To provide certain exceptions from requirements for bilateral agreements with Australia and the United Kingdom for exemptions from the International Traffic in Arms Regulations.

November 14 (legislative day, NOVEMBER 12), 2003

Mr. LUGAR introduced the following bill; which was read the first time

November 17, 2003

Read the second time and placed on the calendar

To provide certain exceptions from requirements for bilateral agreements with Australia and the United Kingdom for exemptions from the International Traffic in Arms Regulations.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Defense Trade Cooperation Act of 2003'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Close defense cooperation between the United States and each of the United Kingdom and Australia requires interoperability among the armed forces.

(2) The need for interoperability must be balanced with the need for the appropriate and effective regulation of trade in defense articles and defense services.

(3) The Arms Export Control Act (22 U.S.C. 2751 et seq.) represents a delegation to the executive branch of the constitutional power of Congress to regulate commerce with foreign nations.

(4) Agreements to gain exemption from the International Traffic in Arms Regulations must be submitted to Congress for review.

SEC. 3. DEFINITIONS.

In this Act--

(1) the term `appropriate congressional committees' means the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate;

(2) the term `defense articles' has the meaning given the term in section 47 of the Arms Export Control Act (22 U.S.C. 2794);

(3) the term `defense services' has the meaning given the term in section 47 of the Arms Export Control Act (22 U.S.C. 2794); and

(4) the term `International Traffic in Arms Regulations' means the regulations maintained under sections 120 through 130 of title 22, Code of Federal Regulations, or any successor regulations.

SEC. 4. EXCEPTIONS TO BILATERAL AGREEMENT REQUIREMENTS FOR AUSTRALIA AND THE UNITED KINGDOM.

(a) EXCEPTIONS- Subsection (j) of section 38 of the Arms Export Control Act (22 U.S.C. 2778) is amended--

(1) by redesignating paragraph (4) as paragraph (5); and

(2) by inserting after paragraph (3) the following new paragraph (4):

`(4) EXCEPTIONS FROM BILATERAL AGREEMENT REQUIREMENTS-

`(A) AUSTRALIA- Subject to the provisions of the Defense Trade Cooperation Act of 2003, the requirements for a bilateral agreement described in paragraph (2)(A) shall not apply to such a bilateral agreement between the United States Government and the Government of Australia with respect to transfers or changes in end use within Australia of defense items that will remain subject to the licensing requirements of this Act after such agreement enters into force.

`(B) UNITED KINGDOM- Subject to the provisions of the Defense Trade Cooperation Act of 2003, the requirements for a bilateral agreement described in paragraphs (1)(A)(ii), (2)(A)(i), and (2)(A)(ii) shall not apply to such a bilateral agreement between the United States Government and the Government of the United Kingdom for an exemption from the licensing requirements of this Act.'.

(b) CONFORMING AMENDMENT- Paragraph (2) of such subsection is amended in the matter preceding subparagraph (A) by striking `A bilateral agreement' and inserting `Except as provided in paragraph (4), a bilateral agreement'.

SEC. 5. CERTIFICATIONS FOR THE UNITED KINGDOM AND AUSTRALIA.

Not later than 30 days before authorizing an exemption from the licensing requirements of the International Traffic in Arms Regulations in accordance with any bilateral agreement entered into with the United Kingdom or Australia under section 38(j) of the Arms Export Control Act (22 U.S.C. 2778(j)), as amended by section 4 of this Act, the President shall certify to the appropriate congressional committees that such agreement--

(1) is in the national interest of the United States and will not in any way affect the goals and policy of the United States as outlined in section 1 of the Arms Export Control Act (22 U.S.C. 2751);

(2) does not adversely affect the ability of the International Traffic in Arms Regulations to provide consistent and adequate controls for licensed exports of United States defense items; and

(3) will not adversely affect the duties or requirements of the Secretary of State under the Arms Export Control Act.

SEC. 6. NOTIFICATION OF REGULATIONS PERMITTING BILATERAL LICENSING EXEMPTIONS.

Not later than 30 days before authorizing an exemption from the licensing requirements of the International Traffic in Arms Regulations in accordance with any bilateral agreement entered into with the United Kingdom or Australia under section 38(j) of the Arms Export Control Act (22 U.S.C. 2778(j)), as amended by section 4 of this Act, the President shall submit to the appropriate congressional committees the text of the regulations that authorize such a licensing exemption.

SEC. 7. REPORT ON ISSUES RAISED IN CONSULTATIONS PURSUANT TO BILATERAL AGREEMENTS WITH AUSTRALIA AND THE UNITED KINGDOM.

Not later than one year after the date of the enactment of this Act and annually thereafter for each of the following 5 years, the President shall submit to the appropriate congressional committees a report on issues raised during the previous year in consultations conducted under the terms of any bilateral agreement with Australia, or under the terms of any bilateral agreement with the United Kingdom, for exemption from the licensing requirements of the Arms Export Control Act (22 U.S.C. 2751 et seq.). Each report shall contain detailed information--

(1) on any notifications or consultations between the United States and the United Kingdom under the terms of any agreement with the United Kingdom, or between the United States and Australia under the terms of any agreement with Australia, concerning the modification, deletion, or addition of defense items on the United States Munitions List, the United Kingdom Military List, or the Australian Defense and Strategic Goods List;

(2) listing all United Kingdom or Australia persons and entities that have been designated as qualified persons eligible to receive United States origin defense items exempt from the licensing requirements of the Arms Export Control Act under the terms of such agreements, and listing any modification, deletion, or addition to such lists, pursuant to the requirements of any agreement with the United Kingdom or any agreement with Australia;

(3) on consultations or steps taken pursuant to any agreement with the United Kingdom or any agreement with Australia concerning cooperation and consultation with either government on the effectiveness of the defense trade control systems of such government;

(4) on provisions and procedures undertaken pursuant to--

(A) any agreement with the United Kingdom with respect to the handling of United States origin defense items exempt from the licensing requirements of the Arms Export Control Act by persons and entities qualified to receive such items in the United Kingdom; and

(B) any agreement with Australia with respect to the handling of United States origin defense items exempt from the licensing requirements of the Arms Export Control Act by persons and entities qualified to receive such items in Australia;

(5) on any new understandings, including the text of such understandings, between the United States and the United Kingdom concerning retransfer of United States origin defense items made pursuant to any agreement with the United Kingdom to gain exemption from the licensing requirements of the Arms Export Control Act;

(6) on consultations with the Government of the United Kingdom or the Government of Australia concerning the legal enforcement of any such agreements;

(7) on United States origin defense items with respect to which the United States has provided an exception under the Memorandum of Understanding between the United States and the United Kingdom and any agreement between the United States and Australia from the requirement for United States Government re-export consent that was not provided for under United States laws and regulations in effect on the date of the enactment of this Act; and

(8) on any significant concerns that have arisen between the Government of Australia or the Government of the United Kingdom and the United States Government concerning any aspect of any bilateral agreement between such country and the United States to gain exemption from the licensing requirements of the Arms Export Control Act.

SEC. 8. SPECIAL REPORTS ON UNAUTHORIZED END-USE OR DIVERSION.

The Secretary of State shall notify the appropriate congressional committees, in a manner consistent with ongoing efforts to investigate and bring civil or criminal charges regarding such matters, not later than 90 days after receiving any credible information regarding the unauthorized end-use or diversion of United States exports made pursuant to any agreement with a country to gain exemption from the licensing requirements of the Arms Export Control Act. Such notification may be made in classified or unclassified form and shall include--

(1) a description of the good or service;

(2) the United States origin of the good or service;

(3) the authorized recipient of the good or service;

(4) a detailed description of the unauthorized end-use or diversion of the good or service, including any knowledge by the United States exporter of such unauthorized end-use or diversion;

(5) any enforcement action taken by the Government of the United States; and

(6) any enforcement action taken by the government of the recipient nation.

Calendar No. 388

To provide certain exceptions from requirements for bilateral agreements with Australia and the United Kingdom for exemptions from the International Traffic in Arms Regulations.

November 17, 2003

END