H.Doc.108-8 AN ALTERNATIVE PLAN FOR LOCALITY PAY INCREASES ...

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Countries. The programs sought not only to familiarize the 
governments of Central and Eastern Europe, the Baltic and the 
Balkans, the Caucasus, Kazakhstan, Kyrgyzstan, Tajikistan, and 
Uzbekistan with the major elements comprising an export control 
system that meets international standards for effectiveness, 
but also to assist the governments in developing and 
strengthening their own national export control systems. These 
elements involve five functional areas: the legal and 
regulatory framework necessary for an effective export control 
system, licensing procedures and control lists, enforcement 
mechanisms, industry-government relations, and system 
administration and automation support. Programs conducted 
during this period also included special activities and 
multilateral conferences that related to NEC objectives. These 
programs have contributed to a reduction of the proliferation 
threat from and through the participating countries by 
strengthening these countries' national export control systems.

              D. REGULATORY ACTIONS: PUBLISHED AND PENDING

Wassenaar Arrangement
    On March 8, 2002, a rule was published in the Federal 
Register revising certain national security export control 
parameters in Category 4 (Computers) of the Commerce Control 
List to conform with changes in the Wassenaar Control List 
agreed to in December 2000.
    On June 6, 2002, a rule was published in the Federal 
Register revising encryption export controls (Category 5--Part 
2, Information Security) to conform with changes in the 
Wassenaar Control List agreed to in December 2000. The rule 
implementing the 2001 Wassenaar changes is pending interagency 
review.
High Performance Computers and Microprocessors
    On March 8, 2002, a rule was published in the Federal 
Register implementing the President's Announcement of January 
2, 2002, that liberalized controls on exports and reexports of 
high performance computers under License Exception Computers 
(CTP).
    On March 21, 2002, a rule was published in the Federal 
Register liberalizing controls on exports and reexports of 
microprocessors to certain civil end-users under License 
Exception Civil End-Users (CIV).
Missile Technology
    On May 20, 2002, a rule was published in the Federal 
Register implementing the changes agreed to at the September 
2001 Missile Technology Control Regime (MTCR) Plenary Meeting. 
The rule implementing the 1999 MTCR changes is pending 
interagency review.
Australia Group and Chemical Weapons Convention Controls
    On May 31, 2002, a rule was published in the Federal 
Register implementing agreements reached at the October 2001 
plenary meeting of the Australia Group and Australia Group 
intersessional decisions. The rule clarifies controls on 
mixtures and certain reexports of Chemical Weapons Convention-
controlled items. Finally, the rule added Nauru and Uganda to 
the list of countries that are currently States Parties to the 
Chemical Weapons Convention.

                     E. EXPORT LICENSE INFORMATION

    During the reporting period, BIS continued to receive many 
requests for export licensing information through the Freedom 
of Information Act and through discovery requests during 
enforcement proceedings. Consistent with section 12(c) of the 
EAA, BIS continues to withhold from public disclosure 
information obtained for the purpose of consideration of, or 
concerning, export license applications, unless the release of 
such information is determined by the Under Secretary to be in 
the national interest, pursuant to Executive Order No. 13222's 
directive to carry out the provisions of the EAA, to the extent 
permitted by law.
    During the reporting period, BIS submitted quarterly 
reports to the Congress on the actions taken relating to 
exports of agricultural commodities to Cuba. Section 906(b) of 
the Trade Sanctions Reform and Export Enhancement Act of 2000 
(TSRA) (Title IX of Pub. L. 106-387), as amended, requires the 
submission of these quarterly reports. Two reports were 
submitted to the Congress during the IEEPA reporting period. 
The first report covered January-March 2002, and the second 
covered April-June 2002. A third report--covering July-
September 2002--was submitted that covers a portion of the 
IEEPA reporting period.

   F. OFFICE OF INSPECTOR GENERAL AND THE GENERAL ACCOUNTING OFFICE 
                                STUDIES

    During the reporting period, BIS continued its cooperation 
with the Office of Inspector General (OIG) and the General 
Accounting Office (GAO). Specifically, the OIG initiated 3 
studies and GAO initiated 12, continued 15, and closed 11 
studies. (BIS has 27 GAO studies open and closed 11 during this 
time frame.)

                         G. EXPORT ENFORCEMENT

    In the reporting period, BIS through its offices of 
Enforcement Analysis, Export Enforcement, and Antiboycott 
Compliance, continued its programs to prevent diversions of 
controlled items, investigate and enforce export control 
violations, and enforce U.S. antiboycott rules.

Office of Enforcement Analysis (OEA)

    In the reporting period, OEA continued to expand its Visa 
Review Program. This program targets visa applications of 
foreign nationals who may be entering the United States to 
access technology controlled for national security reasons or 
to procure items useful for weapons of mass destruction 
programs. The Visa Review Program also provided leads to BIS's 
Office of Export Enforcement relating to possible terrorist 
activities identified subsequent to the terrorist attacks of 
September 11, 2001.
    OEA prevention activities also include a plan to target and 
prioritize pre-license checks (PLCs) and post shipment 
verifications (PSVs) to ensure that such end-use visits reflect 
the full range of U.S. export control concerns. PLCs validate 
information on export license applications, including end-user 
reliability. PSVs strengthen assurances that exporters, 
shippers, consignees, and end-users comply with the terms of 
export licenses. The overall objective for conducting PLCs and 
PSVs is to detect and prevent the illegal transfer of 
controlled U.S.-origin items.
    Another OEA activity is to compile information regarding 
parties of concern and to maintain a watch list. Parties on the 
watch list are screened against names on license applications 
received by BIS to assess diversion risks, identify potential 
violations, and determine the reliability of proposed end-users 
of controlled U.S. items.
    On December 20, 2001, as required by the National Defense 
Authorization Act for FY 1998 (NDAA), BIS delivered to the 
Congress its fourth annual report on HPC exports to Computer 
Tier 3 countries.

Office of Export Enforcement (OEE)

    During the reporting period, OEE opened 564 investigations, 
some of which led to both criminal and administrative 
sanctions. A total of $975,000 in civil penalties and criminal 
fines were imposed for violations during this period. OEE also 
issued 69 warning letters in cases of minor violations, 
informing the recipients that OEE had reason to believe they 
had violated the EAR, and that increased compliance efforts 
were warranted.

Office of Antiboycott Compliance (OAC)

    OAC implements the antiboycott provisions of the EAA and 
the EAR. OAC performs three main functions: enforcing the EAR, 
assisting the public in complying with antiboycott provisions, 
and compiling and analyzing information regarding international 
boycotts. During the reporting period, OAC opened ten cases, 
closed 13 investigations, and imposed $59,000 in civil 
penalties.

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