I
112th CONGRESS
1st Session
H. R. 2122
IN THE HOUSE OF REPRESENTATIVES
June 3, 2011
Ms. Ros-Lehtinen (for herself, Mr. Royce, Mr. Burton of Indiana, and Mr. Chabot) introduced the following bill; which was referred to the Committee on Foreign Affairs
A BILL
To renew the Export Administration Act of 1979, and for other purposes.
Short title
This Act may be cited as the
Export Administration Renewal Act of
2011
.
Export Administration Act of 1979
Violations
Criminal penalties
Section 11 of the Export Administration Act of 1979 (50 U.S.C. App. 2410) is amended by striking subsections (a) and (b) and inserting the following:
Criminal penalties
Violations by an individual
Any individual who willfully violates, conspires to violate, attempts to violate, or aids or abets in the commission of a violation of any provision of this Act or any regulation, license, or order issued under this Act shall be fined not more than $1,000,000, imprisoned for not more than 20 years, or both, for each violation.
Violations by a person other than an individual
Any person, other than an individual, who willfully violates, conspires to violate, attempts to violate, or aids or abets in the commission of a violation of any provision of this Act or any regulation, license, or order issued under this Act shall be fined not more than 10 times the value of the exports involved or $5,000,000, whichever amount is greater, for each violation.
Regulatory authority not affected
Nothing in subsection (a) limits the authority of the Secretary to define by regulations violations under this Act.
.
Civil penalties
Section 11(c)(1) of the Export Administration Act of
1979 (50 U.S.C. 2410(c)(1)) is amended to read as follows: (1) The
Secretary may impose a civil penalty for each violation of this Act, or any
regulation, license, or order issued under this Act, in an amount not to exceed
the greater of $250,000, or an amount that is twice the value of the
transaction that is the basis of the violation. A civil penalty under this
paragraph may be in addition to, or in lieu of, any other liability or penalty
that may be imposed for such a violation.
Forfeiture
Section 11(g) of the Export Administration Act of 1979 (50 U.S.C. App. 2410) is amended to read as follows:
Forfeiture of property interest and proceeds
Criminal forfeiture
Any person who is convicted of a violation under paragraph (1) or (2) of subsection (a) shall, in addition to any other penalty, forfeit to the United States such person’s—
security or other interest in, claim against, or property or contractual rights of any kind in, the real or personal property that was the subject of the violation;
interest in any property, real or personal, constituting or traceable to gross profits or other proceeds obtained from the violation; and
interest in any property, real or personal, used or intended to be used to commit or to promote the commission of the violation.
Civil forfeiture
Any person convicted of a violation under subsection (a), or subject to a civil penalty as set forth in subsection (c), shall forfeit to the United States such person’s interest in—
any security or other interest in, claim against, or property or contractual rights of any kind in, the real or personal property that was the subject of the violation;
any property, real or personal, constituting or traceable to gross profits or other proceeds obtained because of the act or acts constituting the violation; and
any property, real or personal, used or intended to be used to commit or to promote the commission of the violation.
Procedures
Forfeiture under this subsection shall be carried out in accordance with the procedures set forth in chapter 46 of title 18, United States Code.
.
Temporary denial orders
Section 11 of the Export Administration Act of 1979 (50 U.S.C. App. 2410) is amended—
by redesignating subsection (i) as subsection (j);
by inserting after subsection (h) the following:
Imposition of temporary denial orders
Authority of the secretary
In any case in which it is necessary, in the public interest, to prevent an imminent violation of this Act or any regulation, order, or license issued under this Act, the Secretary may, without a hearing, issue an order temporarily denying United States export privileges (in this subsection referred to as a temporary denial order) to a person. A temporary denial order may be effective no longer than 180 days unless renewed in writing by the Secretary for additional 180-day periods in order to prevent such an imminent violation, except that a temporary denial order may be renewed only after notice and an opportunity for a hearing is provided. The Secretary shall publish notice of the issuance of a temporary denial order in the Federal Register and may provide notice of the issuance of the order to the person that is the subject of the order by such additional means as the Secretary considers appropriate.
Procedures
A temporary denial order shall define the imminent violation and state why the temporary denial order was granted without a hearing. The person or persons subject to the issuance or renewal of a temporary denial order may file an appeal of the issuance or renewal of the temporary denial order with an administrative law judge who shall, within 10 working days after the appeal is filed, recommend that the temporary denial order be affirmed, modified, or vacated. Parties may submit briefs and other material to the judge. The recommendation of the administrative law judge shall be submitted to the Secretary who shall either accept, reject, or modify the recommendation by written order within 5 working days after receiving the recommendation. The written order of the Secretary under the preceding sentence shall be final and is not subject to judicial review, except as provided in paragraph (3). The temporary denial order shall be affirmed only if it is reasonable to believe that the order is required in the public interest to prevent an imminent violation of this Act or any regulation, order, or license issued under this Act. All materials submitted to the administrative law judge and the Secretary shall constitute the administrative record for purposes of review by the courts.
Appeals
An order of the Secretary affirming, in whole or in part, the issuance of a temporary denial order may, within 15 days after the order is issued, be appealed by a person subject to the order to the United States Court of Appeals for the District of Columbia Circuit, which shall have jurisdiction of the appeal. The court may review only those issues necessary to determine whether the standard for issuing the temporary denial order has been met. The court shall vacate the Secretary's order if the court finds that the Secretary's order is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
; and
in subsection (j),
as redesignated, by striking or (h)
and inserting (h), or
(i)
.
Conforming amendments
Section 13 of the Export Administration Act of 1979 (50 U.S.C. App. 2412) is amended—
by striking subsection (d); and
by redesignating subsection (e) as subsection (d).
Effective date
The amendments made by this section apply with respect to acts constituting violations under section 11 of the Export Administration Act of 1979 that occur on or after the date of the enactment of this Act.
Enforcement
Findings
The Congress finds the following:
On July 1, 2010, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111–195) was signed into law by the President of the United States.
Section 305 of that Act provides the Department of Commerce with the authority to enforce the provisions of that Act as well as the Export Administration Act of 1979.
Statutory authority to conduct investigations overseas, as well as undercover authority, is necessary for the Office of Export Enforcement of the Department of Commerce to combat increasingly complex international proliferation activities involving Iran and other hostile state and non-state actors.
Enforcement authority
Section 12 of the Export Administration Act of 1979 (50 U.S.C. App. 2411) is amended—
in subsection (a)—
in paragraph (1),
in the first sentence, by striking within the United States, and
and inserting within the United States, the Secretary of Commerce (and
officers and employees of the Department of Commerce specifically designated by
the Secretary of Commerce) may conduct investigations outside of the United
States and, in addition,
;
by striking paragraph (6) and redesignating paragraphs (7) and (8) as paragraphs (6) and (7), respectively; and
in paragraph (7)
(as redesignated) by inserting before the period the following: , and
the enforcement or a violation of the Export Administration Regulations as
maintained and amended under the authority of the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.)
; and
by adding at the end the following new subsections:
Forfeiture
In general
Any tangible items lawfully seized under subsection (a) by designated officers or employees shall be subject to forfeiture to the United States.
Procedures
Any seizure or forfeiture under this subsection shall be carried out in accordance with the procedures set forth in chapter 46 of title 18, United States Code.
Undercover investigation operations
Use of funds
With respect to any undercover investigative operation conducted by the Office of Export Enforcement of the Department of Commerce that is necessary for the detection and prosecution of violations under this Act—
funds made available for export enforcement under this Act may be used to purchase property, buildings and other facilities, and to lease equipment, conveyances, and space within the United States, without regard to sections 1341 and 3324 of title 31, United States Code, section 8141 of title 40, United States Code, and sections 3901(a), 3903, 4501 through 4506, 4706, 6301(a), and 6306 of title 41, United States Code;
funds made available for export enforcement under this Act may be used to establish or to acquire proprietary corporations or business entities as part of an undercover operation, and to operate such corporations or business entities on a commercial basis, without regard to sections 1341, 3324, and 9102 of title 31, United States Code;
funds made available for export enforcement under this Act and the proceeds from undercover operations may be deposited in banks or other financial institutions without regard to section 648 of title 18, United States Code, and section 3302 of title 31, United States Code; and
the proceeds from undercover operations may be used to offset necessary and reasonable expenses incurred in such operations without regard to section 3302 of title 31, United States Code, if the Secretary (or the Secretary’s designee) certifies, in writing, that the action authorized by subparagraph (A), (B), or (C) for which the funds would be used is necessary for the conduct of the undercover operation.
Disposition of business entities
If a corporation or business entity established or acquired as part of an undercover operation has a net value of more than $250,000 and is to be liquidated, sold, or otherwise disposed of, the Secretary shall report the circumstances to the Comptroller General of the United States as much in advance of such disposition as the Secretary determines is practicable. The proceeds of the liquidation, sale, or other disposition, after obligations incurred by the corporation or business entity are met, shall be deposited in the Treasury of the United States as miscellaneous receipts. Any property or equipment purchased pursuant to paragraph (1)(A) may be retained for subsequent use in undercover operations under this subsection. When such property or equipment is no longer needed, it shall be considered as surplus and disposed of as surplus government property.
Deposit of proceeds
As soon as the proceeds from an undercover investigative operation of the Office of Export Enforcement of the Department of Commerce with respect to which an action is authorized and carried out under this subsection are no longer needed for the conduct of such operation, the proceeds or the balance of the proceeds remaining at the time shall be deposited into the Treasury of the United States as miscellaneous receipts.
Audit and report
Audit
The Secretary shall conduct a detailed financial audit of each closed undercover operation of the Office of Export Enforcement of the Department of Commerce. Not later than 180 days after an undercover operation is closed, the Secretary shall submit to the Congress a report on the results of that audit.
Report
The Secretary shall submit annually to the Congress a report, which may be included in the annual report under section 14(a), including the following information:
The number of undercover investigative operations pending as of the end of the period for which the report is submitted.
The number of undercover investigative operations commenced in the 1-year period preceding the period for which the report is submitted.
The number of undercover investigative operations closed in the 1-year period preceding the period for which such report is submitted and, with respect to each such closed undercover operation, the results obtained and any civil claims made with respect to such operation.
Definitions
In this paragraph:
Closed
The term closed, with respect to an undercover investigative operation, refers to the earliest point in time at which all criminal proceedings (other than appeals) pursuant to the investigative operation are concluded, or covert activities pursuant to such operation are concluded, whichever occurs later.
Undercover investigative operation and undercover operation
In general
Subject to subclause (II), the terms undercover investigative operation and undercover operation mean any undercover investigative operation conducted by the Office of Export Enforcement of the Department of Commerce in which the gross receipts (excluding interest earned) exceed $25,000, or expenditures (other than expenditures for salaries of employees) exceed $75,000.
Exception
The report to Congress required by subparagraph (B) shall be made with respect to undercover investigative operations conducted by the Office of Export Enforcement of the Department of Commerce without regard to the gross receipts and expenditures limitations under subclause (I).
Authorization for bureau of industry and security
The Secretary may authorize, without fiscal year limitation, the expenditure of funds transferred to, paid to, received by, or made available to the Bureau of Industry and Security of the Department of Commerce as a reimbursement in accordance with section 9703 of title 31, United States Code (as added by Public Law 102–393).
.
Effective date
In general
Subject to paragraphs (2) and (3), the amendments made by subsection (a) shall take effect on the date of the enactment of this Act.
Forfeiture
Section 12(f) of the Export Administration Act of 1979, as added by subsection (a)(2) of this section, shall apply to items seized on or after the date of the enactment of this Act.
Undercover operations
Section 12(g) of the Export Administration Act of 1979, as added by subsection (a)(2) of this section, shall apply with respect to undercover investigative operations commenced on or after the date of the enactment of this Act.
Administrative and regulatory authority
Section 15 of the Export Administration Act of 1979 (50 U.S.C. App. 2414) is amended—
in subsection (a), in the first sentence—
by striking
Under Secretary of Commerce for Export Administration
and
inserting Under Secretary of Commerce for Industry and Security
;
and
by striking
such other statutes
and all that follows through the end of the
sentence and in inserting other statutes that the Secretary has
delegated to the Under Secretary of Commerce for Industry and Security or any
predecessor (including the Under Secretary of Commerce for Export
Administration and the Assistant Secretary of Commerce for Trade
Administration) as of the date of the enactment of the Export Administration
Renewal Act of 2011, or may delegate to the Under Secretary of Commerce for
Industry and Security on or after that date.
;
in subsection (b)—
by striking
the President and the Secretary
and inserting—
In general
The President and the Secretary
; and
by adding at the end the following:
Advance notice to congress
Any significant regulations issued pursuant to this Act shall be provided to the Committee on Foreign Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate not less than 30 days in advance of the publication of the regulations in the Federal Register, unless exigent circumstances require the Secretary to shorten that 30-day period.
; and
in subsection (c)—
by inserting after
the first sentence the following: The Secretary shall submit the report
under the preceding sentence not less than 30 days in advance of the
publication of the proposed amendments in the Federal Register, unless exigent
circumstances require the Secretary to shorten that 30-day period.
;
and
in the succeeding
sentence, by striking evaluate the cost and burden to United States
exporters
and inserting include the text of the proposed
amendments, as well as evaluate the economic and national security impact on
the United States
.
Authorization of appropriations
Section 18(b) of the Export Administration Act of 1979 (50 U.S.C. App. 2417(b)) is amended—
by striking paragraphs (1) and (2) and inserting the following:
$100,141,000 for fiscal year 2012; $101,643,115 for fiscal year 2013; $103,167,647 for fiscal year 2014; and $104,926,000 for fiscal year 2015; and
; and
by redesignating paragraph (3) as paragraph (2).
Termination date
Section 20 of the Export Administration Act of 1979 (50 U.S.C. App. 2419) is amended to read as follows:
Termination date
The authority granted by this Act terminates on September 30, 2015, except that the authority granted by sections 11 and 12 shall not terminate.
.
Foreign policy controls
Terrorist states
Section 6(j)(4) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(4)) is amended—
in the matter
preceding subparagraph (A), by striking the Speaker
and
inserting the chairman of the Committee on Foreign Affairs
;
and
in subparagraph (B)—
in clause (i), by
striking 6-month period; and
and inserting 36-month
period;
;
in clause (ii), by striking the period at the end and inserting a semicolon; and
by adding after clause (ii) the following:
that government is not a country of
proliferation concern
as defined in section 1055(g)(2) of the National
Defense Authorization Act for Fiscal Year 2010 (50 U.S.C. 2371(g)(2));
and
that government has provided assurances that it will not knowingly facilitate, directly or indirectly, the proliferation of nuclear materials, items, or technology in the future.
.
Conforming amendments
Foreign assistance act of 1961
Section 620A(c) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(c)) is amended—
in the matter preceding paragraph (1), by
striking the Speaker
and inserting the chairman of the
Committee on Foreign Affairs
; and
in paragraph (2)—
in
subparagraph (A), by striking 6-month period; and
and inserting
36-month period;
;
in subparagraph (B), by striking the period at the end and inserting a semicolon; and
by adding after subparagraph (B) the following:
that government is not a country of
proliferation concern
as defined in section 1055(g)(2) of the National
Defense Authorization Act for Fiscal Year 2010 (50 U.S.C. 2371(g)(2));
and
that government has provided assurances that it will not knowingly facilitate, directly or indirectly, the proliferation of nuclear materials, items, or technology in the future.
.
Arms export control act
Section 40(f)(1) of the Arms Export Control Act (22 U.S.C. 2780(f)(1)) is amended—
in the matter preceding subparagraph (A),
by striking the Speaker
and inserting the chairman of the
Committee on Foreign Affairs
; and
in subparagraph (B)—
in clause (i), by
striking 6-month period; and
and inserting 36-month
period;
;
in clause (ii), by striking the period at the end and inserting a semicolon; and
by adding after clause (ii) the following:
that government is not a country of
proliferation concern
as defined in section 1055(g)(2) of the National
Defense Authorization Act for Fiscal Year 2010 (50 U.S.C. 2371(g)(2));
and
that government has provided assurances that it will not knowingly facilitate, directly or indirectly, the proliferation of nuclear materials, items, or technology in the future.
.
Technical and conforming amendments
Renaming of under secretary
In general
Section 5(f)(6) of
the Export Administration Act of 1979 (50 U.S.C. App. 2404(f)(6)) is amended by
striking Under Secretary of Commerce for Export Administration
and inserting Under Secretary of Commerce for Industry and
Security
.
Conforming amendment
Section 5314 of title 5, United States Code, is amended
by striking Under Secretary of Commerce for Export
Administration
and inserting Under Secretary of Commerce for
Industry and Security
.
Amendments to title 31, united states code
Section 9703(a) of
title 31, United States Code (as added by Public Law 102–393), is amended, in
the matter preceding paragraph (1), by striking or the United States
Coast Guard
and inserting, , the United States Coast Guard, or
the Bureau of Industry and Security of the Department of
Commerce
.
Section 9703(o)(1)
of title 31, United States Code (as added by Public Law 102–393) is amended by
adding at the end the following: In addition, for purposes of this
section, the Bureau of Industry and Security of the Department of Commerce
shall be considered to be a Department of the Treasury law enforcement
organization.
.
Civil forfeiture proceedings
Section 983(i)(2) of title 18, United States Code, is amended—
by striking
or
at the end of subparagraph (D);
by striking the
period at the end of subparagraph (E) and inserting ; or
;
and
by adding at the end the following new subparagraph:
the Export Administration Act of 1979.
.
Clerical amendment
Paragraph (3) of section 11A(k) of the Export Administration Act of 1979 (50 U.S.C. App. 2410A(k)(3)) is amended—
by redesignating that paragraph as paragraph (2); and
by striking
paragraph (2)
and inserting paragraph (1)
.
Annual report
Section 14(a)(15) of
the Export Administration Act of 1979 (50 U.S.C. App. 2413(a)(15)) is amended
by striking the export licensing process and
and inserting
export licensing, an assessment of the impact of licensing exemptions on
licensing caseloads, numbers of licensing officers, and the budget of the
Bureau of Industry and Security, and efforts.
Reports by Comptroller General on export control vulnerabilities
In general
Not later than the date that is 1 year, 2 years, and 3 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the appropriate congressional committees a report assessing any progress made in resolving export control issues identified by the Government Accountability Office in—
its report
(GAO–09–767T) entitled Export Controls: Fundamental Reexamination of
System Is Needed to Help Protect Critical Technologies
, dated June 4,
2009; and
its report
(GAO–11–278) entitled High-Risk Series: An Update
, dated
February 16, 2011.
Appropriate congressional committees
For purposes of subsection (a), the term appropriate congressional committees means—
the Committee on Foreign Affairs and the Committee on Armed Services of the House of Representatives; and
the Committee on Banking, Housing, and Urban Affairs, the Committee on Armed Services, and the Committee on Foreign Relations of the Senate.
Effective date
Subject to sections 101(f) and 102(b), this title and the amendments made by this title shall take effect on the date of the enactment of this Act.
Control of Generic Parts and Components
Treatment of generic components or parts
Section 38(a)(1) of the Arms Export Control
Act (22 U.S.C. 2778(a)(1)) is amended by adding at the end the following:
Nothing in this section shall be construed to require the President to
include as a defense article any component, accessory, attachment, or part
associated with any end-item included on the United States Munitions List, if
such component, attachment, or part does not have specialized or unique
military or intelligence capability or significance such that control under the
Arms Export Control Act is warranted.
.
Interagency process for subsequent control of items removed from U.S. Munitions List
Level of export controls on items removed from United States Munitions List
If an item is removed from the United States Munitions List under section 38(f) of the Arms Export Control Act (22 U.S.C. 2778(f)), the item may not be made subject to export controls that are less restrictive than the export controls that are imposed on the item at the time it is removed from the Munitions List, unless the President—
determines that such less restrictive controls are appropriate and in the national security and economic interests of the United States; and
complies with the 30-day notification requirement set forth in section 15(b)(2) of the Export Administration Act of 1979 with respect to the proposed controls, together with a description of, and justification for, the less restrictive controls.
Consensus of department heads
The President shall ensure, through interagency procedures or regulation, that when an item that is removed from the United States Munitions List under section 38(f) of the Arms Export Control Act is subject to controls under the Export Administration Act of 1979, the Secretaries of State, Defense, and Commerce concur on all subsequent modifications to the export controls on the item.
Exports to certain countries
Exports to China
Presumption of denial
There shall be a
presumption of denial of any application for a license or other approval to
export to the People’s Republic of China any item that is removed from the
United States Munitions List under section 38 of the Arms Export Control Act
and is listed on the Very Sensitive List
or Sensitive
List’
of the Wassenaar Arrangement on Export Controls for Conventional
Arms and Dual-Use Goods and Technologies.
Waiver
The President may waive the application of paragraph (1) on a case-by-case basis if the President—
determines that the waiver is in the national security and economic interest of the United States; and
at least 15 days before the waiver is to take effect, the President submits to the Committee on Foreign Affairs of the House of Representatives and the Committees on Banking, Finance, and Urban Affairs and on Foreign Relations of the Senate a report describing the reasons for the waiver.
Exports to certain countries
An application for a license or other approval to export any item that is removed from the United States Munitions List under section 38 of the Arms Export Control Act for export to any country or end-user that is subject to section 126.1 of title 22, Code of Federal Regulations (and any successor regulations), or to a multilateral arms embargo under the United Nations Security Council shall be denied.
Effective date
Section 201
Section 201 shall take effect on the date of the enactment of this Act.
Section 202
Section 202 shall apply with respect to any item removed from the United States Munitions List on or after the date of the enactment of this Act.
Section 203
Section 203 shall apply to any application for a license or other approval to export that is made on or after the date of the enactment of this Act.