HEARING ON ANTITERRORISM AND ARMS EXPORT AMENDMENTS ACT, H.R. 3651

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00234R000300340011-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 27, 2016
• Document Release Date: September 9, 2013
• Sequence Number: 11
• Publication Date: March 17, 1988
• Content Type: MEMO

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17 March 1988
OCA88-0278
MEMORANDUM FOR THE RECORD
SUBJECT: Hearing on Antiterrorism and Arms Export Amendments
Act, H.R. 3651
1. On 17 March 1988, three subcommittees of the House
Committee on Foreign Affairs held a joint, open hearing on the
above-captioned bill. The three subcommittees were the
Subcommittee on Arms Control, International Security and
Science; the Subcommittee on International Economic Policy and
Trade; and the Subcommittee on International Operations.
Members appearing were Representatives Berman, Fascell,
Broomfield, Solomon, Bereuter, Hyde, and Lantos, although all
but Berman left shortly after delivering brief remarks.
Testifying were Paul Bremer and Allen Holmes of the Department
of State, with backup witnesses from the Departments of Defense
and Commerce as well as the Agency. Associate STAT
General Counsel 4 encv's nacKup wicness. Also STAT
attending were OCA and myself. Attached are the STAT
opening statements and other materials handed out at the
hearing.
2. In his opening remarks, Rep. Broomfield questioned the
ability of the bill to combat terrorism. He was interested to
hear the Administration's view and questioned whether the bill
can be amended. He noted that industry is also concerned
because of the potential of foreign retaliation against U.S.
firms as a result of the bill's coverage of foreign
subsidiaries. He hopes Rep. Berman is receptive to amendments.
3. Rep. Berman said the bill reaffirms the prohibition on
exports to terrorist states. For the most part, it is not new
law, but restated law. It is intended to close loopholes and
ensure uniform standards. It does not eliminate the
President's discretion. He noted that he has agreed to make
some changes. These address the question of the bill's
extraterritorial reach, modifying the sanctuary test; the State
Department would have discretion to put a country on the
terrorist list. The "reason to believe" standard has been
changed to a "reason to know" standard. The presumption of
denial regarding the legality of licenses has been abandoned.
Section 7 has also been changed.
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4. Rep. Solomon said that he is not sure this legislation
is the way to go. He commends Rep. Berman for removing solely
from the Department of Commerce jurisdiction over exports of
national security concern.
5. Rep. Hyde said he is "not indifferent" to the problems
with the first draft. The staff is still working on it and he
wants to help.
6. Rep. Berman said that the bill recognizes the role of
covert operations in arms exports. The Administration position
regarding Iran-contra is not that the laws were fine, but the
people violated the laws. Rather, the position is that perhaps
an action was not permissible under one law, but was under
another. He said he would look at the matter of the bill
limiting transfers to non-terrorist nations. He wants a
sensible, bipartisan bill.
7. In speaking with the staff after the hearing, we
learned that the bill will be marked up in two weeks. The
staff indicated their willingness to work with the Agency in
addressing its concerns. However, they also indicated that the
Agency must "pick its poison" in terms of either notifying the
House Foreign Affairs Committee or the House Intelligence
Committee of munitions transfers it makes, even routine
transfers to assets in non-terrorist countries.
Attachments
OCA/LEG
Legislation Attairs
Office of Congressional Affairs
17 March 1988)
Distribution:
Original b' t File: Terrorism
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1 - OCA Registry
1 - RH Signer
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CONGRESSMAN
I IL, 1..i.i.??0
NEWS RELEASE
IL kJ N
137 Cannon House Office Building ? Washington, D.C. 20515 ? 202-225-4695
14600 Roscoe Blvd., Suite 506 ? Panorama City, CA 91402 ? 818-891-0543
March 17, 1988
CONTACT: Gene Smith
202-225-4695
FOREIGN AFFAIRS COMMITTEE HOLDS HEARING ON BEEFED-UP BAN ON ARMS
SALES TO TERRORIST NATIONS
WASHINGTON -- The House Foreign Affairs Committee today
heard testimony on legislation to bar arms transfers to nations
officially found to support international terrorism.
The legislation was characterized by its author, Rep. Howard
Berman (D-CA), as "a clean-up after the fiasco that dirtied the
reputation of the United States with the embarrassing and unwise
arms-for-hostages policy."
The bill, H.R. 3651, closes existing and potential loopholes
in present arms export laws. It amends several key statutes to
ensure that uniform standards regulate arms exports to terrorist
nations and to strengthen notification to the Congress of all
arms exports. H.R. 3651 remedies many of the deficiencies in
current law highlighted by the report of the Iran-contra
Committees.
Original cosponsors of this important bipartisan bill are
Rep. Dante Fascell, Chairman of the House Foreign Affairs
Committee and Vice-Chairman of the House Iran-contra Select Committee;
Rep. Lee Hamilton, Chairman of the House Iran-contra Select
Committee; and Rep. Henry Hyde, Republican Member of the Select
Committee and Member of the Foreign Affairs Committee. Since its
introduction, 50 additional Members of the House have cosponsored
the legislation.
INFORMATION MEMORANDUM
H.R. 3651
Antiterrorism and Arms Export Amendments Act
March 17, 1988
During the last year a clear need has developed to reaffirm
two fundamental principles of American foreign policy embodied in
statute law: 1)the prohibition on the export of military weapons to
states which support international terrorism, and 2)the obligation
of the executive branch to keep Congress informed of both overt and
covert exports of military weapons to foreign governments. While
these principles are clear, and while they have been publicly
supported by the Reagan Administration and Congress, the
implementation of them pursuant to the law remains in doubt.
Rep. Howard Berman has authored the Antiterrorism and Arms
Export Amendments Act (the "Act") to reaffirm this country's
prohibition on exports of military weapons to terrorist states and
to require more detailed and periodic reporting by the executive Of
arms exports. The Act, introduced on November 18, 1987, with the
co-sponsorship of Reps. Dante Fascell, Lee Hamilton, and Henry
Hyde, now has more than 50 co-sponsors. It makes little
substantive change in the law. The Act is largely a restatement of
existing law. Its intent is to close potential loopholes and
revise certain existing provisions to ensure that uniform standards
are present throughout the U.S. Code. The Act makes no attempt to
reform the personnel or structure of the National Security Council
or the State, Commerce or Defense Departments. Nor does it seek to
ryoTutionize the manner in which arms exports are approved by the
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The Act would amend the Arms Export Control Act, the Foreign
Assistance Act of 1961, the Export Administration Act and the
Hostage Act of 1868. The legislation includes the following major
provisions:
--Section 40 of the Arms Export Control Act, which prohibits
exports of arms to terrorist states, would be significantly
reinforced. Prohibited transactions are explained in detail, both
with respect to U.S. Government activities and private
transactions. The President could waive the prohibitions for
specific transactions, but only with prior, detailed reporting to
Congress (on a classified basis if necessary). A clear line is
drawn between overt transfers to terrorist states and arms
transfers which are part of approved intelligence activities. The
amended Section 40 also would have criminal penalties similar to
those found in the Export Administration Act.
--Section 6(j) of the Export Administration Act, which
regulates the export of goods and technology of military or
"terrorist" value to terrorist states, would be amended to 1)remove
the current $1,000,000 annual threshold amount under which the
executive currently does not have to report to Congress exports of
such goods and technology to terrorist states, and 2)require
validated licenses for all such exports to terrorist states and 30-
day prior notification to Congress of the proposed issuance of a
validated license.
--Section 620A of the Foreign Assistance Act of 1961, the
antiterrorism" section of that Act, would be amended to conform it
with other changes in the law, particularly the revision of Section
40 of the Arms Export Control Act.
--Sections 3(a) and 38 of the Arms Export Control Act and
Section 505 of the Foreign Assistance Act of 1961 would be amended
to require that before the President consents to the transfer of
military weapons from a recipient country to a third country, he
must give prior notification to Congress.
--Section 36(a) of the Arms Export Control Act would be
amended to require quarterly reports (classified if necessary) from
the President of inter-agency transfers of military weapons which
will not ultimately be disposed of within the United States.
--The Hostage Act of 1868 would be amended simply to clarify
that the President's authority to take action to release hostages
cannot be carried out in a manner which would otherwise be
prohibited by law.
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STATEMENT OF RtP. HOWARD DUMAN
before a Joint meeting of the Subcommittees on
Arm Control, International Security and Science
International Economic Policy and Trade
International Operations
of the
Committee on Foreign Affairs
March 17, 1988
During the past year we have all been reminded of two
fundamental principles of American foreign policy. They have been
traditionally promoted by both the Administration and Congress.
These principles are already embodied in statutory law:
First, it is illegal to export munitions to states
which support international terrorism, as determined by the
Secretary of State.
Second, Congress must be kept informed of both overt
and covert exports of munitions to other countries.
The investigations into the Iran-contra affair by the Tower
Commission and the Senate and House select committees in 1987
uncovered abuse of these two principles by high-ranking
Administration officials and private United States citizens.
Administration lawyers issued one legal opinion after another (some
oral, others written) justifying actions which common-sense
readings of the law found highly suspect. Somehow the law was
construed (or ignored) by zealous officials and (I am sure) well-
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Intentioned patriots to permit what years of bipartisan efforts had
determined was contrary to the foreign policy interests of this
country.
I should know. In the summer of 1986 my colleague, Henry
Hyde, and I authored an amendment to the Arms Export Control Act
It read very simply: "EIltems on the United States Munitions List
may not be exported to any country which the Secretary of State has
determined...has repeatedly provided support for acts of
international terrorism." The President may waive this
prohibition. But he must determine that the export is important to
the national interests of the United States. And he must notify
Congress. Henry and I pushed this amendment as a logical extension
of the Administration's antiterrorism policy, particularly as it
was reflected in Operation Staunch against Iran.
The Berman-Hyde amendment became the law of this land, with
broad bipartisan support, on August 26, 1986. Two months later the
Administration shipped 500 TOW missiles into Iran. The President
did not inform Congress. Ensuing months produced conflicting
interpretations of our amendment and of other prohibitions in the
U.S. Code.
The considerable debate that erupted during the Iran-contra
investigations over the meaning and intent of arms export and
antiterrorism laws led me to re-examine some of the laws. I looked
not only at the Berman-Hyde amendment but at other provisions in
three statutes which attempt to regulate exports of arms and
certain goods and technology to terrorist states.
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What I found was law which over the years has become riddled
with overlapping standards that can lead to confusion and misuse.
There is no single standard in the law for:
(1)determining whether a state supports international
terrorism;
(2)identifying which U.S. official should make that
determination;
(3)identifying which arms are subject to restrictions;
(4)identifying the criteria that empower the President
to waive statutory restrictions; and
(5)adequately informing Congress of arms exports,
including covert exports.
It may well be that expert lawyers in the State, Commerce and
Defense Departments have constructed an elaborate framework for
interpreting these inconsistent provisions. But that does not make
good law either for the Administration (witness the Iran-contra
affair) or for private American citizens who look to the law for
guidance.
H.R. 3651 reaffirms this country's prohibition on exports of
munitions to terrorist states and requires more detailed and
periodic reporting by the executive branch of certain arms
exports. This bill makes little substantive change in existing
law. It is more in the character of a restatement of the law. For
the most part it is not new law, but restated law.
the Administration
In fact, f- _ may testify today that the bill restates much of
standing policy now being faithfully enforced by the executive
branch. I would applaud such testimony. You certainly should not
interpret this bill as a criticism of your efforts to enforce
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current law. The intent of H.R. 3651 is to close potential
loopholes and restate certain existing provisions to ensure that
uniform standards are present in the U.S. Code.
Let me emphasize what H.R. 3651 does not do.
--It does not impose blanket sanctions on terrorist
states. Its focus is strictly on arms exports and on certain goods
and technology of military or "terrorist" value to terrorist
states, items already regulated by current law.
--It does not eliminate the President's discretion. In
fact, in some cases it broadens the President's discretion.
--H.R. 3651 does not impose management reform on the
Administration. There is no tinkering with the management or
structure of the National Security Council or the State, Commerce
or Defense Departments.
--It does not revolutionize the manner in which arms
exports are approved by the U.S. Government.
What H.R. 3651 does do is make selective amendments (many
quite technical) to the Arms Export Control Act, the Foreign
Assistance Act of 1961, the Export Administration Act and the
Hostage Act of 1868.
--Section 40 of the Arms Export Control Act, the
section which prohibits exports of arms to terrorist states, is
significantly reinforced. Prohibited transactions are explained in
greater detail, both for the U.S. Government and for U.S. persons.
The President's waiver authority can be exercised, but Congress
must be notified in advance.
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--A clear line is drawn between overt and covert arms
transfers to terrorist states. If the arms transfer is covert,
then it must be reported to Congress in accordance with the
National Security Act.
--Sections 3(a) and 38 of the Arms Export Control Act
and Section 505 of the Foreign Assistance Act of 1961 would be
amended to require that before the President consents to the
transfer of military weapons from a recipient country to a third
country, he must give prior notification to Congress.
--Section 36(a) of the Arms Export Control Act would be
amended to require quarterly reports from the President of inter-
agency transfers of military weapons which ultimately are disposed
of overseas.
--Section 6(j) of the Export Administration Act, which
regulates the export of goods and technology of military or
"terrorist" value to terrorist states, would be amended (1) to
eliminate the current $1,000,000 annual threshold amount under
which the executive currently does not have to report to Congress,
and (2) require validated licenses for all the covered exports and
30-day prior notification to Congress.
--The Hostage Act of 1868 would be amended simply to
clarify that the President's authority to take action to release
hostages cannot be carried out in a manner which would otherwise be
prohibited by law.
Since the bill was introduced last November, extensive
discussions have taken place at the staff level to address the
concerns of the executive branch, private industry and Members on
the other side of the aisle.
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There has has been so much progress that a substitute bill has
been drawn up. It was provided to our witnesses yesterday. (It is
also in the folders for Members.) I realize that the executive
branch and some of my colleagues have not yet had time to digest
the substitute, so I want to point out a few key revisions which
respond to our witnesses' concerns:
--The substitute greatly restricts the extraterritorial
reach of the prohibitions on arms transfers found in the original
bill.
--When a state is put on the terrorist list, the
substitute protects the financial interests of suppliers, preserves
the validity of presidential consents for third-country transfers,
and protects the interests of arms exporters who have export
licenses.
--The substitute adopts a stream-lined criterion for
classifying a country on the terrorist list. What concerned so
many, the "sanctuary test", has now been included simply as an
example of the operative test: that a government repeatedly support
acts of international terrorism.
--The substitute adopts a "reason to know" standard for
prohibitions which apply to United States persons, rather than a
"reason to believe" standard found in the original bill.
--The substitute resurrects from current law the
"significant contribution to military potential" standard which
applies to the exports of goods and technology to terrorist
states. The substitute also abandons the presumption of denial for
validated licenses which was found in the original bill.
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--The substitute does not require quarterly reports
from the Department of Defense about inter-agency transfers of arms
which are transferred in connection with intelligence activities
and are reportable under the National Security Act.
--The substitute permits the President to take a
country off the Secretary of State's terrorist list immediately if
there is a fundamental change in its government and it ceases
supporting international terrorism. This provides the President
far greater flexibility than he has under current law.
There will be more discussion as this bill approaches mark-
up. We intend to work closely with the Administration so that the
bipartisan effort already put into H.R. 3651 can be continued.
I welcome Mr. Bremer and Mr. Holmes and look forward to their
testimony today. Thank you, Mr. Chairman.
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