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1 SEC. 5. CERTAIN FOREIGN OWNERSHIP AND CONTROL OF

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DEFENSE ARTICLES IN THE UNITED STATES.

(a) STATEMENT OF POLICY.-Congress determines 4 that special care should be taken by the United States 5 with respect to foreign persons who sell arms and related 6 technology to the People's Republic of China, while simul7 taneously seeking ownership of United States defense arti8 cles or defense services, including the results of United 9 States Government funded defense research and develop10 ment, through the acquisition or control of United States 11 defense firms, directly or through their subsidiaries and 12 affiliates based in the United States.

(b) LICENSE REQUIREMENTS.

(1) REQUIREMENT.-The President shall re

quire a license pursuant to regulations issued under

section 38(g)(6) of the Arms Export Control Act (22

U.S.C. 2778(g)(6)) for the transfer of ownership or

control of United States defense articles or defense

services arising from the acquisition or control of a

person required to be registered under section. 38(b)(1) of such Act (22 U.S.C. 2778(b)(1)), or any

subsidiary, division, affiliate or other entity thereof, whenever the person gaining acquisition or control is

(A) a foreign national of the People's Republic of China or a foreign person otherwise

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subject to the jurisdiction, ownership, or control

of the People's Republic of China;

(B) a foreign person identified in a report transmitted under section 3 or having its prin

cipal place of business in a country described in

a report transmitted under section 4; or

(C) a United States person owned or con

trolled by a foreign person, including a sub

sidiary or affiliate of a foreign person described

in subparagraph (B).

(2) ADDITIONAL REQUIREMENT.-A license under section 38(g)(6) of the Arms Export Control

Act for a person described in paragraph (1)(A) shall

not be issued until 30 days after the date on which

the President transmits a report that contains a de

termination of the President that

(A) the Government of the People's Republic of China meets the requirements of section 902(b)(1) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public

Law 101-246; 22 U.S.C. 2151 note); or

(B) it is in the national interest of the United States to issue the license.

(c) CONGRESSIONAL NOTIFICATION.-The issuance

25 of a license pursuant to subsection (b) shall be subject

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1 to the same requirements as are applicable to the export 2 of items described in section 36(c) of the Arms Export 3 Control Act (22 U.S.C. 2776(c)) (without regard to the 4 dollar amount requirements relating to contracts con5 tained in such section), including the transmittal of infor6 mation and the application of congressional review proce7 dures in accordance with such section.

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(d) EXCEPTION.-The issuance of a license pursuant 9 to subsection (b) shall not be required in the case of an 10 amendment to a munitions license or a change in registra11 tion arising from a sale or transfer of ownership or control 12 of United States defense articles or defense services to a 13 person described in subparagraph (A), (B), or (C) of sub14 section (b)(1) that was approved prior to the date of en15 actment of this Act unless the President determines that 16 it is in the national security interests of the United States 17 to require the issuance of a new license pursuant to sub18 section (b).

19 SEC. 6. CHINESE MILITARY END USE OF DUAL USE EX

21 (a) STATEMENT OF POLICY.-Congress welcomes the 22 understanding reached at the Wassenaar Arrangement's 23 December 2003 plenary meeting to require governmental 24 authorization for the transfer of non-listed dual use items 25 intended for military end use in a destination subject to

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1 any relevant regional arms embargo or to any United Na

2 tions Security Council resolution.

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(b) LICENSE REQUIREMENT.

(1) REQUIREMENT.-The President shall re

quire a license under the Export Administration Regulations for the export of any item described in paragraph (1), or subparagraph (A) or (B) of paragraph (2), of section 3(a) that is not subject to a license under section 38 of the Arms Export Control Act (22 U.S.C. 2778) if the item is intended for military end use by the People's Republic of China.

(2) SENSE OF CONGRESS.-It is the sense of Congress that the President should not approve a license pursuant to paragraph (1) unless the President determines that approval is important to counterterrorism, nonproliferation, or other national security interests of the United States.

(c) CONGRESSIONAL NOTIFICATION. The issuance

19 of a license pursuant to subsection (b) shall be subject 20 to the same requirements as are applicable to the export 21 of items described in section 36(c) of the Arms Export 22 Control Act (22 U.S.C. 2776(c)) (without regard to the 23 dollar amount requirements relating to contracts con24 tained in such section), including the transmittal of infor

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1 mation and the application of congressional review proce

2 dures in accordance with such section.

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(d) DEFINITION.-In this section, the term "military 4 end use" means, with respect to an item, the item is or 5 may be intended, entirely or in part, for use in conjunction 6 with an item described on the Wassenaar Munitions List 7 of July 12, 1996, and subsequent revisions.

8 SEC. 7. APPLICATION OF MEASURES TO CERTAIN FOREIGN

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PERSONS.

(a) APPLICATION OF MEASURES.-Subject to sec11 tions 8 and 9, the President may apply with respect to 12 any foreign person (including a foreign government) iden13 tified in a report transmitted under section 3, and shall 14 apply with respect to any foreign person (including a for15 eign government) identified in more than one report trans16 mitted under section 3, any or all of the following meas17 ures:

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(1) RESEARCH AND DEVELOPMENT.-Denial of participation in existing and new cooperative research and development programs and projects under section 27 of the Arms Export Control Act (22 U.S.C. 2767) or sections 2350a, 2358, or a

memorandum of understanding under 2531 of title 10, United States Code.