[Congressional Record Volume 141, Number 52 (Tuesday, March 21, 1995)]
[House]
[Pages H3342-H3343]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


REPORT ON DEVELOPMENTS RELATING TO THE INTERNATIONAL EMERGENCY ECONOMIC 
 POWERS ACT--MESSAGE FROM THE PRESIDENT OF THE UNITED STATES (H. DOC. 
                              NO. 104-48)

  The SPEAKER pro tempore laid before the House the following message 
from the President of the United States; which was read and, together 
with the accompanying papers, without objection, 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 No. 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 
[[Page H3343]]     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 offices 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's 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.
  

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