11 September 2000 Draft Summary of China Nonproliferation Act, Thompson Amendment to PNTR Bill Senator Fred Thompson (Republican of Tennessee) announced September 11 that he is introducing the China Non-Proliferation Act, which he and Senator Robert Torricelli (Democrat of New Jersey) authored, as an amendment to H.R. 4444, the bill that would grant China Permanent Normal Trade Relations (PNTR) status. According to the press release from his office, the China Non-Proliferation Act would require the President "to impose measures against companies in key supplier nations who have been identified as proliferators." The proposed amendment would also authorize the President "to impose measures against key supplier countries as he sees fit." Following is the text of the draft summary of the Thompson-Torricelli bill: A Draft Summary of the Revised Bill Introduced by Sen. Fred Thompson (R-TN) and Sen. Robert Torricelli (D-NJ) Bill's Purpose The purpose of this legislation is to respond to the proliferation activities of key suppliers of weapons of mass destruction and missile technologies, which constitute a serious threat to the nation's security and regional stability. The bill addresses proliferation activities by requiring the President to impose measures against companies in key supplier nations who have been identified as proliferators. The bill would also authorize the President to impose measures against key supplier countries as he sees fit. Application The bill would apply to countries identified by the Director of Central Intelligence (DCI) in the report required by section 721 of the Intelligence Authorization Act for Fiscal Year 1997 as key suppliers of weapons of mass destruction, currently China, Russia, and North Korea. Countries could be added or removed from this list over time based on the DCI's guidelines. Annual Review/Report The President would submit a report to Congress by June 1st of each year identifying every person, company, or governmental entity of countries covered under the Act with respect to whom credible evidence indicated that these persons had contributed to the design, development, production, or acquisition of nuclear, chemical, or biological weapons or ballistic or cruise missiles by a foreign person. The language requiring this report to Congress is nearly identical to the language contained in the Iran Nonproliferation Act of 2000. The report would also include information on the actions the President intended to take in response to these proliferation activities and any waiver authorities exercised under the Act. Mandatory Measures Against the Proliferator If the President makes a determination that a person identified in an annual report has in fact engaged in the activities reported, the President must deny all pending licenses and suspend all existing licenses (to include prohibiting all after-sale servicing) for the transfer to that person of items that are controlled for export under the Arms Export Control Act, the Export Administration Act of 1979, or the Export Administration Regulations. There is also an across- the-board prohibition on any U.S. government purchases of goods or services from, and U.S. government assistance (grants, loans, credits, guarantees, etc) to, the proliferator. These measures would last for no less than one year. The provisions listed in this section of the revised bill are nearly identical to the language contained in the Arms Export Control Act. Discretionary Measures Against Supplier Countries The President would be authorized to apply measures targeted at the supplier countries themselves, rather than merely the specific proliferator entities, from a list of available measures. These measures include those same measures available to the President in the original bill, but in the revised bill, the President has complete discretion over whether to apply them. Presidential Waiver The President would be authorized to waive the imposition of measures required under this Act if he determined: (1) that the person did not engage in the proliferation activities; (2) that the supplier country was taking appropriate actions to penalize entities for acts of proliferation and to deter future proliferation; or (3) that such a waiver was important to the national security of the United States. Congressional Oversight and Recourse In the event that Congress disagrees with the actions taken by the President under the Act, following the report, one-fifth of the Members of either House of Congress could introduce a joint resolution of disapproval. Such legislation would face an expedited process as a "privileged" motion in the Congress: the committee of jurisdiction in either House would have 15 days to report the legislation out of Committee, before it would be automatically discharged and brought to the floor 15 days later as a "privileged" motion. This procedure would not apply to the Presidential exercise of the national security waiver. Transparency Any person reported by the President to the Congress as a proliferator would also be reported immediately to the Securities and Exchange Commission (SEC). The SEC would be authorized and required to write all appropriate rules, regulations, and policies to ensure that all investors (private, corporate, state & municipal governments, and otherwise) were notified immediately if the reported proliferators were listed or traded on any U.S. debt or equity markets, and that any written or electronic prospectuses or offerings clearly indicated that the entity were so listed. Assessments by the Intelligence Community and Independent Commissions The Rumsfeld Commission reported in July 1998 that China "poses a threat as a significant proliferator of ballistic missiles, weapons of mass destruction, and enabling technologies. It has carried out extensive transfers to Iran's solid-fueled ballistic missile program. It has supplied Pakistan with a design for a nuclear weapon and additional nuclear weapons assistance. It has even transferred complete ballistic missile systems to Saudi Arabia and Pakistan." China's behavior thus far "makes it appear unlikely... [it] will soon effectively reduce its country's sizable transfer of critical technologies, experts, or expertise to the emerging missile powers." The Cox Committee asserted in its May 1999 report that "The PRC has proliferated nuclear, missile, and space-related technologies to a number of countries. The PRC is one of the leading proliferators of complete ballistic missile systems and missile components in the world." The Deutch Commission defined China in its July 1999 report as "a significant proliferator of ballistic missiles, weapons of mass destruction, and enabling technologies. China is both a source and transfer agent for passing knowledge, technology, subsystems and entire systems to dangerous state and sub-national actors." The January, 2000 unclassified report by the Director of Central Intelligence regarding the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions (Jan 1 through Jun 30 1999), reported to Congress, identified China as a "key supplier" of these technologies. The report stated that "During the reporting period, firms in China provided missile-related items, raw materials, and/or assistance to several countries of proliferation concern-such as Iran. China also was a supplier of ACW [Advanced Conventional Weapons] to Iran...." The most recent unclassified report by the Director of Central Intelligence regarding the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions (July 1 through Dec 31 1999), reported to Congress on August 10, 2000, again identified China as a "key supplier" of these technologies. The report states that China has increased its missile-related technical assistance to Pakistan, and that Chinese entities continue to provide missile-related raw materials, technologies, and expertise to several countries, including Iran, North Korea, and Libya. China's Commitment to Nonproliferation? The PRC is a signatory to the Nuclear Nonproliferation Treaty, but has violated the treaty on several occasions by transferring nuclear equipment and technologies to Pakistan and Iran. China is the only major nuclear supplier to shun the 35-nation Nuclear Suppliers Group, which requires "full-scope safeguards"(IAEA inspections of all other declared nuclear materials and facilities in addition to the facility importing supplies to prevent diversions to weapon programs). The PRC has promised on multiple occasions to abide by the Missile Technology Control Regime, but has violated these commitments by transferring missiles and/or missile technologies to North Korea, Pakistan, Iran, and Libya. The PRC has violated the Chemical Weapons Convention by transferring to Iran chemical precursors, production equipment, and other technologies critical to developing chemical weapons and an indigenous production capability. China is not a member of the Australia Group, which seeks to control chemical and biological weapons, or the Wassenaar Arrangement, which governs military and dual-use export controls. China's history of WMD and missile proliferation not only violates a number of international treaties, norms, or public commitments, but also a wide variety of U.S. laws, including the Arms Export Control Act, Export Administration Act, Export-Import Bank Act, Iran-Iraq Arms Nonproliferation Act, and the Iran Nonproliferation Act, which require the President to impose sanctions and other measures. (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov) Return to the Washington File