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H.R. 974 (eas) [Engrossed Amendment Senate] ...


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106th CONGRESS
  1st Session
                                H. R. 973


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 16, 1999

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

_______________________________________________________________________

                                 AN ACT


 
    To modify authorities with respect to the provision of security 
assistance under the Foreign Assistance Act of 1961 and 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.

    This Act may be cited as the ``Security Assistance Act of 1999''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
             TITLE I--TRANSFERS OF EXCESS DEFENSE ARTICLES

Sec. 101. Excess defense articles for central European countries.
Sec. 102. Excess defense articles for certain independent States of the 
                            former Soviet Union.
              TITLE II--FOREIGN MILITARY SALES AUTHORITIES

Sec. 201. Termination of foreign military financed training.
Sec. 202. Sales of excess Coast Guard property.
Sec. 203. Competitive pricing for sales of defense articles.
Sec. 204. Reporting of offset agreements.
Sec. 205. Notification of upgrades to direct commercial sales.
Sec. 206. Expanded prohibition on incentive payments.
Sec. 207. Administrative fees for leasing of defense articles.
    TITLE III--STOCKPILING OF DEFENSE ARTICLES FOR FOREIGN COUNTRIES

Sec. 301. Additions to United States war reserve stockpiles for allies.
Sec. 302. Transfer of certain obsolete or surplus defense articles in 
                            the war reserves stockpile for allies.
     TITLE IV--INTERNATIONAL ARMS SALES CODE OF CONDUCT ACT OF 1999

Sec. 401. Short title.
Sec. 402. Findings.
Sec. 403. International arms sales code of conduct.
 TITLE V--AUTHORITY TO EXEMPT INDIA AND PAKISTAN FROM CERTAIN SANCTIONS

Sec. 501. Waiver authority.
Sec. 502. Consultation.
Sec. 503. Reporting requirement.
Sec. 504. Appropriate congressional committees defined.
    TITLE VI--TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN COUNTRIES

Sec. 601. Authority to transfer naval vessels.
Sec. 602. Inapplicability of aggregate annual limitation on value of 
                            transferred excess defense articles.
Sec. 603. Costs of transfers.
Sec. 604. Expiration of authority.
Sec. 605. Repair and refurbishment of vessels in United States 
                            shipyards.
Sec. 606. Sense of the Congress relating to transfer of naval vessels 
                            and aircraft to the Government of the 
                            Philippines.
                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. Annual military assistance reports.
Sec. 702. Publication of arms sales certifications.
Sec. 703. Notification requirements for commercial export of 
                            significant military equipment on United 
                            States Munitions List.
Sec. 704. Enforcement of Arms Export Control Act.
Sec. 705. Violations relating to material support to terrorists.
Sec. 706. Authority to consent to third party transfer of ex-U.S.S. 
                            Bowman County to USS LST Ship Memorial, 
                            Inc.
Sec. 707. Exceptions relating to prohibitions on assistance to 
                            countries involved in transfer or use of 
                            nuclear explosive devices.
Sec. 708. Continuation of the export control regulations under IEEPA.

             TITLE I--TRANSFERS OF EXCESS DEFENSE ARTICLES

SEC. 101. EXCESS DEFENSE ARTICLES FOR CENTRAL EUROPEAN COUNTRIES.

    Section 105 of Public Law 104-164 (110 Stat. 1427) is amended by 
striking ``1996 and 1997'' and inserting ``2000 and 2001''.

SEC. 102. EXCESS DEFENSE ARTICLES FOR CERTAIN INDEPENDENT STATES OF THE 
              FORMER SOVIET UNION.

    (a) Uses For Which Funds Are Available.--Notwithstanding section 
516(e) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j(e)), 
during each of the fiscal years 2000 and 2001, funds available to the 
Department of Defense may be expended for crating, packing, handling, 
and transportation of excess defense articles transferred under the 
authority of section 516 of that Act to Georgia, Kazakhstan, 
Kyrgyzstan, Moldova, Turkmenistan, Ukraine, and Uzbekistan.
    (b) Content of Congressional Notification.--Each notification 
required to be submitted under section 516(f) of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2321j(f)) with respect to a proposed transfer of 
a defense article described in subsection (a) shall include an estimate 
of the amount of funds to be expended under subsection (a) with respect 
to that transfer.

              TITLE II--FOREIGN MILITARY SALES AUTHORITIES

SEC. 201. TERMINATION OF FOREIGN MILITARY FINANCED TRAINING.

    Section 617 of the Foreign Assistance Act of 1961 (22 U.S.C. 2367) 
is amended--
            (1) by inserting in the second sentence ``and the Arms 
        Export Control Act'' after ``under this Act'' the first place 
        it appears;
            (2) by striking ``under this Act'' the second place it 
        appears; and
            (3) by inserting in the third sentence ``and under the Arms 
        Export Control Act'' after ``this Act''.

SEC. 202. SALES OF EXCESS COAST GUARD PROPERTY.

    Section 21(a)(1) of the Arms Export Control Act (22 U.S.C. 
2761(a)(1)) is amended in the text above subparagraph (A) by inserting 
``and the Coast Guard'' after ``Department of Defense''.

SEC. 203. COMPETITIVE PRICING FOR SALES OF DEFENSE ARTICLES.

    Section 22(d) of the Arms Export Control Act (22 U.S.C. 2762(d)) is 
amended--
            (1) by striking ``Procurement contracts'' and inserting 
        ``(1) Procurement contracts''; and
            (2) by adding at the end the following:
    ``(2) Direct costs associated with meeting additional or unique 
requirements of the purchaser shall be allowable under contracts 
described in paragraph (1). Loadings applicable to such direct costs 
shall be permitted at the same rates applicable to procurement of like 
items purchased by the Department of Defense for its own use.''.

SEC. 204. REPORTING OF OFFSET AGREEMENTS.

    (a) Government-to-Government Sales.--Section 36(b)(1) of the Arms 
Export Control Act (22 U.S.C. 2776(b)(1)) is amended in the fourth 
sentence by striking ``(if known on the date of transmittal of such 
certification)'' and inserting ``and, if known on the date of 
transmittal of such certification, a description of the offset 
agreement. Such description may be included in the classified portion 
of such numbered certification''.
    (b) Commercial Sales.--Section 36(c)(1) of the Arms Export Control 
Act (22 U.S.C. 2776(c)(1)) is amended in the second sentence by 
striking ``(if known on the date of transmittal of such 
certification)'' and inserting ``and, if known on the date of 
transmittal of such certification, a description of the offset 
agreement. Such description may be included in the classified portion 
of such numbered certification''.

SEC. 205. NOTIFICATION OF UPGRADES TO DIRECT COMMERCIAL SALES.

    Section 36(c) of the Arms Export Control Act (22 U.S.C. 2776(c)) is 
amended by adding at the end the following new paragraph:
    ``(4) The provisions of subsection (b)(5) shall apply to any 
equipment, article, or service for which a numbered certification has 
been transmitted to Congress pursuant to paragraph (1) in the same 
manner and to the same extent as that subsection applies to any 
equipment, article, or service for which a numbered certification has 
been transmitted to Congress pursuant to subsection (b)(1). For 
purposes of such application, any reference in subsection (b)(5) to `a 
letter of offer' or `an offer' shall be deemed to be a reference to `a 
contract'.''.

SEC. 206. EXPANDED PROHIBITION ON INCENTIVE PAYMENTS.

    (a) In General.--Section 39A(a) of the Arms Export Control Act (22 
U.S.C. 2779a(a)) is amended--
            (1) by inserting ``or licensed'' after ``sold''; and
            (2) by inserting ``or export'' after ``sale''.
    (b) Definition of United States Person.--Section 39A(d)(3)(B)(ii) 
of the Arms Export Control Act (22 U.S.C. 2779a(d)(3)(B)(ii)) is 
amended by inserting ``or by an entity described in clause (i)'' after 
``subparagraph (A)''.

SEC. 207. ADMINISTRATIVE FEES FOR LEASING OF DEFENSE ARTICLES.

    Section 61(a) of the Arms Export Control Act (22 U.S.C. 2796(a)) is 
amended in paragraph (4) of the first sentence by inserting after 
``including reimbursement for depreciation of such articles while 
leased,'' the following: ``a fee for the administrative services 
associated with processing such leasing,''.

    TITLE III--STOCKPILING OF DEFENSE ARTICLES FOR FOREIGN COUNTRIES

SEC. 301. ADDITIONS TO UNITED STATES WAR RESERVE STOCKPILES FOR ALLIES.

    Paragraph (2) of section 514(b) of the Foreign Assistance Act of 
1961 (22 U.S.C. 2321h(b)(2)) is amended to read as follows:
            ``(2)(A) The value of such additions to stockpiles of 
        defense articles in foreign countries shall not exceed 
        $340,000,000 for fiscal year 1999 and $60,000,000 for fiscal 
        year 2000.
            ``(B)(i) Of the amount specified in subparagraph (A) for 
        fiscal year 1999, not more than $320,000,000 may be made 
        available for stockpiles in the Republic of Korea and not more 
        than $20,000,000 may be made available for stockpiles in 
        Thailand.
            ``(ii) Of the amount specified in subparagraph (A) for 
        fiscal year 2000, not more than $40,000,000 may be made 
        available for stockpiles in the Republic of Korea and not more 
        than $20,000,000 may be made available for stockpiles in 
        Thailand.''.

SEC. 302. TRANSFER OF CERTAIN OBSOLETE OR SURPLUS DEFENSE ARTICLES IN 
              THE WAR RESERVES STOCKPILE FOR ALLIES.

    (a) Items in the Korean Stockpile.--
            (1) In general.--Notwithstanding section 514 of the Foreign 
        Assistance Act of 1961 (22 U.S.C. 2321h), the President is 
        authorized to transfer to the Republic of Korea, in return for 
        concessions to be negotiated by the Secretary of Defense, with 
        the concurrence of the Secretary of State, any or all of the 
        items described in paragraph (2).
            (2) Covered items.--The items referred to in paragraph (1) 
        are munitions, equipment, and material such as tanks, trucks, 
        artillery, mortars, general purpose bombs, repair parts, 
        ammunition, barrier material, and ancillary equipment, if such 
        items are--
                    (A) obsolete or surplus items;
                    (B) in the inventory of the Department of Defense;
                    (C) intended for use as reserve stocks for the 
                Republic of Korea; and
                    (D) as of the date of enactment of this Act, 
                located in a stockpile in the Republic of Korea.
    (b) Items in the Thailand Stockpile.--
            (1) In general.--Notwithstanding section 514 of the Foreign 
        Assistance Act of 1961 (22 U.S.C. 2321h), the President is 
        authorized to transfer to Thailand, in return for concessions 
        to be negotiated by the Secretary of Defense, with the 
        concurrence of the Secretary of State, any or all of the items 
        in the WRS-T stockpile described in paragraph (2).
            (2) Covered items.--The items referred to in paragraph (1) 
        are munitions, equipment, and material such as tanks, trucks, 
        artillery, mortars, general purpose bombs, repair parts, 
        ammunition, barrier material, and ancillary equipment, if such 
        items are--
                    (A) obsolete or surplus items;
                    (B) in the inventory of the Department of Defense;
                    (C) intended for use as reserve stocks for 
                Thailand; and
                    (D) as of the date of enactment of this Act, 
                located in a stockpile in Thailand.
    (c) Valuation of Concessions.--The value of concessions negotiated 
pursuant to subsections (a) and (b) shall be at least equal to the fair 
market value of the items transferred. The concessions may include cash 
compensation, services, waiver of charges otherwise payable by the 
United States, and other items of value.
    (d) Prior Notifications of Proposed Transfers.--Not less 30 days 
before making a transfer under the authority of this section, the 
President shall transmit to the chairmen of the Committee on Foreign 
Relations of the Senate and the Committee on International Relations of 
the House of Representatives a detailed notification of the proposed 
transfer, which shall include an identification of the items to be 
transferred and the concessions to be received.
    (e) Termination of Authority.--No transfer may be made under the 
authority of this section more than three years after the date of 
enactment of this Act.

     TITLE IV--INTERNATIONAL ARMS SALES CODE OF CONDUCT ACT OF 1999

SEC. 401. SHORT TITLE.

    This title may be cited as the ``International Arms Sales Code of 
Conduct Act of 1999''.

SEC. 402. FINDINGS.

    The Congress finds the following:
            (1) The proliferation of conventional arms and conflicts 
        around the globe are multilateral problems. The only way to 
        effectively prevent rogue nations from acquiring conventional 
        weapons is through a multinational ``arms sales code of 
        conduct''.
            (2) Approximately 40,000,000 people, over 75 percent of 
        whom were civilians, died as a result of civil and 
        international wars fought with conventional weapons during the 
        45 years of the cold war, demonstrating that conventional 
        weapons can in fact be weapons of mass destruction.

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