Nuclear Sanctions: Section 102(b) of the Arms Export Control Act and Its Application to Indian and Pakistan
CRS Report for Congress
Nuclear Sanctions: Section 102(b)
of the Arms Export Control Act and Its
Application to India and Pakistan
Updated October 5, 2001
Jeanne J. Grimmett
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress
Nuclear Sanctions: Section 102(b) of the Arms Export
Control Act and Its Application to India and Pakistan
Summary
Section 102(b) of the Arms Export Control Act (AECA) requires the President
to impose sanctions on any country that he has determined is a "non-nuclear-weapon
state" and has received or detonated a "nuclear explosive device." Sanctions include
prohibitions on foreign assistance; munitions sales and licenses; foreign military
financing; government credits, guarantees, and financial assistance; U.S. support for
multilateral financial assistance; private bank lending to the affected government; and
exports of certain specific controlled goods and technology. Specific exceptions exist
for humanitarian aid; food and agricultural exports; food assistance; private bank
loans and credits for purchases of food and agricultural commodities; and certain
transactions involving intelligence activities. The statute does not provide for
terminating or suspending sanctions once imposed. The President placed § 102(b)
sanctions on India and Pakistan in May 1998 following nuclear tests by those
countries earlier that month. The statute had never before been invoked and its full
implementation give rise to various legal and policy issues. After an inter-agency
review, the Administration announced its overall implementation plan for both
countries June 18, 1998. Concerns over the lack of an exemption for agricultural
goods in § 102(b)(2)’s prohibition on government credits and guarantees led to
enactment of the Agriculture Export Relief Act (P.L. 105-194), which exempted
Department of Agriculture programs through FY99; it also permanently exempted
government financing for medicine and medical goods and allowed private loans for
fertilizer exports. In October 1998, Congress authorized the President to waive for
one year certain § 102(b)(2) prohibitions applicable to the two countries, as well as
other related statutory restrictions (India-Pakistan Relief Act, P.L. 105-277). The
President exercised this authority December 1, 1998.
Congress has since authorized the President to waive indefinitely, as they apply
to India and Pakistan, all sanctions imposed under §§ 101 or 102 of the AECA; a
nuclear-related restriction in the Export-Import Bank Act; and § 620E(e) of the
Foreign Assistance Act (FAA)(Pressler Amendment), which restricts military aid and
exports to Pakistan (DOD Appropriations Act, 2000, P.L. 106-79, § 9001). The
President may waive military and export control sanctions only if he certifies to
Congress that applying a restriction would not be in U.S. national security interests;
any licenses for defense exports must be notified to Congress and are subject to
congressional review. In October 1999, President Clinton waived sanctions with
regard to certain programs and commercial transactions specific to each country. In
August and early September 2001, both the Bush Administration and Members of
Congress began to call for removal of the sanctions, mainly as applicable to India;
legislation to lift the measures has also been introduced. Following the September 11
attacks on the World Trade Center and the Pentagon, the President waived for both
India and Pakistan prohibitions on exports of defense items and sensitive technology
and military financing, citing U.S. national security interests; also waived were any
remaining sanctions in §§ 101 or 102 of the AECA, the Export-Import Bank Act, and
the Pressler Amendment. Foreign assistance to Pakistan continues to be restricted
because of an anti-coup provision in appropriations legislation and other debt-related
restrictions; also, three Pakistani entities are subject to two-year AECA missile
1465) was reported by the Senate Foreign Relations Committee October 4. This
report will be updated.
Contents
Requirements of § 102(b) of the Arms Export Control Act (AECA).........2
Application of § 102(b) of the AECA to India and Pakistan................5
Details of § 102(b) Sanctions Imposed on India and Pakistan...............7
1998 Sanctions Relief Legislation..................................12
1999 Sanctions Relief Legislation and Presidential Action................14
Recent Developments...........................................16
Legislation ................................................ 17
Nuclear Sanctions: Section 102(b) of the
Arms Export Control Act and Its Application
to India and Pakistan
This report describes the requirements of § 102(b) of the Arms Export Control
Act, 22 U.S.C. § 2799aa-1(b)(AECA or Act), which requires the imposition of
economic and military sanctions against countries that have engaged in certain types
of nuclear proliferation, and discusses its application to India and Pakistan, which
conducted nuclear weapons tests in May 1998. It also discusses subsequently enacted
legislation authorizing the removal or some or all of these sanctions and presidential
action taken pursuant to these new authorities.
Section 102(b), also known as the Glenn Amendment, was enacted in the
Nuclear Proliferation Prevention Act of 1994 and is an amended version of the now
repealed § 670(b) of the Foreign Assistance Act of 1961, originally enacted in 1977.1
In pertinent part, § 102(b)(1) requires the President to impose sanctions on any
country that he has determined is a "non-nuclear-weapon state" and has received or
detonated a "nuclear explosive device" and on any country that has transferred such
a device to a non-nuclear-weapons state.
The required sanctions include prohibitions on foreign assistance; sales and
licenses under the AECA; U.S. government credits, credit guarantees, and financial
assistance; U.S. support for multilateral financial assistance; private bank lending to
the affected government; and exports of certain specific controlled goods and
technology. Humanitarian aid, food and agricultural exports, food assistance, and
bank loans and credits for purchases of food and agricultural commodities are
exempted, as are certain transactions involving intelligence activities.
Congress amended portions of these sanctions provisions in July 1998 and
subsequently granted the President authority temporarily to waive particular sanctions
with regard to India and Pakistan as of October 21, 1998. The President formally
exercised this waiver authority December 1, 1998, the waiver expiring October 21,
1999. In an October 25, 1999 enactment, Congress granted the President authority
to waive AECA sanctions without time limit; the President used this authority
October 27, 1999 to waive statutory restrictions with regard to specified U.S.
government programs and commercial transactions involving the two countries.
1Foreign Assistance Act of 1961, § 670, added by P.L. 95-92, § 12, amended and restated
by P.L. 97-113, § 737(c). The provision adding § 102 to the AECA, which is contained in
Part B of the Nuclear Proliferation Prevention Act of 1994, was enacted in § 826(a) of the
Foreign Relations Authorization Act, Fiscal Years 1994 and 1995, P.L. 103-236. The
Nuclear Proliferation Prevention Act of 1994 was enacted as Title VIII of P.L. 103-236.
Requirements of § 102(b) of the Arms Export
Control Act (AECA)
The text of § 102(b)(1) of the Arms Export Control Act under discussion here
provides as follows:
Except as provided in paragraphs (4), (5), and (6), in the event that the President
determines that any country, after the effective date of part B of the Nuclear
Proliferation Prevention Act of 1994 —
(B)is a non-nuclear-weapon-state and either —
(i)receives a nuclear explosive device, or
(ii)detonates a nuclear explosive device,
then the President shall forthwith report in writing his determination to the
Congress and shall forthwith impose the sanctions described in paragraph (2)
against that country.
The statute defines a "non-nuclear-weapon state" as "any country which is not
a nuclear-weapon state, as defined in Article IX(3) of the Treaty on the Non-
Proliferation of Nuclear Weapons" (AECA, § 102(c)). Under Article IX(3) of the
Treaty, a nuclear weapon state is "one which has manufactured and exploded a
nuclear weapon or other nuclear device prior to January 1, 1967" (21 U.S.T. 492-93).
The term "nuclear explosive device" is to be defined pursuant to § 830(4) of the
Nuclear Proliferation Prevention Act, 22 U.S.C. § 3201 note, and thus includes "any
device, whether assembled or disassembled, that is designed to produce an
instantaneous release of an amount of nuclear energy from special nuclear material
that is greater than the amount of energy that would be released from the detonation2
of one pound of trinitrotoluene (TNT)."
Section 102(b)(2) of the AECA sets forth the sanctions to be imposed after a
presidential determination. As they existed in May 1998, these sanctions were as
follows:
(A)The United States Government shall terminate assistance to that country
under the Foreign Assistance Act of 1961, except for humanitarian
assistance or food or other agricultural commodities.
(B)The United States Government shall terminate —
(i)sales to that country under this Act [i.e. the AECA] of any defense
articles, defense services, or design and construction services, and
2Legislative history of § 102(b) indicates that sanctions imposed under § 102(b)(2) are
intended to be prospective. House Conference Report language on the provision, which was
adopted as a Senate floor amendment and not contained in the House bill, states that the
"conference substitute is similar to the Senate amendment, but ... refines the language on
sanctions with respect to transfers or detonations of nuclear explosive devices (or transfers
or designs or components thereof) to ensure that such sanctions are prospective." H.Rept.
(ii)licenses for the export to that country of any item on the United States
Munitions List.
(C)The United States Government shall terminate all foreign military financing
for that country under this Act [i.e. the AECA].
(D)The United States Government shall deny to that country any credit, credit
guarantees, or other financial assistance by any department, agency, or
instrumentality of the United States Government, except that the sanction of
this subparagraph shall not apply —
(i)to any transaction subject to the reporting requirements of title V of the
National Security Act of 1947 (relating to congressional oversight of
intelligence activities), or3
(ii)to humanitarian assistance.
(E)The United States Government shall oppose, in accordance with section 701
of the International Financial Institutions Act (22 U.S.C. 262d), the
extension of any loan or financial or technical assistance by any international4
financial institution.
(F)The United States Government shall prohibit any United States bank from
making any loan or providing any credit to the government of that country,
except for loans or credits for the purpose of purchasing food or other
agricultural commodities.
3In addition, § 2(b)(4) of the Export-Import Bank Act, 12 U.S.C. § 635(b)(4)(as amended by
§ 1303(a) of P.L. 104-201) prohibits the Bank from giving approval to guarantees, insurance,
credit extensions or participations in the extension of credit in support of U.S. exports to any
country that the Secretary of State has determined is not a nuclear-weapon state and has
detonated, after October 26, 1977, a nuclear explosive device. The statute gives the President
authority to waive the prohibition if he finds Bank approvals to be in the "national interest."
The Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1998,
prohibited the Export-Import Bank from using funds available to it in FY1998 “to make
expenditures, contracts, or commitments for the export of nuclear equipment, fuel, or
technology to any country other than a nuclear-weapon state as defined in Article IX of the
Nuclear Non-Proliferation Treaty eligible to receive economic or military assistance under this
Act that has detonated a nuclear explosive after the date of enactment,” i.e., November 26,
1997. P.L. 105-118, Title I, 111 Stat. 2386. This is a standard foreign operations
appropriations restriction; it currently appears in the Foreign Operations Appropriations Act,
4Section 701 of the International Financial Institutions Act, 22 U.S.C. § 262d, sets forth
human rights and U.S. assistance policies with international financial institutions. Among
other covered institutions are the International Bank for Reconstruction and Development
(World Bank), the International Development Association, the International Finance
Corporation, the Asian Development Bank, and the International Monetary Fund (IMF). In
carrying out his or her duties, the United States Executive Director of each of the named
institutions is to consider, among other things, whether the recipient country has detonated
a nuclear device. 22 U.S.C. § 262d(b)(3)(C). In addition, the U.S. Government is to "seek
to channel assistance to projects which address basic human needs of the people of the
recipient country." 22 U.S.C. § 262d(d).
(G)The authorities of section 6 of the Export Administration Act of 19795 shall
be used to prohibit exports to that country of specific goods and technology
(excluding food and other agricultural commodities), except that such
prohibition shall not apply to any transaction subject to the reporting
requirements of title V of the National Security Act of 1947 (relating to
congressional oversight of intelligence activities).
While the statute requires that the President impose the sanctions "forthwith,"
it does not specify a date by which they must be imposed. The President may delay
their imposition for a maximum of 30 days of continuous session of Congress,
however, if he first transmits to the Speaker of the House of Representatives and the
Chairman of the Senate Foreign Relations Committee "a certification that he has
determined that an immediate imposition of sanctions on that country would be
detrimental to the national security of the United States" (§ 102(b)(4)(B)). This
section permits only one certification to be transmitted to the Congress for a country
regarding the same detonation, transfer, or receipt of a nuclear explosive device.
Section 102(b) does not allow the President unilaterally to waive one or more
of the sanctions when they are originally imposed, but does provide for the enactment
of legislation on an expedited basis that would permit such a waiver.6 The statute
does not provide for the possible removal or suspension of one or more of the
sanctions once certain conditions are met,7 nor does it provide for their termination.
Thus, in the absence of other provisions of law that may be invoked, legislation must
seemingly be enacted to achieve these ends.8
5The authorities of the Export Administration Act (EAA), now expired, have been carried
forward in Executive Order No. 13222 of August 17, 2001, issued under the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq. 66 Fed. Reg. had been
extended under Executive Order No. 12924 of August 19, 1994. 59 Fed. Reg. 43437 (1994).
Section 6 of the EAA, 50 U.S.C. App. § 2405, authorized the President to impose export
controls for foreign policy reasons, subject to certain conditions and restrictions.
6If the President transmits a certification to the Congress for the delay of sanctions, a joint
resolution to authorize the exercise of waiver authority will be considered under expedited
procedures in the Senate if the legislation is introduced in either House within 30 days of
continuous session after Congress receives the President's certification. Arms Export Control
Act (AECA), § 102(b)(4)(B),(C). The waiver authority allows the President to waive "any
sanction" that must otherwise be imposed under § 102(b)(2) if he determines and certifies in
writing to the Speaker of the House and the Chairman of the Senate Foreign Relations
Committee that "the imposition of the sanction would be seriously prejudicial to the
achievement of United States nonproliferation objectives or otherwise jeopardize the common
defense and security." AECA, § 102(b)(5). The certification must include a statement setting
forth the specific reasons for the waiver. The authority would be limited to the country that
has engaged in the proscribed conduct.
7For example, § 102(b) applies to a country that has detonated a nuclear explosive device
when it had the status of a "non-nuclear-weapon state," an act whose character cannot be
modified were that status subsequently to change.
8Legislative history of P.L. 103-236 does not appear to address the termination of § 102(b)
sanctions. See 140 Cong. Rec. S411-S413 (daily ed. January 31, 1994) and H.Rept. 103-482,
103d Cong., 2d Sess. 261-266 (1994). Section 102(b) may be compared, however, to § 824
(continued...)
Application of § 102(b) of the AECA to India and
Pakistan
On May 11, 1998, India stated publicly that it had conducted three underground
nuclear tests that day; on May 13, it announced that it had conducted two additional
tests. Pakistan announced May 28 that it had conducted five underground nuclear
tests; it reported a sixth test May 30. Because neither India nor Pakistan had
detonated a nuclear device before January 1, 1967, each is considered to be a "non-
nuclear-weapon state" for purposes of § 102(b)(2).
On May 13, 1998, President Clinton signed Presidential Determination No. 98-
22, a memorandum for the Secretary of State, in which he determined "in accordance
with section 102(b)(1) of the Arms Export Control Act ... that India, a non-nuclear-
weapon state, detonated a nuclear explosive device on May 11, 1998," and directed
"the relevant agencies and instrumentalities of the United States Government ... to
take the necessary actions to impose the sanctions described in section 102(b)(2) of
the Act."9 On May 30, the President made an identical determination (No. 98-25)
with respect to Pakistan's May 28 tests.10 In each case, the President decided not to
8 (...continued)
of the Nuclear Proliferation Prevention Act, which, like § 826(a), the section enacting §
102(b), is also contained in Part B of the Act. Section 824, which provides for the imposition
of sanctions on persons found to have assisted nuclear proliferation through the provision of
financing, requires that sanctions continue in effect for 12 months and provides that they will
cease to apply after that period only if the President makes certain determinations.
It should also be noted that while the President has independent powers in the area of
foreign relations, the power of the President (or other entities of the Executive Branch) to
engage in the activities covered by the sanctions (e.g., providing foreign assistance, licensing
arms exports) and to prohibit the particular transactions listed in the Act is based on statutory
grants of delegated authority. In areas where Congress has exercised its express constitutional
powers, the President may not use his independent authority to contravene an expression of
congressional will. See, e.g., Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 634
(1952)(Justice Jackson concurring); Consumers Union of U.S. v. Kissinger, 506 F.2d 136
(D.C.Cir. 1974), cert. denied, 421 U.S. 1004 (1975); United States v. Guy W. Capps, Inc.,th
204 F.2d 655 (4 Cir. 1953), aff’d on other grounds, 348 U.S. 296 (1955). See generally
L. Henkin, Foreign Affairs and the U.S. Constitution 86-96 (1996).
9Presidential Determination No. 98-22 of May 13, 1998, 63 Fed. Reg. 27665 (1998).
10Presidential Determination No. 98-25 of May 30, 1998, 63 Fed. Reg. 31881 (1998). The
United States suspended economic and military aid to Pakistan in April 1979 after receiving
what it considered to be incontrovertible evidence of covert efforts by that country to construct
a uranium enrichment facility. This action was taken under § 669 of the Foreign Assistance
Act of 1961 (FAA), known as the Symington Amendment, which prohibited all U.S. economic
and military assistance to any nonnuclear weapons country that had received nuclear
enrichment equipment, materials or technology which had not been placed under International
Atomic Energy Agency (IAEA) safeguards, unless the President made certain certifications.
Pursuant to subsequent legislation, sanctions were waived and later reapplied. Section 669 is
currently replaced by § 101 of the AECA. The FAA provides that the President may waive
the § 101 prohibition as it applies to Pakistan, with respect to any grounds for the prohibition
(continued...)
invoke that part of § 102(b) allowing a 30-day delay of sanctions. By doing so, the
President appeared to forego the possible expedited enactment of a joint resolution
authorizing him to waive any sanction with respect to India or Pakistan, as provided
in § 102(b)(4)(B). Congress could choose to enact separate legislation, however,
authorizing such a waiver or a version thereof.
The President's determination regarding India was the first invocation of §
While the Executive Branch has implemented many forms of sanctions legislation in
the past and could draw on this experience in implementing § 102(b), it had no prior
regulatory precedents for administering this specific statute. The absence of certain
definitions in § 102(b) could present problems for agencies, but could also afford
them flexibility in implementing these measures.11 Agencies involved in administering
the sanctions include the Department of State, the Department of Defense, the
Agency for International Development (AID), the Overseas Private Investment
Corporation (OPIC), the Department of Commerce, the Office of Foreign Assets
Control of the Department of the Treasury (OFAC), the U.S. Export-Import Bank,
and the Commodity Credit Corporation (CCC). As noted earlier, absent other
provisions of law that may apply, authority for the modification, suspension, or
10 (...continued)
of assistance arising before the effective date of the Nuclear Proliferation Prevention Act of
FAA, § 620E(d), 22 U.S.C. § 2375(d).
Under § 620E(e) of the Foreign Assistance Act, added in 1985 and amended in 1996
(P. L. 104-107)(Pressler Amendment), Pakistan is prohibited from receiving certain military
assistance and military equipment or technology unless the President can certify during the
fiscal year in which such assistance or sales or transfers are to take place,“that Pakistan does
not possess a nuclear explosive device and that the proposed military assistance program will
reduce significantly the risk that Pakistan will possess a nuclear explosive device." Pakistan
has not been certified with respect to non-possession of a nuclear explosive device since
Presidential Determination No. 90-1 of October 5, 1989, 54 Fed. Reg. 43797 (1989). The
President was able to waive § 101 of the AECA and § 620E(e) of the FAA for one year as
these provisions applied to India or Pakistan under the India-Pakistan Relief Act of 1998 (see
pages 11-13, infra) and may now do so without time restriction under authority granted in §
infra). Regarding sanctions imposed on Pakistan, see generally CRS Report 92-631,
Economic Sanctions Imposed by the United States Against Specified Countries: 1979
Through 1992, at 193-96.
11Section 102(b) sanctions are to be imposed against the "country" involved, except for
prohibitions on private bank loans, which apply to the "government of that country." Neither
of these terms is defined in the statute, however, and thus it is not clear whether they are
intended to include sub-national or government-owned entities. (Compare, for example, §
2(b)(4) of the Export-Import Bank Act (see supra note 3), which provides that the term
"country" is to have the meaning given to the term "foreign state" in 28 U.S.C. § 1603(b), a
provision of the Foreign Sovereign Immunities Act. Under this provision, the term "foreign
state" is to include "a political subdivision of a foreign state or an agency or instrumentality
of a foreign state"). Other terms – for example, "humanitarian aid" – also remain undefined.
The legislation does not contain a contract sanctity provision, which would bar the President
from prohibiting transactions in performance of contracts entered into before the date of the
sanctions.
termination of these sanctions would appear to depend on a future congressional
enactment. 12
Details of § 102(b) Sanctions Imposed on India and
Pakistan
After conducting an inter-agency review to develop a comprehensive sanctions
policy with respect to India and Pakistan, the Administration announced its original
implementation scheme for the two countries June 18, 1998.13 Highlights of the
sanctions, as modified by the Agriculture Export Relief Act of 1998 and the India-
Pakistan Relief Act of 1998, are described immediately below. The 1998 enactments
are discussed in greater detail in the following section of this report. Provisions of
P.L. 106-79, enacted October 25, 1999, granting the President broad waiver authority
and repealing the India-Pakistan Relief Act of 1998, along with the President’s actions
under the new statute, are discussed in the last section of this report.
Foreign assistance: The United States terminated or suspended foreign
assistance under the Foreign Assistance Act, with those exceptions provided by law.14
On December 1, 1998, the President exercised his authority under the India-Pakistan
Relief Act of 1998 (enacted October 21, 1998) to waive until October 21, 1999, the
§ 102(b) prohibition as it applied to Trade and Development Agency (TDA) activities
involving both India and Pakistan. The President also exercised his waiver authority
to allow assistance to both countries under the International Military Education and
Training (IMET) program.15 Prior to the waiver, TDA would not consider new
12In testimony before the Senate Foreign Relations Committee, the State Department expressed
the view that new legislation was needed to enable the Executive Branch to terminate § 102(b)
sanctions. Crisis in South Asia: India’s Nuclear Tests; Pakistan’s Nuclear Tests; India and
Pakistan: What Next? Hearings Before the Subcomm. on Near Eastern and South Asianth
Affairs of the Senate Comm. on Foreign Relations, 105 Cong., 2d Sess. 18-19
(1998)(testimony of Robert Einhorn, Assistant Secretary of State). See also Economic
Sanctions and U.S. Policy Interests: Hearing Before the House Comm. on Internationalth
Relations, 105 Cong., 2d Sess. 25 (testimony of Stuart Eizenstat, Under Secretary of State
for Economic, Business, and Agricultural Affairs).
13Dep't of State, "Fact Sheet on India and Pakistan Sanctions," June 18, 1998 [hereinafter
cited as DOS Fact Sheet]; Dep't of State, "India-Pakistan Sanctions," On-the-Record Briefing,
Washington, D.C., June 18, 1998 [http://www.state.gov][hereinafter cited as DOS Briefing].
See also India-Pakistan Nuclear Proliferation in South Asia: Hearing Before the Subcomm.th
on Asia and the Pacific of the House Comm on International Relations, 105 Cong., 2d
Sess. (1998) [hereinafter cited as HIRC Hearing]. For additional information on the
implementation of these sanctions, see CRS Report 98-570, India-Pakistan Nuclear Tests and
U.S. Response.
14DOS Fact Sheet, supra note 13, at 1. The Fact Sheet cites the § 102(b) exceptions for
humanitarian assistance and food and agricultural commodities as examples. The Department
also noted that most assistance to Pakistan had already been prohibited. Id.
15The IMET program is authorized in Part II, Chapter 5 of the FAA (§§ 541-546), 22 U.S.C.
§§ 2347-2347e. Along with the ban on foreign assistance under § 102(b)(2)(A) of the AECA,
(continued...)
projects in the sanctioned countries,16 but commitments made by the TDA before May
13, 1998, for India and before May 30, 1998, for Pakistan were honored “in
accordance with applicable law."17 Policy regarding Overseas Private Development
Corporation (OPIC) programs, which are authorized in §§ 231 et seq. of the Foreign
Assistance Act, is discussed under “Government credits, credit guarantees, and other
financial assistance,” below.
Military sales, exports, and financing: The United States has terminated
foreign military sales under the AECA, revoked licenses for the commercial sale of
any item on the United States Munitions List, and suspended delivery of previously18
approved defense articles and services to India. Pakistan is prohibited from
receiving certain U.S. military assistance, as well as U.S. military equipment and
technology, pursuant to § 620E(e) of the Foreign Assistance Act of 1961 (Pressler
Amendment), a restriction which may now be waived under § 9001 of P.L. 106-79.19
Government credits, credit guarantees, and other financial assistance: The
Export-Import Bank (Eximbank) had issued notices terminating new business in India
and Pakistan prior to the Administration’s June 18 announcement.20 This policy was
later adopted by the Overseas Private Investment Corporation (OPIC) and the
Commodity Credit Corporation (CCC).21 Transactions approved by Eximbank as
well as legally binding commitments made by OPIC and the CCC did, however, go
15 (...continued)
§ 101(a) of the Act bars FAA military assistance and grant military education and training
as a sanction for engaging in certain nuclear enrichment transfers, unless the President makes
specified certifications. The Pressler Amendment ban on military assistance to Pakistan,
however, excludes IMET assistance and certain other FAA programs. FAA, § 620E(e)(2),
16DOS Fact Sheet, supra note 13, at 1.
17HIRC Hearing, supra note 13, at 9 (testimony of David Aaron, Under Secretary of
Commerce for International Trade).
18DOS Fact Sheet, supra note 13, at 1. In a May 20 Federal Register notice, the Bureau of
Political-Military Affairs of the State Department announced that "all licenses and other
approvals to export or otherwise transfer defense articles and defense services from the United
States to India, or transfer U.S. origin defense articles and defense services from a foreign
destination to India, or temporarily import defense articles from India pursuant to Section 38
of the Arms Export Control Act are immediately revoked." 63 Fed. Reg. 27781 (1998). The
Department also stated that it would subsequently "deny all applications and other requests
for approval to export or otherwise transfer or retransfer defense articles and services to
India." Id. The State Department’s notice revoking munitions export licenses and other
approvals for Pakistan is set forth at 63 Fed. Reg. 33122 (June 17, 1998).
19See supra note 10.
20The Export-Import Bank announced a prohibition on financing of new transactions in the
public and private sectors in India May 13, 1998. It did the same for Pakistan June 1. The
sanctions were imposed under both § 102(b) of the AECA and § 2(b)(4) of the Export-Import
Bank Act. Ex-Im Bank Press Releases, May 13, 1998, and June 1, 1998
[http://www.exim.gov/].
21DOS Fact Sheet, supra note 13, at 1.
forward.22 The Agriculture Export Relief Act, enacted July 14, 1998, amended
the AECA to provide an exemption through FY1999 for U.S. Department of
Agriculture financing covered by § 102(b)(2)(D). This enactment permitted U.S.
wheat farmers to participate in a 365,000 metric ton wheat tender by Pakistan that
closed the following day.23 The new statute also permanently exempted from the
AECA prohibition federal government financing for medicine and medical supplies.
On December 1, 1998, the President used his authority under the India-Pakistan Relief
Act of 1998 to waive until October 21, 1999, the AECA prohibition on Eximbank and
OPIC activities with regard to both India and Pakistan, as well as nuclear-related
restrictions on Eximbank activities contained in § 2(b)(4) of the Export-Import Bank
Act. 24
Support for international financial assistance: This sanction affects U.S.
support for the programs of such international financial institutions (IFIs) as
International Bank for Reconstruction and Development (World Bank), the
International Development Association, the International Finance Corporation, the25
Asian Development Bank, and the International Monetary Fund (IMF). In the
Administration's June 19 press briefing, the Treasury Department spokesman stated
that "[t]here is now a G-8 consensus ... on two key points: first, that loans to India
and Pakistan in the category of basic human needs will go forward; and second, that
loans that are outside of that category — non-basic human needs — will be
postponed. With the voting share that the G-8 have at the IFIs, we expect that26
consensus to be sustained." In a written summary, the State Department noted that
the United States has "gained G-8 support to postpone consideration of non-basic
human needs (BHN) loans for India and Pakistan by the International Financial
Institutions (IFI) to bolster the effect of the Glenn Amendment requirement that the27
U.S. oppose non-BHN loans." In July 1998, U.S. officials announced that the
United States would not oppose the negotiation of IMF loans to Pakistan, although
22DOS Briefing, supra note 13 (response of Under Secretary of the Treasury David Lipton);
HIRC Hearing, supra note 13, at 9 (testimony of David Aaron, Under Secretary of Commerce
for International Trade).
23“White House Amends Sanctions Law in Time for Pakistan Wheat Tender,” Inside U.S.
Trade, July 17, 1998. For background on agricultural issues, see CRS Report 98-770, U.S.
Agricultural Exports and the Nuclear Nonproliferation Sanctions on India and Pakistan.
24Section 2(b)(4) of the Export-Import Bank Act is described at note 3, supra.
25See supra note 4.
26DOS Briefing, supra note 13 (statement of Under Secretary of the Treasury David Lipton).
The G-8 countries referred to are the United States, the United Kingdom, France, Germany,
Japan, Canada, Italy, and Russia.
27DOS Fact Sheet, supra note 13, at 2; see supra note 4. The Department added that these
restrictions included a postponement of $1.17 billion in IFI lending for India and "although
no IFI loans for Pakistan have been presented for board consideration, $25 million in IMF
assistance has been postponed for failure to meet economic benchmarks." Id. The Treasury
Department spokesman at the Administration's June 19 press briefing described BHN loans
as including loans in "categories such as education, maternal and child health, water and
sewage, low-income housing, rural development." DOS Briefing, supra note 13 (statement
of Under Secretary of the Treasury David Lipton).
it would abstain from an IMF board vote to approve any resulting loan agreement, an
action the Administration viewed to be in compliance with its statutory obligation
under § 102(b).28 On December 1, 1998, the President invoked the India-Pakistan
Relief Act to waive this provision until October 21, 1999, as it applies to “the
extension of any loan or financial or technical assistance to Pakistan by any
international financial institution in support of the assistance program that Pakistan
is negotiating with the International Monetary Fund.”
Private bank loans: The Administration stated that it planned to implement the
§ 102(b)(2)(F) prohibition on certain private lending in a future Executive Order.29
This prohibition appeared to have posed considerable difficulty for regulators, in part
because of the level and nature of governmental involvement in the Indian banking30
system. As noted earlier, the prohibition’s exemption for agricultural commodities
was legislatively expanded in July 1998 to include fertilizer. On December 1, the
President used his authority under the India-Pakistan Relief Act of 1998 to waive §
102(b) until October 21, 1999, as it applies to “the extension of any loan or the
providing of any credit to the Government of India or the Government of Pakistan by
any U.S. bank.”
Exports: The Commerce Department's Bureau of Export Administration (BXA)
issued interim guidance for exporters May 28 and June 3, 1998, but a number of
questions as to which dual-use items were to be covered and which recipients were
to be embargoed remained unresolved.31 Following the Administration's June 18
statement, the Bureau issued its updated export policy June 22, stating that it would
apply this policy to new and pending license applications. As announced, the
controls were grouped into three categories addressing items to be exported and end-
users, the first category representing the most severe level of controls. These
categories are: (1) nuclear and missile-related items and entities of concern; (2)
exports of national security-related items (including certain computers) and military
entities; and (3) other dual-use items.32 Controls range, for example, from an
28State Department Background Briefing, July 21, 1998, as reported by Federal News
Service, available in LEXIS, News Library, Curnws File; “Despite A-Test, U.S. Won’t Bar
Pakistan Bailout,” N.Y. Times, July 22, 1998, at A3. See generally CRS Report 98-570,
India-Pakistan Nuclear Tests and U.S. Response, at 26-27.
29DOS Fact Sheet, supra note 13, at 2.
30See, e.g., "Banks Lobby Washington for Slack in India Sanctions," Wall St. J., May 22,
1998, at A15. For a discussion of banking issues, see CRS Report 98-537, Bank Loan
Denial for Nuclear Proliferation under Section 102(b) of the Arms Export Control Act as
Applicable to India and Pakistan.
31"U.S. Is Wrestling Over Limits on High-Tech Exports to India," Wall St. J., June 10, 1998,
at A14; "Albright Makes Push for Flexibility on India, Pakistan Nuclear Sanctions," Inside
U.S. Trade, June 12, 1998.
32Bureau of Export Administration, "U.S. Sanctions on the Export of Dual-Use Goods to India
and Pakistan" (June 22, 1998) [http://www.bxa.doc.gov]. By prohibiting the export of
missile-related goods and possibly some dual-use items, DOC appears to have disagreed with
some industry arguments that the NNPA permitted the Department to restrict only nuclear-
(continued...)
absolute prohibition on exports of any dual-use item controlled for nuclear or missile
proliferation reasons to all end users (category 1) to end-user based controls on
computers of over 2000 MTOPS (category 2) to favorable case-by-case consideration
of license applications for dual-use items to Indian and Pakistani entities where neither
the item nor the entity is covered by either of the first two categories.
In codifying its regulations November 19, 1998, BXA, among other things,
added to its general Entity List at 15 C.F.R. Part 744, Supp. 4, the names of Indian
and Pakistani government, parastatal, and private entities determined to be involved
in nuclear or missile activities, as well as the names of Indian and Pakistani military
entities.33 The agency stated that, with limited exceptions, it would require a license
for the export of any item over which BXA exercises regulatory jurisdiction to the
entities cited for nuclear and missile activities, and presume denial with regard to
items specifically listed on the Commerce Control List for export to the named
military entities.34 In March 2000, BXA removed 51 Indian entities from the Entity
List, changed its licensing policy for exports of items not listed on the Commodity
Control List (i.e., those classified as EAR99) to Indian and Pakistani government,
private and parastatal entities from a presumption of denial to a presumption of
approval, and made other changes regarding the treatment of specific entities in both35
countries.
32 (...continued)
related goods and technology. See "Business Groups Face Uphill Battle in Effort to Limit
India Sanctions" and letters of Industry Coalition on Technology Transfer and Electronic
Industries Association to Samuel B. Berger, Assistant to the President to the President for
National Security Affairs, Inside U.S. Trade, May 22, 1998.
33Dep’t of Commerce, Bureau of Export Administration, “India and Pakistan Sanctions and
Other Measures; Interim Rule,” 63 Fed. Reg. 64322-42 (November 19, 1998). In its June 22
export policy statement (supra note 31), BXA announced that, pursuant to the Enhanced
Proliferation Control Initiative (EPCI), it would publish a list of Indian and Pakistani
government and private entities involved in nuclear and missile activities and would prohibit
the exports and reexports of all items subject to the EAR to the listed entities. Under the
EPCI, originally imposed by Executive Order 12735 of November 16, 1990 (55 Fed. Reg.
48587) and a December 1990 presidential directive (26 Weekly Comp. Pres. Docs. 2033
(1990)), foreign policy export controls have been imposed on specific items intended for
proliferation-related uses and on goods that a U.S. exporter knows will be used for
proliferation purposes. Bureau of Export Administration, "Imposition of Foreign Policy
Export Controls under the Enhanced Proliferation Control Initiative; Report to the Congress"
(February 1991).
3463 Fed. Reg. at 64322-23. Current regulations are set forth in 15 C.F.R. §§ 742.16;
744.11; 744.12; Part 744, Supp. No. 4 (Entity List), and related provisions; see also
Department of Commerce, Bureau of Export Administration, “Dual-Use Export Control
Sanctions: India and Pakistan,” posted at [http://www.bxa.doc.gov/Entities/Ind-Pak2.html].
3565 Fed. Reg. 14444 (2000). BXA stated that it was taking its action to remove the 51 Indian
entities from the List “[b]ased on a consensus decision by the Administration to more tightly
focus on those Indian entities which make direct and material contributions to weapons of
mass destruction and missile programs and items that can contribute to such programs” and
cited as support for the regulatory revisions “sense of Congress” language in § 9001(d) of the
(continued...)
1998 Sanctions Relief Legislation
Concern over the lack of an exemption for food and agricultural products in the
§ 102(b)(2)(D) prohibition on government credits, guarantees, and financing led to
the July 14, 1998, enactment of the Agriculture Export Relief Act (AERA), P.L. 105-
194, which amended this AECA section to exempt credits, credit guarantees, and
financial assistance programs provided by the U.S. Department of Agriculture
(USDA) to support the purchase of food or other agricultural commodities, and
makes this amendment applicable to USDA credits, guarantees, and assistance made
before, on, or after the date of enactment, through September 30, 1999.36 The Act
also lifted, through September 30, 1999, any sanctions that had already been imposed
under § 102(b) involving these USDA programs.37 Additionally, the AERA made the
general prohibition on U.S. credits, credit guarantees, and financial assistance
inapplicable to medicine and medical supplies and permanently lifted any sanctions
imposed on such items before the date of enactment.38 Finally, the Act amended the
private loan exemption for agricultural commodities to specifically include fertilizer
and permanently lifted any sanctions imposed on such items before the date of
enactment. 39
35 (...continued)
FY2000 DOD Appropriations Act calling for refinement and focusing of the list (see infra
page 14 for statutory language).
36Agriculture Export Relief Act (AERA), Pub. L. No. 105-194, § 2(a)(3), § 2(d). Of primary
concern at the time were the CCC General Sales Manager (GSM) programs, which provide
export credit guarantees for U.S. agricultural commodities (7 C.F.R. Part 1493). The Justice
Department had reportedly concluded that § 102(b)(2)(D) did not allow the Administration
to provide agricultural credits for exports to sanctioned countries. "No Flexibility for Food,"
Dow Jones News Service, June 11, 1998, available in WESTLAW, ALLNEWSPLUS File;
"U.S. moves to exempt Pakistani wheat credits from sanctions," AP, June 12, 1998;
"Congress May Lift Ban on Wheat Sales to India and Pakistan," N.Y. Times, June 15, 1998,
at A17. Unlike certain other sanctions that must be imposed under § 102(b) — namely, the
prohibition on Foreign Assistance Act assistance, the prohibition on private bank lending, and
the use of Export Administration Act authority to prohibit exports — the prohibition on
government credits, credit guarantees and financial assistance does not include an express
exemption for food and agricultural commodities. Compare AECA, § 102(b)(2)(D), as in
effect in May 1998, with AECA, §§ 102(b)(2)(A), (F), (G).
Amendments exempting USDA programs were originally attached to the reportedth
version of H.R. 4101 (105 Cong.), the Agriculture, Rural Development, Food and Drug
Administration and Related Agencies Appropriations Bill, 1999, at § 737 (H.Rept. 105-588,th
105 Cong., 2d Sess.) and to the reported version of S. 2159, the Senate agriculture
appropriations bill for FY1999, at § 738 (S.Rept. 105-212, 105th Cong., 2d Sess.). The
Agriculture Export Relief Act of 1998 was later enacted as freestanding legislation.
For further discussion of economic sanctions as they relate to the agricultural sector, see
CRS Report RL30108, Economic Sanctions and U.S. Agricultural Exports.
37AERA, §§ 2(d), 2(e).
38AERA, §§ 2(c), 2(e).
39AERA, §§ 2(b), 2(e).
The India-Pakistan Relief Act of 1998 (IPRA), enacted October 21, 1998,
authorized the President to waive “for a period not to exceed one year upon
enactment” all or part of the § 102(b) sanctions imposed on India or Pakistan related
to FAA and governmental financial assistance, international financial assistance, and
private bank loans, as well as all or part of the following: § 620E(e) of the Foreign
Assistance Act, prohibiting military assistance to Pakistan based on its nuclear
activities (Pressler Amendment); § 2(b)(4) of the Export-Import Bank Act, generally
restricting financing based on the detonation of a nuclear device; and § 101 of the
AECA, which prohibits certain FAA and AECA assistance to countries engaged in
nuclear enrichment transfers.40 The Act maintained § 102(b) prohibitions on sales of
defense articles and services, export licenses for U.S. Munitions List items, foreign
military financing under the AECA, and export controls under § 6 of the Export
Administration Act (EAA).41 Before exercising his waiver authority, the President
was required to consult with the Senate Foreign Relations Committee, the House
International Relations Committee, and the Senate and House Appropriations
Committees. In addition, the Secretary of State was required to submit a report to
these committees, at least 30 days before a one-year waiver period expired, on
economic and national security developments in India and Pakistan.
On November 7, 1998, the President announced that he would waive some of
the existing nuclear sanctions because of Indian and Pakistani commitments regarding
further nuclear testing.42 As noted earlier, the President formally exercised his IPRA
authority December 1, 1998, waiving until October 21, 1999, the statutory provisions43
covered by the new law, with regard to specific programs and activities.
40Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 1999, P.L. 105-277, § 101(a), Title IX, § 902(a), 112 Stat. 2681-40.
41P.L. 105-277, § 101(a), Title IX, § 902(b).
42“President Clinton Eases Some Sanctions Against India, Pakistan After Nuke-Test Ban,”
43Presidential Determination No. 99-7, December 1, 1998, 34 Weekly Comp. Pres. Doc. 2401
(1998). At the request of the House Ways and Means Committee, the International Trade
Commission (ITC) in April 1999 began a factfinding investigation regarding the economic
effect of the AECA sanctions imposed on India and Pakistan, publishing its report in
September 1999. As the ITC stated in the report’s abstract, AECA sanctions “appeared to
have had a relatively minimal overall impact on India, while they appeared to have had a more
pronounced adverse impact on Pakistan. However, for both countries it is difficult to isolate
the effects of the U.S. sanctions from other concurrent economic events, such as each
country’s domestic economic policies and sanctions imposed by other countries.” The ITC
also stated that “[r]ecent trade data indicated that reimposition of the Glenn Amendment
sanctions prohibiting USDA export credits and guarantees most likely would adversely affect
U.S. wheat exports to Pakistan, which is an important customer for white wheat grown in the
U.S. Pacific Northwest states.” U.S. Int’l Trade Comm’n, Overview and Analysis of the
Economic Impact of U.S. Sanctions with Respect to India and Pakistan iii (September
1999 Sanctions Relief Legislation and Presidential
Action
A number of bills were introduced in 1999 to narrow the application of § 102(b)
of the AECA and other provisions of law as they pertain to India and Pakistan.44
Three bills containing sanctions relief legislation for India and Pakistan were acted
upon: H.R. 973 passed the House June 15, 1999; H.R. 2415 passed the House July
21, but passed the Senate August 3 in a form that did not contain sanctions relief
provisions; S. 1122 passed the Senate June 8, and was later inserted into H.R. 2561,
the Department of Defense Appropriations Act, 2000. H.R. 2561 passed the Senate
as amended July 28, and was enacted into law October 25 with sanctions relief
language.
The new law, P.L. 106-79, § 9001, authorizes the President to waive, without
time limitation, all of the sanctions contained in §§ 101 or 102 of the AECA, the
nuclear-related restriction in § 2(b)(4) of the Export-Import Bank Act, and § 620E(e)
of the Foreign Assistance Act (Pressler Amendment), as these apply to India or
Pakistan. The President may waive military and export control sanctions in §
102(b)(2), however, only if he certifies to Congress that a particular restriction would
not be in U.S. national security interests. Further, the issuance of a license for defense
exports is subject to the same requirements as those contained in § 36(c) of the
AECA, 22 U.S.C. § 2776(c), which requires the President to certify to Congress
specified information on a proposed defense export before an export license is
issued. 45
The statute also contains “sense of Congress” language that (1) the “broad
application of export controls to nearly 300 Indian and Pakistani entities is
inconsistent with the specific national security interests of the United States and that
this control list requires refinement” and (2) “export controls should be applied only
to those Indian and Pakistani entities that make direct and material contributions to
weapons of mass destruction and missile programs and only to those items that can
contribute to such programs.”
Waivers issued under the law will cease to apply to India or Pakistan if the
respective country detonates a nuclear explosive device or takes one of the nuclear-
44Undersecretary of State Stuart Eizenstat reportedly stated in testimony before the House
Agriculture Committee in June 1999 that the Administration favored having “waiver
authority, full and permanent waiver authority, for all of the Glenn sanctions with respect to
India and Pakistan.” Economic Sanctions and the Effect on U.S. Agriculture; Hearing
Before the House Comm. on Agriculture, June 9, 1999, transcript reported by Federal News
Service, available in LEXIS, News Library, Curnws File (response of Mr. Eizenstat to
question by Mr. Pomeroy).
45Section 36(c), as written, applies to exports of major defense equipment and other defense
articles and services valued over threshold dollar amounts. It also provides that unless the
President states in his certification that an emergency exists which requires the proposed
export in the U.S. national security interests, such a license may not issue until 30 calendar
days after the certification is received by Congress, unless a joint resolution of disapproval
is enacted in the interim.
related actions that would require the President to report to Congress under §
102(b)(1) of the AECA. The statute also repeals the India-Pakistan Relief Act of
On October 27, the President waived the statutory restrictions covered by the
new law as applicable to specific U.S. government programs and commercial
transactions.46 The waiver for India covers the following:
!Export-Import Bank programs;
!OPIC programs;
!Trade and Development Agency programs;
!assistance under the International Military Education and Training (IMET)
program;
!private U.S. bank loans and credits to the Government of India;
!assistance to the Asian Elephant Conservation Fund, the Rhinoceros and Tiger
Conservation Fund, and the Indo-American Environmental Leadership
program; and
!USDA credits, credit guarantees, and other financial assistance to support the
purchase of food or other agricultural commodities.
The waiver for Pakistan is more limited, covering private U.S. bank loans and
credits to the Government of Pakistan, and USDA credits, credit guarantees, and
other financial assistance to support the purchase of food or other agricultural
commodities. The United States had earlier terminated aid to Pakistan under an
annual foreign operations appropriations act provision cutting off all assistance
financed by funds appropriated under the statute to any country whose duly elected
head of government is deposed by military coup or decree, a provision that was47
triggered by the October 12, 1999 military coup in Pakistan. The 2001 Foreign
Operations Appropriations Act, however, allows appropriated funds for certain
Foreign Assistance Act programs to be made available for basic education programs
for Pakistan, “notwithstanding any provision of law that restricts assistance to foreign48
countries.”
As noted earlier, the Commerce Department in March 2001 removed 51 Indian
entities from the Entity List, made other revisions regarding the treatment of specific
entities of both countries, and instituted a presumption of approval for applications
to export goods to certain government, parastatal, and private entities in India or
Pakistan where the goods are subject to DOC jurisdiction but not listed on the
46Presidential Determination No. 2000-04 of October 27, 1999, 64 Fed. Reg 60649 (1999).
47Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1999, §
508, P.L. 105-277, § 101(d), 112 Stat. 2681-171. Aid may be resumed if the President
determines and reports to the House and Senate Appropriations Committees that a
democratically elected government has taken office subsequent to the termination of aid. This
is a standard appropriations restriction and currently appears in § 508 of the Foreign
Operations Appropriations Act, 2001, P.L. 106-429, Appendix A–H.R. 5526, 114 Stat. 1900,
Stat. 1900A-24.
48P.L. 106-429, Appendix A–H.R. 5526, § 597, 114 Stat. 1900, Stat. 1900A-61.
Commodity Control List. The Department referred to the “sense of Congress”
language in the 1999 statute as supporting its regulatory revisions.49
Recent Developments
On August 9, 2001, the President waived the application of restrictions in §§ 101
and 102 of the AECA with regard to Pakistan relating to exports of defense articles
and services to the extent that the restrictions applied to “the sale of certain specified
U.S.-origin helicopter and armored personnel carrier spare parts and ammunition to
Pakistan for use in its deployment in Sierra Leone in support of UN peacekeeping
operations.” 50
Later in the month, the Bush Administration indicated that it was reviewing its
sanctions policy with the primary aim of easing sanctions currently imposed on
India.51 Sen. Joseph Biden, Chairman of the Senate Foreign Relations Committee,
wrote to the President August 24 urging him to use his waiver authority to lift
economic sanctions (mainly export controls) imposed on India, and stating that “a
case can be made for the use of waiver authority to lift sanctions on Pakistan as well,”
but that concerns over missile technology from China to Pakistan should first be
resolved.52 Ranking Member of the House International Relations Committee Tom
Lantos sent a letter to the President August 28 also stating his support for lifting the
nuclear sanctions imposed on India. On September 5, Rep. Jim McDermott and Rep.
Ed Royce (co-chairmen of the Congressional Caucus on India), along with 48 other
House Members, wrote to the President in support of Administration statements
regarding removal of sanctions and asking that he “strongly consider re-evaluation
and substantially changing” the Entity List.
Following the September 11 terrorist attacks on the World Trade Center and the
Pentagon, the President, on September 22, waived § 101(b)(2) sanctions and
prohibitions on exports of defense items and sensitive technology and military
financing with respect to both India and Pakistan, having determined that continuation
of the measures would not be in U.S. national security interests.53 He also waived any
49See text at supra note 35.
50Presidential Determination No. 2001-23 of August 9, 2001, 66 Fed. Reg. 44521 (2001).
The waived restrictions had been imposed under the International Traffic in Arms Regulations
(ITARS).
51“U.S. Seeks to Lift Sanctions on India; Aim Is to Bolster Military Relations,” Wash. Post,
August 12, 2001, at A1; “U.S. Ready to End Sanctions on India to Build Alliance,” N.Y.
Times, Aug. 27, 2001; “Administration to Work with Congress to Lift Economic Sanctions
Against India,” 18 Int’l Trade Rep. 1387 (2001).
52“Biden Calls for Easing India Sanctions, Urges Talks with Administration,” Inside U.S.
Trade, August 31, 2001.
53Presidential Determination No. 2001-28, September 22, 2001, posted at
[http://www.whitehouse.gov/news/releases/2001/09/20010922-4.html]. See also Dep’t of
Commerce, Bureau of Export Administration, “India and Pakistan: Lifting of Sanctions,
(continued...)
remaining sanctions in §§ 101 or 102 of the AECA, the Export-Import Bank Act, and
the Pressler Amendment. As noted above, however, foreign assistance to Pakistan
is currently restricted because of the anti-coup provision in the FY2001 foreign54
operations appropriations act. In addition, the Pakistani Ministry of Defense and its
sub-units and successors, as well as two other Pakistani entities (the Space and Upper
Atmosphere Research Commission (SUPARCO) and the National Development
Complex) are currently subject to two-year AECA missile proliferation sanctions.
These consist of prohibitions on granting export licenses under the EAA and the
AECA and on entering into U.S. government contracts involving the sanctioned
entities. 55
Legislation
H.R. 1358 (McDermott), introduced April 3, 2001, would remove all nuclear
sanctions imposed on India and Pakistan. The bill has been referred to the House
International Relations Committee and the House Financial Services Committee.
H.R. 2889 (Lantos), introduced September 14, 2001, would permanently
remove nuclear sanctions as they apply to India. The bill has been referred to the
House International Relations Committee.
H.R. 2506, the foreign operations appropriations bill for FY2002, as passed the
House, provides that assistance may be resumed to countries subject to the anti-coup
amendment not only if the President certifies that a democratically elected government
has taken office, but also if he certifies that “substantial progress has been made
towards the holding of democratic elections” (§ 508). The bill, as reported by the
Senate Appropriations Committee, does not contain this additional language. Both
bills, however, would provide for basic education assistance for Pakistan (H.R. 2506,
§ 577, as passed by the House; § 572, as reported in the Senate).
53 (...continued)
Removal of Indian and Pakistani Entities, and Revision in License Review Policy,” 66 Fed.
Reg. 50090 (October 1, 2001).
54 The State Department has also cited as currently applicable to Pakistan § 620(q) of the
Foreign Assistance Act and § 512 of the Foreign Operations Appropriations Act (the Brooke
Amendment), which bar certain assistance for countries in default on U.S. Government loans.
“Sanctions on India and Pakistan,” Fact Sheet, September 28, 2001, posted at
<http://www.state.gov> (under “Press Releases (Other).
55The Ministry of Defense is also subject to a two-year import prohibition covering products
produced by the Ministry. The missile proliferation sanctions are imposed under § 73 of the
AECA 22 U.S.C. § 2797b(a)(1), and § 11B(b)(1) of the EAA, 50 U.S.C. App. §
2401b)(b)(1). For further details, see Dep’t of State, “Bureau of Nonproliferation; Imposition
of Missile Proliferation Sanctions Against Entities in Iran and Pakistan,” 65 Fed. Reg. 71348
(November 30, 2000)(Ministry of Defense; Space and Upper Atmosphere Research
Commission), and Dep’t of State, “Bureau of Nonproliferation; Imposition of Missile
Proliferation Sanctions Against a Chinese Entity and a Pakistani Entity,” 65 Fed. Reg. 47256
(September 11, 2001)(National Development Complex). For further discussion of existing
sanctions and other statutory restrictions applicable to India and Pakistan, see CRS Report
RS20995, India and Pakistan: Current U.S. Economic Sanctions.
S. 1465 (Brownback), as reported by the Senate Foreign Relations Committee
October 4, 2001, would make a number of statutory aid-related restrictions
inapplicable to Pakistan and allow flexibility in the use of other related authorities until
October 1, 2003, unless otherwise provided in the bill. Regarding the anti-coup
restriction, it would make inapplicable to Pakistan any such provision in the foreign
operations appropriations act for FY2002 (or for any earlier fiscal year) (§ 1(a)). It
would also authorize the President to waive, with respect to Pakistan, any anti-coup
provision in the foreign operations act for FY2003 if the President determines and
certifies to Congress that the waiver would facilitate the transition to democratic rule
in Pakistan and is important to United States efforts to respond to, deter, or prevent
acts of international terrorism (§ 1(b)). Congressional consultation requirements
would be required before either or these authorities were invoked. Regarding EAA
and AECA missile proliferation sanctions, it would allow the President, with respect
to a sanction imposed on a foreign person in Pakistan prior to January 1, 2001, to
exercise the waiver contained in the underlying authorities after consultation with
appropriate congressional committees and without regard to the notification period
set forth in the waiver provisions (§ 2). Regarding other foreign assistance
restrictions, it would make § 620(q) of the Foreign Assistance Act, prohibiting
assistance to countries in default on certain debt owed the United States, and any
similar provision in the foreign operations appropriations act for FY2002, inapplicable
to Pakistan (§ 3). The reported bill also contains provisions modifying FAA
notification deadlines for drawdowns and transfers of excess defense articles carried
out to respond to, deter, or prevent acts of international terrorism (§ 4).
As introduced September 25, 2001, the bill would have authorized the President
through September 30, 2003, and notwithstanding any other provision of law, to
provide assistance, authorize the export of defense articles or defense services,
authorize the export of dual-use items, or extend other financial assistance to India
or Pakistan, under the Foreign Assistance Act, the Arms Export Control Act, the
Export-Import Bank Act, or any other provision of law, if the President determined
that to do so was in the national interest of the United States and important to U.S.
efforts to respond to, deter, or prevent acts of international terrorism. The President
would have been required to notify Congress before using this authority; the statute
could not have been construed to authorize the President to provide for nuclear
cooperation with either country.