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108th Congress, 1st Session - - - - - - - - - - - - - House Document 108-79
PERIODIC REPORT ON THE NATIONAL EMERGENCY CAUSED BY THE LAPSE OF THE
EXPORT ADMINISTRATION ACT OF 1979
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
A 6-MONTH REPORT ON THE NATIONAL EMERGENCY DECLARED BY EXECUTIVE ORDER
13222 OF AUGUST 17, 2001, 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, PURSUANT TO 50
U.S.C. 1641(c) AND 50 U.S.C. 1703(c)
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
June 3, 2003.--Referred to the Committee on International Relations and
ordered to be printed
The White House,
Washington, May 29, 2003.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: Consistent with section 204(c) of the
International Emergency Economic Powers Act (50 U.S.C. 1703(c))
and section 401(c) of the National Emergencies Act (50 U.S.C.
1641(c)), I transmit herewith a 6-month report prepared by my
Administration on the national emergency declared by Executive
Order 13222 of August 17, 2001, 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.
Sincerely,
George W. Bush.
Periodic Report on the National Emergency Caused by the Lapse of the
Export Administration Act of 1979 for August 19, 2002, to February 19,
2003
The following report fulfills the requirements of section
204 of International Emergency Economic Powers Act (IEEPA) (50
U.S.C. 1703), and section 401(c) of the National Emergencies
Act (50 U.S.C. 1641(c)). These provisions require the President
to report to the Congress every 6 months on, respectively,
activities undertaken pursuant to the national emergency
declared in Executive Order 13222 (issued August 17, 2001), and
the total expenditures directly attributable to that
declaration. The following combined activities and expenditures
report covers the 6-month period from August 19, 2002, to
February 19, 2003.
Detailed information on export control activities is
contained in the most recent Export Administration Annual
Report and the January 2003 Report on Foreign Policy Export
Controls, required by Section 14 and section 6(f) of the EAA,
respectively, which the Department of Commerce continues to
submit to the Congress under a policy of conforming actions
under the Executive Order to the provisions of the EAA, as
appropriate.
Since the issuance of Executive Order No. 13222, the
Department of Commerce has continued to administer and enforce
the system of export controls, including the antiboycott
provisions, contained in the Export Administration Regulations
(EAR). In administering these controls, the Department has
acted under a policy of conforming actions under Executive
Order No. 13222 to the provisions of the EAA, insofar as
appropriate.
The expenses incurred by the Federal Government in the 6-
month period from August 19, 2002, to February 19, 2003, 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's Bureau of Industry and Security (BIS).
Expenditures by the Department of Commerce for the
reporting period are anticipated to be $28,749,000, most of
which represents program operating costs, wage and salary costs
for federal personnel, and overhead expenses.
During the reporting period, there were several significant
export control developments:
A. MULTILATERAL DEVELOPMENTS
The Wassenaar Arrangement
The Wassenaar Arrangement is a multilateral regime
consisting of 33 member countries. Its purpose is to contribute
to regional and international security and stability by
promoting transparency and greater responsibility in
international transfers of conventional arms and dual-use goods
and technologies. Wassenaar members maintain export controls on
the agreed Wassenaar munitions and dual-use lists through their
national policies.
In September 2002, the Experts Group of the Wassenaar
Arrangement agreed to definition and control list changes,
including relaxed controls on analog-to-digital converters, the
retention of software and technology controls for computers
capable of greater than 28,000 million theoretical operations
per second (MTOPS), updated controls on low-bit-rate digital
voice used in command and control, and the retention of
software and technology controls on the ``Sensitive List'' for
certain machine tools.
In October 2002, Wassenaar's General Working Group
exchanged information on regions and projects of concern,
exports of dual-use items, and the scope of dual-use
notifications among members. Discussions also centered on
combating terrorism, U.S. proposals for expanded reporting of
conventional arms transfers, including the establishment of a
reporting category for small arms and light weapons,
strengthening dual-use notification procedures by establishing
a denial consultation mechanism, and adopting ``catch-all''
controls.
In December 2002, the Wassenaar Arrangement Plenary agreed
to several significant initiatives to combat terrorism,
including intensified cooperation among members to prevent the
acquisition by terrorists of conventional arms and dual-use
items and new means for sharing information to strengthen
controls over such items. Agreement also was reached on ``best
practices'' guidelines and criteria for the export of small
armsand light weapons. To keep pace with advances in technology
and developments in international security, the Plenary agreed to
several control list amendments, including strengthened controls on
radiation hardened integrated circuits. At the same time, taking into
account the widespread availability of certain items and a broad
diversity of suppliers, the Plenary agreed to raise the control
threshold for computers and eliminate controls on general purpose
microprocessors. Finally, the Plenary reached agreement on a Statement
of Understanding that recognizes the importance of controlling arms
brokering.
The United States also continues to participate in
submissions of export data by regime members. Wassenaar members
make arms and dual-use data submissions on a semi-annual basis,
in April and October, and specific data submissions as needed.
The Missile Technology Control Regime (MTCR)
The MTCR is an informal nonproliferation regime comprised
of 33 countries that have agreed to coordinate national export
controls to prevent missile proliferation. Each member, under
its own laws and practices, adheres to the export licensing
policy reflected in the MTCR Guidelines for items on the MTCR
Equipment, Software, and Technology Annex.
The MTCR Plenary and Technical Experts Meeting were held in
Warsaw, Poland, on September 21-27, 2002. Consensus was reached
on several major technical issues, the most important being the
definitions of missile range and payload, the parameters that
determine if a missile system falls under the MTCR's purview.
New controls on unmanned aerial vehicles designed or modified
for aerosol delivery were tentatively agreed upon, and will go
into effect in 6 months barring objections by MTCR members in
the interim. Agreement also was reached on the refinement and/
or clarification of existing controls on propellants,
navigation equipment, flight controls, and avionics.
The Nuclear Suppliers Group (NSG)
The NSG is comprised of 40 Participating Governments that
contribute to the nonproliferation of nuclear weapons by
voluntary implementation of guidelines on the export of nuclear
and nuclear-related dual-use items and through exchanges of
information on nuclear proliferation concerns.
The NSG agreed at an Extraordinary Plenary meeting in
December 2002: (i) to adopt U.S. proposed anti-terrorism
amendments to the NSG's Guidelines; (ii) to issue a press
statement alerting supplier states to concerns about the North
Korean (DPRK) nuclear weapons program; and (iii) to authorize
the Chairman to communicate with key non-member supplier and
transit states to alert them to the risks of diversion of
controlled and non-controlled equipment, materials, and
technology to the DPRK nuclear weapons program.
The Australia Group (AG)
The Australia Group (AG) is an informal export control
regime comprised of 33 members that seeks to impede the
proliferation of chemical and biological weapons through the
harmonization of export controls, information exchange on
global proliferation activities, and outreach to non-members.
Australia Group member countries meet annually and communicate
intersessionally to review and refine the list of controlled
chemicals, biological agents, and related equipment and
technology.
The AG convened a Technical Experts Meeting in Paris,
France, during the week of February 10, 2003, to discuss the
possible addition of new controls--as proposed by the United
States--on certain chemical precursors and toxic chemicals.
Export controls on biological agents, as well as U.S.-proposed
control on agricultural sprayers that can be used in the
delivery of biological agents, also were discussed. These
issues will be discussed further at the AG Plenary in June
2003.
The Chemical Weapons Convention (CWC)
The CWC is an international treaty that bans chemical
weapons and monitors the legitimate production, processing,
consumption, export, and import of certain toxic chemicals and
precursors that could contribute to the development of weapons
of mass destruction. Certain export control provisions needed
to implement the CWC are reflected in the EAR.
Firearms Convention
The Inter-American Convention Against the Illicit
Manufacturing of and Trafficking in Firearms, Ammunition,
Explosives, and Other Related Materials (Firearms Convention)
isa treaty that Organization of American States (OAS) member
states signed to control the illicit trafficking of firearms. The
Convention was signed in 1998 but awaits ratification by a number of
OAS member states, including the United States. The Convention requires
OAS member states to establish a program to issue authorizations for
the import and export of firearms. Convention requirements relating to
the export of firearms subject to the EAR have been implemented.
However, those requirements pertaining to transit and explosives
continue to be reviewed by an interagency working group.
B. ENCRYPTION/HIGH PERFORMANCE COMPUTER AND MICROPROCESSOR POLICY
Encryption
During the reporting period, BIS conducted seminars in
Washington, D.C.; Minneapolis, Minnesota; and Santa Clara,
California, on the June 2002 amendments to the encryption
regulations. The Department of Commerce's Bureau of Industry
and Security also continued to consult with industry and the
interagency community on emerging technical and policy issues
to assure the continued effectiveness of encryption export
controls. The Department of Commerce's Bureau of Industry and
Security also processed technical review requests and export
license applications for a wide variety of products with
encryption features.
High Performance Computer and Microprocessor Controls
There were no revisions to high performance computer (HPC)
export control policy during the reporting period. The
Department of Commerce's Bureau of Industry and Security
continued to work with industry and interagency expert groups
to explore alternatives to the current HPC export control
metric based on MTOPS.
On January 14, 2003, BIS published a regulation that
streamlined export controls on general purpose microprocessors,
which are used worldwide in commercial applications, such as
personal computers and cell phones. Under the new rule, a
license only is required to export general purpose
microprocessors to designated terrorism-supporting countries or
to military end-uses or end-users in countries posing national
security concerns (e.g., China and Russia). This action is
consistent with a decision made by the Wassenaar Arrangement in
February 2002 to decontrol general purpose microprocessors, and
was necessary to ensure a level playing field for U.S. industry
in the growing commercial market for microprocessors, yet
protect U.S. national security interests.
C. BILATERAL COOPERATION/TECHNICAL ASSISTANCE
As part of the Administration's continuing effort to
encourage other countries to strengthen their national export
control systems, the Department of Commerce and other agencies
conducted a wide range of export control cooperation
discussions with a number of countries.
Singapore, Malaysia, and Thailand
From October 11-23, 2002, Under Secretary of Commerce
Kenneth I. Juster led a delegation consisting of
representatives from the Departments of State and Commerce to
Singapore, Malaysia, and Thailand. The purpose of the trip was
to consult with senior government officials and industry
representatives in these countries on trade security issues,
including export control matters and the Department of
Commerce's Transshipment Country Export Control Initiative
(TECI). The trip also sought to gain support from the countries
for the STAR Initiative (Secure Trade in the APEC Region) and
to promote attendance by these countries in an international
conference on transshipment and export control issues that was
held in Bangkok from December 11-13, 2002. The Bangkok
conference was organized and funded by the State Department's
Export Control and Related Border Security Assistance (EXBS)
program. As a result of this visit, each country agreed to
participate in the conference in Bangkok, and BIS received a
positive response and willingness to cooperate on trade
security initiatives from senior government officials in all
three countries.
India
In furtherance of the November 2001 pledge by President
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