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The Arms Export Control Act was passed on October 22, 1968. It gave the President the power to establish a "munitions list", to be used for controlling the import and export of weapons. The primary purpose is for preventing hostile countries and terrorist organizations from acquiring weapons of mass destruction, as well as regulating sales of weapons to more developed countries so as to impede nuclear proliferation and the global arms race.

This Act was violated during the 1980s by the Reagan administration. The administration allowed the transfer of helicopters, bombs, and other weapons to Saddam Hussein's government in Iraq. They also sold weapons to the Iranian regime of Ayatollah Khomeini in exchange for the release of hostages, effectively arming both sides of the Iran-Iraq War.

It is debated whether the funding and supplying of the Contras in Nicaragua was illegal, and whether Reagan was aware of it. Regardless, the National Security Council and Central Intelligence Agency used established drug cartels to supply weapons, money, and equipment to the Contras covertly, using the proceeds from the sales to Iran.

The full text of the bill is below.


TITLE 22. FOREIGN RELATIONS AND INTERCOURSE

CHAPTER 39. ARMS EXPORT CONTROL

MILITARY EXPORT CONTROLS

22 USCS § 2778 (1994)

§ 2778. Control of arms exports and imports

  • (a) Presidential control of exports and imports of defense articles and services, guidance of policy, etc.; designation of United States Munitions List; issuance of export licenses; condition for export; negotiations information.
    • (1) In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List.
    • (2) Decisions on issuing export licenses under this section shall be made in coordination with the Director of the United States Arms Control and Disarmament Agency, taking into account the Director's assessment as to whether the export of an article would contribute to an arms race, aid in the development of weapons of mass destruction, support international terrorism, increase the possibility of outbreak or escalation of conflict, or prejudice the development of bilateral or multilateral arms control or nonproliferation agreements or other arrangements. The Director of the Arms Control and Disarmament Agency is authorized, whenever the Director determines that the issuance of an export license under this section would be detrimental to the national security of the United States, to recommend to the President that such export license be disapproved.
    • (3) In exercising the authorities conferred by this section, the President may require that any defense article or defense service be sold under this Act as a condition of its eligibility for export, and may require that persons engaged in the negotiation for the export of defense articles and services keep the President fully and currently informed of the progress and future prospects of such negotiations.

  • (b) Registration and licensing requirements for manufacturers, exporters, or importers of designated defense articles and defense services; exceptions.
    • (1) (A) As prescribed in regulations issued under this section, every person (other than an officer or employee of the United States Government acting in an official capacity) who engages in the business of manufacturing, exporting, or importing any defense articles or defense services designated by the President under subsection (a)(1) shall register with the United States Government agency charged with the administration of this section, and shall pay a registration fee which shall be prescribed by such regulations. Such regulations shall prohibit the return to the United States for sale in the United States (other than for the Armed Forces of the United States and its allies or for any State or local law enforcement agency) of any military firearms or ammunition of United States manufacture furnished to foreign governments by the United States under this Act or any other foreign assistance or sales program of the United States, whether or not enhanced in value or improved in condition in a foreign country. This prohibition shall not extend to similar firearms that have been so substantially transformed as to become, in effect, articles of foreign manufacture.
    • (B) The prohibition under such regulations required by the second sentence of subparagraph (A) shall not extend to any military firearms (or ammunition, components, parts, accessories, and attachments for such firearms) of United States manufacture furnished to any foreign government by the United States under this Act or any other foreign assistance or sales program of the United States if--
      • (i) such firearms are among those firearms that the Secretary of the Treasury is, or was at any time, required to authorize the importation of by reason of the provisions of section 925(e) of title 18, United States Code (including the requirement for the listing of such firearms as curios or relics under section 921(a)(13) of that title); and
      • (ii) such foreign government certifies to the United States Government that such firearms are owned by such foreign government.
    • [(C)] (B) A copy of each registration made under this paragraph shall be transmitted to the Secretary of the Treasury for review regarding law enforcement concerns. The Secretary shall report to the President regarding such concerns as necessary.
    • (2) Except as otherwise specifically provided in regulations issued under subsection (a)(1), no defense articles or defense services designated by the President under subsection (a)(1) may be exported or imported without a license for such export or import, issued in accordance with this Act and regulations issued under this Act, except that no license shall be required for exports or imports made by or for an agency of the United States Government (A) for official use by a department or agency of the United States Government, or (B) for carrying out any foreign assistance or sales program authorized by law and subject to the control of the President by other means.
    • (3) (A) For each of the fiscal years 1988 and 1989, $ 250,000 of registration fees collected pursuant to paragraph (1) shall be credited to a Department of State account, to be available without fiscal year limitation. Fees credited to that account shall be available only for the payment of expenses incurred for--
      • (i) contract personnel to assist in the evaluation of munitions control license applications, reduce processing time for license applications, and improve monitoring of compliance with the terms of licenses; and
  • (ii) the automation of munitions control functions and the processing of munitions control license applications, including the development, procurement, and utilization of computer equipment and related software.
  • (B) The authority of this paragraph may be exercised only to such extent or in such amounts as are provided in advance in appropriation Acts.

  • (c) Criminal violations; punishment. Any person who willfully violates any provision of this section or section 39 [22 USCS § 2779], or any rule or regulation issued under either section, or who willfully, in a registration or license application or required report, makes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon conviction be fined for each violation not more than $ 1,000,000 or imprisoned not more than ten years, or both.

  • (d) Repealed

  • (e) Enforcement powers of President. In carrying out functions under this section with respect to the export of defense articles and defense services, the President is authorized to exercise the same powers concerning violations and enforcement which are conferred upon departments, agencies and officials by subsections (c), (d), (e), and (g) of section 11 of the Export Administration Act of 1979 [50 USCS Appx § 2410(c), (d), (e) and (g)], and by subsections (a) and (c) of section 12 of such Act [50 USCS Appx § 2411(a) and (c)], subject to the same terms and conditions as are applicable to such powers under such Act. Nothing in this subsection shall be construed as authorizing the withholding of information from the Congress. Notwithstanding section 11(c) of the Export Administration Act of 1979 [50 USCS Appx § 2410(c)], the civil penalty for each violation involving controls imposed on the export of defense articles and defense services under this section may not exceed $ 500,000.

  • (f) Periodic review of items on the munitions list. The President shall periodically review the items on the United States Munitions List to determine what items, if any, no longer warrant export controls under this section. The results of such reviews shall be reported to the Speaker of the House of Representatives and to the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate. Such a report shall be submitted at least 30 days before any item is removed from the Munitions List and shall describe the nature of any controls to be imposed on that item under the Export Administration Act of 1979.

  • (g) Identification of persons convicted or subject to indictment for violations of certain provisions.
    • (1) The President shall develop appropriate mechanisms to identify, in connection with the export licensing process under this section--
    • (2) The President shall require that each applicant for a license to export an item on the United States Munitions List identify in the application all consignees and freight forwarders involved in the proposed export.
    • (3) If the President determines--
      • (A) that an applicant for a license to export under this section is the subject of an indictment for a violation of any of the statutes cited in paragraph (1),
      • (B) that there is reasonable cause to believe that an applicant for a license to export under this section has violated any of the statutes cited in paragraph (1), or
      • (C) that an applicant for a license to export under this section is ineligible to contract with, or to receive a license or other form of authorization to import defense articles or defense services from, any agency of the United States Government,
      • the President may disapprove the application. The President shall consider requests by the Secretary of the Treasury to disapprove any export license application based on these criteria.
    • (4) A license to export an item on the United States Munitions List may not be issued to a person--
      • (A) if that person, or any party to the export, has been convicted of violating a statute cited in paragraph (1), or
      • (B) if that person, or any party to the export, is at the time of the license review ineligible to receive export licenses (or other forms of authorization to export) from any agency of the United States Government,
      • except as may be determined on a case-by-case basis by the President, after consultation with the Secretary of the Treasury, after a thorough review of the circumstances surrounding the conviction or ineligibility to export and a finding by the President that appropriate steps have been taken to mitigate any law enforcement concerns.
    • (5) A license to export an item on the United States Munitions List may not be issued to a foreign person (other than a foreign government).
    • (6) The President may require a license (or other form of authorization) before any item on the United States Munitions List is sold or otherwise transferred to the control or possession of a foreign person or a person acting on behalf of a foreign person.
    • (7) The President shall, in coordination with law enforcement and national security agencies, develop standards for identifying high-risk exports for regular end-use verification. These standards shall be published in the Federal Register and the initial standards shall be published not later than October 1, 1988.
    • (8) Upon request of the Secretary of State, the Secretary of Defense and the Secretary of the Treasury shall detail to the office primarily responsible for export licensing functions under this section, on a nonreimbursable basis, personnel with appropriate expertise to assist in the initial screening of applications for export licenses under this section in order to determine the need for further review of those applications for foreign policy, national security, and law enforcement concerns.
    • (9) For purposes of this subsection--
      • (A) the term "foreign corporation" means a corporation that is not incorporated in the United States;
      • (B) the term "foreign government" includes any agency or subdivision of a foreign government, including an official mission of a foreign government;
      • (C) the term "foreign person" means any person who is not a citizen or national of the United States or lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act, and includes foreign corporations, international organizations, and foreign governments;
      • (D) the term "party to the export" means--
        • (i) the president, the chief executive officer, and other senior officers of the license applicant;
        • (ii) the freight forwarders or designated exporting agent of the license application; and
        • (iii) any consignee or end user of any item to be exported; and
      • (E) the term "person" means a natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization, or group, including governmental entities.

  • (h) Judicial review of designation of items as defense articles or services. The designation by the President (or by an official to whom the President's functions under subsection (a) have been duly delegated), in regulations issued under this section, of items as defense articles or defense services for purposes of this section shall not be subject to judicial review.
  • Sources:
    http://samsara.cwru.edu/aeca.html
    http://www.burmalibrary.org/reg.burma/archives/199709/msg00226.html
    http://www.iranchamber.com/history/articles/arming_iraq.php

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