Security Assistance and Arms Export Control Reform Act of 2008

        [Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 5916 Referred in Senate (RFS)]

2d Session
H. R. 5916

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 19, 2008

Received; read twice and referred to the Committee on Foreign
Relations

_______________________________________________________________________

AN ACT

To reform the administration of the Arms Export Control Act, 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 AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Security
Assistance and Arms Export Control Reform Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title and table of contents.
TITLE I--REFORM OF ARMS EXPORT CONTROL PROCEDURES

Subtitle A--Defense Trade Controls Performance Improvement Act of 2008

Sec. 101.  Short title.
Sec. 102.  Findings.
Sec. 103. Strategic review and assessment of the United States export
controls system.
Sec. 104. Performance goals for processing of applications for licenses
to export items on USML.
Sec. 105. Requirement to ensure adequate staff and resources for DDTC
of the Department of State.
Sec. 106. Audit by Inspector General of the Department of State.
Sec. 107. Increased flexibility for use of defense trade controls
registration fees.
Sec. 108. Review of ITAR and USML.
Sec. 109. Special licensing authorization for certain exports to NATO
member states, Australia, Japan, New
Zealand, Israel, and South Korea.
Sec. 110. Availability of information on the status of license
applications under chapter 3 of the Arms
Export Control Act.
Sec. 111. Sense of Congress.
Sec. 112. Definitions.
Sec. 113. Authorization of appropriations.
Subtitle B--Miscellaneous Provisions

Sec. 121. Report on self-financing options for export licensing
functions of DDTC of the Department of
State.
Sec. 122. Expediting congressional defense export review period for
South Korea and Israel.
Sec. 123. Availability to Congress of Presidential directives regarding
United States arms export policies,
practices, and regulations.
Sec. 124. Increase in congressional notification thresholds and
expediting congressional review for South
Korea and Israel.
Sec. 125. Diplomatic efforts to strengthen national and international
arms export controls.
Sec. 126. Reporting requirement for unlicensed exports.
Sec. 127. Report on value of major defense equipment and defense
articles exported under section 38 of the
Arms Export Control Act.
Sec. 128. Report on satellite export controls.
Sec. 129. Definition.
TITLE II--SECURITY ASSISTANCE AND RELATED SUPPORT FOR ISRAEL

Sec. 201. Assessment of Israel's qualitative military edge over
military threats.
Sec. 202. Report on United States' commitments to the security of
Israel.
Sec. 203. War Reserves Stockpile.
Sec. 204. Implementation of Memorandum of Understanding with Israel.
Sec. 205. Definitions.
TITLE III--WAIVER OF CERTAIN SANCTIONS TO FACILITATE DENUCLEARIZATION
ACTIVITIES IN NORTH KOREA

Sec. 301. Waiver authority and exceptions.
Sec. 302. Certification regarding waiver of certain sanctions.
Sec. 303. Congressional notification and report.
Sec. 304. Termination of waiver authority.
Sec. 305. Expiration of waiver authority.
Sec. 306. Continuation of restrictions against the Government of North
Korea.
Sec. 307. Report on verification measures relating to North Korea's
nuclear programs.
Sec. 308. Definitions.
TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Authority to build the capacity of foreign military forces.
Sec. 402. Maintenance of European Union arms embargo against China.
Sec. 403. Reimbursement of salaries of members of the reserve
components in support of security
cooperation missions.
Sec. 404. Foreign Military Sales Stockpile Fund.
Sec. 405. Sense of Congress.
TITLE V--AUTHORITY TO TRANSFER NAVAL VESSELS

Sec. 501. Authority to transfer naval vessels to certain foreign
recipients.

TITLE I--REFORM OF ARMS EXPORT CONTROL PROCEDURES

Subtitle A--Defense Trade Controls Performance Improvement Act of 2008

SEC. 101. SHORT TITLE.

This subtitle may be cited as the ``Defense Trade Controls
Performance Improvement Act of 2008''.

SEC. 102. FINDINGS.

Congress finds the following:
(1) In a time of international terrorist threats and a
dynamic global economic and security environment, United States
policy with regard to export controls is in urgent need of a
comprehensive review in order to ensure such controls are
protecting the national security and foreign policy interests
of the United States.
(2) In January 2007, the Government Accountability Office
designated the effective identification and protection of
critical technologies as a government-wide, high-risk area,
warranting a strategic reexamination of existing programs,
including programs relating to arms export controls.
(3) Federal Government agencies must review licenses for
export of munitions in a thorough and timely manner to ensure
that the United States is able to assist United States allies
and to prevent nuclear and conventional weapons from getting
into the hands of enemies of the United States.
(4) Both staffing and funding that relate to the Department
of State's arms export control responsibilities have not kept
pace with the increased workload relating to such
responsibilities, especially over the last five years.
(5) Outsourcing and off-shoring of defense production and
the policy of many United States trading partners to require
offsets for major sales of defense and aerospace articles
present a potential threat to United States national security
and economic well-being and serve to weaken the defense
industrial base.
(6) Export control policies can have a negative impact on
United States employment, nonproliferation goals, and the
health of the defense industrial base, particularly when
facilitating the overseas transfer of technology or production
and other forms of outsourcing, such as offsets (direct and
indirect), co-production, subcontracts, overseas investment and
joint ventures in defense and commercial industries. Federal
Government agencies must develop new and effective procedures
for ensuring that export control systems address these problems
and the threat they pose to national security.
(7) In the report to Congress required by the Conference
Report (Report 109-272) accompanying the bill, H.R. 2862 (the
Science, State, Justice, Commerce and Related Agencies
Appropriations Act, 2006; Public Law 109-108), the Department
of State concluded that--
(A) defense trade licensing has become much more
complex in recent years as a consequence of the
increasing globalization of the defense industry;
(B) the most important challenge to the Department
of State's licensing process has been the sheer growth
in volume of applicants for licenses and agreements,
without the corresponding increase in licensing
officers;
(C) fiscal year 2005 marked the third straight year
of roughly 8 percent annual increases in licensing
volume;
(D) although an 8 percent increase in workload
equates to a requirement for three additional licensing
officers per year, there has been no increase in
licensing officers during this period; and
(E) the increase in licensing volume without a
corresponding increase in trained and experienced
personnel has resulted in delays and increased
processing times.
(8) In 2006, the Department of State processed over three
times as many licensing applications as the Department of
Commerce with about a fifth of the staff of the Department of
Commerce.
(9) On July 27, 2007, in testimony delivered to the
Subcommittee on Terrorism, Nonproliferation and Trade of the
House Committee on Foreign Affairs to examine the effectiveness
of the United States export control regime, the Government
Accountability Office found that--
(A) the United States Government needs to conduct
assessments to determine its overall effectiveness in
the area of arms export control; and
(B) the processing times of the Department of State
doubled over the period from 2002 to 2006.
(10) Although the current number of unprocessed
applications for licenses to export defense items is less than
3,800 applications, due to the extraordinary efforts of the
personnel and management of the Department of State's
Directorate of Defense Trade Controls, at the end of 2006, the
Department of State's backlog of such unprocessed applications
reached its highest level at more than 10,000 unprocessed
applications. This resulted in major management and personnel
challenges for the Directorate of Defense Trade Controls.
(11)(A) Allowing a continuation of the status quo in
resources for defense trade licensing could ultimately harm the
United States defense industrial base. The 2007 Institute for
Defense Analysis report entitled ``Export Controls and the U.S.
Defense Industrial Base'' found that the large backlog and long
processing times by the Department of State for applications
for licenses to export defense items led to an impairment of
United States firms in some sectors to conduct global business
relative to foreign competitors.
(B) Additionally, the report found that United States
commercial firms have been reluctant to engage in research and
development activities for the Department of Defense because
this raises the future prospects that the products based on
this research and development, even if intrinsically
commercial, will be saddled by Department of State munitions
controls due to the link to that research.
(12) According to the Department of State's fiscal year
2008 budget justification to Congress, commercial exports
licensed or approved under the Arms Export Control Act exceeded
$30,000,000,000, with nearly eighty percent of these items
exported to United States NATO allies and other major non-NATO
allies.
(13) A Government Accountability Office report of October
9, 2001 (GAO-02-120), documented ambiguous export control
jurisdiction affecting 25 percent of the items that the United
States Government agreed to control as part of its commitments
to the Missile Technology Control Regime. The United States
Government has not clearly determined which department has
jurisdiction over these items, which increases the risk that
these items will fall into the wrong hands. During both the
108th and 109th Congresses, the House of Representatives passed
legislation mandating that the Administration clarify this
issue.

SEC. 103. STRATEGIC REVIEW AND ASSESSMENT OF THE UNITED STATES EXPORT
CONTROLS SYSTEM.

(a) Review and Assessment.--
(1) In general.--Not later than March 31, 2009, the
President shall conduct a comprehensive and systematic review
and assessment of the United States arms export controls system
in the context of the national security interests and strategic
foreign policy objectives of the United States.
(2) Elements.--The review and assessment required under
paragraph (1) shall--
(A) determine the overall effectiveness of the
United States arms export controls system in order to,
where appropriate, strengthen controls, improve
efficiency, and reduce unnecessary redundancies across
Federal Government agencies, through administrative
actions, including regulations, and to formulate
legislative proposals for new authorities that are
needed;
(B) develop processes to ensure better coordination
of arms export control activities of the Department of
State with activities of other departments and agencies
of the United States that are responsible for enforcing
United States arms export control laws;
(C) ensure that weapons-related nuclear technology,
other technology related to weapons of mass
destruction, and all items on the Missile Technology
Control Regime Annex are subject to stringent control
by the United States Government;
(D) determine the overall effect of arms export
controls on counterterrorism, law enforcement, and
infrastructure protection missions of the Department of
Homeland Security;
(E) contain a detailed summary of known attempts by
unauthorized end-users (such as international arms
traffickers, foreign intelligence agencies, and foreign
terrorist organizations) to acquire items on the United
States Munitions List and related technical data,
including--
(i) data on--
(I) commodities sought, such as M-4
rifles, night vision devices, F-14
spare parts;
(II) parties involved, such as the
intended end-users, brokers,
consignees, and shippers;
(III) attempted acquisition of
technology and technical data critical
to manufacture items on the United
States Munitions List;
(IV) destination countries and
transit countries;
(V) modes of transport;
(VI) trafficking methods, such as
use of false documentation and front
companies registered under flags of
convenience;
(VII) whether the attempted illicit
transfer was successful; and
(VIII) any administrative or
criminal enforcement actions taken by
the United States and any other
government in relation to the attempted
illicit transfer;
(ii) a thorough evaluation of the Blue
Lantern Program, including the adequacy of
current staffing and funding levels;
(iii) a detailed analysis of licensing
exemptions and their successful exploitation by
unauthorized end-users; and
(iv) an examination of the extent to which
the increased tendency toward outsourcing and
off-shoring of defense production harm United
States national security and weaken the defense
industrial base, including direct and indirect
impact on employment, and formulate policies to
address these trends as well as the policy of
some United States trading partners to require
offsets for major sales of defense articles;
and
(F) assess the extent to which export control
policies and practices under the Arms Export Control
Act promote the protection of basic human rights.
(b) Congressional Briefings.--The President shall provide periodic
briefings to the appropriate congressional committees on the progress
of the review and assessment conducted under subsection (a). The
requirement to provide congressional briefings under this subsection
shall terminate on the date on which the President transmits to the
appropriate congressional committees the report required under
subsection (c).
(c) Report.--Not later than 18 months after the date of the
enactment of this Act, the President shall transmit to the appropriate
congressional committees and the Committee on Armed Services of the
House of Representatives and the Committee on Armed Services of the
Senate a report that contains the results of the review and assessment
conducted under subsection (a). The report required by this subsection
shall contain a certification that the requirement of subsection
(a)(2)(C) has been met, or if the requirement has not been met, the
reasons therefor. The report required by this subsection shall be
submitted in unclassified form, but may contain a classified annex, if
necessary.

SEC. 104. PERFORMANCE GOALS FOR PROCESSING OF APPLICATIONS FOR LICENSES
TO EXPORT ITEMS ON USML.

(a) In General.--The Secretary of State, acting through the head of
the Directorate of Defense Trade Controls of the Department of State,
shall establish the following goals:
(1) The processing time for review of each application for
a license to export items on the United States Munitions List
(other than applications for approval of agreements under part
124 of title 22, Code of Federal Regulations (or successor
regulations)) shall be not more than 60 days from the date of
receipt of the application.
(2) The processing time for review of each application for
a commodity jurisdiction determination shall be not more than
60 days from the date of receipt of the application.
(3) The total number of applications described in paragraph
(1) that are unprocessed shall be not more than 7 percent of
the total number of such applications submitted in the
preceding calendar year.
(b) Additional Review.--(1) If an application described in
paragraph (1) or (2) of subsection (a) is not processed within the time
period described in the respective paragraph of such subsection, then
the Managing Director of the Directorate of Defense Trade Controls or
the Deputy Assistant Secretary for Defense Trade and Regional Security
of the Department of State, as appropriate, shall review the status of
the application to determine if further action is required to process
the application.
(2) If an application described in paragraph (1) or (2) of
subsection (a) is not processed within 90 days from the date of receipt
of the application, then the Assistant Secretary for Political-Military
Affairs of the Department of State shall--
(A) review the status of the application to determine if
further action is required to process the application; and
(B) submit to the appropriate congressional committees a
notification of the review conducted under subparagraph (A),
including a description of the application, the reason for
delay in processing the application, and a proposal for further
action to process the application.
(3) For each calendar year, the Managing Director of the
Directorate of Defense Trade Controls shall review not less than 2
percent of the total number of applications described in paragraphs (1)
and (2) of subsection (a) to ensure that the processing of such
applications, including decisions to approve, deny, or return without
action, is consistent with both policy and regulatory requirements of
the Department of State.
(c) United States Allies.--Congress states that--
(1) it shall be the policy of the Directorate of Defense
Trade Controls of the Department of State to ensure that, to
the maximum extent practicable, the processing time for review
of applications described in subsection (a)(1) to export items
that are not subject to the requirements of section 36(b) or
(c) of the Arms Export Control Act (22 U.S.C. 2776(b) or (c))
to United States allies in direct support of combat operations
or peacekeeping or humanitarian operations with United States
Armed Forces is not more than 7 days from the date of receipt
of the application; and
(2) it shall be the goal, as appropriate, of the
Directorate of Defense Trade Controls to ensure that, to the
maximum extent practicable, the processing time for review of
applications described in subsection (a)(1) to export items
that are not subject to the requirements of section 36(b) or
(c) of the Arms Export Control Act to government security
agencies of United States NATO allies, Australia, New Zealand,
Japan, South Korea, Israel, and, as appropriate, other major
non-NATO allies for any purpose other than the purpose
described in paragraph (1) is not more than 30 days from the
date of receipt of the application.
(d) Report.--Not later than December 31, 2010, and December 31,
2011, the Secretary of State shall submit to the appropriate
congressional committees a report that contains a detailed description
of--
(1)(A) the average processing time for and number of
applications described in subsection (a)(1) to--
(i) United States NATO allies, Australia, New
Zealand, Japan, South Korea, and Israel;
(ii) other major non-NATO allies; and
(iii) all other countries; and
(B) to the extent practicable, the average processing time
for and number of applications described in subsection (b)(1)
by item category;
(2) the average processing time for and number of
applications described in subsection (a)(2);
(3) the average processing time for and number of
applications for agreements described in part 124 of title 22,
Code of Federal Regulations (relating to the International
Traffic in Arms Regulations);
(4) any management decisions of the Directorate of Defense
Trade Controls of the Department of State that have been made
in response to data contained in paragraphs (1) through (3);
and
(5) any advances in technology that will allow the time-
frames described in subsection (a)(1) to be substantially
reduced.
(e) Congressional Briefings.--If, at the end of any month beginning
after the date of the enactment of this Act, the total number of
applications described in subsection (a)(1) that are unprocessed is
more than 7 percent of the total number of such applications submitted
in the preceding calendar year, then the Secretary of State, acting
through the Under Secretary for Arms Control and International
Security, the Assistant Secretary for Political-Military Affairs, or
the Deputy Assistant Secretary for Defense Trade and Regional Security
of the Department of State, as appropriate, shall brief the appropriate
congressional committees on such matters and the corrective measures
that the Directorate of Defense Trade Controls will take to comply with
the requirements of subsection (a).
(f) Transparency of Commodity Jurisdiction Determinations.--
(1) Declaration of policy.--Congress declares that the
complete confidentiality surrounding several hundred commodity
jurisdiction determinations made each year by the Department of
State pursuant to the International Traffic in Arms Regulations
is not necessary to protect legitimate proprietary interests of
persons or their prices and customers, is not in the best
security and foreign policy interests of the United States, is
inconsistent with the need to ensure a level playing field for
United States exporters, and detracts from United States
efforts to promote greater transparency and responsibility by
other countries in their export control systems.
(2) Publication on internet website.--The Secretary of
State shall--
(A) upon making a commodity jurisdiction
determination referred to in paragraph (1) publish on
the Internet website of the Department of State not
later than 30 days after the date of the
determination--
(i) the name of the manufacturer of the
item;
(ii) a brief general description of the
item;
(iii) the model or part number of the item;
and
(iv) the United States Munitions List
designation under which the item has been
designated, except that--
(I) the name of the person or
business organization that sought the
commodity jurisdiction determination
shall not be published if the person or
business organization is not the
manufacturer of the item; and
(II) the names of the customers,
the price of the item, and any
proprietary information relating to the
item indicated by the person or
business organization that sought the
commodity jurisdiction determination
shall not be published; and
(B) maintain on the Internet website of the
Department of State an archive, that is accessible to
the general public and other departments and agencies
of the United States, of the information published
under subparagraph (A).
(g) Rule of Construction.--Nothing in this section shall be
construed to prohibit the President or Congress from undertaking a
thorough review of the national security and foreign policy
implications of a proposed export of items on the United States
Munitions List.

SEC. 105. REQUIREMENT TO ENSURE ADEQUATE STAFF AND RESOURCES FOR DDTC
OF THE DEPARTMENT OF STATE.

(a) Requirement.--The Secretary of State shall ensure that the
Directorate of Defense Trade Controls of the Department of State has
the necessary staff and resources to carry out this subtitle and the
amendments made by this subtitle.
(b) Minimum Number of Licensing Officers.--For fiscal year 2010 and
each subsequent fiscal year, the Secretary of State shall ensure that
the Directorate of Defense Trade Controls has at least 1 licensing
officer for every 1,250 applications for licenses and other
authorizations to export items on the United States Munitions List by
not later than the third quarter of such fiscal year, based on the
number of licenses and other authorizations expected to be received
during such fiscal year. The Secretary shall ensure that in meeting the
requirement of this subsection, the performance of other functions of
the Directorate of Defense Trade Controls is maintained and adequate
staff is provided for those functions.
(c) Minimum Number of Staff for Commodity Jurisdiction
Determinations.--For each of the fiscal years 2009 through 2011, the
Secretary of State shall ensure that the Directorate of Defense Trade
Controls has, to the extent practicable, not less than three
individuals assigned to review applications for commodity jurisdiction
determinations.
(d) Enforcement Resources.--In accordance with section 127.4 of
title 22, Code of Federal Regulations, U.S. Immigration and Customs
Enforcement is authorized to investigate violations of the
International Traffic in Arms Regulations on behalf of the Directorate
of Defense Trade Controls of the Department of State. The Secretary of
State shall ensure that the Directorate of Defense Trade Controls has
adequate staffing for enforcement of the International Traffic in Arms
Regulations.

SEC. 106. AUDIT BY INSPECTOR GENERAL OF THE DEPARTMENT OF STATE.

(a) Audit.--Not later than the end of each of the fiscal years 2010
and 2011, the Inspector General of the Department of State shall
conduct an independent audit to determine the extent to which the
Department of State is meeting the requirements of sections 104 and 105
of this Act.
(b) Report.--The Inspector General shall submit to the appropriate
congressional committees a report that contains the result of each
audit conducted under subsection (a).

SEC. 107. INCREASED FLEXIBILITY FOR USE OF DEFENSE TRADE CONTROLS
REGISTRATION FEES.

(a) In General.--Section 45 of the State Department Basic
Authorities Act of 1956 (22 U.S.C. 2717) is amended--
(1) in the first sentence--
(A) by striking ``For'' and inserting ``(a) In
General.--For''; and
(B) by striking ``Office'' and inserting
``Directorate'';
(2) by amending the second sentence to read as follows:
``(b) Availability of Fees.--Fees credited to the account referred
to in subsection (a) shall be available only for payment of expenses
incurred for--
``(1) management,
``(2) licensing (in order to meet the requirements of
section 105 of the Defense Trade Controls Performance
Improvement Act of 2008 (relating to adequate staff and
resources of the Directorate of Defense Trade Controls)),
``(3) compliance,
``(4) policy activities, and
``(5) facilities,
of defense trade controls functions.''; and
(3) by adding at the end the following:
``(c) Allocation of Fees.--In allocating fees for payment of
expenses described in subsection (b), the Secretary of State shall
accord the highest priority to payment of expenses incurred for
personnel and equipment of the Directorate of Defense Trade Controls,
including payment of expenses incurred to meet the requirements of
section 105 of the Defense Trade Controls Performance Improvement Act
of 2008.''.
(b) Conforming Amendment.--Section 38(b)(3)(A) of the Arms Export
Control Act (22 U.S.C. 2778(b)(3)(A)) is amended to read as follows:
``(3)(A) For each fiscal year, 100 percent of registration fees
collected pursuant to paragraph (1) shall be credited to a Department
of State account, to be available without fiscal year limitation. Fees
credited to that account shall be available only for the payment of
expenses incurred for--
``(i) management,
``(ii) licensing (in order to meet the requirements of
section 105 of the Defense Trade Controls Performance
Improvement Act of 2008 (relating to adequate staff and
resources of the Directorate of Defense Trade Controls)),
``(iii) compliance,
``(iv) policy activities, and
``(v) facilities,
of defense trade controls functions.''.

SEC. 108. REVIEW OF ITAR AND USML.

(a) In General.--The Secretary of State, in coordination with the
heads of other relevant departments and agencies of the United States
Government, shall review, with the assistance of United States
manufacturers and other interested parties described in section 111(2)
of this Act, the International Traffic in Arms Regulations and the
United States Munitions List to determine those technologies and goods
that warrant different or additional controls.
(b) Conduct of Review.--In carrying out the review required under
subsection (a), the Secretary of State shall review not less than 20
percent of the technologies and goods on the International Traffic in
Arms Regulations and the United States Munitions List in each calendar
year so that for the 5-year period beginning with calendar year 2009,
and for each subsequent 5-year period, the International Traffic in
Arms Regulations and the United States Munitions List will be reviewed
in their entirety.
(c) Report.--The Secretary of State shall submit to the appropriate
congressional committees and the Committee on Armed Services of the
House of Representatives and the Committee on Armed Services of the
Senate an annual report on the results of the review carried out under
this section.

SEC. 109. SPECIAL LICENSING AUTHORIZATION FOR CERTAIN EXPORTS TO NATO
MEMBER STATES, AUSTRALIA, JAPAN, NEW ZEALAND, ISRAEL, AND
SOUTH KOREA.

(a) In General.--Section 38 of the Arms Export Control Act (22
U.S.C. 2778) is amended by adding at the end the following:
``(k) Special Licensing Authorization for Certain Exports to NATO
Member States, Australia, Japan, New Zealand, Israel, and South
Korea.--
``(1) Authorization.--(A) The President may provide for
special licensing authorization for exports of United States-
manufactured spare and replacement parts or components listed
in an application for such special licensing authorization in
connection with defense items previously exported to NATO
member states, Australia, Japan, New Zealand, Israel, and South
Korea. A special licensing authorization issued pursuant to
this clause shall be effective for a period not to exceed 5
years.
``(B) An authorization may be issued under subparagraph (A)
only if the applicable government of the country described in
subparagraph (A), acting through the applicant for the
authorization, certifies that--
``(i) the export of spare and replacement parts or
components supports a defense item previously lawfully
exported;
``(ii) the spare and replacement parts or
components will be transferred to a defense agency of a
country described in subparagraph (A) that is a
previously approved end-user of the defense items and
not to a distributor or a foreign consignee of such
defense items;
``(iii) the spare and replacement parts or
components will not to be used to materially enhance,
optimize, or otherwise modify or upgrade the capability
of the defense items;
``(iv) the spare and replacement parts or
components relate to a defense item that is owned,
operated, and in the inventory of the armed forces a
country described in subparagraph (A);
``(v) the export of spare and replacement parts or
components will be effected using the freight forwarder
designated by the purchasing country's diplomatic
mission as responsible for handling transfers under
chapter 2 of this Act as required under regulations;
and
``(vi) the spare and replacement parts or
components to be exported under the special licensing
authorization are specifically identified in the
application.
``(C) An authorization may not be issued under subparagraph
(A) for purposes of establishing offshore procurement
arrangements or producing defense articles offshore.
``(D)(i) For purposes of this subsection, the term `United
States-manufactured spare and replacement parts or components'
means   spare and replacement parts or components--
``(I) with respect to which--
``(aa) United States-origin content costs
constitute at least 85 percent of the total
content costs;
``(bb) United States manufacturing costs
constitute at least 85 percent of the total
manufacturing costs; and
``(cc) foreign content, if any, is limited
to content from countries eligible to receive
exports of items on the United States Munitions
List under the International Traffic in Arms
Regulations (other than de minimis foreign
content);
``(II) that were last substantially transformed in
the United States; and
``(III) that are not--
``(aa) classified as significant military
equipment; or
``(bb) listed on the Missile Technology
Control Regime Annex.
``(ii) For purposes of clause (i)(I)(aa) and (bb), the
costs of non-United States-origin content shall be determined
using the final price or final cost associated with the non-
United States-origin content.
``(2) Inapplicability provisions.--(A) The provisions of
this subsection shall not apply with respect to re-exports or
re-transfers of spare and replacement parts or components and
related services of defense items described in paragraph (1).
``(B) The congressional notification requirements contained
in section 36(c) of this Act shall not apply with respect to an
authorization issued under paragraph (1).''.
(b) Effective Date.--The President shall issue regulations to
implement amendments made by subsection (a) not later than 180 days
after the date of the enactment of this Act.

SEC. 110. AVAILABILITY OF INFORMATION ON THE STATUS OF LICENSE
APPLICATIONS UNDER CHAPTER 3 OF THE ARMS EXPORT CONTROL
ACT.

Chapter 3 of the Arms Export Control Act (22 U.S.C. 2771 et seq.)
is amended by inserting after section 38 the following new section:

``SEC. 38A. AVAILABILITY OF INFORMATION ON THE STATUS OF LICENSE
APPLICATIONS UNDER THIS CHAPTER.

``(a) Availability of Information.--Not later than one year after
the date of the enactment of the Defense Trade Controls Performance
Improvement Act of 2008, the President shall make available to persons
who have pending license applications under this chapter and the
committees of jurisdiction the ability to access electronically current
information on the status of each license application required to be
submitted under this chapter.
``(b) Matters To Be Included.--The information referred to in
subsection (a) shall be limited to the following:
``(1) The case number of the license application.
``(2) The date on which the license application is received
by the Department of State and becomes an `open application'.
``(3) The date on which the Directorate of Defense Trade
Controls makes a determination with respect to the license
application or transmits it for interagency review, if
required.
``(4) The date on which the interagency review process for
the license application is completed, if such a review process
is required.
``(5) The date on which the Department of State begins
consultations with the congressional committees of jurisdiction
with respect to the license application.
``(6) The date on which the license application is sent to
the congressional committees of jurisdiction.''.

SEC. 111. SENSE OF CONGRESS.

It is the sense of Congress that--
(1)(A) the advice provided to the Secretary of State by the
Defense Trade Advisory Group (DTAG) supports the regulation of
defense trade and helps ensure that United States national
security and foreign policy interests continue to be protected
and advanced while helping to reduce unnecessary impediments to
legitimate exports in order to support the defense requirements
of United States friends and allies; and
(B) therefore, the Secretary of State should share
significant planned rules and policy shifts with DTAG for
comment; and
(2) recognizing the constraints imposed on the Department
of State by the nature of a voluntary organization such as
DTAG, the Secretary of State is encouraged to ensure that
members of DTAG are drawn from a representative cross-section
of subject matter experts from the United States defense
industry, relevant trade and labor associations, academic, and
foundation personnel.

SEC. 112. DEFINITIONS.

In this subtitle:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee on
Foreign Affairs of the House of Representatives and the
Committee on Foreign Relations of the Senate.
(2) International traffic in arms regulations; itar.--The
term ``International Traffic in Arms Regulations'' or ``ITAR''
means those regulations contained in parts 120 through 130 of
title 22, Code of Federal Regulations (or successor
regulations).
(3) Major non-nato ally.--The term ``major non-NATO ally''
means a country that is designated in accordance with section
517 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321k) as
a major non-NATO ally for purposes of the Foreign Assistance
Act of 1961 (22 U.S.C. 2151 et seq.) and the Arms Export
Control Act (22 U.S.C. 2751 et seq.).
(4) Missile technology control regime; mtcr.--The term
``Missile Technology Control Regime'' or ``MTCR'' has the
meaning given the term in section 11B(c)(2) of the Export
Administration Act of 1979 (50 U.S.C. App. 2401b(c)(2)).
(5) Missile technology control regime annex; mtcr annex.--
The term ``Missile Technology Control Regime Annex'' or ``MTCR
Annex'' has the meaning given the term in section 11B(c)(4) of
the Export Administration Act of 1979 (50 U.S.C. App.
2401b(c)(4)).
(6) Offsets.--The term ``offsets'' includes compensation
practices required of purchase in either government-to-
government or commercial sales of defense articles or defense
services under the Arms Export Control Act (22 U.S.C. 2751 et
seq.) and the International Traffic in Arms Regulations.
(7) United states munitions list; usml.--The term ``United
States Munitions List'' or ``USML'' means the list referred to
in section 38(a)(1) of the Arms Export Control Act (22 U.S.C.
2778(a)(1)).

SEC. 113. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be
necessary for fiscal year 2009 and each subsequent fiscal year to carry
out this subtitle and the amendments made by this subtitle.

Subtitle B--Miscellaneous Provisions

SEC. 121. REPORT ON SELF-FINANCING OPTIONS FOR EXPORT LICENSING
FUNCTIONS OF DDTC OF THE DEPARTMENT OF STATE.

Not later than 90 days after the date of the enactment of this Act,
the Secretary of State shall submit to the appropriate congressional
committees a report on possible mechanisms to place the export
licensing functions of the Directorate of Defense Trade Controls of the
Department of State on a 100 percent self-financing basis.

SEC. 122. EXPEDITING CONGRESSIONAL DEFENSE EXPORT REVIEW PERIOD FOR
SOUTH KOREA AND ISRAEL.

The Arms Export Control Act (22 U.S.C. 2751 et seq.) is amended--
(1) in sections 3(d)(2)(B), 3(d)(3)(A)(i), 3(d)(5),
21(e)(2)(A), 36(b)(2), 36(c)(2)(A), 36(d)(2)(A), 62(c)(1), and
63(a)(2) by inserting ``the Republic of Korea, Israel,'' before
``or New Zealand'';
(2) in section 3(b)(2), by inserting ``the Government of
the Republic of Korea,'' before ``or the Government of New
Zealand''; and
(3) in section 21(h)(1)(A), by inserting ``the Republic of
Korea,'' before ``or Israel''.

SEC. 123. AVAILABILITY TO CONGRESS OF PRESIDENTIAL DIRECTIVES REGARDING
UNITED STATES ARMS EXPORT POLICIES, PRACTICES, AND
REGULATIONS.

(a) In General.--The President shall make available to the
appropriate congressional committees the text of each Presidential
directive regarding United States export policies, practices, and
regulations relating to the implementation of the Arms Export Control
Act (22 U.S.C. 2751 et seq.) not later than 15 days after the date on
which the directive has been signed or authorized by the President.
(b) Transition Provision.--Any Presidential directive described in
subsection (a) that is signed or authorized by the President on or
after January 1, 2008, and before the date of the enactment of this Act
shall be made available to the appropriate congressional committees not
later than 90 days after the date of the enactment of this Act.
(c) Form.--To the maximum extent practicable, the Presidential
directives required to be made available to the appropriate
congressional committees under this section shall be made available on
an unclassified basis.

SEC. 124. INCREASE IN CONGRESSIONAL NOTIFICATION THRESHOLDS AND
EXPEDITING CONGRESSIONAL REVIEW FOR SOUTH KOREA AND
ISRAEL.

(a) Foreign Military Sales.--
(1) In general.--Subsection (b) of section 36 of the Arms
Export Control Act (22 U.S.C. 2776) is amended--
(A) by redesignating paragraphs (2) through (6) as
paragraphs (3) through (7), respectively; and
(B) by striking ``The letter of offer shall not be
issued'' and all that follows through ``enacts a joint
resolution'' and inserting the following:
``(2) The letter of offer shall not be issued--
``(A) with respect to a proposed sale of any
defense articles or defense services under this Act for
$200,000,000 or more, any design and construction
services for $300,000,000 or more, or any major defense
equipment for $75,000,000 or more, to the North
Atlantic Treaty Organization (NATO), any member country
of NATO, Japan, Australia, the Republic of Korea,
Israel, or New Zealand, if Congress, within 15 calendar
days after receiving such certification, or
``(B) with respect to a proposed sale of any
defense articles or services under this Act for
$100,000,000 or more, any design and construction
services for $200,000,000 or more, or any major defense
equipment for $50,000,000 or more, to any other country
or organization, if Congress, within 30 calendar days
after receiving such certification,
enacts a joint resolution''.
(2) Technical and conforming amendments.--Such section is
further amended--
(A) in subsection (b)--
(i) in paragraph (6)(C), as redesignated,
by striking ``Subject to paragraph (6), if''
and inserting ``If''; and
(ii) by striking paragraph (7), as
redesignated; and
(B) in subsection (c)(4), by striking ``subsection
(b)(5)'' each place it appears and inserting
``subsection (b)(6)''.
(b) Commercial Sales.--Subsection (c) of such section is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) by inserting after ``for an export''
the following: ``of any major defense equipment
sold under a contract in the amount of
$75,000,000 or more or of defense articles or
defense services sold under a contract in the
amount of $200,000,000 or more, (or, in the
case of a defense article that is a firearm
controlled under category I of the United
States Munitions List, $1,000,000 or more)'';
and
(ii) by striking ``Organization,'' and
inserting ``Organization (NATO),'' and by
further striking ``that Organization'' and
inserting ``NATO''; and
(B) in subparagraph (C), by inserting after
``license'' the following: ``for an export of any major
defense equipment sold under a contract in the amount
of $50,000,000 or more or of defense articles or
defense services sold under a contract in the amount of
$100,000,000 or more, (or, in the case of a defense
article that is a firearm controlled under category I
of the United States Munitions List, $1,000,000 or
more)''; and
(2) by striking paragraph (5).

SEC. 125. DIPLOMATIC EFFORTS TO STRENGTHEN NATIONAL AND INTERNATIONAL
ARMS EXPORT CONTROLS.

(a) Sense of Congress.--It is the sense of Congress that the
President should redouble United States diplomatic efforts to
strengthen national and international arms export controls by
establishing a senior-level initiative to ensure that such arms export
controls are comparable to and supportive of United States arms export
controls, particularly with respect to countries of concern to the
United States.
(b) Report.--No later than one year after the date of the enactment
of this Act, and annually thereafter for four years, the President
shall transmit to the appropriate committees of Congress a report on
United States diplomatic efforts described in subsection (a).

SEC. 126. REPORTING REQUIREMENT FOR UNLICENSED EXPORTS.

Section 655(b) of the Foreign Assistance Act of 1961 (22 U.S.C.
2415(b)) is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) were exported without a license under section 38 of
the Arms Export Control Act (22 U.S.C. 2778) pursuant to an
exemption established under the International Traffic in Arms
Regulations, other than defense articles exported in
furtherance of a letter of offer and acceptance under the
Foreign Military Sales program or a technical assistance or
manufacturing license agreement, including the specific
exemption provision in the regulation under which the export
was made.''.

SEC. 127. REPORT ON VALUE OF MAJOR DEFENSE EQUIPMENT AND DEFENSE
ARTICLES EXPORTED UNDER SECTION 38 OF THE ARMS EXPORT
CONTROL ACT.

Section 38 of the Arms Export Control Act (22 U.S.C. 2778) is
amended by adding at the end the following:
``(l) Report.--
``(1) In general.--The President shall transmit to the
appropriate 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
this section for the previous fiscal year.
``(2) Inclusion in annual budget.--The report required by
this subsection shall be included in the supporting information
of the annual budget of the United States Government required
to be submitted to Congress under section 1105 of title 31,
United States Code.
``(3) Appropriate congressional committees defined.--In
this subsection, the term `appropriate congressional
committees' means the Committee on Foreign Affairs of the House
of Representatives and the Committee on Foreign Relations of
the Senate.''.

SEC. 128. REPORT ON SATELLITE EXPORT CONTROLS.

(a) Report.--Not later than 180 days after the date of the
enactment of this Act, the President shall transmit to the appropriate
congressional committees and the Committee on Armed Services of the
House of Representatives and the Committee on Armed Services of the
Senate a report regarding--
(1) the extent to which current United States export
controls on satellites and related items under the Arms Export
Control Act are successfully preventing the transfer of
militarily-sensitive technologies to countries of concern,
especially the People's Republic of China;
(2) the extent to which comparable satellites and related
items are available from foreign sources without comparable
export controls; and
(3) whether the current export controls on satellites and
related items should be altered and in what manner, including
whether other incentives or disincentives should also be
employed to discourage exports of satellites and related items
to the People's Republic of China by any country.
(b) Definitions.--In this section, the terms ``satellite'' and
``related items'' mean satellites and all specifically designed or
modified systems or subsystems, components, parts, accessories,
attachments, and associated equipment for satellites as covered under
category XV of the International Traffic in Arms Regulations (as in
effect on the date of the enactment of this Act).

SEC. 129. DEFINITION.

In this subtitle, the term ``appropriate congressional committees''
means the Committee on Foreign Affairs of the House of Representatives
and the Committee on Foreign Relations of the Senate.

TITLE II--SECURITY ASSISTANCE AND RELATED SUPPORT FOR ISRAEL

SEC. 201. ASSESSMENT OF ISRAEL'S QUALITATIVE MILITARY EDGE OVER
MILITARY THREATS.

(a) Assessment Required.--The President shall carry out an
empirical and qualitative assessment on an ongoing basis of the extent
to which Israel possesses a qualitative military edge over military
threats to Israel. The assessment required under this subsection shall
be sufficiently robust so as to facilitate comparability of data over
concurrent years.
(b) Use of Assessment.--The President shall ensure that the
assessment required under subsection (a) is used to inform the review
by the United States of applications to sell defense articles and
defense services under the Arms Export Control Act (22 U.S.C. 2751 et
seq.) to countries in the Middle East.
(c) Reports.--
(1) Initial report.--Not later than 180 days after the date
of the enactment of this Act, the President shall transmit to
the appropriate congressional committees a report on the
initial assessment required under subsection (a).
(2) Quadrennial report.--Not later than four years after
the date on which the President transmits the initial report
under paragraph (1), and every four years thereafter, the
President shall transmit to the appropriate congressional
committees a report on the most recent assessment required
under subsection (a).
(d) Certification.--Section 36 of the Arms Export Control Act (22
U.S.C. 2776) is amended by adding at the end the following:
``(h) Certification Requirement Relating Israel's Qualitative
Military Edge.--
``(1) In general.--Any certification relating to a proposed
sale or export of defense articles or defense services under
this section to any country in the Middle East other than
Israel shall include a determination that the sale or export of
the defense articles or defense services will not adversely
affect Israel's qualitative military edge over military threats
to Israel.
``(2) Definition.--In this subsection, the term
`qualitative military edge' has the meaning given the term in
section 205 of the Security Assistance and Arms Export Control
Reform Act of 2008.''.

SEC. 202. REPORT ON UNITED STATES' COMMITMENTS TO THE SECURITY OF
ISRAEL.

(a) Initial Report.--Not later than 30 days after the date of the
enactment of this Act, the President shall transmit to the appropriate
congressional committees a report that contains--
(1) a complete, unedited, and unredacted copy of each
assurance made by United States Government officials to
officials of the Government of Israel regarding Israel's
security and maintenance of Israel's qualitative military edge,
as well as any other assurance regarding Israel's security and
maintenance of Israel's qualitative military edge provided in
conjunction with exports under the Arms Export Control Act (22
U.S.C. 2751 et seq.), for the period beginning on January 1,
1975, and ending on the date of the enactment of this Act; and
(2) an analysis of the extent to which, and by what means,
each such assurance has been and is continuing to be fulfilled.
(b) Subsequent Reports.--
(1) New assurances and revisions.--The President shall
transmit to the appropriate congressional committees a report
that contains the information required under subsection (a)
with respect to--
(A) each assurance described in subsection (a) made
on or after the date of the enactment of this Act, or
(B) revisions to any assurance described in
subsection (a) or subparagraph (A) of this paragraph,
within 15 days of the new assurance or revision being conveyed.
(2) 5-year reports.--Not later than 5 years after the date
of the enactment of this Act, and every 5 years thereafter, the
President shall transmit to the appropriate congressional
committees a report that contains the information required
under subsection (a) with respect to each assurance described
in subsection (a) or paragraph (1)(A) of this subsection and
revisions to any assurance described in subsection (a) or
paragraph (1)(A) of this subsection during the preceding 5-year
period.
(c) Form.--Each report required by this section shall be
transmitted in unclassified form, but may contain a classified annex,
if necessary.

SEC. 203. WAR RESERVES STOCKPILE.

(a) Department of Defense Appropriations Act, 2005.--Section
12001(d) of the Department of Defense Appropriations Act, 2005 (Public
Law 108-287; 118 Stat. 1011), is amended by striking ``4'' and
inserting ``6''.
(b) Foreign Assistance Act of 1961.--Section 514(b)(2)(A) of the
Foreign Assistance Act of 1961 (22 U.S.C. 2321h(b)(2)(A)) is amended by
striking ``fiscal years 2007 and 2008'' and inserting ``fiscal years
2009 and 2010''.
(c) Effective Date.--The amendment made by subsection (a) takes
effect on August 5, 2008.

SEC. 204. IMPLEMENTATION OF MEMORANDUM OF UNDERSTANDING WITH ISRAEL.

(a) In General.--Of the amount made available for fiscal year 2009
for assistance under the program authorized by section 23 of the Arms
Export Control Act (22 U.S.C. 2763) (commonly referred to as the
``Foreign Military Financing Program''), the amount specified in
subsection (b) is authorized to be made available on a grant basis for
Israel.
(b) Computation of Amount.--The amount referred to in subsection
(a) is the amount equal to--
(1) the amount specified under the heading ``Foreign
Military Financing Program'' for Israel for fiscal year 2008;
plus
(2) $150,000,000.
(c) Other Authorities.--
(1) Availability of funds for advanced weapons systems.--To
the extent the Government of Israel requests the United States
to provide assistance for fiscal year 2009 for the procurement
of advanced weapons systems, amounts authorized to be made
available for Israel under this section shall, as agreed to by
Israel and the United States, be available for such purposes,
of which not less than $670,650,000 shall be available for the
procurement in Israel of defense articles and defense services,
including research and development.
(2) Disbursement of funds.--Amounts authorized to be made
available for Israel under this section shall be disbursed not
later than 30 days after the date of the enactment of an Act
making appropriations for the Department of State, foreign
operations, and related programs for fiscal year 2009, or
October 31, 2008, whichever occurs later.

SEC. 205. DEFINITIONS.

In this subtitle--
(1) the term ``appropriate congressional committees'' means
the Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations of the
Senate; and
(2) the term ``qualitative military edge'' means the
ability to counter and defeat any credible conventional
military threat from any individual state or possible coalition
of states or from non-state actors, while sustaining minimal
damages and casualties, through the use of superior military
means, possessed in sufficient quantity, including weapons,
command, control, communication, intelligence, surveillance,
and reconnaissance capabilities that in their technical
characteristics are superior in capability to those of such
other individual or possible coalition of states or non-state
actors.

TITLE III--WAIVER OF CERTAIN SANCTIONS TO FACILITATE DENUCLEARIZATION
ACTIVITIES IN NORTH KOREA

SEC. 301. WAIVER AUTHORITY AND EXCEPTIONS.

(a) Waiver Authority.--Except as provided in subsection (b), the
President may waive, in whole or in part, the application of any
sanction contained in subparagraph (A), (B), (D), or (G) of section
102(b)(2) of the Arms Export Control Act (22 U.S.C. 2799aa-1(b)(2))
with respect to North Korea in order to provide material, direct, and
necessary assistance for disablement, dismantlement, verification, and
physical removal activities in the implementation of the commitment of
North Korea, undertaken in the Joint Statement of September 19, 2005,
``to abandoning all nuclear weapons and existing nuclear programs'' as
part of the verifiable denuclearization of the Korean Peninsula.
(b) Exceptions.--The waiver authority under subsection (a) may not
be exercised with respect to the following:
(1) Any export of lethal defense articles that would be
prevented by the application of section 102(b)(2)(B) of the
Arms Export Control Act.
(2) Any sanction relating to credit or credit guarantees
contained in section 102(b)(2)(D) of the Arms Export Control
Act.

SEC. 302. CERTIFICATION REGARDING WAIVER OF CERTAIN SANCTIONS.

Assistance described in subparagraph (B) or (G) of section
102(b)(2) of the Arms Export Control Act (22 U.S.C. 2799aa-1(b)(2)) may
be provided with respect to North Korea by reason of the exercise of
the waiver authority under section 301 only if the President first
determines and certifies to the appropriate congressional committees
that--
(1) all necessary steps will be taken to ensure that the
assistance will not be used to improve the military
capabilities of the armed forces of North Korea; and
(2) the exercise of the waiver authority is in the national
security interests of the United States.

SEC. 303. CONGRESSIONAL NOTIFICATION AND REPORT.

(a) Notification.--The President shall notify the appropriate
congressional committees in writing not later than 15 days before
exercising the waiver authority under section 301.
(b) Report.--Not later than 60 days after the date of the enactment
of this Act, and annually thereafter for such time during which the
exercise of the waiver authority under section 301 remains in effect,
the President shall transmit to the appropriate congressional
committees a report that--
(1) describes in detail the progress that is being made in
the implementation of the commitment of North Korea described
in section 301, including all United States and international
activities to verify compliance with such commitment;
(2) describes in detail any failures, shortcomings, or
obstruction by North Korea with respect to the implementation
of the commitment of North Korea described in section 301;
(3) describes in detail the progress or lack thereof in the
preceding 12-month period of all other programs promoting the
elimination of North Korea's capability to develop, deploy,
transfer, or maintain weapons of mass destruction or their
delivery systems;
(4) describes in detail all United States assistance,
regardless of the source, provided to North Korea by reason of
the exercise of the waiver authority under section 301 and any
assistance provided under any other authority if such
assistance is provided for the same or similar purposes; and
(5) beginning with the second report required by this
subsection, a justification for the continuation of the waiver
exercised under section 301 and, if applicable, section 302,
for the fiscal year in which the report is submitted.

SEC. 304. TERMINATION OF WAIVER AUTHORITY.

Any waiver in effect by reason of the exercise of the waiver
authority under section 301 shall terminate if the President determines
that North Korea--
(1)(A) on or after September 19, 2005, transferred to a
non-nuclear-weapon state, or received, a nuclear explosive
device; or
(B) on or after October 10, 2006, detonated a nuclear
explosive device; or
(2) on or after September 19, 2005--
(A) transferred to a non-nuclear-weapon state any
design information or component which is determined by
the President to be important to, and known by North
Korea to be intended by the recipient state for use in,
the development or manufacture of any nuclear explosive
device, or
(B) sought and received any design information or
component which is determined by the President to be
important to, and intended by North Korea for use in,
the development or manufacture of any nuclear explosive
device,
unless the President determines and certifies to the
appropriate congressional committees that such waiver is vital
to the national security interests of the United States.

SEC. 305. EXPIRATION OF WAIVER AUTHORITY.

Any waiver in effect by reason of the exercise of the waiver
authority under section 301 shall terminate on the date that is 4 years
after the date of the enactment of this Act. The waiver authority under
section 301 may not be exercised beginning on the date that is 3 years
after the date of the enactment of this Act.

SEC. 306. CONTINUATION OF RESTRICTIONS AGAINST THE GOVERNMENT OF NORTH
KOREA.

(a) In General.--Except as provided in section 301(a), restrictions
against the Government of North Korea that were imposed by reason of a
determination of the Secretary of State that North Korea is a state
sponsor of terrorism shall remain in effect, and shall not be lifted
pursuant to the provisions of law under which the determination was
made, unless the President certifies to the appropriate congressional
committees that--
(1) the Government of North Korea is no longer engaged in
the transfer of technology related to the acquisition or
development of nuclear weapons, particularly to the Governments
of Iran, Syria, or any other country that is a state sponsor of
terrorism;
(2) in accordance with the Six-Party Talks Agreement of
February 13, 2007, the Government of North Korea has ``provided
a complete and correct declaration of all its nuclear
programs,'' and there are measures to effectively verify this
declaration by the United States which, ``[a]t the request of
the other Parties,'' is leading ``disablement activities'' and
``provid[ing] the funding for those activities''; and
(3) the Government of North Korea has agreed to the
participation of the International Atomic Energy Agency in the
monitoring and verification of the shutdown and sealing of the
Yongbyon nuclear facility.
(b) State Sponsor of Terrorism Defined.--In this section, the term
``state sponsor of terrorism'' means 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 continued in effect pursuant
to the International Emergency Economic Powers Act), section 40 of the
Arms Export Control Act, section 620A of the Foreign Assistance Act of
1961, or any other provision of law, is a government that has
repeatedly provided support for acts of international terrorism.

SEC. 307. REPORT ON VERIFICATION MEASURES RELATING TO NORTH KOREA'S
NUCLEAR PROGRAMS.

(a) In General.--Not later than 15 days after the date of enactment
of this Act, the Secretary of State shall submit to the appropriate
congressional committees a report on verification measures relating to
North Korea's nuclear programs under the Six-Party Talks Agreement of
February 13, 2007, with specific focus on how such verification
measures are defined under the Six-Party Talks Agreement and understood
by the United States Government.
(b) Matters to Be Included.--The report required under subsection
(a) shall include, among other elements, a detailed description of--
(1) the methods to be utilized to confirm that North Korea
has ``provided a complete and correct declaration of all of its
nuclear programs'';
(2) the specific actions to be taken in North Korea and
elsewhere to ensure a high and ongoing level of confidence that
North Korea has fully met the terms of the Six-Party Talks
Agreement relating to its nuclear programs;
(3) any formal or informal agreement with North Korea
regarding verification measures relating to North Korea's
nuclear programs under the Six-Party Talks Agreement; and
(4) any disagreement expressed by North Korea regarding
verification measures relating to North Korea's nuclear
programs under the Six-Party Talks Agreement.
(c) Form.--The report required under subsection (a) shall be
submitted in unclassified form, but may include a classified annex.

SEC. 308. DEFINITIONS.

In this title--
(1) the term ``appropriate congressional committees''
means--
(A) the Committee on Foreign Affairs, the Committee
on Appropriations, and the Committee on Armed Services
of the House of Representatives; and
(B) the Committee on Foreign Relations, the
Committee on Appropriations, the Committee on Armed
Services of the Senate;
(2) the terms ``non-nuclear-weapon state'', ``design
information'', and ``component'' have the meanings given such
terms in section 102 of the Arms Export Control Act (22 U.S.C.
2799aa-1); and
(3) the term ``Six-Party Talks Agreement of February 13,
2007'' or ``Six-Party Talks Agreement'' means the action plan
released on February 13, 2007, of the Third Session of the
Fifth Round of the Six-Party Talks held in Beijing among the
People's Republic of China, the Democratic People's Republic of
Korea (North Korea), Japan, the Republic of Korea (South
Korea), the Russian Federation, and the United States relating
to the denuclearization of the Korean Peninsula, normalization
of relations between the North Korea and the United States,
normalization of relations between North Korea and Japan,
economy and energy cooperation, and matters relating to the
Northeast Asia Peace and Security Mechanism.

TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. AUTHORITY TO BUILD THE CAPACITY OF FOREIGN MILITARY FORCES.

(a) Authority.--The Secretary of State is authorized to conduct a
program to respond to contingencies in foreign countries or regions by
providing training, procurement, and capacity-building of a foreign
country's national military forces and dedicated counter-terrorism
forces in order for that country to--
(1) conduct counterterrorist operations; or
(2) participate in or support military and stability
operations in which the United States is a participant.
(b) Types of Capacity-Building.--The program authorized under
subsection (a) may include the provision of equipment, supplies, and
training.
(c) Limitations.--
(1) Annual funding limitation.--The Secretary of State may
use up to $25,000,000 of funds available under the Foreign
Military Financing program for each of the fiscal years 2009
and 2010 to conduct the program authorized under subsection
(a).
(2) Assistance otherwise prohibited by law.--The Secretary
of State may not use the authority in subsection (a) to provide
any type of assistance described in subsection (b) that is
otherwise prohibited by any provision of law.
(3) Limitation on eligible countries.--The Secretary of
State may not use the authority in subsection (a) to provide
assistance described in subsection (b) to any foreign country
that is otherwise prohibited from receiving such type of
assistance under any other provision of law.
(d) Formulation and Execution of Activities.--The Secretary of
State shall consult with the head of any other appropriate department
or agency in the formulation and execution of the program authorized
under subsection (a).
(e) Congressional Notification.--
(1) Activities in a country.--Not less than 15 days before
obligating funds for activities in any country under the
program authorized under subsection (a), the Secretary of State
shall submit to the congressional committees specified in
paragraph (3) a notice of the following:
(A) The country whose capacity to engage in
activities in subsection (a) will be assisted.
(B) The budget, implementation timeline with
milestones, and completion date for completing the
activities.
(2) Specified congressional committees.--The congressional
committees specified in this paragraph are the following:
(A) The Committee on Foreign Affairs and the
Committee on Appropriations of the House of
Representatives.
(B) The Committee on Foreign Relations and the
Committee on Appropriations of the Senate.

SEC. 402. MAINTENANCE OF EUROPEAN UNION ARMS EMBARGO AGAINST CHINA.

(a) Findings.--Congress makes the following findings:
(1) Congress has previously expressed its strong concerns
in House Resolution 57 of February 2, 2005, and Senate
Resolution 91 of March 17, 2005, with the transfer of armaments
and related technology to the People's Republic of China by
member states of the European Union, which increased eightfold
from 2001 to 2003, and with plans to terminate in the near
future the arms embargo they imposed in 1989 following the
Tiananmen Square massacre.
(2) The deferral of a decision by the European Council to
terminate its arms embargo following adoption of the
resolutions specified in paragraph (1), the visit by the
President of the United States to Europe, and growing concern
among countries in the regions and the general public on both
sides of the Atlantic, was welcomed by the Congress.
(3) The decision by the European Parliament on April 14,
2005, by a vote of 421 to 85, to oppose the lifting of the
European Union's arms embargo on the People's Republic of
China, and resolutions issued by a number of elected
parliamentary bodies in Europe also opposing the lifting of the
arms embargo, was also welcomed by the Congress as a
reassurance that its European friends and allies understood the
gravity of prematurely lifting the embargo.
(4) The onset of a strategic dialogue between the European
Commission and the Government of the United States on the
security situation in East Asia holds out the hope that a
greater understanding will emerge of the consequences of
European assistance to the military buildup of the People's
Republic of China for peace and stability in that region, to
the security interests of the United States and its friends and
allies in the region, and, in particular, to the safety of
United States Armed Forces whose presence in the region has
been a decisive factor in ensuring peace and prosperity since
the end of World War II.
(5) A more intensive dialogue with Europe on this matter
will clarify for United States' friends and allies in Europe
how their ``non-lethal'' arms transfers improve the force
projection of the People's Republic of China, are far from
benign, and enhance the prospects for the threat or use of
force in resolving the status of Taiwan.
(6) This dialogue may result in an important new consensus
between the United States and its European partners on the need
for coordinated policies that encourage the development of
democracy in the People's Republic of China and which
discourage, not assist, China's unjustified military buildup
and pursuit of weapons that threaten its neighbors.
(7) However, the statement by the President of France in
Beijing in November 2007 that the European Union arms embargo
should be lifted is troubling, especially since France will
assume the six-month presidency of the European Union in July
2008.
(8) There continues to be wide-spread concerns regarding
the lack of any significant progress by the Government of the
People's Republic of China in respecting the civil and
political rights of the Chinese people.
(b) Statement of Policy.--It shall be the policy of the United
States Government to oppose any diminution or termination of the arms
embargo that was established by the Declaration of the European Council
of June 26, 1989, and to take whatever diplomatic and other measures
that are appropriate to convince the Member States of the European
Union, individually and collectively, to continue to observe this
embargo in principle and in practice. Appropriate measures should
include prohibitions on entering into defense procurement contracts or
defense-related research and development arrangements with European
Union Member States that do not observe such an embargo in practice.
(c) Report.--Not later than 180 days after the date of the
enactment of this Act, and every six months thereafter until December
31, 2010, the President shall transmit to the Committee on Foreign
Affairs and Committee on Armed Services of the House of Representatives
and the Committee on Foreign Relations and the Committee on Armed
Services of the Senate a report on all efforts and activities of the
United States Government to ensure the success of the policy declared
in subsection (b).

SEC. 403. REIMBURSEMENT OF SALARIES OF MEMBERS OF THE RESERVE
COMPONENTS IN SUPPORT OF SECURITY COOPERATION MISSIONS.

Section 632(d) of the Foreign Assistance Act of 1961 (22 U.S.C.
2392(d)) is amended--
(1) by striking ``(d) Except as otherwise provided'' and
inserting ``(d)(1) Except as otherwise provided''; and
(2) by adding at the end the following:
``(2) Notwithstanding provisions concerning the exclusion of the
costs of salaries of members of the Armed Forces in section 503(a) of
this Act and paragraph (1) of this subsection, the full cost of
salaries of members of the reserve components of the Armed Forces
(specified in section 10101 of title 10, United States Code) may,
during each of fiscal years 2009 and 2010, be included in calculating
pricing or value for reimbursement charged under section 503(a) of this
Act and paragraph (1) of this subsection, respectively.''.

SEC. 404. FOREIGN MILITARY SALES STOCKPILE FUND.

(a) In General.--Subsection (a) of section 51 of the Arms Export
Control Act (22 U.S.C. 2795) is amended--
(1) in paragraph (1), by striking ``Special Defense
Acquisition Fund'' and inserting ``Foreign Military Sales
Stockpile Fund''; and
(2) in paragraph (4), by inserting ``building the capacity
of recipient countries and'' before ``narcotics control
purposes''.
(b) Contents of Fund.--Subsection (b) of such section is amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by inserting ``and'' at the end; and
(3) by inserting after paragraph (3) the following:
``(4) collections from leases made pursuant to section 61
of this Act,''.
(c) Conforming Amendments.--(1) The heading of such section is
amended by striking ``Special Defense Acquisition Fund'' and inserting
``Foreign Military Sales Stockpile Fund''.
(2) The heading of chapter 5 of the Arms Export Control Act is
amended by striking ``SPECIAL DEFENSE ACQUISITION FUND'' and inserting
``FOREIGN MILITARY SALES STOCKPILE FUND''.

SEC. 405. SENSE OF CONGRESS.

It is the sense of Congress that the United States should not
provide security assistance or arms exports to nations contributing to
massive, widespread, and systematic violations of human rights or acts
of genocide, particularly with respect to Darfur, Sudan.

TITLE V--AUTHORITY TO TRANSFER NAVAL VESSELS

SEC. 501. AUTHORITY TO TRANSFER NAVAL VESSELS TO CERTAIN FOREIGN
RECIPIENTS.

(a) Transfers by Grant.--The President 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:
(1) Pakistan.--To the Government of Pakistan, the OLIVER
HAZARD PERRY class guided missile frigate MCINERNEY (FFG-8).
(2) Greece.--To the Government of Greece, the OSPREY class
minehunter coastal ships OSPREY (MHC-51) and ROBIN (MHC-54).
(3) Chile.--To the Government of Chile, the KAISER class
oiler ANDREW J. HIGGINS (AO-190).
(4) Peru.--To the Government of Peru, the NEWPORT class
amphibious tank landing ships FRESNO (LST-1182) and RACINE
(LST-1191).
(b) Grants Not Counted in Annual Total of Transferred Excess
Defense Articles.--The value of a vessel transferred to a recipient on
a grant basis pursuant to authority provided by subsection (a) shall
not be counted against the aggregate value of excess defense articles
transferred in any fiscal year under section 516(g) of the Foreign
Assistance Act of 1961.
(c) 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.
(d) 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 recipient 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 the
recipient performed at a shipyard located in the United States,
including a United States Navy shipyard.
(e) Expiration of Authority.--The authority to transfer a vessel
under this section shall expire at the end of the 2-year period
beginning on the date of the enactment of this Act.

Passed the House of Representatives May 15, 2008.

Attest:

LORRAINE C. MILLER,

Clerk.