[Congressional Record Volume 147, Number 114 (Wednesday, September 5, 2001)]
[Senate]
[Pages S9110-S9117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXPORT ADMINISTRATION ACT OF 2001--Continued
Mr. INHOFE. Mr. President, on the bill before the Senate, it is my
understanding some people are trying to work out an agreement, but I
rise in opposition to the Export Administration Act. A lot of people
state the purpose of this bill is to protect the national security. We
are kidding ourselves. The real objective of those who wrote this bill
and who actively support it is to promote trade and transfers of the
very dual-use high technologies which, in the wrong hands, pose a
serious threat to national security. Their emphasis is such liberalized
trade will be good for the economy, but we have to ask: At what price?
This debate does not occur in a vacuum. We have the record of the
last 8 years when we had an administration which deliberately ignored
and undermined our Nation's cold war system of export controls designed
to protect national security. Their attitude was that the cold war was
over so there was no real threat out there. Why worry about technology
transfers? Why worry about rogue state missile systems and weapons
programs? This flies in the face of everything that is logical.
We have had very serious problems in hearing things taking place in
China. During the elections in Taiwan when there was a notion we might
go in there and try to intervene, they were trying to intimidate the
elections by firing missiles in the Taiwan Straits. Later on the second
highest ranking Chinese military officer said: We are not concerned
about America coming to the aid of Taipei because they would rather
defend Los Angeles.
Then we had the Defense Minister of China saying, war with America is
inevitable, which he has repeated 3 times, once in the last 8 months.
We have a serious problem out there and we have to recognize that.
My fear is a lot of this technology is going to go to countries such
as China, and specifically China.
I will review the actions of the Clinton administration. The first
thing they did in 1994, shortly after taking office, they ended COCOM,
the Coordinating Committee on Multinational Export Controls. This was
put together so we and our allies could all agree not to export high
technology that could get in the hands of the wrong people. That system
was set in place, and in 1994 the administration ended that.
The administration, shortly after that in 1996, took control of the
authority on export licenses out of the hands of the State Department
and put it in the Commerce Department. Later they recognized it was
wrong, the public recognized it, and after the Cox report they moved it
back to the State Department.
The granting of waivers for missile defense technologies--we all
remember the significant problem we had when the administration signed
a waiver to allow China to have the guidance technology produced by the
Loral Corporation, owned by the Hughes Corporation, that allow the
Chinese to have the guided-missile technology that gave them more
control over where the missiles might go, even if one might be coming
toward the United States. They allowed transfer of high-performance
computers, which ended up helping improve Chinese military systems.
The theft of our nuclear secrets, at that time we had 16 nuclear
compromises. Eight were before the last administration; eight were
during the Clinton administration. We discovered that of the eight
before the Clinton administration, one went back as far as the Carter
administration, which was discovered by this country when a walk-in
informant came to a CIA office with the documentation that China had
that information from those other compromises from the previous
administration. Yet it was covered up until the Cox report came out 4
years later and we realized China had virtually everything.
[[Page S9111]]
The main thing that concerns me is we have a threat out there today.
We have been guilty of allowing our nuclear secrets to get into the
hands of the wrong people. Until this is under control, I think it
would be premature, in my opinion, to pass, to implement those changes
recommended in the Export Administration Act under consideration today.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, we have been here now since 2:15. Senator
Leahy spoke in morning business about Northern Ireland, which was very
lucid and understandable. I appreciate his remarks. We had the Senator
from Oklahoma, Mr. Inhofe, talk for 5 minutes or so about this bill
directly and indirectly. We have a few people who oppose this
legislation, but they literally are holding up not only what is going
on in the Senate but what we need to do for this country.
We have eight appropriations bills that need to be passed. We could
be working on those. We have the education bill and some things we
still need to finalize. We have conference reports. We have lots of
things that need to be done. There is a hue and cry that we need to get
to the Defense bill. We need to do Defense appropriations. We can't do
that until we do the Defense authorization bill.
I hope everyone understands that one of the alternatives available on
this bill and any other bill is we can move to third reading. We could
do that right now. We, of course, will not do that. I will confer with
Senator Sarbanes. I hope Senator Enzi, who has been managing this bill
for the last 2 days, will confer with the ranking member of the Banking
Committee, Senator Gramm, to see if we can get permission to do that.
We really want to move forward on this.
I see the chairman of the committee here who has worked so diligently
on this bill. I say to my friend from Maryland that we are getting
requests now for morning business that are totally unrelated to this
legislation. We have been here all this afternoon. We had some very
good statements this morning on the bill. It is important that Members
have an opportunity to speak on the bill. Here we are, doing nothing,
with so many things left to do.
I say to my friend from Maryland who is so ably managing this bill
that I think we should be arriving at a point soon, if Members aren't
willing to come over and talk about what they want or are not willing
to offer amendments, we move to third reading. Certainly there is
nothing in the order that would prevent that. Senator Daschle said he
would not move to cloture under the agreement with Senator Thompson,
and he will stick to that. But that doesn't mean we do nothing all day
Wednesday, Thursday, and Friday.
I know the Senator from Maryland is trying to work out a compromise.
All I am saying is that I hope before we have an afternoon of morning
business we decide whether or not we are going to be able to complete
this legislation.
Mr. SARBANES. Mr. President, first of all, I don't think we should go
to morning business. I think we should stay on the bill even if there
is a period of time when we are in a quorum call.
Second, I say to my colleagues who are listening that if anyone has
any statement they want to make, they had better get over and do it
because we are working on an amendment which is sort of being cleared
downtown. If we can get clearance on that and an accommodation, I hope
we can then adopt that amendment, probably have some colloquy, do a
managers' amendment, and go to the third reading of the bill and finish
this bill. That would be our objective.
So if we start moving that way, and people who have not been around
and have not been engaged in the process then want to make a statement,
or maybe all of a sudden appear from somewhere and offer an amendment,
we are going to say: Where have you been? We have been biding our time
and waiting and wanting to move ahead, and so forth and so on, and you
were not here.
But at the moment we need to get the clearance on this amendment we
are working on. We think that is in the works. That is the best I can
say to the majority whip on that score.
The PRESIDING OFFICER (Mr. Carper). The Senator from Arizona.
Mr. KYL. Mr. President, I concur in the admonition of the chairman
and the manager on the Republican side that Members who have something
to say should come down and speak because as we speak there are some
discussions going on about some possible amendments that would move us
much closer toward a time when the bill could be completed. In fact,
some of us are meeting at 3:30 to try to resolve some issues that are
pending right now. So I join in the comment made that people who wish
to speak to the bill should do so as soon as possible.
I will take this opportunity to highlight some of the issues, a
couple of which might be the subject of a potential agreement that
would be added to the bill and that might help to move it along to
completion.
As I said in my other remarks, there are some concerns about the way
current agreements have been enforced or have not been enforced with
respect to dual-technology items that have been sent to these
countries. There is a provision in the bill that enables the United
States to come down hard on a company which receives an item that is
supposed to be used for commercial purposes--for research or university
purposes, something such as that--and then in turn transfers that item
to some kind of defense program that is unauthorized in the license.
Just to use a purely hypothetical example, I said there might be some
nuclear generation facility component which is sent to help build a
nuclear generating plant, but the end user, instead of being that
commercial reactor facility, sends it over to some defense plant, which
then uses it in their nuclear program for weaponry. That would be a
good example of an improper application of one of these dual-use items
where the license had been granted for shipment for one purpose but it
turns out to have been used for another.
We have a postshipment verification requirement ordinarily. That
means we have somebody who goes over and makes sure the item was used
in the way and in the place they said it was going to be used. The
problem is, in the past we have found those postverification shipment
procedures are not followed all the time. Indeed, a lot of the time
they are not followed, and there is not much the United States can do
about it.
I quoted the statistics earlier today--I am not sure I have them
here--but the fact is, with respect to satellites, the United States
has an agreement with China that was entered into in 1998 that provides
some degree of postshipment verification that the satellite is being
used where it is supposed to be used, and so on, but it turns out less
than a fourth of the required verifications have been permitted. They
have been delayed. There have been requests by the Chinese Government:
Let us do the inspection rather than have you do it--this kind of
thing.
Clearly, if we are going to have a liberalization of our export
control policy, and we are going to be granting more licenses to permit
the shipment of dual-technology items which could be put to military
use, and we are willing to say, look, if you will put it to commercial
use, OK, but we don't want you to put it to military use, and we want
to have somebody check that after the fact to make sure that is
correct, if we are going to do that procedure, we have to make sure it
works, and there has to be some penalty for those who violate it.
The bill has a penalty if it is a company that violates the
procedure, but there is no provision to deal with a country that
violates it. So one of the proposals that is under active consideration
right now as a possible amendment that could be agreed to would make a
minor change, but it would have a major effect.
In reference to the subsection on page 296 of the bill, the first
seven lines in this case would read: If the country in which the end-
user is located refuses
[[Page S9112]]
to allow post-shipment verification of a controlled item, the
Secretary--meaning the Secretary of Commerce--may deny a license for
the export of any other controlled item until such post-shipment
verification is allowed.
It is very straightforward. It is not mandatory, so there is nothing
that makes the Secretary of Commerce do this. But at least the
Secretary would have an ability to say to a country, such as China, for
example: Look, you have not allowed us to inspect the ultimate user of
the last three items we sent you, so we are not going to approve any
more licenses--at least of products A, B, and C--until you allow that.
That might be one way to help get this provision of postshipment
verification enforced.
So that is one of the ideas we have. As I say, it is one that is
being discussed right now. It is one on which possibly there could be
some agreement. We hope so. If so, I think that will advance the time
that we can get the bill resolved.
Another question has to do with this matter of a product that is
available in foreign markets. The concept of the proponents of the bill
is if a product is available in a foreign market, then the cat is
already out of the bag; we might as well let American companies compete
for that business, too.
I raised a lot of questions this morning about how that really works.
But leaving that aside, at least one very modest addition which
certainly would help somewhat would be to ensure that not only are the
items comparable in the sense that if you can buy this particular kind
of computer in country A, then why restrict American companies from
selling the same kind of computer?--that what we would want to do is
ensure that we are talking about computers of comparable quality, not
just that they are sold for roughly the same price, not just that they
have roughly the same capacity, but that they are truly of the same
quality.
The reason for that is most people would like to buy American
products because of their quality. It is not enough to say you can buy
a similar computer three other places in the world if you are not ready
to establish that the computer you are talking about in those three
other places is of comparable quality to the U.S. computer. It does not
matter if it has the same capacity and if it costs roughly the same; if
it is not as good, if it does not have the same quality, then it would
not be a comparable item. We just want to make sure when we are talking
about foreign availability we really mean the same basic kind of
product is available in those foreign countries.
To give you an illustration, you can buy two different cars that go
just as fast. One goes just as fast as the other one. One has just as
much acceleration as the other one. The air-conditioner is just as
good. And it costs about the same amount of money. But what you might
find if you read Consumer Reports is the first car will last you about
20,000 miles and then it becomes a piece of junk, whereas the second
car has much better quality. It has a 50,000-mile warranty. It has a
great service record. The company will always take care of it if there
is something wrong, and so on.
That is just a hypothetical example. But I think if we are going to
say we are going to permit the export of items as long as they are
available anywhere else in the world, even though they are products we
would just as soon not fall into the hands of the wrong countries, if
we are going to go that way, we have to make sure we are at least
talking about goods that have comparable quality. I think the addition
of some language in that regard would be very useful.
Another idea that has been discussed--and there are others who,
frankly, would be better able to discuss this than I because it has
been their idea--is to have some kind of commission, a blue ribbon
commission that would evaluate the success of this new regime after it
has been put into place.
Nobody knows for sure how this is going to work. I think almost
everybody would concede we are in unchartered territory, that the
stakes are enormous, and that what we do not want to do is find out 5
years down the road that something we put in place --locked into place
in statutory form--is actually permitting the rogue countries of the
world to acquire a lot of equipment or technology that we would rather
not have fall into their hands simply because we were not careful
enough in writing the legislation.
I don't think most of us are smart enough to predict that far in the
future exactly how we want do all of this. The notion has been that it
would be good to have in place some kind of a blue ribbon commission
which could be appointed in the not-too-distant future to examine how
this is working and to make recommendations to the President and to the
Congress on how to make improvements in that. We can talk about the
details of how the commission is appointed and when it reports and all
those kinds of things. This kind of idea is a good idea, and it would
be useful to have that incorporated into the legislation as well.
I believe there will be some kind of agreement on this. I think the
parties are talking. Everybody recognizes the value, the utility of
that.
A fourth area I will mention is that in the past the Department of
Commerce has added items and subtracted items to the so-called
controlled commodity list. It has done so under its own rules and
regulations which could in fact and maybe does involve some
consultation with other departments of government. It is a little
unclear exactly how the process works. In the past, the Department of
Commerce has been the department in charge. I believe the list is some
2,400 items controlled right now.
Part of the theory of the legislation is that some of those items
would be taken off the controlled list so that a party wishing to
export them would not have to come to the U.S. Government and obtain a
license for the export of that item. That is probably appropriate with
respect to many of these controlled items. Still we have to be careful
that we are not taking items off the list which could in fact be used
by a hostile country against the interests of the United States.
Given the fact that the Department of Commerce has as its mission
trade promotion, it is not exactly evident that that department is in
the best position to judge whether or not an item should stay on the
list. Obviously, it at least ought to be talking to the intelligence
community, the Defense Department, the State Department, the Department
of Energy, and so on. We want to have at least some recognition of the
fact that as this is going to be administered in the future, the
Department of Commerce will, to an extent appropriate, call upon the
advice and counsel of these other departments in seeking to make
determinations with respect to what items are on that control list or
not.
It may be that this is a matter the administration needs to think
about and figure out how they want to handle. For my own part, I have,
as I have said before, the utmost confidence in this administration and
Secretary Don Evans and the other people who would be making the
decisions. As a matter of fact, my only beef with Don Evans, the
Secretary of Commerce, is that he hired away my chief of staff when he
was confirmed. We have a great relationship. I have total confidence in
him and in the people in his department. I believe they will, in fact,
call upon the expertise of other people in government who may be in a
better position to judge with respect to a particular item.
They will have a lot of cross pressures, too. They will have folks in
industry pushing them to decontrol as much as possible because
obviously it is more costly and more difficult to export an item if you
have to go get a license for the export than if you don't have to worry
about that.
Given these cross pressures, we would at least like to get some kind
of commitment from the administration that it is going to look at this
and try to find a way to ensure that the other departments of
government are brought into the process as appropriate.
There may be some other things, as the administration has indicated
to us, that should be the subject of a subsequent Executive order to
implement the legislation. Obviously, we will be interested in working
with the administration on what some of those items might be as well.
Some of them might be able to correct some of the problems I identified
this morning and that some others have as well. We will be expressing
that to the administration again. I
[[Page S9113]]
am sure they will respond with an appropriate response.
These are the kinds of items we are talking about now as possibly
being resolved by some kind of amendment or series of amendments that
could get us to a conclusion on this legislation. Since it is very
evident from the standpoint of those of us who have concerns about it
that in the end legislation is going to pass and we have no desire to
delay or to stall it, we are not going to win very many amendments that
we propose. Notwithstanding the fact we are very serious and concerned
about it, there is no point in us taking up the Senate's time or
persisting in a matter on which we are not likely to succeed,
especially if, as has been conveyed to us, a few changes might be
possible to be agreed to here fairly quickly, and then we could move on
with the conclusion of the legislation.
That is why I add my comments to those of the Senator from Maryland
and suggest that if there are those who would like to come here to make
an opening statement about the legislation or to express concerns or
support for it or any particular amendment, this would be a good time
to do so. I am hopeful that within the next several minutes we will be
able to meet and we will be able to confer about some of the things I
have talked about and perhaps come to some conclusion. I am sure it is
the position of the managers that they would like to move fairly
quickly after that, if we are able to do that. Therefore, it would be
appropriate to discuss at this time any concerns or other items with
respect to this bill people would like to take up.
I had indicated this morning that I would just quickly detail sort of
a list of potential amendments in case anybody is interested. These
were proposals that were prepared before the legislation was taken up.
I don't know how many people are still planning on offering any of
these amendments. My own view is that if we are able to achieve
consensus on the items I mentioned a moment ago, it will probably be
doubtful that these amendments will be adopted. Therefore, people might
want to consider dealing with the subjects in some other way. I will
just run through them quickly.
One of the problems has to do with deemed exports. Deemed exports are
basically transfer of technology, of knowledge, rather than a
particular product, but that can, of course, be just as important to a
rogue nation in putting together some kind of weapons program or
missile program as the export of a particular item. Some of us believe
we should deal a little bit more specifically with the matter of deemed
exports. Again, that matter might be at least handled for the time
being through some communication with the administration, assurance
that it intends to deal with the subject in some way.
I talked about the matter of the controlled list and how other
departments probably need to have a little more involvement in that
than the legislation itself provides. The legislation itself provides
no assurance that any other departments will be involved in the listing
of items on the controlled list. We think it would be a good idea if
there were some assurance that they would be included in the process.
I mentioned the standard of finding for foreign availability. There
are quite a few different ideas about how that might be strengthened. I
mentioned the one about comparable quality. I hope we can do something
on that.
There is a question that we are not going to pursue here--at least I
will not pursue--but it could be the subject of an amendment. It is
important. I wish we could do something about it. It had to do with
taking a little bit of extra time to deal with matters that are
particularly complex. The Thompson amendment failed yesterday. There
are other ideas about how to deal with that so that the Departments of
Defense, State, and Energy, and any other agencies that are involved in
a particular license would have enough time to review the license
application beyond the limit of 30 days, which is currently provided
for.
The Thompson amendment provided an additional potentially 60 days.
There are some other potential compromises that could be offered there.
I doubt, since the Thompson amendment was defeated, that an amendment
on this subject will be offered again.
There is a question about the interagency dispute resolution process,
and there have been some proposed changes that could come up as an
amendment with respect thereto. This process requires any dispute over
a license, application, or a commodity classification to be resolved by
the various departments that should be involved and then to forward any
disagreement up the chain of command. This is a recommendation of the
Cox commission and frankly would strengthen the hand of individual
departments in this interagency review process. I am not certain, but I
believe the House bill addressed this in some fashion, and it may be
that if the House holds to its position and we pass the bill before us
today, that issue is going to have to be further visited. At least from
my perspective, it would be a wise thing to do.
There is another potential amendment relating to standardization of
determination requirements. This is something others have brought up.
This is not something that I would bring up. It has to do with the
standard for waiving the foreign availability or mass market
determinations. I did allude to this in my opening statement--the
different standards of serious, significant, or merely a national
threat. It may be wise to try to standardize those. Somebody else might
bring that up.
There could also be an amendment relating to a reporting requirement
for key proliferators, requiring a report on certain items transferred
to certain key proliferator countries. This is something that I think
would be useful to the Congress as we continue to review how the act is
working and, frankly, useful to a blue ribbon commission as well. It is
not in the bill at this point. Somebody else may pursue that. Likewise,
a license for key proliferators requiring that a license for certain
items transferred to certain key proliferators be actually established
in the legislation, rather than leaving it up to a question of what is
on the control list.
There is also a proposed amendment relating to congressional
notification when changes are made in either the particular countries
involved or the tiers--as you know, we have tier I, tier II, and tier
III countries--or when violations of the Export Administration Act
occur. I think, frankly, this would be a useful report, especially if
we have a blue ribbon commission. They are going to want to collect
this data anyway.
Congress should be aware of the data. It is especially going to be
important for countries that may continue to violate the postshipment
verification procedures. I think it would be useful to have a
congressional notification process. It is not in the bill now. I have
not proposed that this be part of a managers' amendment. I wonder if
people will consider that. Somebody may want to offer that amendment.
There is also a different version of the blue ribbon commission which
I understand might be proposed, and there may be other amendments.
I think that is a list of at least several of the amendments that
were being drafted for presentation a little later. Again, many might
be obviated by the discussion I had before.
There are a couple of other items that have to do with specific
provisions of the bill, such as the 18-month limitation on the
Presidential authority to grant a waiver from the foreign availability.
That is too restrictive. I would eliminate that.
There is another possibility in that same section for another change.
This has to do with the fact that the President can't delegate his
authority. You want the President making the ultimate determinations,
but you want him making big determinations, not little ones. There are
a lot of things in this bill that have to do with particular items that
should not go up to the President. He could delegate that easily to one
of his secretaries. I don't believe that will be a proposed amendment.
I want to explain to my colleagues that notwithstanding the fact that
an item or a concern may not be proposed here in the form of an
amendment, that doesn't mean there are not additional concerns we have
with the legislation that I hope eventually, between the House and
Senate, will be addressed. Much of that was discussed in my opening
comments.
[[Page S9114]]
That is the list. I hope in the next few minutes we can try to
resolve these remaining issues so we can move forward.
Mr. SARBANES. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Ms. CANTWELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. CANTWELL. Mr. President, I rise today in support of Senate bill
S. 149, the Export Administration Act of 2001. I am very proud to be an
original cosponsor of this bill. I thank the Senator from Wyoming for
his tireless efforts in crafting legislation that I believe will move
us forward in this area. I am thankful for the leadership of the
distinguished chair and the ranking member of the Banking Committee,
the Senator from Maryland, and the Senator from Texas, and others who
have worked hard to successfully address the issue of export controls
in a changing economy.
U.S. competitiveness in the global economy will depend heavily on our
ability to foster continued innovation in our technology sector and
help domestic companies gain markets overseas.
Mr. President, in my State, technology-based industries are the
bulwark of the Washington State economy. They now account for the
largest share of employment, business activity, and labor income of any
sector in the State's economic base. Roughly 38 percent of all
Washington State jobs are tied to the tech sector, and the State's
286,000 tech workers earn wages that are 81 percent above the State
average.
This sector is gearing up to be a crucial engine for the future of
the U.S. economy, and for Washington State in particular. However, to
guide the continued development of this sector, we need to ensure the
success of U.S. companies and their exports in the international
marketplace. This legilsation streamlines the process by which
companies gain approval to export their products to foreign markets.
This is important because it is increasingly importer that in today's
economy, a company that cannot compete globally will not succeed.
Although the United States currently leads the world in technology,
we are not the only technology suppliers and this lead is not
guaranteed to last. We sacrifice our position as a global technology
and economic leader when we limit U.S. companies' ability to sell their
products abroad through a burdensome, unreasonable, and flawed export
control system.
Under the current system, companies lose out in the short term
through restrictions on direct sales but also in the long term through
loss of market share.
The existing process for U.S. companies to acquire export licenses
involves a complex application procedure and a Byzantine system of
bureaucratic authority spread over four Federal agencies. Getting the
license can take a very long time, which compromises the reliability of
U.S. suppliers and makes it hard for manufacturers and customers to
plan ahead.
Mr. President, S. 149 will go a long way in streamlining the export
control process and utlimately strengthening U.S. economic
competitiveness by making three major changes:
First, this bill provides a commonsense approach to the reality of
the global economy by recognizing that if a certain technology is
available on the mass market or made available for sale to multiple
buyers, it simply does not make sense to restrict U.S. companies from
these commercial opportunities.
Second, this bill streamlines export control licensing by
centralizing authority under one agency and streamlining the process.
Let me be clear. It does not do anything to reduce the depth of the
review process, nor compromise its effectiveness; it simply provides
accountability and structure to ensure that decisions are made in a
more timely efficient and transparent manner.
Third, this bill removes the antiquated MTOPS standard for
categorizing high-speed computers, and allows the President and his
security team to develop a control system that is flexible and
specifically tailored to keep pace with advances in technological
capability.
United States companies operate in a fiercely competitive
environment, and we cannot afford to have outdated regulations make
that competition even more difficult--especially if these regulations
do not effectively meet their objectives.
This is the fundamental flaw of the current control system. Although
restrictions disadvantage American companies globally in the name of
national security, in practice, they do not effectively enhance our
security interests.
I refer to the December GAO report which states:
The current system of controlling the export of individual
machines is ineffective in limiting countries of concern from
obtaining high performance computing capabilities for
military applications.
This is a crucial point. Especially as we have heard many of our
distinguished colleagues in this Chamber characterize this bill as
putting business or economic interests over national security
interests.
With all due respect to the opponents of this bill, this perceived
conflict of economic versus security interests is fundamentally
misguided. In fact, this bill helps support our economic interests
while enhancing the President's ability to ensure our national
security.
And you need not take my word for it. I am joined by leaders of the
intelligence community, the Secretary of State, the Secretary of
Defense, the National Security Advisor, and President Bush who all
agree that these changes will actually strengthen the President's
national security authority. Instead of his having to rely on an
antiquated system to control security the President will be granted
direct authority to intervene in matters where he determines national
security is at stake.
This bill helps us focus on those export technologies that constitute
true national security threats. And, make no mistake, this bill is not
soft on those who break the law. For those firms and individuals who
violate the established control laws, this bill authorizes
substantially higher criminal and civil penalties that those included
in the current system.
We need to establish an export control regime that facilitates our
Nation's status as a global economic and technology leader and provides
a control system that allows the administration to focus on those
exports that do constitute a specific security threat. We must come to
realize that these are not competing goals but constitute intertwined
objectives. This bill helps to achieve both, and I urge my colleagues
to join me in supporting it.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. KYL. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Corzine). Without objection, it is so
ordered.
Mr. KYL. Mr. President, I ask unanimous consent to have printed in
the Record at this point a document entitled ``Talking Points on High
Performance Computers,'' which describes some of the difficulties we
have encountered in the transfer of high-technology computers to other
countries, and which basically says we should be more careful about
liberalizing export controls on these items.
There being on objection, the material was ordered to be printed in
the Record, as follows:
Talking Points on High Performance Computers
introduction
In 1997, in response to growing concerns that foreign
entities had illegally acquired U.S.-made high performance
computers for military purposes, Congress inserted language
into the FY 1998 Defense Authorization Act that was designed
to strengthen export controls on such computers.
S. 149 would repeal the sections of that Act requiring
prior notification for exports of HPCs above the MTOP
threshold to Tier 3 countries (including China), post-
shipment verifications for these HPCs, and Congressional
notification of an adjustment in MTOP threshold levels. It
also contains a provision to repeal the sections that
established MTOPS performance levels above which no computers
could be sold to certain countries without a license.
[[Page S9115]]
current export controls on hpcs
In January 2001, President Clinton loosened export controls
on high performance computers for the sixth time. Under the
latest guidelines, computers with a processing speed of less
than 85,000 million theoretical operations per seconds
(MTOPS) no longer require a license for export to military
organizations in Tier 3 countries like China.
The bar requiring firms to notify the Commerce Department
of an export was also raised to 85,000 MTOPS--establishing,
for the first time, licensing and advanced notification
thresholds at the same level. Consequently, the new rules
effectively eliminate routine prior U.S. government review of
any computer exports below the licensing threshold to Tier 3
countries.
By contrast, in January 2000, computers with processing
speeds above 2,000 MTOPS required a license for export to
Tier 3 countries--over a 40-fold increase in a 1-year period.
85,000 MTOPS computers are very powerful. As a comparison,
in 1997 some of the initial computers developed in the U.S.
under the Stockpile Stewardship Program's Accelerated
Strategic Computing Initiative (ASCI), called ASCI Red and
ASCI Red/1024, had processing speeds of 46,000 and 76,000
MTOPS respectively. These computers were used for 3D modeling
and shock physics simulation for nuclear weapons
applications.
In March 2001, the General Accounting Office concluded that
President Clinton failed to adequately analyze ``military
significant uses for computers at the new thresholds and
assess the national security impact of such uses.''
For example, in testimony to the Senate Governmental
Affairs Committee in March 2001, Susan Westin, Managing
Director of the International Affairs and Trade Division at
GAO, stated, ``The report does not note that applications for
3-dimensional modeling of armor and anti-armor and 3-
dimensional modeling of submarines can be run on computers
at about 70,000 MTOPS.
Furthermore, Ms. Westin noted that ``The President's report
does not state that computers rated up to 85,000 MTOPS could
operate all but four of the 194 militarily significant
applications identified in the 1998 Defense- and Commerce-
sponsored study.'' (The study to which she referred was one
of two studies upon which the report's section on the
computer uses of military significance was largely based.)
controllability of high performance computers
Some cite computer ``clustering'' as making computer
controls ineffective. This involves linking several
processors together to create a parallel processing system
with greater capabilities than the individual processors.
According to Susan Westin's testimony to the Senate
Governmental Affairs Committee in March, President Clinton
set the licensing control threshold of 85,000 MTOPS based on
the availability of clustering technologies projected to be
available by the end of 2001.
However, as Ms. Westin noted in her testimony, ``DOD
officials, when asked, could not provide evidence to support
their conclusions that there is necessary technical expertise
in tier three countries [like China] to cluster to any
performance level.'' (Emphasis in original.)
Additionally, as Andrew Grover, CEO of Intel, concluded
during his remarks to the Forum for Technology and Innovation
in March 1999, ``The physical technology, the hardware
technology implicit in building these large parallel
machines, is not the same as the physical technology used in
building commodity machines.''
The report produced in 1999 by a 9-member bipartisan
commission chaired by Congressman Chris Cox in the House of
Representatives (the Cox Report) also addressed this issue
with regard to China's computing abilities, stating that
``while the PRC might attempt to perform some HPC functions
by other means, these computer work-arounds remain difficult
and imperfect.''
why do hpc's need to be controlled?
As stated by Gary Milhollin, Executive Director of the
Wisconsin project on Nuclear Arms Control, in an op-ed in the
Washington Post in March 2000,
``The truth is, high-performance computers aren't like most
other exports--they're more like weapons. They are essential
to develop the software and hardware that make things like
advanced military radar work. And one of the driving forces
behind the development of `supercomputers' has always been
the desire to design better nuclear weapons and the
missiles that deliver them . . . It is easier, safer, and
more economical to stop dangerous exports than to defend
against the weapons they produce.'' (Emphasis added.)
The Cox report discussed in detail China's potential use of
high-performance computers for the design and testing of
ballistic missiles and advanced conventional weapons, the
design and manufacturing of chemical and biological weapons,
nuclear weapons development, warfare applications such as
computer network attack, intelligence collection and
analysis, and military command and control.
The Cox Committee concluded that China is ``attempting to
achieve parity with U.S. systems and capabilities in its
military modernization efforts.'' As illustrated by Beijing's
recent military exercises, its rapid efforts to modernize its
military, and its continuing buildup of short-range missiles
aimed at Taiwan, China poses a real and growing threat to
U.S. national security.
The United States should not ease restrictions on the
export of high performance computers that China can use to
further its weapons development programs. Unfortunately, this
is precisely what S. 149 would accomplish.
Notification Process
The 1998 Defense Authorization Act requires exporters to
submit for review any proposed Tier 3 sale above the MTOPS
threshold. This review is conducted by the Secretaries
Commerce, Defense, State, and Energy, and the Director of the
Arms Control and Disarmament Agency.
This requirement would be repealed by S. 149.
In his testimony to the House Armed Services Committee in
October 1999, Gary Milhollin discussed the importance of the
notification process set forth in the 1998 Defense
Authorization Act, stating that it ``has worked
brilliantly.'' Furthermore, he concluded, ``It has stopped a
number of dangerous exports without imposing any significant
burden on American industry.''
In his testimony, Mr. Milhollin sited a number of instances
where the process has been successful.
For example, Digital Equipment Corporation (Now Compaq)
applied for permission to sell a supercomputer to the Harbin
Institute of Technology in China. According to Mr.
Milhollin's testimony, this institute ``is overseen by the
China Aerospace Corporation, China's principal missile and
rocket manufacturer,'' and it ``makes rocket castings and
other components for long-range missiles.''
The application was denied as a result of objections from
the Arms Control and Disarmament Agency and the State
Department. Mr. Milhollin further notes that the sale would
have been worth only $348,000, in comparison to Compaq's
annual revenue of approximately $31 billion.
Without the notification process, Digital would most likely
have indirectly aided China in its effort to make more long-
range ballistic missiles. Do we want to risk such an outcome
in the future?
Post-Shipment Verification
S. 149 would also repeal the section in the 1998 Defense
Authorization Act that requires post-shipment verifications
for high performance computers exported to Tier 3 countries,
like China.
In June 1998, China agreed to allow post-shipment
verifications for all exports, including high-performance
computers. For the following reasons, the Cox Committee found
the terms of the agreement ``wholly inadequate'':
1. China considers U.S. Commerce Department requests to
verify the end-use of a U.S. high performance computer to be
non-binding.
2. China insists that one of its own ministries conduct an
end-use verification, if it agrees to one at all.
3. China argues that U.S. Embassy and Consulate commercial
service personnel may not attend an end-use verification
unless invited by China.
4. China argues that it is at China's discretion whether or
not to conduct any end-use verification.
5. China will not permit an end-use verification at any
time after the first six months of the computer's arrival.
According to the Bureau of Export Administration, out of
857 high-performance computers shipped to China, only 132
post-shipment verifications have been performed.
According to the Cox Report,
``The illegal diversion of HPCs for the benefit of the PRC
military is facilitated by the lack of effective post-sale
verifications of the locations and purposes for which the
computers are being used. HPC diversion for PRC military use
is also facilitated by the steady relaxation of U.S. export
controls over sales of HPCs.''
The Cox Report also states,
``. . . the United States has no effective way to verify
that high-performance computer purchases reportedly made for
commercial purposes are not diverted to military uses. The
Select Committee judges that the PRC has in fact used
high-performance computers to perform nuclear weapon
applications.''
More recently, during a July 2001 hearing of the House
International Relations Committee, David Tarbell, Deputy
Undersecretary of Defense for Technology Security Policy,
stated, ``. . . the Chinese government has been unwilling to
establish a verification regime and an end use monitoring
regime that would get all of the security interests that
we're interested in to ensure that items that are shipped are
not diverted.'' (Emphasis added.)
When pressed further by Chairman Hyde about whether the
post-shipment verification regime is a failure, Secretary
Tarbell replied, ``I'm not sure I would characterize it as a
complete failure, but it is close to . . . It is not
something I have a great deal of confidence in.'' (Emphasis
added.)
The lack of an effective post-shipment verification regime
for dual-use exports eliminates any benefit to U.S. national
security of a licensing process. This bill would allow the
Commerce Department to grant licenses to countries that
refuse to allow post-shipment verification.
China's Use of U.S. HPC's for Military Purposes
The Cox report discussed China's use of high performance
computers for military applications, stating.
[[Page S9116]]
``. . . open source reporting and stated PRC military
modernization goals tend to support the belief that the PRC
could be using HPCs in the design, development, and operation
of missiles, anti-armor weapons, chemical and biological
weapons, and information warfare technologies.''
Furthermore, specifically with regard to nuclear weapons
development and testing, the Cox report states, ``The Select
Committee judges that the PRC is almost certain to use U.S.
HPCs to perform nuclear weapons applications. Moreover the
PRC continues to seek HPCs and the related computer programs
for these applications.''
According to an article in the Washington Times in June
2000, ``U.S. high-performance computers are being used at the
Chinese Academy of Engineering Physics, the main nuclear
weapons facility in Beijing.'' The Times reported that this
was the third time the Chinese government has been detected
diverting U.S.-origin computers to defense facilities.
conclusion
S. 149 significantly weakens controls on the export of high
performance computers. The bill reverses the efforts of
Congress in 1997 to strengthen such controls.
The foreign availability of high performance computers is
controllable. Computer ``clustering'' will not necessarily
provide China, or another country, with the capability that
would be achieved with a commodity machine purchased from the
United States.
The notification process established in the 1998 Defense
Authorization Act has been effective in preventing some sales
of high performance computers that would most likely have
been diverted to military uses.
A mandatory post-shipment verification regime is necessary
to ensure that U.S. high performance computers are being used
for commercial, not military, purposes.
Mr. KYL. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SARBANES. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SARBANES. Mr. President, I want to report to our colleagues where
I think we are. We had been hopeful that we would have agreement on a
few amendments that had been discussed at some length--largely with
Senator Kyl and Senator Thompson--and that those amendments could be
agreed to and the managers' amendment would be agreed to, and then we
would have been able to go on to final passage of the legislation this
evening. I know a number of our colleagues are going to the White House
for the state dinner with the President of the Republic of Mexico.
Regrettably, there has been a hangup, I guess I will describe it as,
at this point with respect to this blue ribbon commission amendment
that we had discussed. An effort is still underway to try to work that
out. We did reach agreement on two other amendments that I think are of
some consequence, for which both Senator Kyl and Senator Thompson
earlier in the debate sort of laid out a rationale. Senator Enzi and I
joined together in trying to accommodate that concern.
Apparently, it is believed that if we go overnight, that will provide
some opportunity to work out the one remaining item.
If Members choose an amendment on that, we will have to deal with the
amendment on its terms in one way or another or Members may choose at
that point not to offer the amendment. But that would be the situation
we would find ourselves in, and then we would move to final passage.
As best we can ascertain, there are not other amendments, and I
certainly hope that is the case. That is the premise on which we are
now proceeding. In light of that, I expect what we would do shortly is
go over until the morning, and if the blue ribbon commission amendment
has been worked out, that will be included in what would be passed. If
not, we would pass the other two amendments that have been addressed
and worked out, pass the managers' amendment, and go to third reading
and final passage of the legislation.
This is what we have been trying to work towards all day long, and I
think we came close but not quite there. So that is the situation. I
want to report that to all of my colleagues. I know a lot of time has
been spent in a sense waiting while discussions were going on, but that
is not new for this body. We actually had hopes we would be able to get
the bill done today. I very much regret that is not the case.
I discussed it with my colleagues on the other side. I do not think
there are other amendments hanging out there, but if there are, we
certainly want to be enlightened as to them. I am certainly not
inviting them. We need to complete this legislation now.
It is clear what the will of this body is with respect to this
legislation, and I hope Members would get a chance to exercise that
will and then we will be able to get on with the other extended agenda
which confronts the Senate now as we move into the fall period.
Mr. REID. Will the Senator yield for the purpose of asking a
question?
Mr. SARBANES. Certainly.
Mr. REID. First of all, it is my understanding the Senator from
Maryland and Senator Enzi, who both have managed this bill so well, are
going to work with Senator Thompson and others, hopefully in the
morning when we come in at 10:30, to have some kind of unanimous
consent agreement at that time that would give us a final order to
dispose of this bill. Is that true?
Mr. SARBANES. We very much hope to achieve that. And if we could do
that, I also hope it would not take a great deal of time to implement
or carry out a unanimous consent agreement, then not only get the
agreement but move from the agreement to where we do the final passage.
Then this legislation is completed and the floor is clear for other
matters which I know the leadership is anxious to consider.
Mr. REID. I say to my friend before the Senator from Tennessee
speaks, we are going to come in at 10:30 tomorrow and then the
President of Mexico, as the Senator indicated, will be here in the
morning. We will have a short time in the morning. I hope early in the
morning the staffs could work with the principals to try to come up
with a UC that we can propound before we listen to the President of
Mexico. That would really work well.
It is my understanding the Senator from Maryland, the Senator from
Wyoming, and the Senator from Tennessee are going to work toward that
end so we can move to the Commerce-State-Justice bill, which Senators
Lott and Daschle are very anxious we finish this week.
Mr. SARBANES. I yield to the Senator from Tennessee.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. THOMPSON. Mr. President, the scenario that has been outlined is a
probability. That is something for which we can strive. We have
accomplished some things in this down time we have had today. We are
talking about a couple of amendments, and we are talking about a couple
of letters, all of which will need to be finally agreed upon among the
parties. I do not think that would be any problem. I do not anticipate
other amendments at this time, but I say to my colleagues who might be
listening, if anyone has any amendments, they should come forth
immediately and announce them. Otherwise, I would anticipate tomorrow
morning we would know where we stand with regard to the blue ribbon
commission issue and would tomorrow morning be able to enter into some
sort of unanimous consent agreement.
There being no further amendments other than our agreeing to the
language of the letters and to the other amendments, we will be able to
proceed on to final passage.
Mr. REID. Will the Senator yield for a question?
Mr. THOMPSON. I will be happy to.
Mr. REID. I always feel a sense of almost guilt when the Chamber is
empty all day long and there are not people offering amendments and
discussing the legislation, but it is important to note to all of the
Senators within the sound of my voice and anyone else who is watching,
today has been a very productive day. There has been tremendous work
done by numerous Senators--Senator Enzi, Senator Sarbanes, Senator
Gramm, Senator Thompson, and Senator Kyl. We could go through the whole
list of Senators who have been heavily involved in working on this bill
today behind the scenes. There has been a lot of work.
The fact that we have not been in the Chamber should not diminish the
fact there has been a lot of progress on this legislation.
Will the Senator from Tennessee agree with that statement?
Mr. THOMPSON. I certainly will, and I express appreciation to the
leadership
[[Page S9117]]
for allowing us to do this unfettered and unhassled because I know the
Senator wants to finish and move on to other things. We have
accomplished a couple of different things in the first day. We have had
an opportunity to say our piece on our side to express our concern with
some of the provisions. We have also had an opportunity to have a vote.
It does not take a genius to count that vote.
After the vote occurred, the proponents of this legislation, in a
very reasonable fashion, suggested we get together and see if some of
the concerns we expressed could not be addressed. That is what good
debate and good interchange is all about: actually listening to each
other and learning something from each other and trying to see whether
or not we could address some issues.
Those thoughts have been expressed in a way that had not been heard
before. All of this happened, and that is a good thing. We are going to
wind up with a better product than we otherwise would have. So, yes, I
concur with the Senator. It is time to do what we can do and then move
on.
I add we still need to be diligent and make sure we agree on the
language, as we have orally, and hopefully wrap this thing up tomorrow.
Mr. SARBANES. Mr. President, we are going to strive very hard to get
this unanimous consent agreement before we go to the joint meeting of
the Congress, and then I hope we can come back and in fairly short
order execute the unanimous consent request and move to final passage
of this legislation by midday tomorrow, and then clear the Chamber for
the leadership to take up other matters which I know are pressing on
their agenda.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________