[House Document 104-48]
[From the U.S. Government Publishing Office]
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)
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.