in
accordance with section 5(a)(4)(D), the Secretary shall
restrict or eliminate any preferential licensing
treatment for exports to that country provided under
this subsection.
[(l) Missile Technology.--
[(1) Determination of controlled items.--The
Secretary, in consultation with the Secretary of State,
the Secretary of Defense, and the heads of other
appropriate departments and agencies--
[(A) shall establish and maintain, as part of
the control list established under this
section, a list of all dual use goods and
technology on the MTCR Annex; and
[(B) may include, as part of the control list
established under this section, goods and
technology that would provide a direct and
immediate impact on the development of missile
delivery systems and are not included in the
MTCR Annex but which the United States is
proposing to the other MTCR adherents to have
included in the MTCR Annex.
[(2) Requirement of individual validated licenses.--
The Secretary shall require an individual validated
license for--
[(A) any export of goods or technology on the
list established under paragraph (1) to any
country; and
[(B) any export of goods or technology that
the exporter knows is destined for a project or
facility for the design, development, or
manufacture of a missile in a country that is
not an MTCR adherent.
[(3) Policy of denial of licenses.--(A) Licenses
under paragraph (2) should in general be denied if the
ultimate consignee of the goods or technology is a
facility in a country that is not an adherent to the
Missile Technology Control Regime and the facility is
designed to develop or build missiles.
[(B) Licenses under paragraph (2) shall be denied if
the ultimate consignee of the goods or technology is a
facility in a country the government of which has been
determined under subsection (j) to have repeatedly
provided support for acts of international terrorism.
[(4) Consultation with other departments.--(A) A
determination of the Secretary to approve an export
license under paragraph (2) for the export of goods or
technology to a country of concern regarding missile
proliferation may be made only after consultation with
the Secretary of Defense and the Secretary of State for
a period of 20 days. The countries of concern referred
to in the preceding sentence shall be maintained on a
classified list by the Secretary of State, in
consultation with the Secretary and the Secretary of
Defense.
[(B) Should the Secretary of Defense disagree with
the determination of the Secretary to approve an export
license to which subparagraph (A) applies, the
Secretary of Defense shall so notify the Secretary
within the 20 days provided for consultation on the
determination. The Secretary of Defense shall at the
same time submit the matter to the President for
resolution of the dispute. The Secretary shall also
submit the Secretary's recommendation to the President
on the license application.
[(C) The President shall approve or disapprove the
export license application within 20 days after
receiving the submission of the Secretary of Defense
under subparagraph (B).
[(D) Should the Secretary of Defense fail to notify
the Secretary within the time period prescribed in
subparagraph (B), the Secretary may approve the license
application without awaiting the notification by the
Secretary of Defense. Should the President fail to
notify the Secretary of his decision on the export
license application within the time period prescribed
in subparagraph (C), the Secretary may approve the
license application without awaiting the President's
decision on the license application.
[(E) Within 10 days after an export license is issued
under this subsection, the Secretary shall provide to
the Secretary of Defense and the Secretary of State the
license application and accompanying documents issued
to the applicant, to the extent that the relevant
Secretary indicates the need to receive such
application and documents.
[(5) Information sharing.--The Secretary shall
establish a procedure for information sharing with
appropriate officials of the intelligence community, as
determined by the Director of Central Intelligence, and
other appropriate Government agencies, that will ensure
effective monitoring of transfers of MTCR equipment or
technology and other missile technology.
[(m) Chemical and Biological Weapons.--
[(1) Establishment of list.--The Secretary, in
consultation with the Secretary of State, the Secretary
of Defense, and the heads of other appropriate
departments and agencies, shall establish and maintain,
as part of the list maintained under this section, a
list of goods and technology that would directly and
substantially assist a foreign government or group in
acquiring the capability to develop, produce,
stockpile, or deliver chemical or biological weapons,
the licensing of which would be effective in barring
acquisition or enhancement of such capability.
[(2) Requirement for validated licenses.--The
Secretary shall require a validated license for any
export of goods or technology on the list established
under paragraph (1) to any country of concern.
[(3) Countries of concern.--For purposes of paragraph
(2), the term ``country of concern'' means any country
other than--
[(A) a country with whose government the
United States has entered into a bilateral or
multilateral arrangement for the control of
goods or technology on the list established
under paragraph (1); and
[(B) such other countries as the Secretary of
State, in consultation with the Secretary and
the Secretary of Defense, shall designate
consistent with the purposes of the Chemical
and Biological Weapons Control and Warfare
Elimination Act of 1991.
[(n) Crime Control Instruments.--(1) Crime control and
detection instruments and equipment shall be approved for
export by the Secretary only pursuant to a validated export
license. Notwithstanding any other provision of this Act--
[(A) any determination of the Secretary of what goods
or technology shall be included on the list established
pursuant to subsection (1) of this section as a result
of the export restrictions imposed by this subsection
shall be made with the concurrence of the Secretary of
State, and
[(B) any determination of the Secretary to approve or
deny an export license application to export crime
control or detection instruments or equipment shall be
made in concurrence with the recommendations of the
Secretary of State submitted to the Secretary with
respect to the application pursuant to section 10(e) of
this Act,
except that, if the Secretary does not agree with the Secretary
of State with respect to any determination under subparagraph
(A) or (B), the matter shall be referred to the President for
resolution.
[(2) The provisions of this subsection shall not apply with
respect to exports to countries which are members of the North
Atlantic Treaty Organization or to Japan, Australia, or New
Zealand, or to such other countries as the President shall
designate consistent with the purposes of this subsection and
section 502B of the Foreign Assistance Act of 1961.
[(o) Control List.--The Secretary shall establish and
maintain, as part of the control list, a list of any goods or
technology subject to export controls under this section, and
the countries to which such controls apply. The Secretary shall
clearly identify on the control list which goods or technology,
and which countries or destinations, are subject to which types
of controls under this section. Such list shall consist of
goods and technology identified by the Secretary of State, with
the concurrence of the Secretary. If the Secretary and the
Secretary of State are unable to agree on the list, the matter
shall be referred to the President. Such list shall be reviewed
not less frequently than every three years in the case of
controls maintained cooperatively with other countries, and
annually in the case of all other controls, for the purpose of
making such revisions as are necessary in order to carry out
this section. During the course of such review, an assessment
shall be made periodically of the availability from sources
outside the United States, or any of its territories or
possessions, of goods and technology comparable to those
controlled for export from the United States under this
section.
[(p) Effect on Existing Contracts and Licenses.--The
President may not, under this section, prohibit or curtail the
export or reexport of goods, technology, or other information--
[(1) in performance of a contract or agreement
entered into before the date on which the President
reports to the Congress, pursuant to subsection (f) of
this section, his intention to impose controls on the
export or reexport of such goods, technology, or other
information, or
[(2) under a validated license or other authorization
issued under this Act,
unless and until the President determines and certifies to the
Congress that--
[(A) a breach of the peace poses a serious and direct
threat to the strategic interest of the United States,
[(B) the prohibition or curtailment of such
contracts, agreements, licenses, or authorizations will
be instrumental in remedying the situation posing the
direct threat, and
[(C) the export controls will continue only so long
as the direct threat persists.
[(q) Extension of Certain Controls.--Those export controls
imposed under this section with respect to South Africa which
were in effect on February 28, 1982, and ceased to be effective
on March 1, 1982, September 15, 1982, or January 20, 1983,
shall become effective on the date of the enactment of this
subsection, and shall remain in effect until 1 year after such
date of enactment. At the end of that 1-year period, any of
those controls made effective by this subsection may be
extended by the President in accordance with subsections (b)
and (f) of this section.
[(r) Expanded Authority to Impose Controls.--(1) In any case
in which the President determines that it is necessary to
impose controls under this section without any limitation
contained in subsection (c), (d), (e), (g), (h), or (m) of this
section, the President may impose those controls only if the
President submits that determination to the Congress, together
with a report pursuant to subsection (f) of this section with
respect to the proposed controls, and only if a law is enacted
authorizing the imposition of those controls. If a joint
resolution authorizing the imposition of those controls is
introduced in either House of Congress within 30 days after the
Congress receives the determination and report of the
President, that joint resolution shall be referred to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and to the appropriate committee of the House of
Representatives. If either such committee has not reported the
joint resolution at the end of 30 days after its referral, the
committee shall be discharged from further consideration of the
joint resolution.
[(2) For purposes of this subsection, the term ``joint
resolution'' means a joint resolution the matter after the
resolving clause of which is as follows: ``That the Congress,
having received on a determination of the President under
section 6(o)(1) of the Export Administration Act of 1979 with
respect to the export controls which are set forth in the
report submitted to the Congress with that determination,
authorizes the President to impose those export controls.'',
with the date of the receipt of the determination and report
inserted in the blank.
[(3) In the computation of the periods of 30 days referred to
in paragraph (1), there shall be excluded the days on which
either House of Congress is not in session because of an
adjournment of more than 3 days to a day certain or because of
an adjournment of the Congress sine die.
[(s) Spare Parts.--(1) At the same time as the President
imposes or expands export controls under this section, the
President shall determine whether such export controls will
apply to replacement parts for parts in goods subject to such
export controls.
[(2) With respect to export controls imposed under this
section before the date of the enactment of this subsection, an
individual validated export license shall not be required for
replacement parts which are exported to replace on a one-for-
one basis parts that were in a good that was lawfully exported
from the United States, unless the President determines that
such a license should be required for such parts.
[short supply controls
[Sec. 7. (a) Authority.--(1) In order to carry out the policy
set forth in section 3(2)(C) of this Act, the President may
prohibit or curtail the export of any goods subject to the
jurisdiction of the United States or exported by any person
subject to the jurisdiction of the United States. In curtailing
exports to carry out the policy set forth in section 3(2)(C) of
this Act, the President shall allocate a portion of export
licenses on the basis of factors other than a prior history of
exportation. Such factors shall include the extent to which a
country engages in equitable trade practices with respect to
United States goods and treats the United States equitably in
times of short supply.
[(2) Upon imposing quantitative restrictions on exports of
any goods to carry out the policy set forth in section 3(2)(C)
of this Act, the Secretary shall include in a notice published
in the Federal Register with respect to such restrictions an
invitation to all interested parties to submit written comments
within 15 days from the date of publication on the impact of
such restrictions and the method of licensing used to implement
them.
[(3) In imposing export controls under this section, the
President's authority shall include, but not be limited to, the
imposition of export license fees.
[(b) Monitoring.--(1) In order to carry out the policy set
forth in section 3(2)(C) of this Act, the Secretary shall
monitor exports, and contracts for exports, of any good (other
than a commodity which is subject to the reporting requirements
of section 812 of the Agricultural Act of 1970) when the volume
of such exports in relation to domestic supply contributes, or
may contribute, to an increase in domestic prices or a domestic
shortage, and such price increase or shortage has, or may have,
a serious adverse impact on the economy or any sector thereof.
Any such monitoring shall commence at a time adequate to assure
that the monitoring will result in a data base sufficient to
enable policies to be developed, in accordance with section
3(2)(C) of this Act, to mitigate a short supply situation or
serious inflationary price rise or, if export controls are
needed, to permit imposition of such controls in a timely
manner. Information which the Secretary requires to be
furnished in effecting such monitoring shall be confidential,
except as provided in paragraph (2) of this subsection.
[(2) The results of such monitoring shall, to the extent
practicable, be aggregated and included in weekly reports
setting forth, with respect to each item monitored, actual and
anticipated exports, the destination by country, and the
domestic and worldwide price, supply, and demand. Such reports
may be made monthly if the Secretary determines that there is
insufficient information to justify weekly reports.
[(3) The Secretary shall consult with the Secretary of Energy
to determine whether monitoring or export controls under this
section are warranted with respect to exports of facilities,
machinery, or equipment normally and principally used, or
intended to be used, in the production, conversion, or
transportation of fuels and energy (except nuclear energy),
including, but not limited to, drilling rigs, platforms, and
equipment; petroleum refineries, natural gas processing,
liquefaction, and gasification plants; facilities for
production of synthetic natural gas or synthetic crude oil; oil
and gas pipelines, pumping stations, and associated equipment;
and vessels for transporting oil, gas, coal, and other fuels.
[(c) Petitions for Monitoring or Controls.--(1)(A) any
entity, including a trade association, firm, or certified or
recognized union or group of workers, that is representative of
an industry or a substantial segment of an industry that
processes metallic materials capable of being recycled may
transmit a written petition to the Secretary requesting the
monitoring of exports or the imposition of export controls, or
both, with respect to any such material, in order to carry out
the policy set forth in section 3(2)(C) of this Act.
[(B) Each petition shall be in such form as the Secretary
shall prescribe and shall contain information in support of the
action requested. The petition shall include any information
reasonably available to the petitioner indicating that each of
the criteria set forth in paragraph (3)(A) of this subsection
is satisfied.
[(2) Within 15 days after receipt of any petition described
in paragraph (1), the Secretary shall publish a notice in the
Federal Register. The notice shall--
[(A) include the name of the material that is the
subject of the petition,
[(B) include the Schedule B number of the material as
set forth in the Statistical Classification of Domestic
and Foreign Commodities Exported from the United
States,
[(C) indicate whether the petitioner is requesting
that controls or monitoring, or both, be imposed with
respect to the exportation of such material, and
[(D) provide that interested persons shall have a
period of 30 days beginning on the date of publication
of such notice to submit to the Secretary written data,
views or arguments, with or without opportunity for
oral presentation, with respect to the matter involved.
At the request of the petitioner or any other entity described
in paragraph (1)(A) with respect to the material that is the
subject of the petition, or at the request of any entity
representative of producers or exporters of such material, the
Secretary shall conduct public hearings with respect to the
subject of the petition, in which case the 30-day period may be
extended to 45 days.
[(3)(A) Within 45 days after the end of the 30- or 45-day
period described in paragraph (2), as the case may be, the
Secretary shall determine whether to impose monitoring or
controls, or both, on the export of the material that is the
subject of the petition, in order to carry out the policy set
forth in section 3(2)(C) of this Act. In making such
determination, the Secretary shall determine whether--
[(i) there has been a significant increase, in
relation to a specific period of time, in exports of
such material in relation to domestic supply and
demand;
[(ii) there has been a significant increase in the
domestic price of such material or a domestic shortage
of such material relative to demand;
[(iii) exports of such material are as important as
any other cause of a domestic price increase or
shortage relative to demand found under clause (ii);
[(iv) a domestic price increase or shortage relative
to demand found under clause (ii) has significantly
adversely affected or may significantly adversely
affect the national economy or any sector thereof,
including a domestic industry; and
[(v) monitoring or controls, or both, are necessary
in order to carry out the policy set forth in section
3(2)(C) of this Act.
[(B) The Secretary shall publish in the Federal Register a
detailed statement of the reasons for the Secretary's
determination pursuant to subparagraph (A) of whether to impose
monitoring or controls, or both, including the findings of fact
in support of that determination.
[(4) Within 15 days after making a determination under
paragraph (3) to impose monitoring or controls on the export of
a material, the Secretary shall publish in the Federal Register
proposed regulations with respect to such monitoring or
controls. Within 30 days after the publication of such proposed
regulations, and after considering any public comments on the
proposed regulations, the Secretary shall publish and implement
final regulations with respect to such monitoring or controls.
[(5) For purposes of publishing notices in the Federal
Register and scheduling public hearings pursuant to this
subsection, the Secretary may consolidate petitions, and
responses to such petitions which involve the same or related
materials.
[(6) If a petition with respect to a particular material or
group of materials has been considered in accordance with all
the procedures prescribed in this subsection, the Secretary may
determine, in the absence of significantly changed
circumstances, that any other petition with respect to the same
material or group of materials which is filed within 6 months
after the consideration of the prior petition has been
completed does not merit complete consideration under this
subsection.
[(7) The procedures and time limits set forth in this
subsection with respect to a petition filed under this
subsection shall take precedence over any review undertaken at
the initiative of the Secretary with respect to the same
subject as that of the petition.
[(8) The Secretary may impose monitoring or controls, on a
temporary basis, on the export of a metallic material after a
petition is filed under paragraph (1)(A) with respect to that
material but before the Secretary makes a determination under
paragraph (3) with respect to that material only if--
[(A) the failure to take such temporary action would
result in irreparable harm to the entity filing the
petition, or to the national economy or segment
thereof, including a domestic industry, and
[(B) the Secretary considers such action to be
necessary to carry out the policy set forth in section
3(2)(C) of this Act.
[(9) The authority under this subsection shall not be
construed to affect the authority of the Secretary under any
other provision of this Act, except that if the Secretary
determines, on the Secretary's own initiative, to impose
monitoring or controls, or both, on the export of metallic
materials capable of being recycled, under the authority of
this section, the Secretary shall publish the reasons for such
action in accordance with paragraph (3) (A) and (B) of this
subsection.
[(10) Nothing contained in this subsection shall be construed
to preclude submission on a confidential basis to the Secretary
of information relevant to a decision to impose or remove
monitoring or controls under the authority of this Act, or to
preclude consideration of such information by the Secretary in
reaching decisions required under this subsection. The
provisions of this paragraph shall not be construed to affect
the applicability of section 552(b) of title 5, United States
Code.
[(d) Domestically Produced Crude Oil.--(1) Notwithstanding
any other provision of this Act and notwithstanding subsection
(u) of section 28 of the Mineral Leasing Act of 1920 (30 U.S.C.
185), no domestically produced crude oil transported by
pipeline over right-of-way granted pursuant to section 203 of
the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1652)
(except any such crude oil which (A) is exported to an adjacent
foreign country to be refined and consumed therein in exchange
for the same quantity of crude oil being exported from that
country to the United States; such exchange must result through
convenience or increased efficiency of transportation in lower
prices for consumers of petroleum products in the United States
as described in paragraph (2)(A)(ii) of this subsection, (B) is
temporarily exported for convenience or increased efficiency of
transportation across parts of an adjacent foreign country and
reenters the United States, or (C) is transported to Canada, to
be consumed therein, in amounts not to exceed an annual average
of 50,000 barrels per day, in addition to exports under
subparagraphs (A) and (B), except that any ocean transportation
of such oil shall be by vessels documented under section 12106
of title 46, United States Code) may be exported from the
United States, or any of its territories and possessions,
subject to paragraph (2) of this subsection.
[(2) Crude oil subject to the prohibition contained in
paragraph (1) may be exported only if--
[(A) the President so recommends to the Congress
after making and publishing express findings that
exports of such crude oil, including exchanges--
[(i) will not diminish the total quantity or
quality of petroleum refined within, stored
within, or legally committed to be transported
to and sold within the United States;
[(ii) will, within 3 months following the
initiation of such exports or exchanges, result
in (I) acquisition costs to the refiners which
purchase the imported crude oil being lower
than the acquisition costs such refiners would
have to pay for the domestically produced oil
in the absence of such an export or exchange,
and (II) not less than 75 percent of such
savings in costs being reflected in wholesale
and retail prices of products refined from such
imported crude oil;
[(iii) will be made only pursuant to
contracts which may be terminated if the crude
oil suppliers of the United States are
interrupted, threatened, or diminished;
[(iv) are clearly necessary to protect the
national interest; and
[(v) are in accordance with the provisions of
this Act; and
[(B) the President includes such findings in his
recommendation to the Congress and the Congress, within
60 days after receiving that recommendation, agrees to
a joint resolution which approves such exports on the
basis of those findings, and which is thereafter
enacted into law.
[(3) Notwithstanding any other provision of this section or
any other provision of law, including subsection (u) of section
28 of the Mineral Leasing Act of 1920, the President may export
oil to any country pursuant to a bilateral international oil
supply agreement entered into by the United States with such
nation before June 25, 1979, or to any country pursuant to the
International Emergency Oil Sharing Plan of the International
Energy Agency.
[(e) Refined Petroleum Products.--(1) In any case in which
the President determines that it is necessary to impose export
controls on refined petroleum products in order to carry out
the policy set forth in section 3(2)(C) of this Act, the
President shall notify the Congress of that determination. The
President shall also notify the Congress if and when he
determines that such export controls are no longer necessary.
During any period in which a determination that such export
controls are necessary is in effect, no refined petroleum
product may be exported except pursuant to an export license
specifically authorizing such export. Not later than 5 days
after an application for a license to export any refined
petroleum product or residual fuel oil is received, the
Secretary shall notify the Congress of such application,
together with the name of the exporter, the destination of the
proposed export, and the amount and price of the proposed
export. Such notification shall be made to the chairman of the
Committee on Foreign Affairs of the House of Representatives
and the chairman of the Committee on Banking, Housing, and
Urban Affairs of the Senate.
[(2) The Secretary may not grant such license during the 30-
day period beginning on the date on which notification to the
Congress under paragraph (1) is received, unless the President
certifies in writing to the Speaker of the House of
Representatives and the President pro tempore of the Senate
that the proposed export is vital to the national interest and
that a delay in issuing the license would adversely affect that
interest.
[(3) This subsection shall not apply to (A) any export
license application for exports to a country with respect to
which historical export quotas established by the Secretary on
the basis of past trading relationships apply, or (B) any
license application for exports to a country if exports under
the license would not result in more than 250,000 barrels of
refined petroleum products being exported from the United
States to such country in any fiscal year.
[(4) For purposes of this subsection, ``refined petroleum
product'' means gasoline, kerosene, distillates, propane or
butane gas, diesel fuel, and residual fuel oil refined within
the United States or entered for consumption within the United
States.
[(5) The Secretary may extend any time period prescribed in
section 10 of this Act to the extent necessary to take into
account delays in action by the Secretary on a license
application on account of the provisions of this subsection.
[(f) Certain Petroleum Products.--Petroleum products refined
in United States Foreign Trade Zones, or in the United States
Territory of Guam, from foreign crude oil shall be excluded
from any quantitative restrictions imposed under this section
except that, if the Secretary finds that a product is in short
supply, the Secretary may issue such regulations as may be
necessary to limit exports.
[(g) Agricultural Commodities.--(1) The authority conferred
by this section shall not be exercised with respect to any
agricultural commodity, including fats and oils or animal hides
or skins, without the approval of the Secretary of Agriculture.
The Secretary of Agriculture shall not approve the exercise of
such authority with respect to any such commodity during any
period for which the supply of such commodity is determined by
the Secretary of Agriculture to be in excess of the
requirements of the domestic economy except to the extent the
President determines that such exercise of authority is
required to carry out the policies set forth in subparagraph
(A) or (B) of paragraph (2) of section 3 of this Act. The
Secretary of Agriculture shall, by exercising the authorities
which the Secretary of Agriculture has under other applicable
provisions of law, collect data with respect to export sales of
animal hides and skins.
[(2) Upon approval of the Secretary, in consultation with the
Secretary of Agriculture, agricultural commodities purchased by
or for use in a foreign country may remain in the United States
for export at a later date free from any quantitative
limitations on export which may be imposed to carry out the
policy set forth in section 3(2)(C) of this Act subsequent to
such approval. The Secretary may not grant such approval unless
the Secretary receives adequate assurance and, in conjunction
with the Secretary of Agriculture, finds (A) that such
commodities will eventually be exported, (B) that neither the
sale nor export thereof will result in an excessive drain of
scarce materials and have a serious domestic inflationary
impact, (C) that storage of such commodities in the United
States will not unduly limit the space available for storage of
domestically owned commodities, and (D) that the purpose of
such storage is to establish a reserve of such commodities for
later use, not including resale to or use by another country.
The Secretary may issue such regulations as may be necessary to
implement this paragraph.
[(3)(A) If the President imposes export controls on any
agricultural commodity in order to carry out the policy set
forth in paragraph (2)(B), (2)(C), (7), or (8) of section 3 of
this Act, the President shall immediately transmit a report on
such action to the Congress, setting forth the reasons for the
controls in detail and specifying the period of time, which may
not exceed 1 year, that the controls are proposed to be in
effect. If the Congress, within 60 days after the date of its
receipt of the report, adopts a joint resolution pursuant to
paragraph (4) approving the imposition of the export controls,
then such controls shall remain in effect for the period
specified in the report, or until terminated by the President,
whichever occurs first. If the Congress, within 60 days after
the date of its receipt of such report, fails to adopt a joint
resolution approving such controls, then such controls shall
cease to be effective upon the expiration of that 60-day
period.
[(B) The provisions of subparagraph (A) and paragraph (4)
shall not apply to export controls--
[(i) which are extended under this Act if the
controls, when imposed, were approved by the Congress
under subparagraph (A) and paragraph (4); or
[(ii) which are imposed with respect to a country as
part of the prohibition or curtailment of all exports
to that country.
[(4)(A) For purposes of this paragraph, the term joint
resolution means only a joint resolution the matter after the
resolving clause of which is as follows: ``That, pursuant to
section 7(g)(3) of the Export Administration Act of 1979, the
President may impose export controls as specified in the report
submitted to the Congress on.'', with the blank space being
filled with the appropriate date.
[(B) On the day on which a report is submitted to the House
of Representatives and the Senate under paragraph (3), a joint
resolution with respect to the export controls specified in
such report shall be introduced (by request) in the House by
the chairman of the Committee on Foreign Affairs, for himself
and the ranking minority member of the Committee, or by Members
of the House designated by the chairman and ranking minority
member; and shall be introduced (by request) in the Senate by
the majority leader of the Senate, for himself and the minority
leader of the Senate, or by Members of the Senate designated by
the majority leader and minority leader of the Senate. If
either House is not in session on the day on which such a
report is submitted, the joint resolution shall be introduced
in that House, as provided in the preceding sentence, on the
first day thereafter on which that House is in session.
[(C) All joint resolutions introduced in the House of
Representatives shall be referred to the appropriate committee
and all joint resolutions introduced in the Senate shall be
referred to the Committee on Banking, Housing, and Urban
Affairs.
[(D) If the committee of either House to which a joint
resolution has been referred has not reported the joint
resolution at the end of 30 days after its referral, the
committee shall be discharged from further consideration of the
joint resolution or of any other joint resolution introduced
with respect to the same matter.
[(E) A joint resolution under this paragraph shall be
considered in the Senate in accordance with the provisions of
section 601(b)(4) of the International Security Assistance and
Arms Export Control Act of 1976. For the purpose of expediting
the consideration and passage of joint resolutions reported or
discharged pursuant to the provisions of this paragraph, it
shall be in order for the Committee on Rules of the House of
Representatives to present for consideration a resolution of
the House of Representatives providing procedures for the
immediate consideration of a joint resolution under this
paragraph which may be similar, if applicable, to the
procedures set forth in section 601(b)(4) of the International
Security Assistance and Arms Export Control Act of 1976.
[(F) In the case of a joint resolution described in
subparagraph (A), if, before the passage by one House of a
joint resolution of that House, that House receives a
resolution with respect to the same matter from the other
House, then--
[(i) the procedure in that House shall be the same as
if no joint resolution had been received from the other
House; but
[(ii) the vote on final passage shall be on the joint
resolution of the other House.
[(5) In the computation of the period of 60 days referred to
in paragraph (3) and the period of 30 days referred to in
subparagraph (D) of paragraph (4), there shall be excluded the
days on which either House of Congress is not in session
because of an adjournment of more than 3 days to a day certain
or because of an adjournment of the Congress sine die.
[(h) Barter Agreements.--(1) The exportation pursuant to a
barter agreement of any goods which may lawfully be exported
from the United States, for any goods which may lawfully be
imported into the United States, may be exempted, in accordance
with paragraph (2) of this subsection, from any quantitative
limitation on exports (other than any reporting requirement)
imposed to carry out the policy set forth in section 3(2)(C) of
this Act.
[(2) the Secretary shall grant an exemption under paragraph
(1) if the Secretary finds, after consulation with the
appropriate department or agency of the United States, that--
[(A) for the period during which the barter agreement
is to be performed--
[(i) the average annual quantity of the goods
to be exported pursuant to the barter agreement
will not be required to satisfy the average
amount of such goods estimated to be required
annually by the domestic economy and will be
surplus thereto; and
[(ii) the average annual quantity of the
goods to be imported will be less than the
average amount of such goods estimated to be
required annually to supplement domestic
production; and
[(B) the parties to such barter agreement have
demonstrated adequately that they intend, and have the
capacity, to perform such barter agreement.
[(3) For purposes of this subsection, the term ``barter
agreement'' means any agreement which is made for the exchange,
without monetary consideration, of any goods produced in the
United States for any goods produced outside of the United
States.
[(4) This subsection shall apply only with respect to barter
agreements entered into after the effective date of this Act.
[(i) Unprocessed Red Cedar.--(1) The Secretary shall require
a validated license, under the authority contained in
subsection (a) of this section, for the export of unprocessed
western red cedar (Thuja plicata) logs, harvested from State or
Federal lands. The Secretary shall impose quanitiative
restrictions upon the export of unprocessed western red cedar
logs during the 3-year period beginning on the effective date
of this Act as follows:
[(A) Not more than thirty million board feet scribner
of such logs may be exported during the first year of
such 3-year period.
[(B) Not more than fifteen million board feet
scribner of such logsmay be exported during the second
year of such period.
[(C) Not more than five million board feet scribner
of such logs may be exported during the third year of
such period.
After the end of such 3-year period, no unprocessed western red
cedar logs harvested from State or Federal lands may be
exported from the United States.
[(2) To the maximum extent practicable, the Secretary shall
utilize the multiple validated export licenses described in
section 4(a)(2) of ths Act in lieu of validated licenses for
exports under this subsection.
[(3) The Secretary shall allocate export licenses to
exporters pursuant to this subsection on the basis of a prior
history of exportation by such exporters and such other factors
as the Secretary considers necessary and appropriate to
minimize any hardship to the producers of western red cedar and
to further the foreign policy of the United States.
[(4) Unprocessed western red cedar logs shall not be
considered to be an agricultural commodity for purposes of
subsection (g) of this section.
[(5) As used in this subsection, the term ``unprocessed
western red cedar'' means red cedar timber which has not been
processed into--
[(A) lumber of American Lumber Standards Grades of
Number 3 dimension or better, or Pacific Lumber
Inspection Bureau Export R-List Grades of Number 3
common or better;
[(B) chips, pulp, and pulp products;
[(C) veneer and plywood;
[(D) poles, posts, or pilings cut or treated with
preservative for use as such and not intended to be
further processed; or
[(E) shakes and shingles.
[(j) Effect of Controls on Existing Contracts.--The export
restrictions contained in subsection (i) of this section and
any export controls imposed under this section shall not affect
any contract to harvest unprocessed western red cedar from
State lands which was entered into before October 1, 1979, and
the performance of which would make the red cedar available for
export. Any export controls imposed under this section on any
agricultural commodity (including fats, oils, and animal hides
and skins) or on any forest product or fishery product, shall
not affect any contract to export entered into before the date
on which such controls are imposed. For purposes of this
subsection, the term ``contract to export'' includes, but is
not limited to, an export sales agreement and an agreement to
invest in an enterprise which involves the export of goods or
technology.
[(k) Oil Exports for Use by United States Military
Facilities.--For purposes of subsection (d) of this section,
and for purposes of any export controls imposed under this Act,
shipments of crude oil, refined petroleum products, or
partially refined petroleum products from the United States for
use by the Department of Defense or United States-supported
installations or facilities shall not be considered to be
exports.
[foreign boycotts
[Sec. 8. (a) Prohibitions and Exceptions.--(1) For the
purpose of implementing the policies set forth in subparagraph
(A) or (B) of paragraph (5) of section 3 of this Act, the
President shall issue regulations prohibiting any United States
person, with respect to his activities in the interstate or
foreign commerce of the United States, from taking or knowingly
agreeing to take any of the following actions with intent to
comply with, further, or support any boycott fostered or
imposed by a foreign country against a country which is
friendly to the United States and which is not itself the
object of any form of boycott pursuant to United States law or
regulation:
[(A) Refusing, or requiring any other person to
refuse, to do business with or in the boycotted
country, with any business concern organized under the
laws of the boycotted country, with any national or
resident of the boycotted country, or with any other
person, pursuant to an agreement with, a requirement
of, or a request from or on behalf of the boycotting
country. The mere absence of a business relationship
with or in the boycotted country with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person, does not indicate
the existence of the intent required to establish a
violation of regulations issued to carry out this
subparagraph.
[(B) Refusing, or requiring any other person to
refuse, to employ or otherwise discriminating against
any United States person on the basis of race,
religion, sex, or national origin of that person or of
any owner, officer, director, or employee of such
person.
[(C) Furnishing information with respect to the race,
religion, sex, or national origin of any United States
person or of any owner, officer, director, or employee
of such person.
[(D) Furnishing information about whether any person
has, has had, or proposes to have any business
relationship (including a relationship by way of sale,
purchase, legal or commercial representation, shipping
or other transport, insurance, investment, or supply)
with or in the boycotted country, with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person which is known or
believed to be restricted from having any business
relationship with or in the boycotting country. Nothing
in this paragraph shall prohibit the furnishing of
normal business information in a commercial context as
defined by the Secretary.
[(E) Furnishing information about whether any person
is a member of, has made contribution to, or is
otherwise associated with or involved in the activities
of any charitable or fraternal organization which
supports the boycotted country.
[(F) Paying, honoring, confirming, or otherwise
implementing a letter of credit which contains any
condition or requirement compliance with which is
prohibited by regulations issued pursuant to this
paragraph, and no United States person shall, as a
result of the application of this paragraph, be
obligated to pay or otherwise honor or implement such
letter of credit.
[(2) Regulations issued pursuant to paragraph (1) shall
provide exceptions for--
[(A) complying or agreeing to comply with
requirements (i) prohibiting the import of goods or
services from the boycotted country or goods produced
or services provided by any business concern organized
under the laws of the boycotted country or by nationals
or residents of the boycotted country, or (ii)
prohibiting the shipment of goods to the boycotted
country on a carrier of the boycotted country, or by a
route other than that prescribed by the boycotting
country or the recipient of the shipment;
[(B) complying or agreeing to comply with import and
shipping document requirements with respect to the
country of origin, the name of the carrier and route of
shipment, the name of the supplier of the shipment or
the name of the provider of other services, except that
no information knowingly furnished or conveyed in
response to such requirements may be stated in
negative, blacklisting, or similar exclusionary terms,
other than with respect to carriers or route of
shipment as may be permitted by such regulations in
order to comply with precautionary requirements
protecting against war risks and confiscation;
[(C) complying or agreeing to comply in the normal
course of business with the unilateral and specific
selection by a boycotting country, or national or
resident thereof, of carriers, insurers, suppliers of
services to be performed within the boycotting country
or specific goods which, in the normal course of
business, are identifiable by source when imported into
the boycotting country;
[(D) complying or agreeing to comply with export
requirements of the boycotting country relating to
shipments or transshipments of exports to the boycotted
country, to any business concern of or organized under
the laws of the boycotted country, or to any national
or resident of the boycotted country;
[(E) compliance by an individual or agreement by an
individual to comply with the immigration or passport
requirements of any country with respect to such
individual or any member of such individual's family or
with requests for information regarding requirements of
employment of such individual within the boycotting
country; and
[(F) compliance by a United States person resident in
a foreign country or agreement by such person to comply
with the laws of that country with respect to his
activities exclusively therein, and such regulations
may contain exceptions for such resident complying with
the laws or regulations of that foreign country
governing imports into such country of trademarked,
trade named, or similarly specifically identifiable
products, or components of products for his own use,
including the performance of contractual services
within that country, as may be defined by such
regulations.
[(3) Regulations issued pursuant to paragraphs (2)(C) and
(2)(F) shall not provide exceptions from paragraphs (1)(B) and
(1)(C).
[(4) Nothing in this subsection may be construed to supersede
or limit the operation of the antitrust, or civil rights laws
of the United States.
[(5) This section shall apply to any transaction or activity
undertaken, by or through a United States person or any other
person, with intent to evade the provisions of this section as
implemented by the regulations issued pursuant to this
subsection, and such regulations shall expressly provide that
the exceptions set forth in paragraph (2) shall not permit
activities or agreements (expressed or implied by a course of
conduct, including a pattern of responses) otherwise
prohibited, which are not within the intent of such exceptions.
[(b) Foreign Policy Controls.--(1) In addition to the
regulations issued pursuant to subsection (a) of this section,
regulations issued under section 6 of this Act shall implement
the policies set forth in section 3(5).
[(2) Such regulations shall require that any United States
person receiving a request for the furnishing of information,
the entering into or implementing of agreements, or the taking
of any other action referred to in section 3(5) shall report
that fact to the Secretary, together with such other
information concerning such request as the Secretary may
require for such action as the Secretary considers appropriate
for carrying out the policies of that section. Such person
shall also report to the Secretary whether such person intends
to comply and whether such person has complied with such
request. Any report filed pursuant to this paragraph shall be
made available promptly for public inspection and copying,
except that information regarding the quantity, description,
and value of any goods or technology to which such report
relates may be kept confidential if the Secretary determines
that disclosure thereof would place the United States person
involved at a competitive disadvantage. The Secretary shall
periodically transmit summaries of the information contained in
such reports to the Secretary of State for such action as the
Secretary of State, in consultation with the Secretary,
considers appropriate for carrying out the policies set forth
in section 3(5) of this Act.
[(c) Preemption.--The provisions of this section and the
regulations issued pursuant thereto shall preempt any law,
rule, or regulation of any of the several States or the
District of Columbia, or any of the territories or possessions
of the United States, or of any governmental subdivision
thereof, which law, rule, or regulation pertains to
participation in, compliance with, implementation of, or the
furnishing of information regarding restrictive trade practices
or boycotts fostered or imposed by foreign countries against
other countries.
[procedures for hardship relief from export controls
[Sec. 9. (a) Filing of Petitions.--Any person who, in such
person's domestic manufacturing process or other domestic
business operation, utilizes a product produced abroad in whole
or in part from a good historically obtained from the United
States but which has been made subject to export controls, or
any person who historically has exported such a good, may
transmit a petition of hardship to the Secretary requesting an
exemption from such controls in order to alleviate any unique
hardship resulting from the imposition of such controls. A
petition under this section shall be in such form as the
Secretary shall prescribe and shall contain information
demonstrating the need for the relief requested.
[(b) Decision of the Secretary.--Not later than 30 days after
receipt of any petition under subsection (a), the Secretary
shall transmit a written decision to the petitioner granting or
denying the requested relief. Such decision shall contain a
statement setting forth the Secretary's basis for the grant or
denial. Any exemption granted may be subject to such conditions
as the Secretary considers appropriate.
[(c) Factors To Be Considered.--For purposes of this section,
the Secretary's decision with respect to the grant or denial of
relief from unique hardship resulting directly or indirectly
from the imposition of export controls shall reflect the
Secretary's consideration of factors such as the following:
[(1) Whether denial would cause a unique hardship to
the petitioner which can be alleviated only by granting
an exception to the applicable regulations. In
determining whether relief shall be granted, the
Secretary shall take into account--
[(A) ownership of material for which there is
no practicable domestic market by virtue of the
location or nature of the material;
[(B) potential serious financial loss to the
applicant if not granted an exception;
[(C) inability to obtain, except through
import, an item essential for domestic use
which is produced abroad from the good under
control;
[(D) the extent to which denial would
conflict, to the particular detriment of the
applicant, with other national policies
including those reflected in any international
agreement to which the United States is a
party;
[(E) possible adverse effects on the economy
(including unemployment) in any locality or
region of the United States; and
[(F) other relevant factors, including the
applicant's lack of an exporting history during
any base period that may be established with
respect to export quotas for the particular
good.
[(2) The effect a finding in favor of the applicant
would have on attainment of the basic objectives of the
short supply control program.
In all cases, the desire to sell at higher prices and thereby
obtain greater profits shall not be considered as evidence of a
unique hardship, nor will circumstances where the hardship is
due to imprudent acts or failure to act on the part of the
petitioner.
[procedures for processing export license applications; other inquiries
[Sec. 10. (a) Primary Responsibility of the Secretary.--(1)
All export license applications required under this Act shall
be submitted by the applicant to the Secretary. All
determinations with respect to any such application shall be
made by the Secretary, subject to the procedures provided in
this section.
[(2) It is the intent of the Congress that a determination
with respect to any export license application be made to the
maximum extent possible by the Secretary without referral of
such application to any other department or agency of the
Government.
[(3) To the extent necessary, the Secretary shall seek
information and recommendations from the Government departments
and agencies concerned with aspects of United States domestic
and foreign polices and operations having an important bearing
on exports. Such departments and agencies shall cooperate fully
in rendering such information and recommendations.
[(b) Initial Screening.--Within 10 days after the date on
which any export license application is submitted pursuant to
subsection (a)(1), the Secretary shall--
[(1) sent the applicant an acknowledgment of the
receipt of the application and the date of the receipt;
[(2) submit to this applicant a written description
of the procedures required by this section, the
responsibilities of the Secretary and of other
departments and agenices with respect to the
application and the rights of the applicant;
[(3) return the application without action if the
application is improperly completed or if additional
information is required, with sufficient information to
permit the application to be properly resubmitted, in
which case of such application is resubmitted, it shall
be treated as a new application for the purpose of
calculating the time periods prescribed in this
section;
[(4) determine whether it is necessary to refer the
application to any other department or agency and, if
such referral is determined to be necessary, inform the
applicant of any such department or agency to which the
application will be referred; and
[(5) determine whether it is necessary to submit the
application to a multilateral review process, pursuant
to a multilateral agreement, formal or informal, to
which the United States is a part and, if so inform the
applicant of this requirement.
[(c) Action on Certain Applications.--Except as provided in
subsection (o), in each case in which the Secretary determines
that it is not necessary to refer an application to any other
department or agency for its information and recommendations, a
license shall be formally issued or denied within 60 days after
a properly completed application has been submited pursuant to
this section.
[(d) Referral to Other Departments and Agencies.--Except in
the case of exports described in subsection (o), in each case
in which the Secretary determines that it is necessary to refer
an application to any other department or agency for its
information and recommendations, the Secretary shall, within 20
days after the submission of a properly completed application--
[(1) refer the application, together with all
necessary analysis and recommendations of the
Department of Commerce, concurrently to all such
departments or agencies; and
[(2) if the applicant so requests, provide the
applicant with an opportunity to review for accuracy
any documentation to be referred to any such department
or agency with respect to such application for the
purpose of describing the export in question in order
to determine whether such documentation accurately
describes the proposed export.
Notwithstanding the 10-day period set forth in subsection (b),
in the case of exports described in subsection (o), in each
case in which the Secretary determines that it is necessary to
refer an application to any other department or agency for its
information and recommendations, the Secretary shall,
immediately upon receipt of the properly completed application,
refer the application to such department or agency for its
review. Such review shall be concurrent with that of the
Department of Commerce.
[(e) Action by Other Departments and Agencies.--(1) Any
department or agency to which an application is referred
pursuant to subsection (d) shall submit to the Secretary the
information or recommendations requested with respect to the
application. The information or recommendations shall be
submitted within 20 days after the department or agency
receives the application or, in the case of exports described
in subsection (o), before the expiration of the time periods
permitted by that subsection. Except as provided in paragraph
(2), any such department or agency which does not submit its
recommendations within the time period prescribed in the
preceding sentence shall be deemed by the Secretary to have no
objection to the approval of such application.
[(2)(A) Except in the case of exports described in subsection
(o), if the head of any such department or agency notifies the
Secretary before the expiration of the time period provided in
paragraph (1) for submission of its recommendations that more
time is required for review by such department or agency, such
department or agency shall have an additional 20-day period to
submit its recommendations to the Secretary. If such department
or agency does not submit its recommendations within the time
period prescribed by the preceding sentence, it shall be deemed
by the Secretary to have no objection to the approval of such
application.
[(B) In the case of exports described in subsection (o), if
the head of any such department or agency notifies the
Secretary, before the expiration of the 15-day period provided
in subsection (o)(1), that more time is required for review by
such department or agency, the Secretary shall notify the
applicant, pursuant to subsection (o)(1)(C), that additional
time is required to consider the application, and such
department or agency shall have additional time to consider the
application within the limits permitted by subsection (o)(2).
If such department or agency does not submit its
recommendations within the time periods permitted under
subsection (o), it shall be deemed by the Secretary to have no
objection to the approval of such application.
[(f) Action by the Secretary.--(1) Within 60 days after
receipt of the recommendations of other departments and
agencies with respect to a license application, as provided in
subsection (e), the Secretary shall formally issue or deny the
license. In deciding whether to issue or deny a license, the
Secretary shall take into account any recommendation of a
department or agency with respect to the application in
question. In cases where the Secretary receives conflicting
recommendations, the Secretary shall, within the 60-day period
provided for in this subsection, take such action as may be
necessary to resolve such conflicting recommendations. The
provisions of this paragraph shall not apply in the case of
exports described in subsection (o).
[(2) In cases where the Secretary receives questions or
negative considerations or recommendations from any other
department or agency with respect to an application, the
Secretary shall, to the maximum extent consistent with the
national security and foreign policy of the United States,
inform the applicant in writing of the specific questions
raised and any such negative considerations or recommendations.
Before a final determination with respect to the application in
made, the applicant shall be entitled--
[(A) to respond in writing to such questions,
considerations, or recommendations within 30 days after
receipt of such information from the Secretary; and
[(B) upon the filing of a written request with the
Secretary within 15 days after the receipt of such
information, to respond in person to the department or
agency raising such questions, considerations, or
recommendations.
The provisions of this paragraph shall not apply in the case of
exports described in subsection (o).
[(3) In cases where the Secretary has determined that an
application should be denied, the applicant shall be informed
in writing, within 5 days after such determination is made,
of--
[(A) the determination,
[(B) the statutory basis for the proposed denial,
[(C) the policies set forth in section 3 of this Act
which would be furthered by the proposed denial,
[(D) what if any modifications in or restrictions on
the goods or technology for which the license was
sought would allow such export to be compatible with
export controls imposed under this Act,
[(E) which officers and employees of the Department
of Commerce who are familar with the application will
be made reasonably available to the applicant for
considerations with regard to such modifications or
restrictions, if appropriate,
[(F) to the extent consistent with the national
security and foreign policy of the United States, the
specific considerations which led to the determination
to deny the application, and
[(G) the availability of appeal procedures.
The Secretary shall allow the applicant at least 30 days to
respond to the Secretary's determination before the license
application is denied. In the event decisions on license
applications are deferred inconsistent with the provisions of
this section, the applicant shall be so informed in writing
within 5 days after such deferral.
[(4) If the Secretary determines that a particular
application or set of applications is of exceptional importance
and complexity, and that additional time is required for
negotiations to modify the application or applications, the
Secretary may extend any time period prescribed in this
section. The Secretary shall notify the Congress and the
applicant of such extension and the reasons therefor. The
provisions of this paragraph shall not apply in the case of
exports described in subsection (o).
[(g) Special Procedures for Secretary of Defense.--(1)
Notwithstanding any other provision of this section, the
Secretary of Defense is authorized to review any proposed
export of any goods or technology to any country to which
exports are controlled for national security purposes and,
whenever the Secretary of Defense determines that the export of
such goods or technology will make a significant contribution,
which would prove detrimental to the national security of the
United States, to the military potential of any such country,
to recommend to the President that such export be disapproved.
[(2) Notwithstanding any other provision of law, the
Secretary of Defense shall determine, in consultation with the
Secretary, and confirm in writing the types and categories of
transactions which should be reviewed by the Secretary of
Defense in order to make a determination referred to in
paragraph (1). Whenever a license or other authority is
requested for the export to any country to which exports are
controlled for national security purposes of goods or
technology within any such type or category, the Secretary
shall notify the Secretary of Defense of such request, and the
Secretary may not issue any license or other authority pursuant
to such request before the expiration of the period within
which the President may disapprove such export. The Secretary
of Defense shall carefully consider any notification submitted
by the Secretary pursuant to this paragraph and, not later than
20 days after notification of the request, shall--
[(A) recommend to the President and the Secretary
that he disapprove any request for the export of the
goods or technology involved to the particular country
if the Secretary of Defense determines that the export
of such goods or technology will make a significant
contribution, which would prove detrimental to the
national security of the United States, to the military
potential of such country or any other country;
[(B) notify the Secretary that he would recommend
approval subject to specified conditions; or
[(C) recommend to the Secretary that the export of
goods or technology be approved.
Whenever the Secretary of Defense makes a recommendation to the
President pursuant to paragraph (2)(A), the Secretary shall
also submit his recommendation to the President on the request
to export if the Secretary differs with the Secretary of
Defense. If the President notifies the Secretary, with 20 days
after receiving a recommendation from the Secretary of Defense,
that he disapproves such export, no license or other authority
may be issued for the export of such goods or technology to
such country. If the Secretary of Defense fails to make a
recommendation or notification under this paragraph within the
20-day period specified in the third sentence, or if the
President, within 20 days after receiving a recommendation from
the Secretary of Defense with respect to an export, fails to
notify the Secretary that he approves or disapproves the
export, the Secretary shall approve or deny the request for a
license or other authority to export without such
recommendation or notification.
[(3) The Secretary shall approve or disapprove a license
application, and issue or deny a license, in accordance with
the provisions of this subsection, and, to the extent
applicable, in accordance with the time periods and procedures
otherwise set forth in this section.
[(h) Multilateral Controls.--In any case in which an
application, which has been finally approved under subsection
(c), (f), or (g) of this section, is required to be submitted
to a multilateral review process, pursuant to a multilateral
agreement, formal or informal, to which the United States is a
party, the license shall not be issued as prescribed in such
subsections, but the Secretary shall notify the applicant of
the approval of the application (and the date of such approval)
by the Secretary subject to such multilateral review. The
license shall be issued upon approval of the application under
such multilateral review. If such multilateral review has not
resulted in a determination with respect to the application
within 40 days after such date, the Secretary's approval of the
license shall be final and the license shall be issued, unless
the Secretary determines that issuance of the license would
prove detrimental to the national security of the United
States. At the time at which the Secretary makes such a
determination, the Secretary shall notify the applicant of the
determination and shall notify the Congress of the
determination, the reasons for the determination, the reasons
for which the multilateral review could not be concluded within
such 40-day period, and the actions planned or being taken by
the United States Government to secure conclusion of the
multilateral review. At the end of every 40-day period after
such notification to Congress, the Secretary shall advise the
applicant and the Congress of the status of the application,
and shall report to the Congress in detail on the reasons for
the further delay and any further actions being taken by the
United States Government to secure conclusion of the
multilateral review. In addition, at the time at which the
Secretary issues or denies the license upon conclusion of the
multilateral review, the Secretary shall notify the Congress of
such issuance or denial and of the total time required for the
multilateral review.
[(i) Records.--The Secretary and any department or agency to
which any application is referred under this section shall keep
accurate records with respect to all applications considered by
the Secretary or by any such department or agency, including,
in the case of the Secretary, any dissenting recommendations
received from any such department or agency.
[(j) Appeal and Court Action.--(1) The Secretary shall
establish appropriate procedures for any applicant to appeal to
the Secretary the denial of an export license application of
the applicant.
[(2) In any case in which any action prescribed in this
section is not taken on a license application within the time
periods established by this section (except in the case of a
time period extended under subsection (f)(4) of which the
applicant is notified), the applicant may file a petition with
the Secretary requesting compliance with the requirements of
this section. When such petition is filed, the Secretary shall
take immediate steps to correct the situation giving rise to
the petition and shall immediately notify the applicant of such
steps.
[(3) If, within 20 days after a petition is filed under
paragraph (2), the processing of the application has not been
brought into conformity with the requirements of this section,
or the application has been brought into conformity with such
requirements but the Secretary has not so notified the
applicant, the applicant may bring an action in an appropriate
United States district court for a restraining order, a
temporary or permanent injunction, or other appropriate relief,
to require compliance with the requirements of this section.
The United States district courts shall have jurisdiction to
provide such relief, as appropriate.
[(k) Changes in Requirements for Applications.--Except as
provided in subsection (b)(3) of this section, in any case in
which, after a license application is submitted, the Secretary
changes the requirements for such a license application, the
Secretary may request appropriate additional information of the
applicant, but the Secretary may not return the application to
the applicant without action because it fails to meet the
changed requirements.
[(l) Other Inquiries.--(1) In any case in which the Secretary
receives a written request asking for the proper classification
of a good or technology on the control list, the Secretary
shall, within 10 working days after receipt of the request,
inform the person making the request of the proper
classification.
[(2) In any case in which the Secretary receives a written
request for information about the applicability of export
license requirements under this Act to a proposed export
transaction or series of transactions, the Secretary shall,
within 30 days after receipt of the request, reply with that
information to the person making the request.
[(m) Small Business Assistance.--Not later than 120 days
after the date of the enactment of this subsection, the
Secretary shall develop and transmit to the Congress a plan to
assist small businesses in the export licensing application
process under this Act. The plan shall include, among other
things, arrangements for counseling small businesses on filing
applications and identifying goods or technology on the control
list, proposals for seminars and conferences to educate small
businesses on export controls and licensing procedures, and the
preparation of informational brochures. The Secretary shall,
not later than 120 days after the date of the enactment of the
Export Enhancement Act of 1988, report to the Congress on steps
taken to implement the plan developed under this subsection to
assist small businesses in the export licensing application
process.
[(n) Reports on License Applications.--(1) Not later than 180
days after the date of the enactment of this subsection, and
not later than the end of each 3-month period thereafter, the
Secretary shall submit to the Committee on Foreign Affairs of
the House of Representatives and to the Committee on Banking,
Housing, and Urban Affairs of the Senate a report listing--
[(A) all applications on which action was completed
during the preceding 3-month period and which required
a period longer than the period permitted under
subsection (c), (f)(1), or (h) of this section, as the
case may be, before notification of a decision to
approve or deny the application was sent to the
applicant; and
[(B) in a separate section, all applications which
have been in process for a period longer than the
period permitted under subsection (c), (f)(1), or (h)
of this section, as the case may be, and upon which
final action has not been taken.
[(2) With regard to each application, each listing shall
identify--
[(A) the application case number;
[(B) the value of the goods or technology to which
the application relates;
[(C) the country of destination of the goods or
technology;
[(D) the date on which the application was received
by the Secretary;
[(E) the date on which the Secretary approved or
denied the application;
[(F) the date on which the notification of approval
or denial of the application was sent to the applicant;
and
[(G) the total number of days which elapsed between
receipt of the application, in its properly completed
form, and the earlier of the last day of the 3-month
period to which the report relates, or the date on
which notification of approval or denial of the
application was sent to the applicant.
[(3) With respect to an application which was referred to
other departments or agencies, the listing shall also include--
[(A) the departments or agencies to which the
application was referred;
[(B) the date or dates of such referral; and
[(C) the date or dates on which recommendations were
received from those departments or agencies.
[(4) With respect to an application referred to any other
department or agency which did not submit or has not submitted
its recommendations on the application within the period
permitted under subsection (e) of this section to submit such
recommendations, the listing shall also include--
[(A) the office responsible for processing the
application and the position of the officer responsible
for the office; and
[(B) the period of time that elapsed before the
recommendations were submitted or that has elapsed
since referral of the application, as the case may be.
[(5) Each report shall also provide an introduction which
contains--
[(A) summary of the number of applications described
in paragraph (1)(A) and (B) of this subsection, and the
value of the goods or technology involved in the
applications, grouped according to--
[(i) the number of days which elapsed before
action on the applications was completed, or
which has elapsed without action on the
applications being completed, as follows: 61 to
75 days, 76 to 90 days, 91 to 105 days, 106 to
120 days, and more than 120 days; and
[(ii) the number of days which elapsed before
action on the applications was completed, or
which has elapsed without action on the
applications being completed, beyond the period
permitted under subsection (c), (f)(1), or (h)
of this section for the processing of
applications, as follows: not more than 15
days, 16 to 30 days, 31 to 45 days, 46 to 60
days, and more than 60 days; and
[(B) a summary by country of destination of the
number of applications described in paragraph (1)(A)
and (B) of this subsection, and the value of the goods
or technology involved in applications, on which action
was not completed within 60 days.
[(o) Exports to Members of Coordinating Committee.--(1)
Fifteen working days after the date of formal filing with the
Secretary of an individual validated license application for
the export of goods or technology to a country that maintains
export controls on such goods or technology pursuant to the
agreement of the governments participating in the group known
as the coordinating Committee, a license for the transaction
specified in the application shall become valid and effective
and the goods or technology are authorized for export pursuant
to such license unless--
[(A) the application has been otherwise approved by
the Secretary, in which case it shall be valid and
effective according to the terms of the approval;
[(B) the application has been denied by the Secretary
pursuant to this section and the applicant has been so
informed, or the applicant has been informed, pursuant
to subsection (f)(3) of this section, that the
application should be denied; or
[(C) the Secretary requires additional time to
consider the application and the applicant has been so
informed.
[(2) In the event that the Secretary notifies an applicant
pursuant to paragraph (1)(C) that the Secretary notifies an
applicant pursuant to paragraph (1)(C) that more time is
required to consider an individual validated license
application, a license for the transaction specified in the
application shall become valid and effective and the goods or
technology are authorized for export pursuant to such license
30 working days after the date that such license application
was formally filed with the Secretary unless--
[(A) the application has been otherwise approved by
the Secretary, in which case it shall be valid and
effective according to the terms of the approval; or
[(B) the application has been denied by the Secretary
pursuant to this section and the applicant has been so
informed, or the applicant has been informed, pursuant
to subsection (f)(3) of this section, that the
application should be denied.
[(3) In reviewing an individual license application subject
to this subsection, the Secretary shall evaluate the
information set forth in the application and the reliability of
the end-user.
[(4) Nothing in this subsection shall affect the scope or
availability of licenses authorizing multiple exports set forth
in section 4(a)(2) of this Act.
[(5) The provisions of this subsection shall take effect 4
months after the date of the enactment of the Export
Administration Amendments Act of 1985.
[violations
[Sec. 11. (a) In General.--Except as provided in subsection
(b) of this section, whoever knowingly violates or conspires to
or attempts to violate any provision of this Act or any
regulation, order, or license issued thereunder shall be fined
not more than five times the value of the exports involved or
$50,000, whichever is greater, or imprisoned not more than 5
years, or both.
[(b) Willful Violations.--(1) Whoever willfully violates or
conspires to or attempts to violate any provision of this Act
or any regulation, order, or license issued thereunder, with
knowledge that the exports involved will be used for the
benefit of, or that the destination or intended destination of
the goods or technology involved is, any controlled country or
any country to which exports are controlled for foreign policy
purposes--
[(A) except in the case of an individual, shall be
fined not more than five times the value of the exports
involved or $1,000,000, whichever is greater; and
[(B) in the case of an individual, shall be fined not
more than $250,000, or imprisoned not more than 10
years, or both.
[(2) Any person who is issued a validated license under this
Act for the export of any good or technology to a controlled
country and who, with knowledge that such a good or technology
is being used by such controlled country for military or
intelligence gathering purposes contrary to the conditions
under which the license was issued, willfully fails to report
such use of the Secretary of Defense--
[(A) except in the case of an individual, shall be
fined not more than five times the value of the exports
involved or $1,000,000, whichever is greater; and
[(B) in the case of an individual, shall be fined not
more than $250,000, or imprisoned not more than 5
years, or both.
[(3) Any person who possesses any goods or technology--
[(A) with the intent to export such goods or
technology in violation of an export control imposed
under section 5 or 6 of this Act or any regulation,
order, or license issued with respect to such control,
or
[(B) knowing or having reason to believe that the
goods or technology would be so exported,
shall, in the case of a violation of an export control imposed
under section 5 (or any regulation, order, or license issued
with respect to such control), be subject to the penalties set
forth in paragraph (1) of this subsection and shall, in the
case of a violation of an export control imposed under section
6 (or any regulation, order, or license issued with respect to
such control), be subject to the penalties set forth in
subsection (a).
[(4) Any person who takes any action with the intent to evade
the provisions of this act or any regulation, order, or license
issued under this Act shall be subject to the penalties set
forth in subsection (a), except that in the case of an evasion
of an export control imposed under section 5 or 6 of this act
(or any regulation, order, or license issued with respect to
such control), such person shall be subject to the penalties
set forth in paragraph (1) of this subsection.
[(5) Nothing in this subsection or subsection (a) shall limit
the power of the Secretary to define by regulations violations
under this Act.
[(c) Civil Penalties; Administrative Sanctions.--(1) The
Secretary (and officers and employees of the Department of
Commerce specifically designated by the Secretary) may impose a
civil penalty not to exceed $10,000 for each violation of this
Act or any regulation, order, or license issued under this act,
either in addition to or in lieu of any other liability or
penalty which may be imposed, except that the civil penalty for
each such violation involving national security controls
imposed under section 5 of this Act or controls imposed on the
export of defense articles and defense services under section
38 of the Arms Export Control Act may not exceed $100,000.
[(2)(A) The authority under this Act to suspend or revoke the
authority of any United States person to export goods or
technology may be used with respect to any violation of the
regulations issued pursuant to section 8(a) of this Act.
[(B) Any administrative sanction (including any civil penalty
or any suspension or revocation of authority to export) imposed
under this Act for a violation of the regulations issued
pursuant to section 8(a) of this Act may be imposed only after
notice and opportunity for an agency hearing on the record in
accordance with sections 554 through 557 of title 5, United
States Code.
[(C) Any charging letter or other document initiating
administrative proceedings for the imposition of sanctions for
violations of the regulations issued pursuant to section 8(a)
of this Act shall be made available for public inspection and
copying.
[(3) An exception may not be made to any order issued under
this Act which revokes the authority of a United States person
to export goods or technology unless the Committee on Foreign
Affairs of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate are first
consulted concerning the exception.
[(4) The President may by regulation provide standards for
establishing levels of civil penalty provided in this
subsection based upon the seriousness of the violation, the
culpability of the violator, and the violator's record of
cooperation with the Government in disclosing the violation.
[(d) Payment of Penalties.--The payment of any penalty
imposed pursuant to subsection (c) may be made a condition, for
a period not exceeding one year after the imposition of such
penalty, to the granting, restoration, or continuing validity
of any export license, permission, or privilege granted or to
be granted to the person upon whom such penalty is imposed. In
addition, the payment of any penalty imposed under subsection
(c) may be deferred or suspended in whole or in part for a
period of time no longer than any probation period (which may
exceed one year) that may be imposed upon such person. Such a
deferral or suspension shall not operate as a bar to the
collection of the penalty in the event that the conditions of
the suspension, deferral, or probation are not fulfilled.
[(e) Refunds.--Any amount paid in satisfaction of any penalty
imposed pursuant to subsection (c), or any amounts realized
from the forefeiture of any property interest or proceeds
pursuant to subsection (g), shall be covered into the Treasury
as a miscellaneous receipt. The head of the department or
agency concerned may, in his discretion, refund any such
penalty imposed pursuant to subsection (c), within 2 years
after payment, on the ground of a material error of fact or law
in the imposition of the penalty. Notwithstanding section
1346(a) of title 28, United States Code, no action for the
refund of any such penalty may be maintained in any court.
[(f) Actions for Recovery of Penalties.--In the event of the
failure of any person to pay a penalty imposed pursuant to
subsection (c) a civil action for the recovery thereof may, in
the discretion of the head of the department or agency
concerned, be brought in the name of the United States. In any
such action the court shall determine de novo all issues
necessary to the establishment of liability. Except as provided
in this subsection and in subsection (d), no such liabilty
shall be asserted, claimed, or recovered upon by the United
States in any way unless it has previously been reduced to
judgment.
[(g) Forfeiture of Property Interest and Proceeds.--(1) Any
person who is convicted under subsection (a) or (b) of a
violation of an export control imposed under section 5 of this
Act (or any regulation, order, or license issued with respect
to such control) shall, in addition to any other penalty,
forfeit to the United States--
[(A) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in the goods or tangible items that were the
subject of the violation;
[(B) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in tangible property that was used in the export
or attempt to export that was the subject of the
violation; and
[(C) any of that person's property constituting, or
derived from, any proceeds obtained directly or
indirectly as a result of the violation.
[(2) The procedures in any forfeiture under this subsection,
and the duties and authority of the courts of the United States
and the Attorney General with respect to any forfeiture action
under this subsection or with respect to any property that may
be subject to forfeiture under this subsection, shall be
governed by the provisions of section 1963 of title 18, United
States Code.
[(h) Prior Convictions.--(1) No person convicted of a
violation of this Act (or any regulation, license, or order
issued under this Act), any regulation, license, or order
issued under the International Emergency Economic Powers Act,
section 793, 794, or 798 of title 18, United States Code,
section 4(b) on the Internal Security Act of 1950 (50 U.S.C.
783(b)), or section 38 of the Arms Export Control Act (22
U.S.C. 2778) shall be eligible, at the discretion of the
Secretary, to apply for or use any export license under this
Act for a period of up to 10 years from the date of the
conviction. The Secretary may revoke any export license under
this Act in which such person has an interest at the time of
the conviction.
[(2) The Secretary may exercise the authority under paragraph
(1) with respect to any person related, through affiliation,
ownership, control, or position of responsibility, to any
person convicted of any violation of law set forth in paragraph
(1), upon a showing of such relationship with the convicted
party, and subject to the procedures set forth in section 13(c)
of this Act.
[(i) Other Authorities.--Nothing in subsection (c), (d), (f),
(g), or (h) limits--
[(1) the availability of other administrative or
judicial remedies with respect to violations of this
Act, or any regulation, order, or license issued under
this Act;
[(2) the authority to compromise and settle,
administrative proceedings brought with respect to
violations of this Act, or any regulation, order, or
license issued under this Act; or
[(3) the authority to compromise, remit or mitigate
seizures and forfeitures pursuant to section 1(b) of
title VI of the Act of June 15, 1917 (22 U.S.C.
401(b)).
[multilateral export control violations
[Sec. 11A. (a) Determination by the President.--The
President, subject to subsection (c), shall apply sanctions
under subsection (b) for a period of not less than 2 years and
not more than 5 years, if the President determines that--
[(1) a foreign person has violated any regulation
issued by a country to control exports for national
security purposes pursuant to the agreement of the
group known as the Coordinating Committee, and
[(2) such violation has resulted in substantial
enhancement of Soviet and East bloc capabilities in
submarine or antisubmarine warfare, ballistic or
antiballistic missile technology, strategic aircraft,
command, control, communications and intelligence, or
other critical technologies as determined by the
President, on the advice of the National Security
Council, to represent a serious adverse impact on the
strategic balance of forces.
The President shall notify the Congress of each action taken
under this section. This section, except subsections (h) and
(j), applies only to violations that occur after the date of
the enactment of the Export Enhancement Act of 1988.
[(b) Sanctions.--The sanctions referred to in subsection (a)
shall apply to the foreign person committing the violation, as
well as to any parent, affiliate, subsidiary, and successor
entity of the foreign person, and, except as provided in
subsection (c), are as follows:
[(1) a prohibition on contracting with, and
procurement of products and services from, a sanctioned
person, by any department, agency, or instrumentality
of the United States Government, and
[(2) a prohibition on importation into the United
States of all products produced by a sanctioned person.
[(c) Exceptions.--The President shall not apply sanctions
under this section--
[(1) in the case of procurement of defense articles
or defense services--
[(A) under existing contracts or
subcontracts, including the exercise of options
for production quantities to satisfy United
States operational military requirements;
[(B) if the President determines that the
foreign person or other entity to which the
sanctions would otherwise be applied is a sole
source supplier of essential defense articles
or services and no alternative supplier can be
identified; or
[(C) if the President determines that such
articles or services are essential to the
national security under defense coproduction
agreements; or
[(2) to--
[(A) products or services provided under
contracts or other binding agreements (as such
terms are defined by the President in
regulations) entered into before the date on
which the President notifies the Congress of
the intention to impose the sanctions;
[(B) spare parts;
[(C) component parts, but not finished
products, essential to United States products
or production;
[(D) routine servicing and maintenance of
products; or
[(E) information and technology.
[(d) Exclusion.--The President shall not apply sanctions
under this section to a parent, affiliate, subsidiary, and
successor entity of a foreign person if the President
determines that--
[(1) the parent, affiliate, subsidiary, or successor
entity (as the case may be) has not knowingly violated
the export control regulation violated by the foreign
person, and
[(2) the government of the country with jurisdiction
over the parent, affiliate, subsidiary, or successor
entity had in effect, at the time of the violation by
the foreign person, an effective export control system
consistent with principles agreed to in the
Coordinating Committee, including the following:
[(A) national laws providing appropriate
civil and criminal penalties and statutes of
limitations sufficient to deter potential
violations;
[(B) a program to evaluate export license
applications that includes sufficient technical
expertise to assess the licensing status of
exports and ensure the reliability of end-
users;
[(C) an enforcement mechanism that provides
authority for trained enforcement officers to
investigate and prevent illegal exports;
[(D) a system of export control documentation
to verify the movement of goods and technology;
and
[(E) procedures for the coordination and
exchange of information concerning violations
of the agreement of the Coordinating Committee.
[(e) Definitions.--For purposes of this section--
[(1) the term ``component part'' means any article
which is not usable for its intended functions without
being imbedded in or integrated into any other product
and which, if used in production of a finished product,
would be substantially transformed in that process;
[(2) the term ``finished product'' means any article
which is usable for its intended functions without
being imbedded or integrated into any other product,
but in no case shall such term be deemed to include an
article produced by a person other than a sanctioned
person that contains parts or components of the
sanctioned person if the parts or components have been
substantially transformed during production of the
finished product; and
[(3) the term ``sanctioned person'' means a foreign
person, and any parent, affiliate, subsidiary, or
successor entity of the foreign person, upon whom
sanctions have been imposed under this section.
[(f) Subsequent Modifications of Sanctions.--The President
may, after consultation with the Congress, limit the scope of
sanctions applied to a parent, affiliate, subsidiary, or
successor entity of the foreign person determined to have
committed the violation on account of which the sanctions were
imposed if the President determines that--
[(1) the parent, affiliate, subsidiary, or successor
entity (as the case may be) has not, on the basis of
available evidence, itself violated the export control
regulation involved, either directly or through a
course of conduct;
[(2) the government with jurisdiction over the
parent, affiliate, subsidiary, or successor entity has
improved its export control system as measured by the
criteria set forth in subsection (d)(2);
[(3) the parent, affiliate, subsidiary, or successor
entity, has instituted improvements in internal
controls sufficient to detect and prevent violations of
the export control regime implemented under paragraph
(2); and
[(4) the impact of the sanctions imposed on the
parent, affiliate, subsidiary, or successor entity is
proportionate to the increased defense expenditures
imposed on the United States.
Notwithstanding the preceding sentence, the President may not
limit the scope of the sanction referred to in subsection
(b)(1) with respect to the parent of the foreign person
determined to have committed the violation, until that sanction
has been in effect for at least 2 years.
[(g) Reports to Congress.--The President shall include in the
annual report submitted under section 14, a report on the
status of any sanctions imposed under this section, including
any exceptions, exclusions, or modifications of sanctions that
have been applied under subsection (c), (d), or (f).
[(h) Discretionary Imposition of Sanctions.--If the President
determines that a foreign person has violated a regulation
issued by a country to control exports for national security
purposes pursuant to the agreement of the group known as the
Coordinating Committee, but in a case in which subsection
(a)(2) may not apply, the President may apply the sanctions
referred to in subsection (b) against that foreign person for a
period of not more than 5 years.
[(i) Compensation for Diversion of Militarily Critical
Technologies to Controlled Countries.--(1) In cases in which
sanctions have been applied against a foreign person under
subsection (a), the President shall initiate discussions with
the foreign person and the government with jurisdiction over
that foreign person regarding compensation on the part of the
foreign person in an amount proportionate to the costs of
research and development and procurement of new defensive
systems by the United States and the allies of the United
States to counteract the effect of the technological advance
achieved by the Soviet Union as a result of the violation by
that foreign person.
[(2) The President shall, at the time that discussions are
initiated under paragraph (1), report to the Congress that such
discussions are being undertaken, and shall report to the
Congress the outcome of those discussions.
[(j) Other Actions by the President.--Upon making a
determination under subsection (a) or (h), the President
shall--
[(1) initiate consultations with the foreign
government with jurisdiction over the foreign person
who committed the violation involved, in order to seek
prompt remedial action by that government;
[(2) initiate discussions with the governments
participating in the Coordinating Committee regarding
the violation and means to ensure that similar
violations do not occur; and
[(3) consult with and report to the Congress on the
nature of the violation and the actions the President
proposes to take, or has taken, to rectify the
situation.
[(k) Damages for Certain Violations.--(1) In any case in
which the President makes a determination under subsection (a),
the Secretary of Defense shall determine the costs of restoring
the military preparedness of the United States on account of
the violation involved. The Secretary of Defense shall notify
the Attorney General of his determination, and the Attorney
General may bring an action for damages, in any appropriate
district court of the United States, to recover such costs
against the person who committed the violation, any person that
is owned or controlled by the person who committed the
violation, and any person who owns and controls the person who
committed the violation.
[(3) The total amount awarded in any case brought under
paragraph (2) shall be determined by the court in light of the
facts and circumstances, but shall not exceed the amount of the
net loss to the national security of the United States. An
action under this subsection shall be commenced not later than
3 years after the violation occurs, or one year after the
violation is discovered, whichever is later.
[(l) Definition.--For purposes of this section, the term
``foreign person'' means any person other than a United States
person.
[missile proliferation control violations
[Sec. 11B. (a) Violations by United States Persons.--
[(1) Sanctions.--(A) If the President determines that
a United States person knowingly--
[(i) exports, transfers, or otherwise engages
in the trade of any item on the MTCR Annex, in
violation of the provisions of section 38 (22
U.S.C. 2778) or chapter 7 of the Arms Export
Control Act, section 5 or 6 of this Act, or any
regulations or orders issued under any such
provisions,
[(ii) conspires to or attempts to engage in
such export, transfer, or trade, or
[(iii) facilitates such export, transfer, or
trade by any other person,
then the President shall impose the applicable
sanctions described in subparagraph (B).
[(B) The sanctions which apply to a United States
person under subparagraph (A) are the following:
[(i) If the item on the MTCR Annex involved
in the export, transfer, or trade is missile
equipment or technology within category II of
the MTCR Annex, then the President shall deny
to such United States person, for a period of 2
years, licenses for the transfer of missile
equipment or technology controlled under this
Act.
[(ii) If the item on the MTCR Annex involved
in the export, transfer, or trade is missile
equipment or technology within category I of
the MTCR Annex, then the President shall deny
to such United States person, for a period of
not less than 2 years, all licenses for items
the export of which is controlled under this
Act.
[(2) Discretionary sanctions.--In the case of any
determination referred to in paragraph (1), the
Secretary may pursue any other appropriate penalties
under section 11 of this Act.
[(3) Waiver.--The President may waive the imposition
of sanctions under paragraph (1) on a person with
respect to a product or service if the President
certifies to the Congress that--
[(A) the product or service is essential to
the national security of the United States; and
[(B) such person is a sole source supplier of
the product or service, the product or service
is not available from any alternative reliable
supplier, and the need for the product or
service cannot be met in a timely manner by
improved manufacturing processes or
technological developments.
[(b) Transfers of Missile Equipment or Technology by Foreign
Persons.--
[(1) Sanctions.--(A) Subject to paragraphs (3)
through (7), if the President determines that a foreign
person, after the date of the enactment of this
section, knowingly--
[(i) exports, transfers, or otherwise engages
in the trade of any MTCR equipment or
technology that contributes to the design,
development, or production of missiles in a
country that is not an MTCR adherent and would
be, if it were United States-origin equipment
or technology, subject to the jurisdiction of
the United States under this Act,
[(ii) conspires to or attempts to engage in
such export, transfer, or trade, or
[(iii) facilitates such export, transfer, or
trade by any other person,
or if the President has made a determination with
respect to a foreign person under section 73(a) of the
Arms Export Control Act, then the President shall
impose on that foreign person the applicable sanctions
under subparagraph (B).
[(B) The sanctions which apply to a foreign person
under subparagraph (A) are the following:
[(i) If the item involved in the export,
transfer, or trade is within category II of the
MTCR Annex, then the President shall deny, for
a period of 2 years, licenses for the transfer
to such foreign person of missile equipment or
technology the export of which is controlled
under this Act.
[(ii) If the item involved in the export,
transfer, or trade is within category I of the
MTCR Annex, then the President shall deny, for
a period of not less than 2 years, licenses for
the transfer to such foreign person of items
the export of which is controlled under this
Act.
[(iii) If, in addition to actions taken under
clauses (i) and (ii), the President determines
that the export, transfer, or trade has
substantially contributed to the design,
development, or production of missiles in a
country that is not an MTCR adherent, then the
President shall prohibit, for a period of not
less than 2 years, the importation into the
United States of products produced by that
foreign person.
[(2) Inapplicability with respect to mtcr
adherents.--Paragraph (1) does not apply with respect
to--
[(A) any export, transfer, or trading
activity that is authorized by the laws of an
MTCR adherent, if such authorization is not
obtained by misrepresentation or fraud; or
[(B) any export, transfer, or trade of an
item to an end user in a country that is an
MTCR adherent.
[(3) Effect of enforcement actions by mtcr
adherents.--Sanctions set forth in paragraph (1) may
not be imposed under this subsection on a person with
respect to acts described in such paragraph or, if such
sanctions are in effect against a person on account of
such acts, such sanctions shall be terminated, if an
MTCR adherent is taking judicial or other enforcement
action against that person with respect to such acts,
or that person has been found by the government of an
MTCR adherent to be innocent of wrongdoing with respect
to such acts.
[(4) Advisory opinions.--The Secretary, in
consultation with the Secretary of State and the
Secretary of Defense, may, upon the request of any
person, issue an advisory opinion to that person as to
whether a proposed activity by that person would
subject that person to sanctions under this subsection.
Any person who relies in good faith on such an advisory
opinion which states that the proposed activity would
not subject a person to such sanctions, and any person
who thereafter engages in such activity, may not be
made subject to such sanctions on account of such
activity.
[(5) Waiver and report to congress.--(A) In any case
other than one in which an advisory opinion has been
issued under paragraph (4) stating that a proposed
activity would not subject a person to sanctions under
this subsection, the President may waive the
application of paragraph (1) to a foreign person if the
President determines that such waiver is essential to
the national security of the United States.
[(B) In the event that the President decides to apply
the waiver described in subparagraph (A), the President
shall so notify the Congress not less than 20 working
days before issuing the waiver. Such notification shall
include a report fully articulating the rationale and
circumstances which led the President to apply the
waiver.
[(6) Additional waiver.--The President may waive the
imposition of sanctions under paragraph (1) on a person
with respect to a product or service if the President
certifies to the Congress that--
[(A) the product or service is essential to
the national security of the United States; and
[(B) such person is a sole source supplier of
the product or service, the product or service
is not available from any alternative reliable
supplier, and the need for the product or
service cannot be met in a timely manner by
improved manufacturing processes or
technological developments.
[(7) Exceptions.--The President shall not apply the
sanction under this subsection prohibiting the
importation of the products of a foreign person--
[(A) in the case of procurement of defense
articles or defense services--
[(i) under existing contracts or
subcontracts, including the exercise of
options for production quantities to
satisfy requirements essential to the
national security of the United States;
[(ii) if the President determines
that the person to which the sanctions
would be applied is a sole source
supplier of the defense articles and
services, that the defense articles or
services are essential to the national
security of the United States, and that
alternative sources are not readily or
reasonably available; or
[(iii) if the President determines
that such articles or services are
essential to the national security of
the United States under defense
coproduction agreements or NATO
Programs of Cooperation;
[(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
the sanctions; or
[(C) to--
[(i) spare parts,
[(ii) component parts, but not
finished products, essential to United
States products or production,
[(iii) routine services and
maintenance of products, to the extent
that alternative sources are not
readily or reasonably available, or
[(iv) information and technology
essential to United States products or
production.
[(c) Definitions.--For purposes of this section and
subsection (k) and (l) of section 6--
[(1) the term ``missile'' means a category I system
as defined in the MTCR Annex, and any other unmanned
delivery system of similar capability, as well as the
specially designed production facilities for these
systems;
[(2) the term ``Missile Technology Control Regime''
or ``MTCR'' means the policy statement, between the
United States, the United Kingdom, the Federal Republic
of Germany, France, Italy, Canada, and Japan, announced
on April 16, 1987, to restrict sensitive missile-
relevant transfers based on the MTCR Annex, and any
amendments thereto;
[(3) the term ``MTCR adherent'' means a country that
participates in the MTCR or that, pursuant to an
international understanding to which the United States
is a party, controls MTCR equipment or technology in
accordance with the criteria and standards set forth in
the MTCR;
[(4) the term ``MTCR Annex'' means the Guidelines and
Equipment and Technology Annex of the MTCR, and any
amendments thereto;
[(5) the terms ``missile equipment or technology''
and ``MTCR equipment or technology'' mean those items
listed in category I or category II of the MTCR Annex;
[(6) the term ``foreign person'' means any person
other than a United States person;
[(7)(A) the term ``person'' means a natural person as
well as a corporation, business association,
partnership, society, trust, any other nongovernmental
entity, organization, or group, and any governmental
entity operating as a business enterprise, and any
successor of any such entity; and
[(B) in the case of countries where it may be
impossible to identify a specific governmental entity
referred to in subparagraph (A), the term ``person''
means--
[(i) all activities of that government
relating to the development or production of
any missile equipment or technology; and
[(ii) all activities of that government
affecting the development or production of
aircraft, electronics, and space systems or
equipment; and
[(8) the term ``otherwise engaged in the trade of''
means, with respect to a particular export or transfer,
to be a freight forwarder or designated exporting
agent, or a consignee or end user of the item to be
exported or transferred.
[chemical and biological weapons proliferation sanctions
[Sec. 11C. (a) Imposition of Sanctions.--
[(1) Determination by the president.--Except as
provided in subsection (b)(2), the President shall
impose both of the sanctions described in subsection
(c) if the President determines that a foreign person,
on or after the date of the enactment of this section,
has knowingly and materially contributed--
[(A) through the export from the United
States of any goods or technology that are
subject to the jurisdiction of the United
States under this Act, or
[(B) through the export from any other
country of any goods or technology that would
be, if they were United States goods or
technology, subject to the jurisdiction of the
United States under this Act,
to the efforts by any foreign country, project, or
entity described in paragraph (2) to use, develop,
produce, stockpile, or otherwise acquire chemical or
biological weapons.
[(2) Countries, projects, or entities receiving
assistance.--Paragraph (1) applies in the case of--
[(A) any foreign country that the President
determines has, at any time after January 1,
1980--
[(i) used chemical or biological
weapons in violation of international
law;
[(ii) used lethal chemical or
biological weapons against its own
nationals; or
[(iii) made substantial preparations
to engage in the activities described
in clause (i) or (ii);
[(B) any foreign country whose government is
determined for purposes of section 6(j) of this
Act to be a government that has repeatedly
provided support for acts of international
terrorism; or
[(C) any other foreign country, project, or
entity designated by the President for purposes
of this section.
[(3) Persons against which sanctions are to be
imposed.--Sanctions shall be imposed pursuant to
paragraph (1) on--
[(A) the foreign person with respect to which
the President makes the determination described
in that paragraph;
[(B) any successor entity to that foreign
person;
[(C) any foreign person that is a parent or
subsidiary of that foreign person if that
parent or subsidiary knowingly assisted in the
activities which were the basis of that
determination; and
[(D) any foreign person that is an affiliate
of that foreign person if that affiliate
knowingly assisted in the activities which were
the basis of that determination and if that
affiliate is controlled in fact by that foreign
person.
[(b) Consultations With and Actions by Foreign Government of
Jurisdiction.--
[(1) Consultations.--If the President makes the
determinations described in subsection (a)(1) with
respect to a foreign person, the Congress urges the
President to initiate consultations immediately with
the government with primary jurisdiction over that
foreign person with respect to the imposition of
sanctions pursuant to this section.
[(2) Actions by government of jurisdiction.--In order
to pursue such consultations with that government, the
President may delay imposition of sanctions pursuant to
this section for a period of up to 90 days. Following
these consultations, the President shall impose
sanctions unless the President determines and certifies
to the Congress that that government has taken specific
and effective actions, including appropriate penalties,
to terminate the involvement of the foreign person in
the activities described in subsection (a)(1). The
President may delay imposition of sanctions for an
additional period of up to 90 days if the President
determines and certifies to the Congress that that
government is in the process of taking the actions
described in the preceding sentence.
[(3) Report to congress.--The President shall report
to the Congress, not later than 90 days after making a
determination under subsection (a)(1), on the status of
consultations with the appropriate government under
this subsection, and the basis for any determination
under paragraph (2) of this subsection that such
government has taken specific corrective actions.
[(c) Sanctions.--
[(1) Description of sanctions.--The sanctions to be
imposed pursuant to subsection (a)(1) are, except as
provided in paragraph (2) of this subsection, the
following:
[(A) Procurement sanction.--The United States
Government shall not procure, or enter into any
contract for the procurement of, any goods or
services from any person described in
subsection (a)(3).
[(B) Import sanctions.--The importation into
the United States of products produced by any
person described in subsection (a)(3) shall be
prohibited.
[(2) Exceptions.--The President shall not be required
to apply or maintain sanctions under this section--
[(A) in the case of procurement of defense
articles or defense services--
[(i) under existing contracts or
subcontracts, including the exercise of
options for production quantities to
satisfy United States operational
military requirements;
[(ii) if the President determines
that the person or other entity to
which the sanctions would otherwise be
applied is a sole source supplier of
the defense articles or services, that
the defense articles or services are
essential, and that alternative sources
are not readily or reasonably
available; or
[(iii) if the President determines
that such articles or services are
essential to the national security
under defense coproduction agreements;
[(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
sanctions;
[(C) to--
[(i) spare parts,
[(ii) component parts, but not
finished products, essential to United
States products or production, or
[(iii) routine servicing and
maintenance of products, to the extent
that alternative sources are not
readily or reasonably available;
[(D) to information and technology essential
to United States products or production; or
[(E) to medical or other humanitarian items.
[(d) Termination of Sanctions.--The sanctions imposed
pursuant to this section shall apply for a period of at least
12 months following the imposition of sanctions and shall cease
to apply thereafter only if the President determines and
certifies to the Congress that reliable information indicates
that the foreign person with respect to which the determination
was made under subsection (a)(1) has ceased to aid or abet any
foreign government, project, or entity in its efforts to
acquire chemical or biological weapons capability as described
in that subsection.
[(e) Waiver.--
[(1) Criterion for waiver.--The President may waive
the application of any sanction imposed on any person
pursuant to this section, after the end of the 12-month
period beginning on the date on which that sanction was
imposed on that person, if the President determines and
certifies to the Congress that such waiver is important
to the national security interests of the United
States.
[(2) Notification of and report to congress.--If the
President decides to exercise the waiver authority
provided in paragraph (1), the President shall so
notify the Congress not less than 20 days before the
waiver takes effect. Such notification shall include a
report fully articulating the rationale and
circumstances which led the President to exercise the
waiver authority.
[(f) Definition of Foreign Person.--For the purposes of this
section, the term ``foreign person'' means--
[(1) an individual who is not a citizen of the United
States or an alien admitted for permanent residence to
the United States; or
[(2) a corporation, partnership, or other entity
which is created or organized under the laws of a
foreign country or which has its principal place of
business outside the United States.
[enforcement
[Sec. 12. (a) General Authority.--(1) To the extent necessary
or appropriate to the enforcement of this Act or to the
imposition of any penalty, forfeiture, or liability arising
under the Export Control Act of 1949 or the Export
Administration Act of 1969, the head of any department or
agency exercising any function thereunder (and officers or
employees of such department or agency specifically designated
by the head thereof) may make such investigations within the
United States, and the Commissioner of Customs (and officers or
employees of the United States Customs Service specifically
designated by the Commissioner) may make such investigations
outside of the United States, and the head of such department
of agency (and such officers or employees) may obtain such
information from, require such reports or the keeping of such
records by, make such inspection of the books, records, and
other writings, premises, or property of, and take the sworn
testimony of, any person. In addition, such officers or
employees may administer oaths or affirmations, and may be
subpena require any person to appear and testify or to appear
and produce books, records, and other writings, or both, and in
the case of contumacy by, or refusal to obey a subpena issued
to, any such person, a district court of the United States,
after notice to any such person and hearing, shall have
jurisdiction to issue an order requiring such person to appear
and give testimony or to appear and produce books, records, and
other writings, or both, and any failure to obey such order of
the court may be punished by such court as a contempt thereof.
In addition to the authority conferred by this paragraph, the
Secretary (and officers or employees of the Department of
Commerce designated by the Secretary) may conduct, outside the
United States, pre-license investigations and post-shipment
verifications of items licensed for export, and investigations
in the enforcement of section 8 of this Act.
[(2)(A) Subject to subparagraph (B) of this paragraph, the
United States Customs Service is authorized, in the enforcement
of this Act, to search, detain (after search), and seize goods
or technology at those ports of entry or exit from the United
States where officers of the Customs Service are authorized by
law to conduct such searches, detentions, and seizures, and at
those places outside the United States where the Customs
Service, pursuant to agreements or other arrangements with
other countries, is authorized to perform enforcement
activities.
[(B) An officer of the United States Customs Service may do
the following in carrying out enforcement authority under this
Act:
[(i) Stop, search, and examine a vehicle, vessel,
aircraft, or person on which or whom such officer has
reasonable cause to suspect there are any goods or
technology that has been, is being, or is about to be
exported from the United States in violation of this
Act.
[(ii) Search any package or container in which such
officer has reasonable cause to suspect there are any
goods or technology that has been, is being, or is
about to be exported from the United States in
violation of this Act.
[(iii) Detain (after search) or seize and secure for
trial any goods or technology on or about such vehicle,
vessel, aircraft, or person, or in such package or
container, if such officer has probable cause to
believe the goods or technology has been, is being, or
is about to be exported from the United States in
violation of this Act.
[(iv) Make arrests without warrant for any violation
of this Act committed in his or her presence or view or
if the officer has probable cause to believe that the
person to be arrested has committed or is committing
such a violation.
The arrest authority conferred by clause (iv) of this
subparagraph is in addition to any arrest authority under other
laws. The Customs Service may not detain for more than 20 days
any shipment of goods or technology eligible for export under a
general license under section 4(a)(3). In a case in which such
detention is on account of a disagreement between the Secretary
and the head of any other department or agency with export
license authority under other provisions of law concerning the
export license requirements for such goods or technology, such
disagreement shall be resolved within that 20-day period. At
the end of that 20-day period, the Customs Service shall either
release the goods or technology, or seize the goods or
technology as authorized by other provisions of law.
[(3)(A) Subject to subparagraph (B) of this paragraph, the
Secretary shall have the responsibility for the enforcement of
section 8 of this Act and, in the enforcement of the other
provisions of this Act, the Secretary is authorized to search,
detain (after search), and seize goods or technology at those
places within the United States other than those ports
specified in paragraph (2)(A) of this subsection. The search,
detention (after search), or seizure of goods or technology at
those ports and places specified in paragraph (2)(A) may be
conducted by officers or employees of the Department of
Commerce designated by the Secretary with the concurrence of
the Commissioner of Customs or a person designated by the
Commissioner.
[(B) The Secretary may designate any employee of the Office
of Export Enforcement of the Department of Commerce to do the
following in carrying out enforcement authority under this Act:
[(i) Execute any warrant or other process issued by a
court or officer of competent jurisdiction with respect
to the enforcement of the provisions of this Act.
[(ii) Make arrests without warrant for any violation
of this Act committed in his or her presence or view,
or if the officer or employee has probable cause to
believe that the person to be arrested has committed or
is committing such a violation.
[(iii) Carry firearms in carrying out any activity
described in clause (i) or (ii).
[(4) The authorities first conferred by the Export
Administration Amendments Act of 1985 under paragraph (3) shall
be exercised pursuant to guidelines approved by the Attorney
General. Such guidelines shall be issued not later than 120
days after the date of the enactment of the Export
Administration Amendments Act of 1985.
[(5) All cases involving violations of this Act shall be
referred to the Secretary for purposes of determining civil
penalties and administrative sanctions under section 11(c) of
this Act, or to the Attorney General for criminal action in
accordance with this Act.
[(6) Nothwithstanding any other provision of law, the United
States Customs Service may expend in the enforcement of export
controls under this Act not more than $12,000,000 in the fiscal
year 1985 and not more than $14,000,000 in the fiscal year
1986.
[(7) Not later than 90 days after the date of the enactment
of the Export Administration Amendments Act of 1985, the
Secretary, with the concurrence of the Secretary of the
Treasury, shall publish in the Federal Register procedures
setting forth, in accordance with this subsection, the
responsibilities of the Department of Commerce and the United
States Customs Service in the enforcement of this Act. In
addition, the Secretary, with the concurrence of the Secretary
of the Treasury, may publish procedures for the sharing of
information in accordance with subsection (c)(3) of this
section, and procedures for the submission to the appropriate
departments and agencies by private persons of information
relating to the enforcement of this Act.
[(8) For purposes of this section, a reference to the
enforcement of this Act or to a violation of this Act includes
a reference to the enforcement or a violation of any
regulation, order, or license issued under this Act.
[(b) Immunity.--No person shall be excused from complying
with any requirements under this section because of his
privilege against self-incrimination, but the immunity
provisions of section 6002 of title 18, United States Code,
shall apply with respect to any individual who specifically
claims such privilege.
[(c) Confidentiality.--(1) Except as otherwise provided by
the third sentence of section 8(b)(2) and by section
11(c)(2)(C) of this Act, information obtained under this Act on
or before June 30, 1980, which is deemed confidential,
including Shippers' Export Declarations, or with reference to
which a request for confidential treatment is made by the
person furnishing such information, shall be exempt from
disclosure under section 552 of title 5, United States Code,
and such information shall not be published or disclosed unless
the Secretary determines that the withholding thereof is
contrary to the national interest. Information obtained under
this Act after June 30, 1980, may be withheld only to the
extent permitted by statute, except that information obtained
for the purpose of consideration of, or concerning, license
applications under this Act shall be withheld from public
disclosure unless the release of such information is determined
by the Secretary to be in the national interest. Enactment of
this subsection shall not affect any judicial proceeding
commenced under section 552 of title 5, United States Code, to
obtain access to boycott reports submitted prior to October 31,
1976, which was pending on May 15, 1979; but such proceeding
shall be continued as if this Act had not been enacted.
[(2) Nothing in this Act shall be construed as authorizing
the withholding of information from the Congress or from the
General Accounting Office. All information at any time under
this Act or previous Acts regarding the control of exports,
including any report or license application required under this
Act, shall be made available to any committee or subcommittee
of Congress of appropriate jurisdiction upon request of the
chairman or ranking minority member of such committee or
subcommittee. No such committee or subcommittee, or member
thereof, shall disclose any information obtained under this Act
or previous Acts regarding the control of exports which is
submitted on a confidential basis unless the full committee
determines that the withholding of that information is contrary
to the national interest. Notwithstanding paragraph (1) of this
subsection, information referred to in the second sentence of
this paragraph shall, consistent with the protection of
intelligence, counterintelligence, and law enforcement sources,
methods, and activities, as determined by the agency that
originally obtained the information, and consistent with the
provisions of section 313 of the Budget and Accounting Act,
1921, be made available only by that agency, upon request, to
the Comptroller General of the United States or to any officer
or employee of the General Accounting Office who is authorized
by the Comptroller General to have access to such information.
No officer or employee of the General Accounting Office shall
disclose, except to the Congress in accordance with this
paragraph, any such information which is submitted on a
confidential basis and from which any individual can be
identified.
[(3) Any department or agency which obtains information which
is relevant to the enforcement of this Act, including
information pertaining to any investigation, shall furnish such
information to each department or agency with enforcement
responsibilities under this Act to the extent consistent with
the protection of intelligence, counterintelligence, and law
enforcement sources, methods, and activities. The provisions of
this paragraph shall not apply to information subject to the
restrictions set forth in section 9 of title 13, United States
Code; and return information, as defined in subsection (b) of
section 6103 of the Internal Revenue Code of 1954, may be
disclosed only as authorized by such section. The Secretary and
the Commissioner of Customs, upon request, shall exchange any
licensing and enforcement information with each other which is
necessary to facilitate enforcement efforts and effective
license decisions. The Secretary, the Attorney General, and the
Commissioner of Customs shall consult on a continuing basis
with one another and with the heads of other departments and
agencies which obtain information subject to this paragraph, in
order to facilitate the exchange of such information.
[(d) Reporting Requirements.--In the administration of this
Act, reporting requirements shall be so designed as to reduce
the cost of reporting, recordkeeping, and export documentation
required under this Act to the extent feasible consistent with
effective enforcement and compilation of useful trade
statistics. Reporting, recordkeeping, and export documentation
requirements shall be periodically reviewed and revised in the
light of developments in the field of information technology.
[(e) Simplification of Regulations.--The Secretary, in
consultation with appropriate United States Government
departments and agencies and with appropriate technical
advisory committees established under section 5(h), shall
review the regulations issued under this Act and the commodity
control list in order to determine how compliance with the
provisions of this Act can be facilitated by simplifying such
regulations, by simplifying or clarifying such list, or by any
other means.
[administrative procedure and judicial review
[Sec. 13. (a) Exemption.--Except as provided in section
11(c)(2) and subsection (c) of this section, the functions
exercised under this Act are excluded from the operation of
sections 551, 553 through 559, and 701 through 706 of title 5,
United States Code.
[(b) Public Participation.--It is the intent of the Congress
that, to the extent practicable, all regulations imposing
controls on exports under this Act be issued in proposed form
with meaningful opportunity for public comment before taking
effect. In cases where a regulation imposing controls under
this Act is issued with immediate effect, it is the intent of
the Congress that meaningful opportunity for public comment
also be provided and that the regulation be reissued in final
form after public comments have been fully considered.
[(c) Procedures Relating to Civil Penalties and Sanctions.--
(1) In any case in which a civil penalty or other civil
sanction (other than a temporary denial order or a penalty or
sanction for a violation of section 8) is sought under section
11 of this Act, the charged party is entitled to receive a
formal complaint specifying the charges and, at his or her
request, to contest the charges in a hearing before an
administrative law judge. Subject to the provisions of this
subsection, any such hearing shall be conducted in accordance
with sections 556 and 557 of title 5, United States Code. With
the approval of the administrative law judge, the Government
may present evidence in camera in the presence of the charged
party or his or her representative. After the hearing, the
administrative law judge shall make findings of fact and
conclusions of law in a written decision, which shall be
referred to the Secretary. The Secretary shall, in a written
order, affirm, modify, or vacate the decision of the
administrative law judge within 30 days after receiving the
decison. The order of the Secretary shall be final and is not
subject to judicial review, except as provided in paragraph
(3).
[(2) The proceedings described in paragraph (1) shall be
concluded within a period of 1 year after the complaint is
submitted, unless the administrative law judge extends such
period for good cause shown.
[(3) The order of the Secretary under paragraph (1) shall be
final, except that the charged party may, within 15 days after
the order is issued, appeal the order in the United States
Court of Appeals for the District of Columbia Circuit, which
shall have jurisdiction of the appeal. The court may, while the
appeal is pending, stay the order of the Secretary. The court
may review only those issues necessary to determine liability
for the civil penalty or other sanction involved. In an appeal
filed under this paragraph, the court shall set aside any
finding of fact for which the court finds there is not
substantial evidence on the record and any conclusion of law
which the court finds to be arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.
[(4) An administrative law judge referred to in this
subsection shall be appointed by the Secretary from among those
considered qualified for selection and appointment under
section 3105 of title 5, United States Code. Any person who,
for at least 2 of the 10 years immediately preceding the date
of the enactment of the Export Administration Amendments Act of
1985, has served as a hearing commissioner of the Department of
Commerce shall be included among these considered as qualified
for selection and appointment to such position.
[(d) Imposition of Temporary Denial Orders.--(1) In any case
in which it is necessary, in the public interest, to prevent an
imminent violation of this Act or any regulation, order, or
license issued under this Act, the Secretary may, without a
hearing, issue an order temporarily denying United States
export privileges (hereinafter in this subsection referred to
as a ``temporary denial order'') to a person. A temporary
denial order may be effective no longer than 180 days unless
renewed in writing by the Secretary for additional 180-day
periods in order to prevent such an imminent violation, except
that a temporary denial order may be renewed only after notice
and an opportunity for a hearing is provided.
[(2) A temporary denial order shall define the imminent
violation and state why the temporary denial order was granted
without a hearing. The person or persons subject to the
issuance or renewal of a temporary denial order may file an
appeal of the issuance or renewal of the temporary denial order
with an administrative law judge who shall, within 10 working
days after the appeal is filed, recommend that the temporary
denial order be affirmed, modified, or vacated. Parties may
submit briefs and other material to the judge. The
recommendation of the administrative law judge shall be
submitted to the Secretary who shall either accept, reject, or
modify the recommendation by written order within 5 working
days after receiving the recommendation. The written order of
the Secretary under the preceding sentence shall be final and
is not subject to judicial review, except as provided in
paragraph (3). The temporary denial order shall be affirmed
only if it is reasonable to believe that the order is required
in the public interest to prevent an imminent violation of this
Act or any regulation, order, or license issued under this Act.
All materials submitted to the administrative law judge and the
Secretary shall constitute the administrative record for
purposes of review by the courts.
[(3) An order of the Secretary affirming, in whole or in
part, the issuance of a temporary denial order may, within 15
days after the order is issued, be appealed by a person subject
to the order to the United States Court of Appeals for the
District of Columbia Circuit, which shall have jurisdiction of
the appeal. The court may review only those issues necessary to
determine whether the standard for issuing the temporary denial
order has been met. The court shall vacate the Secretary's
order if the court finds that the Secretary's order is
arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.
[(e) Appeals From License Denials.--A determination of the
Secretary, under section 10(f) of this Act, to deny a license
may be appealed by the applicant to an administrative law judge
who shall have the authority to conduct proceedings to
determine only whether the item sought to be exported is in
fact on the control list. Such proceedings shall be conducted
within 90 days after the appeal is filed. Any determination by
an administrative law judge under this subsection and all
materials filed before such judge in the proceedings shall be
reviewed by the Secretary, who shall either affirm or vacate
the determination in a written decision within 30 days after
receiving the determination. The Secretary's written decision
shall be final and is not subject to judicial review. Subject
to the limitations provided in section 12(c) of this Act, the
Secretary's decision shall be published in the Federal
Register.
[annual report
[Sec. 14. (a) Contents.--Not later than December 31 of each
year, the Secretary shall submit to the Congress a report on
the administration of this Act during the preceding fiscal
year. All agencies shall cooperate fully with the Secretary in
providing information for such report. Such report shall
include detailed information with respect to--
[(1) the implementation of the policies set forth in
section 3;
[(2) general licensing activities under sections 5,
6, and 7, and any changes in the exercise of the
authorities contained in sections 5(a), 6(a), and 7(a);
[(3) the results of the review of United States
policy toward individual countries pursuant to section
5(b);
[(4) the results, in as much detail as may be
included consistent with the national security and the
need to maintain the confidentiality of proprietary
information, of the actions, including reviews and
revisions of export controls maintained for national
security purposes, required by section 5(c)(3);
[(5) actions taken to carry our section 5(d);
[(6) changes in categories of items under export
control referred to in section 5(e);
[(7) determinations of foreign availability made
under section 5(f), the citeria used to make such
determinations, the removal of any export controls
under such section, and any evidence demonstrating a
need to impose export controls for national security
purposes notwithstanding foreign availability;
[(8) actions taken in compliance with section
5(f)(6);
[(9) the operation of the indexing system under
section 5(g);
[(10) consultations with the technical advisory
committees established pursuant to section 5(h), the
use made of the advice rendered by such committees, and
the contributions of such committees toward
implementing the policies set forth in this Act;
[(11) the effectiveness of export controls imposed
under section 6 in furthering the foreign policy of the
United States;
[(12) export controls and monitoring under section 7;
[(13) the information contained in the reports
required by section 7(b)(2), together with an analysis
of--
[(A) the impact on the economy and world
trade of shortages or increased prices for
commodities subject to monitoring under this
Act or section 812 of the Agricultural Act of
1970;
[(B) the worldwide supply of such
commodities; and
[(C) actions being taken by other countries
in response to such shortages or increased
prices;
[(14) actions taken by the President and the
Secretary to carry out the antiboycott policies set
forth in section 3(5) of this Act;
[(15) organizational and procedural changes
undertaken in furtherance of the policies set forth in
this Act, including changes to increase the efficiency
of the export licensing process and to fulfill the
requirements of section 10, including an accounting of
appeals received, court orders issued, and actions
taken pursuant thereto under subsection (j) of such
section;
[(16) delegations of authority by the President as
provided in section 4(e) of this Act;
[(17) efforts to keep the business sector of the
Nation informed with respect to policies and procedures
adopted under this Act;
[(18) any reviews undertaken in furtherance of the
policies of this Act, including the results of the
review required by section 12(d), and any action taken,
on the basis of the review required by section 12(e),
to simplify regulations issued under this Act;
[(19) violations under section 11 and enforcement
activities under section 12; and
[(20) the issuance of regulations under the authority
of this Act, including an explanation of each case in
which regulations were not issued in accordance with
the first sentence of section 13(b).
[(b) Report on Certain Export Controls.--To the extent that
the President determines that the policies set forth in section
3 of this Act require the control of the export of goods and
technology other than those subject to multilateral controls,
or require more stringent controls than the multilateral
controls, the President shall include in each annual report the
reasons for the need to impose, or to continue to impose, such
controls and the estimated domestic economic impact on the
various industries affected by such controls.
[(c) Report on Negotiations.--The President shall include in
each annual report a detailed report on the progress of the
negotiations required by section 5(i), until such negotiations
are concluded.
[(d) Report on Exports to Controlled Countries.--The
Secretary shall include in each annual report a detailed report
which lists every license for exports to controlled countries
which was approved under this Act during the preceding fiscal
year. Such report shall specify to whom the license was
granted, the type of goods or technology exported, and the
country receiving the goods or technology. The information
required by this subsection shall be subject to the provisions
of section 12(c) of this Act.
[(e) Report on Domestic Economic Impact of Exports to
Controlled Countries.--The Secretary shall include in each
annual report a detailed description of the extent of injury to
United States industry and the extent of job displacement
caused by United States exports of goods and technology to
controlled countries. The annual report shall also include a
full analysis of the consequences of exports of turnkey plants
and manufacturing facilities to controlled countries which are
used by such countries to produce goods for export to the
United States or to compete with United States products in
export markets.
[(f) Annual Report of the President.--The President shall
submit an annual report to the Congress estimating the
additional defense expenditures of the United States arising
from illegal technology transfers, focusing on estimated
defense costs arising from illegal technology transfers that
resulted in a serious adverse impact on the strategic balance
of forces. These estimates shall be based on assessment by the
intelligence community of any technology transfers that
resulted in such serious adverse impact. This report may have a
classified annex covering any information of a sensitive
nature.
[administrative and regulatory authority
[Sec. 15. (a) Under Secretary of Commerce.--The President
shall appoint, by and with the advice and consent of the
Senate, an Under Secretary of Commerce for Export
Administration who shall carry out all functions of the
Secretary under this Act and such other statutes that relate to
national security which were delegated to the office of the
Assistant Secretary of Commerce for Trade Administration before
the date of the enactment of the Export Administration
Amendments Act of 1985, and such other functions under this Act
which were delegated to such office before such date of
enactment, as the Secretary may delegate. The President shall
appoint, by and with the advice and consent of the Senate, two
Assistant Secretaries of Commerce to assist the Under Secretary
in carrying out such functions.
[(b) Issuance of Regulations.--The President and the
Secretary may issue such regulations as are necessary to carry
out the provisions of this Act. Any such regulations issued to
carry out the provisions of section 5(a), 6(a), 7(a), or (8)(b)
may apply to the financing, transporting, or other servicing of
exports and the participation therein by any person. Any such
regulations the purpose of which is to carry out the provisions
of section 5, or of section 4(a) for the purpose of
administering the provisions of section 5, may be issued only
after the regulations are submitted for review to the Secretary
of Defense, the Secretary of State, such other departments and
agencies as the Secretary considers appropriate, and the
appropriate technical advisory committee. The preceding
sentence does not require the concurrence or approval of any
official, department, or agency to which such regulations are
submitted.
[(c) Amendments to Regulations.--If the Secretary proposes to
amend regulations issued under this Act, the Secretary shall
report to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Foreign Affairs of the House
of Representatives on the intent and rationale of such
amendments. Such report shall evaluate the cost and burden to
United States exporters of the proposed amendments in relation
to any enhancement of licensing objectives. The Secretary shall
consult with the technical advisory committees authorized under
section 5(h) of this Act in formulating or amending regulations
issued under this Act. The procedures defined by regulations in
effect on January 1, 1984, with respect to sections 4 and 5 of
this Act, shall remain in effect unless the Secretary
determines, on the basis of substantial and reliable evidence,
that specific change is necessary to enhance the prevention of
diversions of exports which would prove detrimental to the
national security of the United States or to reduce the
licensing and paperwork burden on exporters and their
distributors.
[definitions
[Sec. 16. As used in this Act--
[(1) the term ``person'' includes the singular and
the plural and any individual, partnership,
corporation, or other form of association, including
any government or agency thereof;
[(2) the term ``United States person'' means any
United States resident or national (other than an
individual resident outside the United States and
employed by other than a United States person), any
domestic concern (including any permanent domestic
establishment of any foreign concern) and any foreign
subsidiary or affiliate (including any permanent
foreign establishment) of any domestic concern which is
controlled in fact by such domestic concern, as
determined under regulations of the President;
[(3) the term ``good'' means any article, natural or
manmade substance, material, supply or manufactured
product, including inspection and test equipment, and
excluding technical data;
[(4) the term ``technology'' means the information
and knowhow (whether in tangible form, such as models,
prototypes, drawings, sketches, diagrams, blueprints,
or manuals, or in intangible form, such as training or
technical services) that can be used to design,
produce, manufacture, utilize, or reconstruct goods,
including computer software and technical data, but not
the goods themselves;
[(5) the term ``export'' means--
[(A) an actual shipment, transfer, or
tramsmission of goods or technology out of the
United States;
[(B) a transfer of goods or technology in the
United States to an embassy or affiliate of a
controlled country; or
[(C) a transfer to any person of goods or
technology either within the United States or
outside of the United States with the knowledge
or intent that the goods or technology will be
shipped, transferred, or transmitted to an
unauthorized recipient;
[(6) the term ``controlled country'' means a
controlled country under section 5(b)(1) of this Act;
[(7) the term ``United States'' means the States of
the United States, the District of Columbia, and any
commonwealth, territory, dependency, or possession of
the United States, and includes the outer Continental
Shelf, as defined in section 2(a) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1331(a)); and
[(8) the term ``Secretary'' means the Secretary of
Commerce.
[effect on other acts
[Sec. 17. (a) In General.--Except as otherwise provided in
this Act, nothing contained in this Act shall be construed to
modify, repeal, supersede, or otherwise affect the provisions
of any other laws authorizing control over exports of any
commodity.
[(b) Coordination of Controls.--The authority granted to the
President under this Act shall be exercised in such manner as
to achieve effective coordination with the authority exercised
under section 38 of the Arms Export Control Act (22 U.S.C.
2778).
[(c) Civil Aircraft Equipment.--Notwithstanding any other
provision of law, any product (1) which is standard equipment
certified by the Federal Aviation Administration, in civil
aircraft and is an integral part of such aircraft, and (2)
which is to be exported to a country other than a controlled
country, shall be subject to export controls exclusively under
this Act. Any such product shall not be subject to controls
under section 38(b)(2) of the Arms Export Control Act.
[(d) Nonproliferation Controls.--(1) Nothing in section 5 or
6 of this Act shall be construed to supersede the procedures
published by the President pursuant to section 309(c) of the
Nuclear Non-Proliferation Act of 1978.
[(2) With respect to any export license application which,
under the procedures published by the President pursuant to
section 309(c) of the Nuclear Non-Proliferation Act of 1978, is
referred to the Subgroup on Nuclear Export Coordination or
other interagency group, the provisions of section 10 of this
Act shall apply with respect to such license application only
to the extent that they are consistent with such published
procedures, except that if the processing of any such
application under such procedures is not completed within 180
days after the receipt of the application by the Secretary, the
applicant shall have the rights of appeal and court action
provided in section 10(j) of this Act.
[(e) Termination of Other Authority.--On October 1, 1979, the
Mutual Defense Assistance Control Act of 1951 (22 U.S.C. 1611-
1613d), is superseded.
[(f) Agricultural Act of 1970.--Nothing in this Act shall
affect the provisions of the last sentence of section 812 of
the Agricultural Act of 1970 (7 U.S.C. 612c-3).
[authorization of appropriations
[Sec. 18. (a) Requirement of Authorizing Legislation.--(1)
Notwithstanding any other provisions of law, money appropriated
to the Department of Commerce for expenses to carry out the
purposes of this Act may be obligated or expended only if--
[(A) the appropriation thereof has been previously
authorized by law enacted on or after the date of the
enactment of the Export Administration Amendments Act
of 1985; or
[(B) the amount of all such obligations and
expenditures does not exceed an amount previously
prescribed by law enacted on or after such date.
[(2) To the extent that legislation enacted after the making
of an appropriation to carry out the purposes of this Act
authorizes the obligation or expenditure thereof, the
limitation contained in paragraph (1) shall have no effect.
[(3) The provisions of this subsection shall not be
superseded except by a provision of law enacted after the date
of the enactment of the Export Administration Amendments Act of
1985 which specifically repeals, modifies, or supersedes the
provisions of this subsection.
[(b) Authorization.--There are authorized to be appropriated
to the Department of Commerce to carry out the purposes of this
Act--
[(1) $42,813,000 for the fiscal year 1993;
[(2) such sums as may be necessary for the fiscal
year 1994; and
[(3) such additional amounts, for each such fiscal
year, as may be necessary for increases in salary, pay,
retirement, other employee benefits authorized by law,
and other nondiscretionary costs.
[effective date
[Sec. 19. (a) Effective Date.--This Act shall take effect
upon the expiration of the Export Administration Act of 1969.
[(b) Issuance of Regulations.--(1) Regulations implementing
the provisions of section 10 of this Act shall be issued and
take effect not later than July 1, 1980.
[(2) Regulations implementing the provisions of section 7(c)
of this Act shall be issued and take effect not later than
January 1, 1980.
[termination date
[Sec. 20. The authority granted by this Act terminates on
August 20, 2001.
[savings provisions
[Sec. 21. (a) In General.--All, delegations, rules,
regulations, orders, determinations, licenses, or other forms
of administrative action which have been made, issued,
conducted, or allowed to become effective under the Export
Control Act of 1949 or the Export Administration Act of 1969
and which are in effect at the time this Act takes effect shall
continue in effect according to their terms until modified,
superseded, set aside, or revoked under this Act.
[(b) Administrative Proceedings.--This Act shall not apply to
any administrative proceedings commenced or any application for
a license made, under the Export Administration Act of 1969,
which is pending at the time this Act takes effect.
[technical amendments
[Sec. 22. (a) Section 38(e) of the Arms Export Control Act
(22 U.S.C. 2778(e)) is amended by striking out ``sections 6(c),
(d), (e), and (f) and 7(a) and (c) of the Export Administration
Act of 1969'' and inserting in lieu thereof ``subsections (c),
(d), (e), and (f) of section 11 of the Export Administration
Act of 1979, and by subsections (a) and (c) of section 12 of
such Act''.
[(b)(1) Section 103(c) of the Energy Policy and Conservation
Act (42 U.S.C. 6212(c)) is amended--
[(A) by striking out ``1969'' and inserting in lieu
thereof ``1979''; and
[(B) by striking out ``(A)'' and inserting in lieu
thereof ``(C)''.
[(2) Section 254(e)(3) of such Act (42 U.S.C. 6274(e)(3)) is
amended by striking out ``section 7 of the Export
Administration Act of 1969'' and inserting in lieu thereof
``section 12 of the Export Administration Act of 1979''.
[(c) Section 993(c)(2)(D) of the Internal Revenue Code of
1954 (26 U.S.C. 993(c)(2)(D)i) s amended--
[(1) by striking out ``403(b) of the Export
Administration Act of 1969 (50 U.S.C. App. 2403(b))''
and inserting in lieu thereof ``7(a) of the Export
Administration Act of 1979''; and
[(2) by striking out ``(A)'' and inserting in lieu
thereof ``(C)''.
[international investment survey act authorizations
[Sec. 23. (a) Section 9 of the International Investment
Survey Act of 1976 (22 U.8.C. 3108) is amended to read as
follows: * * *
[(b) The amendment made by subsection (a) shall take effect
on October 1,1979.
[miscellaneous
[Sec. 24. Section 402 of the Agricultural Trade Development
and Assistance Act of 1954 is amended by inserting ``or beer''
in the second sentence immediately after ``wine''.]
[all]