Foreign Investment Risk Review Modernization Act of 2018
This bill amends the Defense Production Act of 1950 to revise the Committee on Foreign Investment in the United States' (CFIUS's) authority to review the national security implications of foreign investments. The definition of a "covered transaction" subject to CFIUS review is amended to include certain real estate transactions, sensitive transactions involving countries of special concern, and asset transfers pursuant to bankruptcy proceedings. Other topics revised by this bill include mitigation agreements, required CFIUS review factors, and CFIUS funding and resources.
The bill delays to 2021 the National Credit Union Administration rule titled "Risk-Based Capital" published on October 29, 2015.
Export Control Reform Act of 2018
Export Controls Act of 2018
The bill grants the President authority to control and regulate: (1) the export, reexport, and transfer of commodities, software, or technology; and (2) activities relating to specific nuclear, chemical, biological, or other weapons and related projects, and foreign intelligence services. The President must establish an interagency process to identify emerging technologies essential to national security.
Anti-Boycott Act of 2018
The President must issue regulations prohibiting specified actions with respect to foreign boycotts against a country friendly to the United States.
The President must impose sanctions regarding the export, the transfer, or efforts by a foreign country to use or acquire specified weapons technology.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5841 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 16, 2018
Mr. Pittenger introduced the following bill; which was referred to the
Committee on Foreign Affairs, and in addition to the Committees on
Financial Services, Energy and Commerce, Intelligence (Permanent
Select), and Oversight and Government Reform, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``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.
TITLE IV--MODIFICATION OF ANNUAL REPORT
Sec. 401. Modification of annual report.
TITLE V--RESOURCES, SPECIAL HIRING AUTHORITY, AND OUTREACH
Sec. 501. Centralization of certain Committee functions.
Sec. 502. CFIUS resource needs.
Sec. 503. 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.
``(III) Countries of special
concern.--For the purposes of this
subparagraph, the term `countries of
special concern' means--
``(aa) any foreign country
that is subject to export
restrictions pursuant to
section 744.21 of title 15,
Code of Federal Regulations;
``(bb) any country
determined by the Secretary of
State to be a state sponsor of
terrorism; and
``(cc) 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
identified as a country
of special concern in
regulations prescribed
by the Committee.
``(ii) 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.
``(iii) 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.
``(iv) Waiver.--The President may waive any
requirement of this subparagraph upon reporting
to the Committees on Financial Services and
Foreign Affairs of the House 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) 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 subparagraphs (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 foreign government or a person controlled by or
acting on behalf of a foreign government.'';
(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, as specified in regulations
prescribed by the Committee.''.
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 may 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
acquisition, directly or
indirectly, of a substantial
interest in a United States
business by 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:
``(viii) 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.''; and
(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 (4), by striking ``proposed or pending'';
(2) by striking paragraph (5);
(3) by redesignating paragraphs (6), (7), (8), (9), (10),
and (11) as paragraphs (5), (6), (7), (8), (9), and (16),
respectively;
(4) in paragraph (9), as so redesignated, by striking
``and'' at the end; and
(5) 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''.
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''; and
(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), 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, 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.''.
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.''.
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.--
``(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).''.
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.--
``(1) 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.
``(2) Form of budget request.--A unified request under
paragraph (1) 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.''.
(b) Annual Spending Plan.--Not later than 90 days following the
date of enactment of this Act, and annually thereafter, the chairperson
of the Committee on Foreign Investment in the United States 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) of section 721 of the Defense Production Act of 1950, as
amended by this Act, 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.
(c) Waiver.--The chairperson may waive the reporting requirement
under subsection (b) with respect to a fiscal year for which a unified
budget request described under section 721(p) of the Defense Production
Act of 1950 has been submitted.
(d) 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.''.
(e) 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), or the spending plan
described under section 502 of the Foreign Investment Risk
Review Modernization Act of 2018, 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. 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.
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Introduced in House
Referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Energy and Commerce, Intelligence (Permanent Select), and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Energy and Commerce, Intelligence (Permanent Select), and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Energy and Commerce, Intelligence (Permanent Select), and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Energy and Commerce, Intelligence (Permanent Select), and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Energy and Commerce, Intelligence (Permanent Select), and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Referred to the Subcommittee on Digital Commerce and Consumer Protection.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 53 - 0.
Reported (Amended) by the Committee on Financial Services. H. Rept. 115-784, Part I.
Reported (Amended) by the Committee on Financial Services. H. Rept. 115-784, Part I.
Mr. Royce (CA) moved to suspend the rules and pass the bill, as amended.
Considered under suspension of the rules. (consideration: CR H5674-5696)
DEBATE - The House proceeded with forty minutes of debate on H.R. 5841.
At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
Considered as unfinished business. (consideration: CR H5705-5706)
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 400 - 2 (Roll no. 295).(text: CR H5674-5690)
Roll Call #295 (House)On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 400 - 2 (Roll no. 295). (text: CR H5674-5690)
Roll Call #295 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate. Read twice. Placed on Senate Legislative Calendar under General Orders. Calendar No. 492.