Committee Documents Online -- 107th Congress

Major Provisions: The Export Administration Act of 2001

September 6, 2001

I. GENERAL AUTHORITY & ADVISORY COMMITTEES

• Authorizes the Secretary of Commerce (the Secretary) to identify items subject to export controls.
• Requires the Secretary to keep the public fully informed regarding export control policy.
• Authorizes the Secretary to appoint Export Control Advisory Committees, with membership drawn from U.S. industry and government, to provide technical advice regarding export control policy.
• Authorizes the President to establish a President's Technology Export Council to advise him on the implementation, operation, and effectiveness of the export control system.

II. NATIONAL SECURITY CONTROLS

In General

• Authorizes the President to impose national security controls to restrict items that would contribute to the military potential of countries in a manner detrimental to U.S. national security; to stem the proliferation of weapons of mass destruction; and to deter acts of international terrorism.
• Directs the Secretary, with the concurrence of the Secretary of Defense, to identify items to be included on a National Security Control List. Among the risk factors to be considered in establishing the list are the characteristics of the item, the threat to the United States from misuse or diversion of the item, and the effectiveness of national security controls on the item. Requires the Secretary to periodically review and, with the concurrence of the Secretary of Defense, make adjustments to the list.
• Establishes a country tiering system under which countries are assigned to one of a range of tiers for each controlled item or group of items.
• Authorizes national security controls, based on the end use or end user, on any item that could materially contribute to the proliferation of weapons of mass destruction.
• Grants the President enhanced authority to control any item, regardless of its mass-market or foreign availability status, if he determines that removing controls on the item would constitute a significant threat to U.S. national security.

Mass-Market and Foreign Availability Status

• Allows the Secretary to remove controls on an item that has been determined to have foreign availability or mass-market status. Requires the Secretary to make foreign availability or mass-market status determinations within 6 months of receiving a petition for such status.
• Directs the Secretary, in determining foreign availability status, to consider criteria such as the item's availability from sources outside the United States, its price, and whether it is available in sufficient quantity to render controls ineffective. Authorizes the President to set aside a foreign availability determination if he finds that the absence of controls on that item would constitute a threat to the national security of the United States and controls would advance the national security interests of the United States, or that there is a high probability that the foreign availability status will be eliminated through international negotiations.
• Directs the Secretary, in determining mass-market status, to consider criteria such as the item's production and availability for sale, its distribution, its conduciveness to commercial shipping, and its usage for its normal intended purpose without modification. Authorizes the President to set aside a mass-market determination if he finds that the absence of controls on that item would constitute a serious threat to the national security of the United States and controls would advance the national security interests of the United States.
• Creates an Office of Technology Evaluation responsible for gathering, coordinating, and analyzing information for foreign availability and mass market determinations.

III. FOREIGN POLICY CONTROLS

In General

• Authorizes the President to impose foreign policy controls on items in order to promote U.S. foreign policy objectives; to promote international peace, stability, and respect for human rights; and to deter and punish acts of international terrorism.
• Provides that national security or foreign policy controls may be imposed on items listed on the control list of a multilateral export control regime or to fulfill U.S. international obligations or commitments.
• Prohibits foreign policy controls on exports subject to existing contracts.
• Prohibits foreign policy controls on other countries' export of items containing U.S. parts or components unless the export is to a country that has repeatedly provided for support for acts of international terrorism.

Procedures for Imposing Controls

• Sets forth mandatory criteria for the imposition of foreign policy controls, such as clearly stated, specific foreign policy objectives; objective standards to evaluate the control's success or failure; an assessment that the control's objective outweighs its costs; a narrow, targeted scope; and an effort to minimize any adverse impact on humanitarian efforts.
• Requires the President, 45 days prior to imposing a foreign policy control, to publish for public comment his intent to impose the control. Encourages the President to negotiate with the government of the targeted country to resolve the reasons underlying the proposed control.
• Directs the President, prior to imposing a foreign policy control, to submit a report to the Senate Banking Committee and the House International Relations Committee assessing diplomatic and multilateral efforts relating to the accomplishment of the foreign policy objective, the likely economic and foreign policy impact of the proposed control, and likely costs compared to the probable achievement of the objective.
• Terminates a foreign policy control after two years unless renewed by the President after a period of public comment, with an exception for those controls targeted against countries designated as supporting international terrorism.

Controls Relating to Terrorism

• Requires controls on exports that make a significant contribution to the military potential of countries determined by the Secretary of State to have repeatedly provided support for acts of international terrorism.

IV. EXPORT LICENSING & DISPUTE RESOLUTION PROCEDURES

License Review Process

• Establishes criteria for review of license applications, including the characteristics of the item, the threat to U.S. national security or foreign policy interests, the destination country's tier designation, and the risk of diversion or misuse.
• Directs the Secretary, within 9 days, to review applications for accuracy and refer them to the Secretary of Defense, Secretary of State, and the heads of other appropriate departments.
• Requires each referral department, within 30 days, to provide a recommendation either to approve or deny the license. Provides that a referral department that fails to provide a recommendation within 30 days is deemed to have no objection to the Secretary's decision.
• Sets forth exceptions from the stated time periods in specified circumstances, including where the Secretary and applicant mutually agree to delay, a prelicense check is required, or consultation with foreign governments is required.
• Requires the Secretary, if agreement exists among the referral departments, to notify the exporter of the decision to approve or deny the license application.

Interagency Dispute Resolution Process

• Establishes an interagency dispute resolution process for license applications for which no agreement exists.
• Provides an initial level of review by an interagency committee chaired by the Secretary's representative who has the authority to decide, after considering the position of other agencies, application approval or denial.
• Directs the President to establish additional levels of review that provide for decision-making based on majority vote of participating departments and agencies. Establishes that any decision may be appealed to the next level of review, with final appeal to the President, at the request of a Senate-confirmed official.

Overall Resolution Period

• Requires the application resolution process to be completed or referred to the President within 90 days of the date of the application's initial referral.

V. INTERNATIONAL ARRANGEMENTS, PENALTIES, & ENFORCEMENT

International Arrangements

• Encourages U.S. participation in new and existing multilateral export control regimes
• Directs the President to take steps to enhance multilateral export control regimes by including in them features such as full membership, effective enforcement and compliance, periodic meetings among high-level representatives, a common list of controlled items and regular updates thereto, harmonization of license approval procedures and treatment of certain countries, and agreement to prevent undercutting of regime member controls.
• Requires the Secretary to publish information on each multilateral export control regime relating to its purpose, members, policy, controlled items, and other related matters.
• Directs the President to issue regulations prohibiting the participation of U.S. persons in boycotts imposed by a foreign country against a country that is friendly to the United States.

Penalties

• Establishes criminal and civil penalties for export control violations.
• Provides criminal penalties for individuals of up to $1 million or 10 times the value of the export, whichever is greater, per violation, and up to 10 years' imprisonment per violation. Provides criminal penalties for corporations of up to $5 million or 10 times the value of the export, whichever is greater, per violation.
• Requires individuals or corporations convicted of criminal violations to forfeit the property that was the subject of the violation, and any properties used to aid the violation.
• Authorizes the Secretary to impose civil penalties of up to $500,000 per violation and to deny export privileges for violations.
• Requires the President to impose sanctions on persons that contribute to the proliferation of missiles and items on the Missile Technology Control Regime (MTCR) Annex.
• Requires the President to impose sanctions on persons that contribute to the proliferation or development of chemical or biological weapons.

Enforcement

• Directs the Secretary to target post-shipment verifications (PSVs) against exports involving the greatest risk to national security.
• Requires the Secretary to deny a license to any end-user who refuses to allow post-shipment verifications. Permits the Secretary to deny future exports of an item to any country that refuses to allow post-shipment verifications.
• Authorizes funding for the Bureau of Export Administration of the Department of Commerce, with significant additional resources for enforcement programs:
• $3.5 million to hire 20 new employees to implement a best practices program for freight forwarders;
• $4.5 million to hire 10 new investigators to conduct end-user verifications;
• $5.0 million to enhance the end-use verification program;
• $5.0 million for upgrading the computer licensing and enforcement system;
• $2.0 million to hire additional license review officers; and
• $2.0 million to train license review officers, auditors, and investigators.

Authority

• Terminates the authority granted by the Act unless the President provides Congress with a detailed report on the implementation of the legislation and of export controls in general, and either provides Congress with legislative reform proposals in connection with that report or certifies to Congress that no such reforms are necessary.