Details of the Export License Provisions in House-Passed H.R. 2410

Subtitle A of Title VIII, the Defense Trade Controls Performance Improvement Act of 2009, was summarized in a previous issue of ITT. Today's summary provides highlights of Subtitle B of Title VIII (Provisions Relating to Export Licenses).

(See ITT's Online Archives or 06/24/09 news, 09062420, for BP summary of Subtitle A.)

Although the House passed H.R. 2410 on June 10, 2009, it is not in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate and then the bill must be approved (enacted) by the President.

Highlights of Subtitle B, based on both the bill text and the Committee's report, include (partial list):

Authority to Remove Satellites, Related Components from USML

The President would be authorized to remove satellites and related components from the U.S. Munitions List, consistent with the procedures in 22 U.S.C. 2778(f). The President may not exercise this authority before the date that is 90 days after the date of enactment.

China exception. The president would not be allowed to exercise such authority with respect to any satellite or related component that may, directly or indirectly, be transferred to, or launched into outer space by, the People's Republic of China.

Penalties for Violations of AECA Sections 38 and 39 Updated

1. U.S.C. 2778(c) would be amended to state that whoever willfully (1) violates Arms Export Control Act (AECA) Section 38 or 39, or (2) in a registration or license application or required report, makes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, shall be fined not more than $1,000,000 or imprisoned not more than 20 years, or both. Such changes would take effect on the date of enactment and would apply with respect to violations of section 38 and 39 of the AECA committed on or after that date. The provisions on the identification of violators (22 USC 2778(g)) would also be amended.

(According to the Committee report, this change would update the AECA penalties for violations in the export of U.S. arms to conform to the increased penalties enacted in the 110th Congress amending the International Emergency Economic Powers Act (IEEPA).)

Expediting Congressional Defense Export Review Period for Israel

1. USC 2751 et seq. would be amended to grant Israel the same 15-day Congressional Review period of proposed arms sales that applies to NATO countries, Australia, New Zealand, South Korea, and Japan.

Reporting Requirement for Certain Unlicensed Defense Article Exports

1. USC 2415(b) would be amended by adding a requirement to report on certain unlicensed defense article exports to an existing annual military assistance report.

Presidential Directives Regarding U.S. Export Policies

The President would be required to make available to specified Congressional committees the text of each Presidential directive regarding U.S. export policies, practices, and regulations relating to the implementation of the AECA not later than 15 days after the date on which the directive has been signed or authorized by the President. Each Presidential directive described above that is signed or authorized by the President on or after January 1, 2009, and before the date of the enactment would have to be made available to the specified congressional committees not later than 90 days after the date of the enactment.

Increase in Value of Defense Articles, Services for Congressional Review

The value thresholds would be increased for Congressional 15/30-day review periods of Foreign Military Sales (FMS) and commercial arms sales between $50 to $100 million for various categories, and would increase the threshold for notification of arms sales to Congress for all countries to account for inflation since the lower level was set in the 1980s. However, it would retain the general statutory threshold levels for notification of the export to Congress.

Investigations of Violations of Arms Export Control Act Section 3

The bill would require the Inspector General of the State Department to conduct a review of investigations by the State Department during each of fiscal years 2010 through 2014 of any and all possible violations of 22 USC 2753 with respect to misuse of U.S.-origin defense items to determine whether the State Department has fully complied with the requirements of such section, as well as its own internal procedures (and whether such procedures are adequate), for reporting to Congress any information regarding the unlawful use or transfer of U.S.-origin defense articles, defense services, and technology by foreign countries. The Inspector General would also be required to report to specified congressional committees.

Reports to Congress on DDTC Self-Financing, Major Defense Exports, U.S. Export Controls

The following reporting requirements in HR 2410 include:

DDTC self-financing. Not later than 90 days after the date of the enactment, the Secretary of State would be required to submit to the appropriate congressional committees a report on possible mechanisms to place the export licensing functions of DDTC on a 100% self-financing basis.

Major defense exports under AECA Section 38. 22 USC 2778 would be amended by adding a new subsection which requires the President to transmit to specified congressional committees a report that contains a detailed listing, by country and by international organization, of the total dollar value of major defense equipment and defense articles exported pursuant to licenses authorized under 22 USC 2778 for the previous fiscal year.

Certain aspects of U.S. export controls. Not later than 180 days after the date of the enactment of this Act, the President would be required to transmit to Congress a report on the plans of such departments and agencies to streamline U.S. export controls and processes to better serve the needs of the U.S. scientific and research community, consistent with the protection of U.S. national security interests.

(See ITT's Online Archives or 06/15/09 news, 09061520, for previous BP summary on the House passage of H.R. 2410.)

H.R. 2410 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h2410eh.txt.pdf.