To provide certain authorities, requirements, and limitations on foreign assistance and arms exports.

1. Adds TITLE XIII--FOREIGN ASSISTANCE AND ARMS EXPORT MATTERS on page 296, between lines 14 and 15

   Adds a titlePrinted page

   Inserted: TITLE XIII--FOREIGN ASSISTANCE AND ARMS EXPORT MATTERS

   Inserted: SEC. 1301. TRANSFER OF CERTAIN OBSOLETE OR SURPLUS DEFENSE ARTICLES IN THE WAR RESERVE STOCKPILES FOR ALLIES TO ISRAEL.

   Inserted: (a) Transfers for Concessions.--

   Inserted: (1) Authority.--Notwithstanding section 514 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h), the President may transfer to Israel, in exchange for concessions to be negotiated by the Secretary of Defense, with the concurrence of the Secretary of State, any or all of the items described in paragraph (2).

   Inserted: (2) Covered items.--The items referred to in paragraph (1) are armor, artillery, automatic weapons ammunition, missiles, and other munitions that--

   Inserted: (A) are obsolete or surplus items;

   Inserted: (B) are in the inventory of the Department of Defense;

   Inserted: (C) are intended for use as reserve stocks for Israel; and

   Inserted: (D) as of the date of enactment of this Act, are located in a stockpile in Israel.

   Inserted: (b) Value of Concessions.--The value of concessions negotiated pursuant to subsection (a) shall be at least equal to the fair market value of the items transferred. The concessions may include cash compensation, services, waiver of charges otherwise payable by the United States, and other items of value.

   Inserted: (c) Advance Notification of Transfers.--Not later than 30 days before making a transfer under the authority of this section, the President shall transmit a notification of the proposed transfer to the Committees on Foreign Relations and Armed Services of the Senate and the Committees on International Relations and Armed Services of the House of Representatives. The notification shall identify the items to be transferred and the concessions to be received.

   Inserted: (d) Expiration of Authority.--No transfer may be made under the authority of this section more than 5 years after the date of the enactment of this Act.

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   Inserted: SEC. 1302. ADDITIONS TO WAR RESERVE STOCKPILES FOR ALLIES FOR FISCAL YEARS 2004 AND 2005.

   Inserted: Section 514(b)(2) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h(b)(2)) is amended--

   Inserted: (1) in subparagraph (A), by striking "for fiscal year 2003" and inserting "for each of fiscal years 2004 and 2005"; and

   Inserted: (2) in subparagraph (B), by striking "for fiscal year 2003" and inserting "for a fiscal year".

   Inserted: SEC. 1303. THRESHOLDS FOR ADVANCE NOTICE TO CONGRESS OF SALES OR UPGRADES OF DEFENSE ARTICLES, DESIGN AND CONSTRUCTION SERVICES, AND MAJOR DEFENSE EQUIPMENT.

   Inserted: (a) Letters of Offer To Sell.--Subsection (b) of section 36 of the Arms Export Control Act (22 U.S.C. 2776) is amended--

   Inserted: (1) in the first sentence of paragraph (1)--

   Inserted: (A) by striking "Subject to paragraph (6), in" and inserting "In";

   Inserted: (B) by striking "Act for $50,000,000" and inserting "Act for $100,000,000";

   Inserted: (C) by striking "services for $200,000,000" and inserting "services for $350,000,000";

   Inserted: (D) by striking "$14,000,000" and inserting "$50,000,000"; and

   Inserted: (E) by inserting "and in other cases if the President determines it is appropriate," before "before such letter";

   Inserted: (2) in the first sentence of paragraph (5)(C)--

   Inserted: (A) by striking "Subject to paragraph (6), if" and inserting "If";

   Inserted: (B) by striking "costs $14,000,000" and inserting "costs $50,000,000";

   Inserted: (C) by striking "equipment, $50,000,000" and inserting "equipment, $100,000,000";

   Inserted: (D) by striking "or $200,000,000" and inserting "or $350,000,000"; and

   Inserted: (E) by inserting "and in other cases if the President determines it is appropriate," before "then the President"; and

   Inserted: (3) by striking paragraph (6).

   Inserted: (b) Export Licenses.--Subsection (c) of section 36 of the Arms Export Control Act (22 U.S.C. 2776) is amended--

   Inserted: (1) in the first sentence of paragraph (1)--

   Inserted: (A) by striking "Subject to paragraph (5), in" and inserting "In";

   Inserted: (B) by striking "$14,000,000" and inserting "$50,000,000";

   Inserted: (C) by striking "services sold under a contract in the amount of $50,000,000" and inserting "services sold under a contract in the amount of $100,000,000"; and

   Inserted: (D) by inserting "and in other cases if the President determines it is appropriate," before "before issuing such";

   Inserted: (2) in the last sentence of paragraph (2), by striking "(A) and (B)" and inserting "(A), (B), and (C)"; and

   Inserted: (3) by striking paragraph (5).

   Inserted: (c) Presidential Consent.--Section 3(d) of the Arms Export Control Act (22 U.S.C. 2753(d)) is amended--

   Inserted: (1) in paragraphs (1) and (3)(A)--

   Inserted: (A) by striking "Subject to paragraph (5), the" and inserting "The";

   Inserted: (B) by striking "$14,000,000" and inserting "$50,000,000"; and

   Inserted: (C) by striking "service valued (in terms of its original acquisition cost) at $50,000,000" and inserting "service valued (in terms of its original acquisition cost) at $100,000,000"; and

   Inserted: (2) by striking paragraph (5).

   Inserted: SEC. 1304. EXCEPTION TO BILATERAL AGREEMENT REQUIREMENTS FOR TRANSFERS OF DEFENSE ITEMS.

   Inserted: (a) Findings.--Congress makes the following findings:

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

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

   Inserted: (3) The Arms Export Control Act (22 U.S.C. 2751 et seq.) authorizes the executive branch to administer arms export policies enacted by Congress in the exercise of its constitutional power to regulate commerce with foreign nations.

   Inserted: (4) The executive branch has exercised its authority under the Arms Export Control Act, in part, through the International Traffic in Arms Regulations.

   Inserted: (5) Agreements to gain exemption from the International Traffic in Arms Regulations must be submitted to Congress for review.

   Inserted: (b) Definitions.--In this section:

   Inserted: (1) Appropriate congressional committees.--The term "appropriate congressional committees" means the Committee on Foreign Relations of the Senate and the Committee on International Relations of the House of Representatives.

   Inserted: (2) Defense items.--The term "defense items" has the meaning given the term in section 38 of the Arms Export Control Act (22 U.S.C. 2778).

   Inserted: (3) International traffic in arms regulations.--The term "International Traffic in Arms Regulations" means the regulations maintained under parts 120 through 130 of title 22, Code of Federal Regulations, and any successor regulations.

   Inserted: (c) Exceptions From Bilateral Agreement Requirements.--

   Inserted: (1) In general.--Subsection (j) of section 38 of the Arms Export Control Act (22 U.S.C. 2778) is amended--

   Inserted: (A) by redesignating paragraph (4) as paragraph (5); and

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

   Inserted: "(4) Exceptions from bilateral agreement requirements.--

   Inserted: "(A) Australia.--Subject to the provisions of section 1304 of the National Defense Authorization Act for Fiscal Year 2005, the requirements for a bilateral agreement described in paragraph (2)(A) shall not apply to a bilateral agreement between the United States Government and the Government of Australia with respect to transfers or changes in end use of defense items within Australia that will remain subject to the licensing requirements of this Act after such agreement enters into force.

   Inserted: "(B) United kingdom.--Subject to the provisions of section 1304 of the National Defense Authorization Act for Fiscal Year 2005, the requirements for a bilateral agreement described in paragraphs (1)(A)(ii), (2)(A)(i), and (2)(A)(ii) shall not apply to 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.".

   Inserted: (2) 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".

   Inserted: (d) Certifications.--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 subsection (c), the President shall certify to the appropriate congressional committees that such agreement--

   Inserted: (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 under section 1 of the Arms Export Control Act (22 U.S.C. 2751);

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

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

   Inserted: (e) Notification of 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 subsection (c), the President shall submit to the appropriate congressional committees the text of the regulations that authorize such a licensing exemption.

   Inserted: (f) Report on Consultation Issues.--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 entered into with Australia under section 38(j) of the Arms Export Control Act, or under the terms of any bilateral agreement entered into with the United Kingdom under such section, for exemption from the licensing requirements of the Arms Export Control Act (22 U.S.C. 2751 et seq.). Each report shall contain--

   Inserted: (1) information 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;

   Inserted: (2) a list of 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;

   Inserted: (3) information 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;

   Inserted: (4) information on provisions and procedures undertaken pursuant to--

   Inserted: (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

   Inserted: (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;

   Inserted: (5) information 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;

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

   Inserted: (7) information 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

   Inserted: (8) information 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.

   Inserted: (g) Special Notifications.--

   Inserted: (1) Required notifications.--The Secretary of State shall notify the appropriate congressional committees not later than 90 days after receiving any credible information regarding an unauthorized end-use or diversion of United States exports of goods or services made pursuant to any agreement with a country to gain exemption from the licensing requirements of the Arms Export Control Act. The notification shall be made in a manner that is consistent with any ongoing efforts to investigate and commence civil actions or criminal investigations or prosecutions regarding such matters and may be made in classified or unclassified form.

   Inserted: (2) Content.--The notification regarding an unauthorized end-use or diversion of goods or services under paragraph (1) shall include--

   Inserted: (A) a description of the goods or services;

   Inserted: (B) the United States origin of the good or service;

   Inserted: (C) the authorized recipient of the good or service;

   Inserted: (D) a detailed description of the unauthorized end-use or diversion, including any knowledge by the United States exporter of such unauthorized end-use or diversion;

   Inserted: (E) any enforcement action taken by the Government of the United States; and

   Inserted: (F) any enforcement action taken by the government of the recipient nation.

   Inserted: SEC. 1305. AUTHORITY TO PROVIDE CATALOGING DATA AND SERVICES TO NON-NATO COUNTRIES.

   Inserted: Section 21(h)(2) of the Arms Export Control Act (22 U.S.C. 2761(h)(2)) is amended by striking "to the North Atlantic Treaty Organization or to any member government of that Organization if that Organization or member government" and inserting "to the North Atlantic Treaty Organization, to any member government of that Organization, or to the government of any other country if that Organization, member government, or other government".

   Inserted: SEC. 1306. FREEDOM SUPPORT ACT PERMANENT WAIVER AUTHORITY.

   Inserted: (a) Authority To Waive Restrictions and Eligibility Requirements.--If the President submits the certification and report described in subsection (b) with respect to an independent state of the former Soviet Union for a fiscal year, funds may be obligated and expended during that fiscal year under sections 503 and 504 of the FREEDOM Support Act (22 U.S.C. 5853 and 5854) for assistance or other programs and activities for that state even if that state has not met one or more of the requirements for eligibility under paragraphs (1) through (4) of section 502 of such Act (22 U.S.C. 5852).

   Inserted: (b) Certification and Report.--

   Inserted: (1) In general.--The certification and report referred to in subsection (a) are a written certification submitted by the President to Congress that the waiver of the restriction under such section 502 and the requirements in that section during the fiscal year covered by such certification is important to the national security interests of the United States, together with a report containing the following:

   Inserted: (A) A description of the activity or activities that prevent the President from certifying that the state is committed to the matters set forth in the provisions of law specified in subsection (a) in such fiscal year.

   Inserted: (B) An explanation of why the waiver is important to the national security interests of the United States.

   Inserted: (C) A description of the strategy, plan, or policy of the President for promoting the commitment of the state to, and compliance by the state with, such matters, notwithstanding the waiver.

   Inserted: (2) Form of report.--A report under paragraph (1) shall be submitted in unclassified form, but may include a classified annex.

   Inserted: SEC. 1307. MARKETING INFORMATION FOR COMMERCIAL COMMUNICATIONS SATELLITES.

   Inserted: (a) In General.--A license shall not be required under section 38 of the Arms Export Control Act (22 U.S.C. 2778) for the transfer of marketing information for the purpose of providing information directly related to the sale of commercial communications satellites and related parts to a member country of the North Atlantic Treaty Organization (NATO) and Australia, Japan, and New Zealand.

   Inserted: (b) Marketing Information.--In this section, the term "marketing information" means data that a seller must provide to a potential customer (including a foreign end-user) that will enable the customer to make a purchase decision to award a contract for goods or services, including system description, functional information, price and schedule information, information required for installation, operation, maintenance, and

   Inserted: repair, and includes that level of data necessary to ensure safe use of the product, but does not include sensitive encryption and source code data, detailed design data, engineering analysis, or manufacturing know-how.

   Inserted: (c) Exception.--Nothing in this section shall exempt commercial communications satellites from any licensing requirement under section 38 of the Arms Export Control Act (22 U.S.C. 2778) for defense items and defense services, except as described in subsection (a).

   Inserted: SEC. 1308. AUTHORITY TO TRANSFER NAVAL VESSELS TO CERTAIN FOREIGN COUNTRIES.

   Inserted: (a) Authority To Transfer by Grant.--The Secretary of the Navy is authorized to transfer vessels to foreign countries on a grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j) as follows:

   Inserted: (1) Chile.--To the Government of Chile, the SPRUANCE class destroyer O'BANNON (DD 987).

   Inserted: (2) Portugal.--To the Government of Portugal, the OLIVER HAZARD PERRY class guided missile frigate GEORGE PHILIP (FFG 12).

   Inserted: (b) Authority To Transfer by Sale.--The Secretary of the Navy is authorized to transfer on a sale basis under section 21 of the Arms Export Control Act (22 U.S.C. 2761) to the Taipei Economic and Cultural Representative Office in the United States (which is the Taiwan instrumentality designated pursuant to section 10(a) of the Taiwan Relations Act) the ANCHORAGE class dock landing ship ANCHORAGE (LSD 36).

   Inserted: (c) Grants Not Counted in Annual Total of Transferred Excess Defense Articles.--The value of a vessel transferred to another country on a grant basis under section 516 of the Foreign Assistance Act of 1961 pursuant to authority provided by subsection (a) shall not be counted for the purposes of subsection (g) of that section in the aggregate value of excess defense articles transferred to countries under that section in any fiscal year.

   Inserted: (d) Costs of Transfers.--Any expense incurred by the United States in connection with a transfer authorized by this section shall be charged to the recipient (notwithstanding section 516(e)(1) of the Foreign Assistance Act of 1961 in the case of a transfer authorized to be made on a grant basis under subsection (a)).

   Inserted: (e) Repair and Refurbishment in United States Shipyards.--To the maximum extent practicable, the President shall require, as a condition of the transfer of a vessel under this section, that the country to which the vessel is transferred have such repair or refurbishment of the vessel as is needed, before the vessel joins the naval forces of that country, performed at a shipyard located in the United States, including a United States Navy shipyard.

   Inserted: (f) Expiration of Authority.-- The authority to transfer a vessel under this section shall expire at the end of the two-year period beginning on the date of the enactment of this Act.

   Inserted: SEC. 1309. ADDITIONAL INFORMATION IN CERTIFICATIONS BY THE PRESIDENT WITH RESPECT TO APPLICATIONS FOR LICENSES FOR THE EXPORT OF DEFENSE ARTICLES OR DEFENSE SERVICES SOLD UNDER A CONTRACT.

   Inserted: Section 36(c)(1) of the Arms Export Control Act (22 U.S.C. 2776(c)(1)) is amended by striking "and (C) a description of the items to be exported" and inserting "(C) a description of the items to be exported, and (D) the date on which the contract was signed and the identities of the parties to the contract".

   Original wording

   On page 296, between lines 14 and 15, insert the following:

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As printed