[Weekly Compilation of Presidential Documents Volume 29, Number 17 (Monday, May 3, 1993)]
[Pages 700-703]
[Online from the Government Publishing Office, www.gpo.gov]
<R04>
Message to the Congress Reporting on the Continuation of Export Control
Regulations
April 27, 1993
To the Congress of the United States:
1. On September 30, 1990, in Executive Order No. 12730, President
Bush 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 and foreign policy 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, the President 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, Executive Order
No. 12214 of May 2, 1980, and Executive Order No. 12131 of May 4, 1979,
as amended by Executive Order No. 12551 of February 21, 1986.
2. President Bush issued Executive Order No. 12730 pursuant to the
authority vested in him as President by the Constitution and laws of the
United States, including IEEPA, the National Emergencies Act (NEA) (50
U.S.C. 1601 et seq.), and section 301 of title 3 of the United States
Code. At that time, the President 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 NEA 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
October 1, 1992, to March 31, 1993, is submitted in compliance with
these requirements.
3. Since the issuance of Executive Order No. 12730, 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. 12730 to those required under the Export
Administration Act, insofar as appropriate.
4. Since the last report to the Congress, there have been several
significant developments in the area of export controls:
--United States Government experts have continued their efforts to
implement and strengthen export control systems, including pre-license
inspections and post-shipment verifications, in the nations of Central
Europe and the former Soviet Union--notably Belarus, Bulgaria, the Czech
Republic, Hungary, Kazakhstan, Poland, Romania, Russia, the Slovak
Republic, and Ukraine, as they continue their progress towards democracy
and market economies. We anticipate that these developments will
facilitate enhanced trade in high-technology items and other commodities
in the region, while helping to prevent unauthorized shipments or uses
of such items. A key element of these efforts continues to be the
prevention of proliferation of weapons of mass destruction and
corresponding technology.
--Working diligently with our Coordinating Committee (COCOM)
partners to expand export control cooperation with the newly developing
democracies of Central Europe and the former Soviet Union and to
streamline multilateral national security controls, we are pleased to
report the following important developments:
--In their November 1992 High-Level Meeting, the COCOM partners took
action to significantly liberalize export controls on certain
telecommunications exports to the newly independent states (NIS)
of the former Soviet Union and other Central European nations,
which should facilitate rapid and reliable telecommunications
between these nations and the West, as well as modern, cost-
[[Page 701]]
effective domestic telecommunications systems. This action was
soon thereafter reflected in corresponding amendments to the
Export Administration Regulation. (57 F.R. 61259, December 24,
1992.)
--Also in November, at the first High-Level ``COCOM Cooperation
Forum'' (CCF) Meeting, which included the 17 members of COCOM,
most of the newly independent states of the former Soviet Union
(NIS), and other Central European nations, the United States
announced an $11 million technical assistance package to assist in
the elimination of nuclear arms, enhanced nonproliferation
efforts, and export control development. The United States, in
cooperation with the CCF, hopes to engage these nations in further
establishing controls for trade in sensitive goods and
technologies, and to provide an impetus for wider access by those
countries to controlled items.
--In the first 2 months of 1993, as a result of Bulgarian and
Romanian commitments to undertake the establishment of effective
export control systems, COCOM agreed to provide favorable
consideration treatment for exports of strategic items to those
countries. The Commerce Department is amending its regulations to
reflect this development.
--We are also continuing our efforts to address the threat to the
national security and foreign policy interests of the United States
posed by the spread of weapons of mass destruction and missile delivery
systems. As such, we continue to work with our major trading partners to
strengthen export controls over goods, technology, and other forms of
assistance that can contribute to the spread of nuclear, chemical, and
biological weapons and missile systems:
--As of December 1992, the Australia Group (AG), a consortium of
nations that seeks to prevent the proliferation of chemical and
biological weapons (CBW), increased its membership to 24, with the
admission of Iceland and Sweden in 1991 and Argentina and Hungary
in 1992. In addition, the delegates agreed to increase from 50 to
54 the number of precursor chemicals subject to control and to
adopt a common list of controlled biological items. The Commerce
Department published a rule implementing these measures. (57 F.R.
60122, December 18, 1992.) As of December 1992, the delegates also
agreed to a refined common control list of dual-use biological
equipment. The Commerce Department is in the process of publishing
a rule reflecting the changes to conform the U.S. list to the AG
list.
--The United States was also a key participant in the Chemical
Weapons Convention (CWC) negotiations in Geneva, Switzerland. On
September 3, 1992, the Conference on Disarmament, which drafted
the CWC, forwarded to the United Nations General Assembly a draft
CWC, which includes a prohibition on the development, production,
acquisition, stockpiling, use, or transfer of chemical weapons, as
well as provides for destruction of chemical weapons production
facilities and stockpiles. The Convention opened for signing in
January of this year. The United States strongly supports these
provisions and is working to implement them in harmony with our
laws.
--In December 1992, the 27-nation Nuclear Suppliers Group (NSG), in
which the United States participates, continued its discussions on
nuclear-related dual-use controls. The NSG list is similar to the
nuclear referral list currently administered by the Department of
Commerce. The Department is working to publish a rule to conform
the U.S. list with the NSG list. Also in December 1992, the NSG
members agreed to procedures intended to standardize and improve
the exchange of information among members.
--At the March plenary session in Canberra, the Missile Technology
Control Regime (MTCR) members welcomed Iceland as the newest
partner, bringing the total membership to 23 nations. Argentina
and Hungary were also accepted as members, subject to final
arrangements agreed to by the MTCR partners. A licensing and
enforcement officers
[[Page 702]]
conference will be held in June 1993 to provide an information
exchange forum for all partners on implementation of the new
extended Guidelines, which now cover missiles capable of
delivering all weapons of mass destruction. Previously, the regime
covered only missiles capable of delivering nuclear weapons. The
future of the MTCR is likely to be a main agenda item for the next
plenary session to be held in November 1993.
--In the area of supercomputers, in 1991 the United States
established a supercomputer safeguard regime with Japan. Since
that time both countries have negotiated with European suppliers
to expand this regime. Issues discussed at the March 1993 London
meeting include the development of a common licensing policy and
security safeguards.
--Finally, we continue to enforce export controls vigorously. The
export control provisions of the Export Administration Regulations are
enforced jointly by the Commerce Department's Office of Export
Enforcement and the U.S. Customs Service. Both of these agencies
investigate allegations and, where appropriate, refer them for criminal
prosecution by the Justice Department. Additionally, the Commerce
Department has continued its practice of imposing significant
administrative sanctions for violations, including civil penalties and
denial of export privileges.
--Commerce's Office of Export Enforcement (OEE) has continued its
vital preventive programs such as pre-license checks and post-
shipment verifications, export license review, and on-site
verification visits by teams of enforcement officers in many
countries. The OEE has also continued its outreach to the business
community to assist exporters with their compliance programs and
to solicit their help in OEE's enforcement effort. The OEE further
continued its well-received Business Executive Enforcement Team
(BEET) to enhance interaction between the regulators and the
regulated.
--During this 6-month reporting period, OEE has continued its new
program--the Strategic and Nonproliferation Enforcement Program
(SNEP)--which targets critical enforcement resources on exports to
countries of concern in the Middle East and elsewhere.
--Two particularly important enforcement efforts during the past 6
months in which OEE was involved resulted in the arrest and
indictment of several individuals, including several foreign
nationals. In one case, OEE special agents arrested an Iranian
national, Reza Zandian, and an American citizen, Charles Regar, on
charges that they conspired and attempted to export a computer to
Iran without the required validated license. The computer, valued
in excess of $2 million, was seized by the Commerce Department.
The Department of Justice will seek forfeiture of the computer to
the United States. In another case, a British citizen doing
business in South Africa, David Brownhill, was arrested and
charged with attempting to export polygraph and thermal imaging
system equipment to South Africa without authorization. Both of
these cases are currently pending trial.
--In the last 6 months, the Commerce Department has also continued
to enforce the antiboycott law vigorously. The Office of
Antiboycott Compliance (OAC) maintains 30 full-time staff
positions, and OAC has doubled the level of civil penalties it
seeks to impose within the statutory $10,000 per violation
maximum. The total dollar amount of civil penalties imposed in
fiscal year 1992 approaches $2,109,000, the second largest amount
in the history of the program. This amount includes a civil
penalty of $444,000 imposed in the first case alleging both
antiboycott and export control violations.
--One particularly significant antiboycott compliance case was
recently concluded by an order of February 11, 1993. Under that
order, William Hardimon was assessed a civil penalty of $54,000,
and his export privileges were denied for 6 months. Hardimon
allegedly refused to do business with another person in order to
comply with an illegal Saudi
[[Page 703]]
Arabian requirement, complied with an illegal Kuwaiti boycott
request, and failed to report the receipt of the boycott requests.
5. The expenses incurred by the Federal Government in the 6-month
period from October 1, 1992, to March 31, 1993, 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
$17,897,000, most of which represents program operating costs, wage and
salary costs for Federal personnel, and overhead expenses.
William J. Clinton
The White House,
April 27, 1993.