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H.Doc.104-49 CUMULATIVE REPORT ON RESCISSIONS AND DEFERRALS, MARCH 1, 1995 ...
104th Congress, 1st Session - - - - - - - - - - - - - House Document 104-48 EXPENDITURES INCURRED TO DEAL WITH A NATIONAL EMERGENCY __________ MESSAGE from THE PRESIDENT OF THE UNITED STATES transmitting A FINAL REPORT ON THE TOTAL EXPENDITURES DIRECTLY ATTRIBUTABLE TO THE NATIONAL EMERGENCY DECLARATION RESULTING FROM THE LAPSE OF THE EXPORT ADMINISTRATION ACT OF 1979, COVERING THE PERIOD FROM AUGUST 19, 1994, TO FEBRUARY 19, 1995, PURSUANT TO 50 U.S.C. 1641(C) <GRAPHIC NOT AVAILABLE IN TIFF FORMAT> March 21, 1995.--Message referred to the Committee on International Relations and ordered to be printed To the Congress of the United States: 1. On August 19, 1994, in Executive Order No. 12924, I declared a national emergency under the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.) to deal with the threat to the national security, foreign policy, and economy of the United States caused by the lapse of the Export Administration Act of 1979, as amended (50 U.S.C. App. 2401 et seq.) and the system of controls maintained under that Act. In that order, I continued in effect, to the extent permitted by law, the provisions of the Export Administration Act of 1979, as amended, the Export Administration Regulations (15 C.F.R. 768 et seq.), and the delegations of authority set forth in Executive Order No. 12002 of July 7, 1977 (as amended by Executive Order 12755 of March 12, 1991), Executive Order No. 12214 of May 2, 1980, Executive Order No. 12735 of November 16, 1990 (subsequently revoked by Executive Order No. 12938 of November 14, 1994), and Executive Order No. 12851 of June 11, 1993. 2. I issued Executive Order No. 12924 pursuant to the authority vested in me as President by the Constitution and laws of the United States, including, but not limited to, IEEPA. At that time, I also submitted a report to the Congress pursuant to section 204(b) of IEEPA (50 U.S.C. 1703(b)). Section 204 of IEEPA requires follow-up reports, with respect to actions or changes, to be submitted every 6 months. Additionally, section 401(c) of the National Emergencies Act (NEA) (50 U.S.C. 1601 et seq.) requires that the President, within 90 days after the end of each 6-month period following a declaration of a national emergency, report to the Congress on the total expenditures directly attributable to that declaration. This report, covering the 6-month period from August 19, 1994, to February 19, 1995, is submitted in compliance with these requirements. 3. Since the issuance of Executive Order No. 12924, the Department of Commerce has continued to administer and enforce the system of export controls, including antiboycott provisions, contained in the Export Administration Regulations. In administering these controls, the Department has acted under a policy of conforming actions under Executive Order No. 12924 to those required under the Export Administration Act, insofar as appropriate. 4. Since my last report to the Congress, there have been several significant developments in the area of export controls: Bilateral cooperation/technical assistance As part of the Administration's continuing effort to encourage other countries to implement effective export controls to stem the proliferation of weapons of mass destruction, as well as certain sensitive technologies, the Department of Commerce and other agencies conducted a range of discussions with a number of foreign countries, including governments in the Baltics, Central and Eastern Europe, the Newly Independent States (NIS) of the former Soviet Union, the Pacific Rim, and China. Licensing requirements were liberalized for exports to Argentina, South Korea, and Taiwan, responding in part to their adoption of improved export control procedures. Australia group The Department of Commerce issued regulations to remove controls on certain chemical weapon stabilizers that are not controlled by the Australia Group, a multilateral regime dedicated to stemming the proliferation of chemical and biological weapons. This change became effective October 19, 1994. In that same regulatory action, the Department also published a regulatory revision that reflects an Australia Group decision to adopt a multi-tiered approach to control of certain mixtures containing chemical precursors. The new regulations extend General License G-DEST treatment to certain categories of such mixtures. Nuclear suppliers group (NSG) NSG members are examining the present dual-use nuclear control list to both remove controls no longer warranted and to rewrite control language to better reflect nuclear proliferation concerns. A major item for revision involves machine tools, as the current language was accepted on an interim basis until agreement on more specific language could be reached. The Department of Commerce has implemented license denials for NSG-controlled items as part of the ``no-undercut'' provision. Under this provision, denial notifications received from NSG member countries obligate other member nations not to approve similar transactions until they have consulted with the notifying party, thus reducing the possibilities for undercutting such denials. Missile technology control regime (MTCR) Effective September 30, 1994, the Department of Commerce revised the control language for MTCR items on the Commerce Control List, based on the results of the last MTCR plenary. The revisions reflect advances in technology and clarifications agreed to multilaterally. On October 4, 1994, negotiations to resolve the 1993 sanctions imposed on China for MTCR violations involving missile-related trade with Pakistan were successfully concluded. The United States lifted the Category II sanctions effective November 1, in exchange for a Chinese commitment not to export ground-to-ground Category I missiles to any destination. At the October 1994 Stockholm plenary, the MTCR made public the fact of its ``no-undercut policy on license denials. Under this multilateral arrangement, denial notifications received from MTCR members are honored by other members for similar export license applications. Such a coordinated approach enhances U.S. missile nonproliferation goals and precludes other member nations from approving similar transactions without prior consultation. Modifications in controls on embargoed destinations Effective August 30, 1994, the Department of Commerce restricted the types of commodities eligible for shipment to Cuba under the provisions of General License GIFT. Only food, medicine, clothing, and other human needs items are eligible for this general license. The embargo against Haiti was lifted on October 16, 1994. That embargo had been under the jurisdiction of the Department of the Treasury. Export license authority reverted to the Department of Commerce upon the termination of the embargo. Regulatory reform In February 1994, the Department of Commerce issued a Federal Register notice that invited public comment on ways to improve the Export Administration Regulations. The project's objective is ``to make the rules and procedures for the control of exports simpler and easier to understand and apply.'' This project is not intended to be a vehicle to implement substantive change in the policies or procedures of export administration, but rather to make those policies and procedures simpler and clearer to the exporting community. Reformulating and simplifying the Export Administration Regulations is an important priority, and significant progress has been made over the last 6 months in working toward completion of this comprehensive undertaking. Export enforcement Over the last 6 months, the Department of Commerce continued its vigorous enforcement of the Export Administration Act and the Export Administration Regulations through educational outreach, license application screening, spot checks, investigations, and enforcement actions. In the last 6 months, these efforts resulted in civil penalties, denials of export privileges, criminal fines, and imprisonment. Total fines amounted to over $12,289,000 in export control and antiboycott compliance cases, including criminal fines of nearly $9,500,000 while 11 parties were denied export privileges. Teledyne Fined $12.9 Million and a Teledyne Division Denied Export Privileges for Export Control Violations: On January 26 and January 27, Teledyne Industries, Inc. of Los Angeles, agreed to a settlement of criminal and administrative charges arising from illegal export activity in the mid-1980's by its Teledyne Wah Chang division, located in Albany, Oregon. The settlement levied criminal fines and civil penalties on the firm totaling $12.9 million and imposed a denial of export privileges on Teledyne Wah Chang. The settlement is the result of a 4-year investigation by the Office of Export Enforcement and the U.S. Customs Service. United States Attorneys office in Miami and Washington, D.C., coordinated the investigation. The investigation determined that during the mid-1980's, Teledyne illegally exported nearly 270 tons of zirconium that was used to manufacture cluster bombs for Iraq. As part of the settlement, the Department restricted the export privileges of Teledyne Wah Chang division; the division will have all export privileges denied for 3 months, with the remaining portion of the 3-year denial period suspended. Storm Kheem Pleads Guilty to Nonproliferation and Sanctions Violations: On January 27, Storm Kheem pled guilty in Brooklyn, New York, to charges that he violated export control regulations barring U.S. persons from contributing to Iraq's missile program. Kheem arranged for the shipment of foreign- source ammonium perchlorate, a highly explosive chemical used in manufacturing rocket fuel, from the People's Republic of China to Iraq via Amman, Jordan, without obtaining the required validated license from the Department of Commerce for arranging the shipment. Kheem's case represents the first conviction of a person for violating section 778.9 of the Export Administration Regulations, which restricts proliferation-related activities of ``U.S. persons.'' Kheem also pled guilty to charges of violating the Iraqi Sanctions Regulations. 5. The expenses incurred by the Federal Government in the 6-month period from August 19, 1994, to February 19, 1995, that are directly attributable to the exercise of authorities conferred by the declaration of a national emergency with respect to export controls were largely centered in the Department of Commerce, Bureau of Export Administration. Expenditures by the Department of Commerce are anticipated to be $19,681,000 most of which represents program operating costs, wage and salary costs for Federal personnel and overhead expenses. William J. Clinton. The White House, March 21, 1995. <greek-d>
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