[Congressional Record Volume 147, Number 115 (Thursday, September 6, 2001)]
[Senate]
[Pages S9130-S9146]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXPORT ADMINISTRATION ACT OF 2001
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of S. 149, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 149) to provide authority to control exports,
and for other purposes.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. McCAIN. Madam President, as we debate our system of export
controls in this new era, we hear an array of arguments that reflect
America's preeminent role in the world, our military and economic
power, and the absence of the threat of major war that has prevailed
since the demise of the Soviet Union a decade ago. We hear proud claims
that trade is the new currency of international politics; that the
strength of our economy, now more than ever, underpins our national
power and global influence; and that in the brave new world of the
Information Age, most technological flows are uncontrollable, or
controls are meaningless due to the availability of the same technology
from foreign competitors.
The business of America is business, we are told, and those of us who
believe national security controls exist to protect national security,
rather than simply expedite American exports, are accused of old
thinking, of living in a dangerous past rather than a prosperous and
peaceful present. For many, the new definition of national security--in
a haunting echo of the thinking that inaugurated the last century--
predicates the safety and well-being of the American people upon the
free flows of trade and finance that make our economy the envy of the
world, and our business leaders a dominant force in our time.
I am an ardent free trader, and I believe economic dynamism is indeed
a central pillar of national strength. But I do not believe our
prosperity requires us to forego very limited and appropriate controls
on goods and technologies that, in the wrong hands, could be used to
attack our civilian population here at home, or against American troops
serving overseas. Experts agree that both rogue regimes and hostile
terrorist organizations are actively seeking components for weapons of
mass destruction, many of which are included in the list of goods we
control under our current export licensing system.
Unlike in the Cold War era, when we created our export control regime
to keep sensitive technologies out of the hands of the Soviet Union,
this era is characterized by an array of diverse threats emanating from
both hostile nations and non-state actors. Hostile nations like Iran
and North Korea are disturbingly close to developing multiple-stage
ballistic missiles with the capability to target the United States.
These and other nations, including Syria and Iraq, receive significant
and continuing technical assistance and material support for their
weapons development efforts from China and Russia, with whom much of
our trade in dual-use items is conducted. The intelligence community
has made startlingly clear the proliferation record of China and
Russia, as well as North Korea, and the adverse consequences of their
weapons development and technology transfers to American security
interests.
[[Page S9131]]
I do not believe that S. 149 adequately addresses these threats.
Unfortunately, the Senate yesterday rejected a reasonable amendment
offered by Senator Thompson allowing the relevant national security
agencies to receive a 60-day time extension to review particularly
complex license applications. This reform, proposed by the Cox
Commission, and a number of amendments adopted by the House
International Relations Committee in its markup of the Export
Administration Act, properly addressed some of the deficiencies in the
current version of S. 149.
S. 149 has the strong support of the business community and the Bush
Administration. In the short term, proponents of this legislation are
correct: loosening our export controls will assist American businesses
in selling advanced products overseas. In another age, proponents of
free trade in sensitive goods with potentially hostile nations were
also correct in asserting the commercial value of such enterprise:
Britain's pre-World War I steel trade with Germany earned British
plants substantial profits even as it allowed Germany to construct a
world-class navy. Western sales of oil to Imperial Japan in the years
preceding World War II similarly earned peaceful nations commercial
revenues. In both cases, friendly powers caught on to the destructive
potential of such sales and embargoed them, but it was too late. Such
trade inflicted an immeasurable cost on friendly nations blinded by
pure faith in the market, and in the power of commerce to overcome the
ambitions of hostile powers that did not share their values.
I resolutely support free trade. But I cannot with a clear conscience
support passage of legislation that weakens our national security
controls on sensitive exports to a point that we may one day be
challenged, or face attack, from weapons derived from the very
technologies we have willingly contributed to the world. Our peaceable
intentions, our love of prosperity and stability, are not shared by
those who would do America harm, and whose hostile ambitions today may
well be matched tomorrow by the ability to deliver on that threat. We
should make it harder, not easier, for them to do so.
Our export control regime should undergo significant reform to
address the challenges and opportunities of our time. Proponents of S.
149 focus on the opportunities this legislation affords American
business. I have worked with Senators Thompson, Kyl, Shelby, Helms, and
Warner to highlight the reality that this bill does not adequately
address the national security challenges we face today. National
security controls cover only a tiny fraction of total American exports;
the overwhelming majority of export applications for dual-use items are
approved by our government; limited controls properly exist to help
prevent highly sensitive technologies from falling into the wrong
hands; and such safeguards are more relevant than ever in the face of
the multifaceted and unconventional threats to our country unleashed by
the information revolution.
A number of proponents of S. 149 argue that American companies should
not be straitjacketed by U.S. national security controls even as their
foreign competitors remain free to peddle similar technologies to
proliferators and rogue regimes. This argument overlooks the fact that
America continues to lead the world in technological innovation; our
products are often unique when compared with those produced by
businesses in France, Germany, or Japan. More fundamentally, such an
approach only emboldens potential enemies who seek access to our
markets in sensitive goods. In concert with friends and allies, we
should endeavor to shame foreign companies who sell dangerous items to
rogue buyers by making their identities public--not scramble for market
access in dangerous technologies at their expense, as if nothing more
than corporate profits were at stake. We should also make it a
diplomatic priority to construct a new multilateral export control
regime, in concert with like-minded nations, to fill the vacuum created
by the collapse of COCOM, which regulated Allied exports during the
Cold War to keep critical technologies out of Soviet hands.
As a proud free-trader, I maintain that we should continue to
carefully review our most sensitive exports; we can, in fact, exercise
some control over their end use. I fear we shall one day reap the
bitter harvest we sow in our neglect of the consequences to America's
security of an overly complacent export licensing regime. As a nation,
we may have to learn the hard way that winking at the proliferation
threats we face today, in light of clear evidence that nations to which
we export sensitive technologies continue to apply and share them with
our enemies, diminishes our national security to a point for which no
amount of corporate profits will compensate.
I thank Senator Thompson for his efforts on this legislation. I do
not believe that his amendment yesterday should have been defeated. I
thought it was a reasonable amendment. I think it is also another
example of a compelling requirement for campaign finance reform.
I yield the floor.
The PRESIDING OFFICER (Mrs. Clinton). The Senator from South Dakota.
Mr. JOHNSON. Madam President, S. 149 is, in fact, a balance that
modernizes our export control laws to account for the geopolitical,
commercial, and technological changes of this past decade.
This bill recognizes that on occasion exports must be controlled for
national security and for foreign policy reasons. S. 149 substantially
increases the President's authority to impose controls when in fact
they are necessary.
I have great respect for the few opponents of this legislation.
However, I believe it is a misstatement to suggest that this bill
somehow diminishes our Nation's ability to control technology which
needs to be controlled when in fact this legislation imposes greater
controls where necessary and significantly increases penalties and
decreases the likelihood of sales that are inappropriate.
At the same time this legislation acknowledges that a vibrant
American economy is a critical component of our national security.
Senator Bennett, our friend from Utah, spoke eloquently to this point
yesterday.
Advancements in high technology allow us to ``run faster'' than our
enemies. To foster continued advancements, we must take great care not
to punish American businesses by limiting unnecessarily their
marketplace, if those same products will simply be provided by our
foreign competitors.
The observation is made, well, what about unique American technology?
This legislation takes that into account. It allows for strong
limitations where it is truly unique and where those sales would, in
fact, pose some jeopardy to our Nation's security.
S. 149 balances our national security interests and our commercial
interests with a first and foremost concern for national security--
appropriately so. But it does recognize that our prosperity and our
security are, in fact, interrelated.
This has been a thoroughly bipartisan process--a process, frankly,
that I would like to see more often the case on the floor of this body.
I have great gratitude for the work of Chairman Sarbanes, ranking
member Gramm, Senator Enzi, and some others who have contributed in a
constructive way to this legislation. And Senators Thompson and Kyl
have made valuable suggestions to enhance the bill. I thank them for
their role and their sincere concern for our Nation's security. I thank
Senators Dayton and Roberts for their constructive input on this
legislation as well.
I urge the House to move expeditiously to pass the EAA so the White
House can sign this bill into law. This is a high priority for the
White House.
For those who may have some concern about the expertise of the vast
bipartisan majority of this Senate in support of this legislation out
of national security concerns, I again remind the body that this
legislation not only had the overwhelming bipartisan support of
thoughtful Senators on both sides of the aisle but is urgently
supported by President Bush, by Secretary of Defense Rumsfeld,
Secretary of State Powell, Commerce Secretary Evans, and National
Security Adviser Condoleezza Rice. Certainly those in the White House
have taken national security as a first and foremost concern. Any
suggestion that somehow that issue has been taken lightly by the
advocates of this bill is simply incorrect.
[[Page S9132]]
This has been, frankly, a model for how the Senate can work together
for the good of our Nation. It is not a Republican bill. It is not a
Democrat bill. But it is a bill put together across the aisle with the
cooperation of the White House. It has been extremely gratifying,
frankly, to have been so closely involved in the creation of this
reauthorization.
To reject this legislation, to fall back on the Executive order,
which is under legal challenge, and which extends far less authority to
the White House to control the sales of high-tech items around the
world, would be a tragic mistake. This Nation needs a modern dual-use
technology trade regime. This legislation provides that.
Those in our Government who are given the great responsibility of
national security have applauded this bill. It is the kind of balance
our country needs. I believe the Senate has performed its work very
ably to bring this bill to this point.
It is my hope we can conclude this debate very soon, work with our
colleagues in the other body, and deliver this bill onto the desk of
the President, who has urged us over and over again to pass this bill
and to again have in place a strong, powerful, dual-use technology
trade regime for our Nation.
Madam President, 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. THOMPSON. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 1527
Mr. THOMPSON. Madam President, I send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report the amendment.
The assistant legislative clerk read as follows:
The Senator from Tennessee [Mr. Thompson] proposes an
amendment numbered 1527:
On page 197, line 15, strike ``substantially inferior'' and
insert ``not of comparable quality''.
Mr. THOMPSON. Madam President, this amendment addresses the issue of
foreign availability. As all who have listened to our discussion up
until now realize, one of the more important pieces of S. 149 has to do
with foreign availability. Essentially, what this bill does is say if
the Department of Commerce makes a determination that some item has
foreign availability status, then that item is essentially
decontrolled. It does not go through the licensing process anymore, the
idea being that it is out there and anybody can get it, and why control
it.
Frankly, I think it is not a good idea. I think that foreign
availability should be taken into consideration, as we always have in
our export policy taken foreign availability into consideration. We do
not want to try to stop the export of items that are clearly out there
in the domain, but it should not be an overriding consideration. We
should not be deregulating whole categories of items, and not even
being able to keep up with how much we are shipping to some country,
and what kind of item we are sending to some country.
This foreign availability concept takes these large categories
totally outside the regulatory process that we are fearful might
contain something that might turn out to be harmful to our national
security. We ought to have a way for the appropriate representatives in
our Government to judge these matters, item by item, and case by case,
to make a determination. It may take a few days, a few weeks in some
cases perhaps, to make this determination, but it is well worth it
because the reason for export control laws is not primarily commerce;
it is primarily national security.
If you look at this bill, you will see that the purpose of the export
control law is to prevent the proliferation of weapons of mass
destruction and things that are detrimental to our national security or
things that potentially are. But, anyway, I am in the minority on that.
The administration supports this concept of foreign availability. The
majority leadership supports this concept. So that being the case, we
have attempted to enter into discussions whereby, hopefully, we could
convince our colleagues on the other side of this issue that there is
some validity to our concern and, hopefully, the idea being that they
would make some accommodation to us on this concept.
I am happy to say that we have been able to reach some accommodation
on this issue that addresses some of our concerns.
This amendment that I have just offered makes an important change to
the definition of ``foreign availability.'' Under S. 149, items could
be decontrolled and bypass any kind of review so long as similar items
that were available from foreign countries were not substantially
inferior to U.S. items. In other words, foreign availability would kick
in and the decontrol would kick in under the bill as long as countries
could get things that were not substantially inferior.
Our belief is that we ought to make sure, before we decontrol our
items, they can really get items that are comparable to what we have.
If they can get items that are inferior to what we have, then we should
still maintain controls because we have something they cannot otherwise
get. And they are sensitive matters or they would not have been on the
control list. So we ought to be careful about that.
So this amendment changes that standard of ``not substantially
inferior'' to ensure that the items are of ``comparable quality'' to
U.S. items. It is a small but significant change that ensures that we
will not decontrol superior American technology just because inferior
items are available overseas.
So I think this strengthens this provision in an important way. It
certainly does not address all of our concerns, but it does strengthen
this provision in an important way to make sure if we are going to
enter into this, what I consider to be a very large decontrol process,
in a very dangerous time, to very dangerous countries, that we ought to
at least make sure that if we are claiming they can get these items
anyway, it is really the same kind of items we have, the same quality
we have. I think this amendment would go a long way toward ensuring
that.
I thank my colleagues on the other side of this issue for entering
into real discussions with us on it. Hopefully, we have come to an
agreement on this issue.
I yield the floor.
Mr. SARBANES. Madam President, I thank the Senator from Tennessee for
his contribution throughout this debate. As he said, we have listened
and considered carefully. I am perfectly prepared to accept this
amendment. And I think introducing this quality concept about which he
spoke yesterday is an important improvement and addition to this bill.
I am happy to be supportive of it.
Mr. ENZI. I, too, thank the Senator from Tennessee for his
cooperation and diligence in the months of working on this bill with
us, and with the 59 other changes in the bill as well, and for his
willingness to work with us on this change. We are happy to accept it.
The PRESIDING OFFICER. Is there further debate on the amendment?
Mr. SARBANES. I urge adoption of the amendment.
The PRESIDING OFFICER. If not the question is on agreeing to
amendment No. 1527.
The amendment (No. 1527) was agreed to.
Mr. SARBANES. I move to reconsider the vote.
Mr. ENZI. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. SARBANES. Madam President, I suggest the absence of a quorum.
Mr. THOMPSON addressed the Chair.
Mr. SARBANES. I withhold the request.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. THOMPSON. Madam President, I suggest that while we are waiting on
another Senator, who I believe has one more amendment to consider, we
discuss the matters of deemed exports and commodity classification. We
have had some discussions about those subjects also. If I may, I will
simply relate what my understanding is with regard to those issues.
First of all, on the deemed export issue, we have had concerns on
this side that the legislation did not adequately address the problem
of deemed
[[Page S9133]]
exports. As most who follow this issue know, a deemed export comes
about when, in a typical situation, sensitive information is passed to
a foreign national who perhaps is working at one of our National
Laboratories or working in one of our businesses on sensitive
information, who may or may not have a government contract, the idea
being that with regard to the physical exporting of an item, that
information should then be controlled when giving it to a foreign
national. That should be reported. We should go through a reasonable
process to make sure no damage is being done.
We learned from hearings with regard to our National Laboratories,
for example, that we were woefully behind as a government from even
private industry; that we were not paying attention in our National
Laboratories to the deemed export requirements. There were hardly any
deemed export notifications or licenses issued by our laboratories. Our
laboratories contain probably the most sensitive matters that we have
in this Nation, including the maintenance of our nuclear stockpile, our
Stockpile Stewardship Program, including information concerning our
most sensitive weapons.
We believed we should deal with the deemed export issue. The
administration has said it would like to address this complex issue--
and it is complex--through regulation rather than include it in the
legislation. We have agreed that a letter will be sent to the
administration from both supporters and opponents of this bill asking
the administration to review existing regulations and address this
issue.
Continued control of deemed exports is an essential component of our
export control process. Right now there is substantial noncompliance,
as I said. This letter is designed to urge the administration to
develop new regulations that ensure understanding of and compliance
with the responsibility to control deemed exports.
I understand there are some in the business community who do not like
the concept of deemed exports at all. My understanding and intention,
as far as this letter is concerned, is not to give the administration
the option of continuing a deemed export policy or not; it is to
tighten up the policy and make sure it is updated and clear in terms of
what responsibilities are under that policy.
It is a reasonable request that they be given the opportunity to
address it. It is a very complex issue. We don't want to create onerous
requirements. These foreign students and scientists who come to America
make valuable contributions in many different ways. But we simply have
to exercise common sense and protect ourselves and go through an
appropriate process when it comes to deemed exports.
I am happy. I believe we have reached some agreement that we write
the administration and express generally those thoughts.
Could I get an amen on that?
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Madam President, again, I appreciate the care, concern, and
detail in which the Senator from Tennessee and the Senator from
Arizona, and others who have participated on this, have expressed their
concerns about the deemed export controls. We do recognize that the
problem is not primarily in the private sector; that it is primarily in
the government and educational and health institutions. The private
sector has some proprietary rights they try to preserve, but it would
be a problem there, too, and we wanted it addressed in all those
sectors.
Mr. THOMPSON. I thank the Senator.
The PRESIDING OFFICER. The Senator from Arizona.
Amendment No. 1529
Mr. KYL. Madam President, I have an amendment I send to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Arizona [Mr. Kyl] proposes an amendment
numbered 1529.
Mr. KYL. Madam President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 296, strike line 1 through line 7 and insert the
following:
``(3) Refusal by country.--If the country in which the end-
user is located refuses to allow post-shipment verification
of a controlled item, the Secretary may deny a license for
the export of that item, any substantially identical or
directly competitive item or class of items, any item that
the Secretary determines to be of equal or greater
sensitivity than the controlled item, or any controlled item
for which a determination has not been made pursuant to
section 211 to all end-users in that country until such post-
shipment verification is allowed.''
Mr. KYL. Madam President, let me explain what this amendment does and
indicate to my colleagues that I believe I have the concurrence of the
chairman of the committee and the ranking member of the subcommittee
and have met this morning with the ranking member of the Banking
Committee who worked out the language with us. In fact, much of this is
his language.
This is the amendment I spoke to yesterday regarding the post-
shipment verification that sometimes has to occur when we say, in the
granting of an export, we will grant the license to send the item
overseas but for a peaceful purpose, for a commercial purpose, or
research, or university, a business purpose; we don't want you to take
this item and put it in your defense facility or a nuclear weapons
facility, something of that kind. We are going to verify, after we ship
it, that it went to the right place.
Remember these are dual-use items. They have two different uses. They
may be very useful in a private way, business way. They may also be
useful in a military way. Let me give an example.
Not too long ago, some folks in Germany developed a very important
medical device called the lithotriptor which, with a high-energy beam,
literally zaps kidney stones so they break up into a million little
pieces and surgery is not necessary to remove them. It is a very
important medical treatment now for people. It is nonintrusive, no
surgery, and has a great success rate.
These are very sophisticated pieces of equipment. They have some
special switching components in them. It turns out that Iraq has found
that those switches are useful in their nuclear weapons program. This
is a good example of a dual-use item. It was not invented for defense
purposes. It has an item in it that can be used for weapons. We know
that. We don't want that item to be used for that purpose.
Saddam Hussein has ordered 50 of these. I don't think there is a need
for 50 lithotriptors in Iraq, frankly. We want to be careful about the
export of items that are available on the market. Any hospital can buy
a lithotriptor if they have enough money. They are available. By now I
am sure there are more companies than just the one German company that
make them. These are items that can be acquired. They have dual-use
capabilities.
In the granting of an export license on this kind of product, you
have to be careful that it is not used for military purposes.
It may be that the example I used isn't technically correct in the
way the bill would work, but I think I make my point.
The bill has a provision in it which says that if a company to which
you sell, let's say a company in China, uses this product improperly,
or they don't let you inspect to see where they have used it to verify
that the shipment went to where it was supposed to go, then the
Secretary shall cut that company off from further exports; they can't
buy anything else from the United States.
But since countries such as China have established a rather gray
relationship between the Government and businesses, there also needs to
be a way of making the same point with the Government of China or any
other government.
I am not trying to pick on China. There happen to be some very
egregious examples of the Government of China right now not living up
to agreements or post-shipment verification. We need to have some kind
of enforcement mechanism in a country such as China as well. I proposed
that we have the same kind of provision and say if the Chinese
Government won't permit a post-shipment verification, then the
Secretary shall stop such exports until
[[Page S9134]]
they begin to comply. Well, supporters of the bill said, ``That is too
drastic; why don't you say `may' so that the Secretary has total
discretion?'' I was willing to do that. That would have been the
simplest way to solve the problem.
That is something I would like to offer in the spirit of cooperation
with my friend Phil Gramm, who said, ``Let's try to work a few of these
things out; since we know the bill will pass, you can make it
marginally better.'' So we sat down with him. Frankly, the language we
are offering is not what I would have personally offered, but it is
acceptable to him and it marginally makes the bill better. I will read
it and offer it. It is simple. It says: If the country in which the end
user is located refuses to allow post-shipment verification of a
controlled item, the Secretary may deny a license for the export of
that item, any substantially identical or directly competitive item or
class of items, any item that the Secretary determines to be of equal
or greater sensitivity than the controlled item, or any controlled item
for which a determination has not been made pursuant to section 211 to
all end users in that country until such post-shipment verification is
allowed.
That latter reference to section 211 has to do with the item subject
to foreign availability. It would have been simpler to say the
Secretary may deny a license for any item on the list until post-
shipment verification is allowed by the country in question. Total
discretion of the Secretary would have been easier. We have created
jobs for lawyers now. I am not necessarily against that, but when we
have terms such as this in the statute, we are going to have litigation
on what it means. It would have been easier to do it the other way. But
this is the language I will offer. The Secretary, at least with respect
to some items on the control list, can say to a country such as China,
for example: Until you are willing to allow post-shipment verification
of items A and B, which you already have, then we are not going to
grant a license on items X, Y, and Z. They can pick what those items
are if they so choose.
In closing, I will give examples of what would happen to illustrate
the need for this particular provision. In 1998, very recently, China
agreed to allow post-shipment verification for all exports. They signed
an agreement. But the Cox Commission issued its report and deemed the
terms of the agreement wholly inadequate, from the U.S. point of view,
to ensure that these verifications really occur.
The amendment I proposed is designed to try to fill a void the Cox
Commission identified in the U.S.-China agreement. For example, the
Commission's report discusses a number of weaknesses in the agreement
as it relates to the export of high-performance computers. According to
the Bureau of Export Administration, out of 857 high performance
computers that have been shipped to China, only 132 post-shipment
verifications have been performed. Some of these have been outstanding
for a long time. First you get foot-dragging, and then you get a
``no.'' On other occasions they say: If you allow us to do the post-
shipment verification, that ought to suffice. But, of course, it does
not. These items would not necessarily be subject to the terms of this
section, although they might. I think it illustrates the nature of the
problem that exists if you don't have an enforcement mechanism. You
have to have the will to enforce.
I think there will be great questions as to whether or not the
Secretary, in the exercise of his discretion, is going to be willing to
deny a license to an American company which, after all, hasn't done
anything wrong and is simply trying to make a buck, in order to get
China to enforce the limitation. Let me respond to that point.
Any American company which understands that the item it is wanting to
export to a third-tier country, countries of concern here, has dual-use
capability has to exercise some responsibility. I think it has to take
some of the consequences of the person to whom it is exporting not
being willing to guarantee that the item is going to be used for
appropriate purposes.
So I don't think you can make the case that all we are doing here is
potentially punishing American businesses that are totally innocent and
therefore we should not really be very forward-leaning in the
enforcement of this section.
The fact is that any American business worth its salt should want to
ensure that the terms of the export license are being complied with. It
doesn't want to sell dual-use technology to a country that could use it
against us militarily. It ought to be willing to ensure that the
verification of the end user has in fact been established and enforced.
So it seems to me there is no argument that all we are doing here is
hurting American businesses. Any American business would have the same
interest as the U.S. Government in ensuring that the end user is in
fact who it is supposed to be, both from a national security standpoint
and being able to make future exports.
There has even been an idea advanced, that I think has some merit,
which would put all of the burden on American business. It would
basically privatize this enforcement and say the Government is going to
get out of this business; it cost a lot of money, and we have trouble
getting in the door to verify these things. Private industry, in
effect, has to certify that the item it sold abroad went to the user
that filled out on the form the certificate. And if the company isn't
willing to verify that, or isn't able to certify it under penalty of
some financial detriment here in the United States, then it is going to
become much more careful about to whom those items are sold and how the
post-shipment verification is actually implemented.
So my suggestion to American businesses is, if you really want to
continue to be able to export, then help us work out a system that
ensures that these items you are exporting, which have a dangerous
potential use, get to the proper people and are not misused. If you are
not willing to help us do this and if you are going to argue against
enforcement of a section such as this, then something worse could
happen. You could have the enforcement responsibility put on your
shoulders. And if you are not able to certify that it went to the right
place, you are not going to be able to make exports in the future.
Everybody should have an interest in making this work.
Let me close with a note about some testimony that verified the need
for this. David Tarbell, Deputy Under Secretary of Defense for
Technology Security Policy, testified in July at a hearing before the
House International Relations Committee regarding the right to perform
post-shipment verifications. He very diplomatically said:
The Chinese government has been unwilling to establish a
verification regime and end-use monitoring regime that would
get all of the security interests that we are interested in
to ensure that items that are shipped are not diverted.
Impressed further by Chairman Hyde about whether the post-shipment
verification regime is a failure, Secretary Tarbell delicately said:
I am not sure I would characterize it as a complete
failure, but it is close to it. It is not something I have a
great deal of confidence in.
The point here is to create something that we do have confidence in,
that we know would work, that we can enforce and ensure the safety and
security of the United States in the future, knowing we have not
allowed the wrong people to get the wrong things into their hands in a
way that comes back against the United States in a military way.
Therefore, I urge my colleagues to support the amendment I have
offered and which has the concurrence of Senators Gramm and Enzi and, I
believe, the Senator from Maryland, Mr. Sarbanes.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Again, we appreciate the participation in the 59 changes
before and now this change. It shows the level of detail in which
Senator Thompson and Senator Kyl have approached this bill. We
appreciate this change. We are willing to accept it.
The PRESIDING OFFICER. Is there further debate on the amendment?
The question is on agreeing to the amendment.
The amendment (No. 1529) was agreed to.
Mr. SARBANES. Madam President, I move to reconsider the vote.
Mr. GRAMM. I move to lay that motion on the table.
[[Page S9135]]
The motion to lay on the table was agreed to.
Mr. THOMPSON. Madam President, I ask the Senator from Maryland if we
may make a brief statement as to our understanding on the second letter
we have discussed. That will complete our business, I believe.
Mr. SARBANES. Certainly.
Mr. THOMPSON. Madam President, this has to do with commodity
classification. We have had some concern that when people in the
business of exporting items come into the Department of Commerce and
they get a different classification for a commodity--in other words,
something might be subject to license and they believe it should not be
subject to license anymore--they can come in and get that
consideration. That is appropriate. That needs to be done, but it needs
to be done in a manner which protects the Government and the country's
interest from a national security standpoint.
The executive branch has traditionally dealt with this issue through
interagency agreements. We think they need to be updated. The existing
agreement is 5 years old and needs to be updated to create an increased
role for the Departments of Defense and State.
Both the opponents and supporters of this legislation will send a
letter to the administration requesting the issuance of a new Executive
order on commodity classification to ensure the participation of the
National Security Agency. We believe that with regard to many of these
issues, as the administration is trying to staff up and with our
discussions with them and among each other, we have realized just how
outdated the existing agreement is. We are going to send a letter to
them to bring this to their attention further, and suggest they issue
an Executive order.
We assume this will be done in an appropriate manner, and we will not
have to take additional action. That option, of course, is always
there. Pending that, we think this is an appropriate way to proceed.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Madam President, I thank the Senator from Tennessee again
for his emphasis. It is important that there be updates on the
different procedures, particularly the ones that are done through memos
of understanding between the agencies.
We appreciate the willingness of the Senator from Tennessee to allow
that to continue to be done that way so there is more flexibility to
react to current crises under that kind of ability. We have prepared a
letter to that effect, and we will be sending it.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. THOMPSON. Madam President, one final note. We have had some
discussion in this Chamber concerning the possibility of an amendment
that would create a so-called blue ribbon commission to address
additional concerns as to how our export policies might be affecting
national security. I believe it is fair to say, not having heard from
my other colleagues on this issue, that we have not been able to reach
agreement with regard to that.
Without a doubt, we will continue to work together among ourselves to
try to agree on the composition of such a commission. I think we all
agree the concept is a good idea, and that we ought to take a long
impassioned look at what we are doing. We will continue to work on
that, but for right now I believe we can take that off the table.
That concludes our comments on the bill in terms of these amendments.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. SARBANES. Madam President, I thank the distinguished Senator from
Tennessee for his very positive and constructive contributions
throughout.
Amendment No. 1530
Mr. SARBANES. Madam President, I send a managers' amendment to the
desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The senior assistant bill clerk read as follows:
The Senator from Maryland [Mr. Sarbanes], for himself, Mr.
Gramm, Mr. Enzi, and Mr. Johnson, proposes an amendment
numbered 1530.
Mr. SARBANES. Madam President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 193, line 10, strike ``party'' and insert
``person''.
On page 193, line 16, strike ``party'' and insert
``person''.
On page 205, line 7, after ``competition'' insert ``,
including imports of manufactured goods''.
On page 222, line 6, strike ``Crime'' and insert ``In order
to promote respect for fundamental human rights, crime''.
On page 223, line 3, strike ``The'' and insert ``Except as
herein provided, the''.
On page 223, line 9, after the period, insert the
following: ``The provisions of subsection (a) shall apply
with respect to exports of any of the items identified in
subsection (c).''.
On page 223, between lines 9 and 10, insert the following:
(c) Report.--Notwithstanding the provisions of section 602
or any other confidentiality requirements, the Secretary
shall include in the annual report submitted to Congress
pursuant to section 701 a report describing the aggregate
number of licenses approved during the preceding calendar
year for the export of any items listed in the following
paragraphs identified by country and control list number:
(1) Serrated thumbcuffs, leg irons, thumbscrews, and
electro-shock stun belts.
(2) Leg cuffs, thumbcuffs, shackle boards, restraint
chairs, straitjackets, and plastic handcuffs.
(3) Stun guns, shock batons, electric cattle prods,
immobilization guns and projectiles, other than equipment
used exclusively to treat or tranquilize animals and arms
designed solely for signal, flare, or saluting use.
(4) Technology exclusively for the development or
production of electro-shock devices.
(5) Pepper gas weapons and saps.
(6) Any other item or technology the Secretary determines
is a specially designed instrument of torture or is
especially susceptible to abuse as an instrument of torture.
On page 226, line 8, insert ``and'' after ``title;''.
On page 226, strike lines 9 through 22 and insert the
following:
(ii) upon receipt of completed application--
(I) ensure that the classification stated on the
application for the export items is correct;
(II) refer the application, through the use of a common
data-base or other means, and all information submitted by
the applicant, and all necessary recommendations and analyses
by the Secretary to the Secretary of Defense, the Secretary
of State, and the heads of any other departments and agencies
the Secretary considers appropriate; or
(III) return the application if a license is not required.
On page 296, line 13, strike ``parties'' and insert
``persons.''
On page 296, line 11, after ``necessary'' insert ``, to be
available until expended,''.
On page 296, line 20, after ``necessary'' insert ``, to be
available until expended,''.
On page 297, line 20, after ``$5,000,000'' insert ``, to be
available until expended,''.
On page 298, line 12, after ``necessary'' insert ``, to be
available until expended,''.
On page 300, line 12, after ``$2,000,000'' insert ``, to be
available until expended,''.
On page 300, line 14, after ``$2,000,000'' insert ``, to be
available until expended,''.
On page 311, strike lines 2 through 4 and insert the
following:
``other export authorization (or recordkeeping or reporting
requirement), enforcement activity, or other operations under
the Export Administration Act of 1979, under this Act, or
under the Export''
On page 311, line 14, insert ``by an employee or officer of
the Department of Commerce'' after ``investigation''.
On page 315, strike lines 6 through 10 and insert the
following: (1), except that no civil penalty may be imposed
on an officer or employee of the United States, or any
department or agency thereof, without the concurrence of the
department or agency employing such officer or employee.
Sections 503 (e), (g), (h), and (i) and 507 (a), (b), and (c)
shall apply to actions to impose civil penalties under this
paragraph. At the request of the Secretary, a department or
agency employing an officer or employee found to have
violated paragraph (1) shall deny that officer or employee
access to information exempt from disclosure under this
section. Any officer or employee who commits a violation of
paragraph (1) may also be removed from office or employment
by the employing agency.
On page 315, line 11, insert the following:
SEC. 603. AGRICULTURAL COMMODITIES, MEDICINE, MEDICAL
DEVICES.
(a) Applicability of Trade Sanctions Reform and Export
Enhancement Act of 2000.--Nothing in this Act authorizes the
exercise of authority contrary to the provisions of the Trade
Sanctions Reform and Export Enhancement Act of 2000 (Public
Law 106-387; 114 Stat. 1549, 549A-45) applicable to exports
of agricultural commodities, medicine, or medical devices.
(b) Title II Limitation.--Title II does not authorize
export controls on food.
(c) Title III Limitation.--Except as set forth in section
906 of the Trade Sanctions Reform and Export Enhancement Act
of 2000, title III does not authorize export controls on
agricultural commodities, medicine, or medical devices unless
the procedures set forth in section 903 of such Act are
complied with.
[[Page S9136]]
(d) Definition.--In this section, the term ``food'' has the
same meaning as that term has under section 201(f) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(f)).
On page 318, on line 2, strike ``and''.
On page 318, on line 3, insert after ``(15)'' the
following: ``a description of the assessment made pursuant to
section 214, including any recommendations to ensure that the
defense industrial base (including manufacturing) is
sufficient to protect national security; and'' and
redesignate paragraph 15 accordingly.
On page 324, strike lines 1 through 4 and redesignate
paragraphs (14) and (15) accordingly.
Beginning on page 324, line 21, strike all through page
325, line 5, and insert the following:
(j) Civil Aircraft Equipment.--Notwithstanding any other
provision of law, any product that is standard equipment,
certified by the Federal Aviation Administration, in civil
aircraft, and is an integral part of such aircraft, shall be
subject to export control only under this Act. Any such
product shall not be subject to controls under section
38(b)(2) of the Arms Export Control Act (22 U.S.C. 2778(b)).
On page 325, between lines 5 and 6, insert the following:
(k) Civil Aircraft Safety.--Notwithstanding any other
provision of law, the Secretary may authorize, on a case-by-
case basis, exports and reexports of civil aircraft equipment
and technology that are necessary for compliance with flight
safety requirements for commercial passenger aircraft. Flight
safety requirements are defined as airworthiness directives
issued by the Federal Aviation Administration (FAA) or
equipment manufacturers' maintenance instructions or
bulletins approved or accepted by the FAA for the continued
airworthiness of the manufacturers' products.
On page 325, line 6, strike ``(k)'' and insert ``(l)''.
Mr. SARBANES. Madam President, the managers' amendment consists of
provisions intended to clarify, correct, and improve the bill.
Section 211: This provision amends the term ``interested party'' in
Section 211 (foreign availability and mass market status) to ensure its
consistency with terms used in the rest of the bill. Sections 205, 302,
and 307 all refer to ``interested person(s)''. The managers' amendment
corrects the references in Section 211 by replacing ``interested
party'' with ``interested person''.
Sections 214 and 701: This provision clarifies the duties of the
Office of Technology Evaluation. Section 214 of the bill establishes an
Office of Technology Evaluation to analyze information and provide
assessments for use in export control policy. The managers' amendment
clarifies that when assessing the effect of foreign competition on
critical US industrial sectors, the Office is to consider imports of
manufactured goods. It also modifies Section 701 (annual report) to
ensure that the Commerce Department's annual report to Congress
includes a description of such assessments. The managers worked closely
with Senator Hollings to include this provision.
Section 311: The next provision modifies Section 311 (crime control
instruments). Section 311 preserves authority contained in existing law
(Section 6(n) of the Export Administration Act of 1979) to ensure that
crime control and detection instruments and equipment may be exported
only subject to an export license. The managers' amendment further
provides that any item or technology that the Secretary of Commerce
determines is a specially designed instrument of torture or is
especially susceptible to abuse as an instrument of torture can be
exported only pursuant to an individual export license. In addition,
the Annual Report of the Bureau of Export Administration must describe
the aggregate number of licenses approved during the preceding calendar
year for the export of any such items by country and control list
number. This provision was included in the Managers Amendment at the
request of Senators Leahy and Biden.
Section 401: The next provision makes a technical correction to
Section 401 (export license procedures). Section 401 requires Commerce
to take four actions--hold incomplete applications, refer applications
to other agencies, confirm commodity classification, and return
application--at the beginning of the license review process. As
drafted, however, some of these actions are mutually incompatible (for
example, Commerce cannot hold an incomplete application while
simultaneously referring the application to another agency). The
managers' amendment revises the language to correct this inadvertent
incompatibility.
Section 506: This provision amends the term ``interested parties'' in
Section 506 (enforcement) to ensure its consistency with terms used in
the rest of the bill. Sections 205, 302, and 307 all refer to
``interested person(s)''. The managers' amendment corrects the
references in Section 506 by replacing ``interested parties'' with
``interested person''.
Section 506: The next provision makes technical amendments to Section
506. Sections 506(h), (i), (l), and (o) all contain funding
authorizations for personnel or activities of the Bureau of Export
Administration. The managers' amendment clarifies that the funding is
to remain available until expended.
Section 602: This provision clarifies a provision in Section 602
(confidentiality of information). Section 602 outlines the treatment of
confidential information obtained after 1980. The managers' amendment
clarifies that the provision applies to not only to information
obtained through license applications, but to information obtained
through enforcement activity or other EAA operations.
Section 602: This provision further clarifies Section 602
(confidentiality of information). Section 602 provides that information
obtained through licenses, classification requests, investigations,
treaty, or the foreign availability/mass-market process shall be kept
confidential unless its release is in the national interest. It goes on
to provide penalties against those who violate this prohibition. The
managers' amendment makes three changes: it (1) clarifies the
investigations referred to are those carried out by Department of
Commerce officials; (2) ensures that penalties on violators are imposed
with the agreement of the violators' employing agency; and (3) allows
violators to be denied further access to confidential information and
to be removed from office.
Section 603: The next provision adds a technical provision relating
to the Trade Sanctions Reform and Export Enhancement Act of 2000
(TSRA). TSRA established restrictions on sanctions dealing with
agricultural commodities, medicine, and medical devices. The managers'
amendment adds a new Section 603 that is intended to hold TSRA harmless
by (1) ensuring that no authority in this Act may be exercised contrary
to TSRA; (2) clarifying the limitations on national security controls;
and (3) clarifying the application of TSRA procedures to foreign policy
controls. Senators Roberts and Dayton were instrumental in crafting
this language, and worked with bill managers to perfect the text.
Section 702: This provision corrects a technical reference in Section
702 (technical and conforming amendments). As drafted, the reference
would have affected the Forest Resources Conservation and Shortage
Relief Act of 1990. The managers' amendment removes the reference and
thus any inadvertent impact on the Forest Resources Act.
Section 702: The next provision corrects a drafting error in Section
702 (technical and conforming amendments). Section 702(j) preserves
authority contained in existing law (Section 17(c) of the Export
Administration Act of 1979) to ensure that standard civil aircraft
products remain subject to the EAA. As drafted, Section 702(j)
inadvertently departed from current law by breaking the original
paragraph into subparagraphs. Because this structure could cause
confusion in interpretation, the managers' amendment returns the text
to its original structure.
Section 702: This provision addresses a humanitarian issue. U.S.
aircraft manufacturers cannot export critical aircraft safety parts to
countries subject to U.S. embargo. Without those parts, the planes may
crash, with terrible humanitarian implications. A presidential waiver
to export such parts is available, but is rarely invoked and takes
years. The managers' amendment provides that exports of civil aircraft
equipment to comply with flight safety requirements for commercial
passenger aircraft may be authorized on a case-by-case basis. Senators
Dodd, Bond, Murray, and Roberts expressed particular interest in
addressing this problem.
Mr. ENZI. Madam President, the managers' amendment to S. 149 adds a
new provision to address a pressing humanitarian issue: flight safety.
[[Page S9137]]
U.S. aircraft manufacturers have sold commercial passenger aircraft
internationally since the 1950s. Moreover, some European-made
commercial aircraft are made with U.S. components. As a result, U.S.
aircraft are used widely around the world.
The safe operation of these aircraft depends on the replacement of
worn parts, repair of unsafe components, and receipt of technical
bulletins and airworthiness directives. These parts, services, and
information are highly specialized, and often are available only from
the original manufacturer.
Over the years, several nations that operate U.S.-made aircraft, or
European-made aircraft that incorporate U.S. parts, have become subject
to U.S. embargo. As a result, U.S.-made aircraft items cannot be
exported to those countries. This poses a significant threat to the
safe operation of those airplanes. Without replacement parts, repair,
and technical information, the planes literally may fall out of the
sky, with terrible humanitarian implications for passengers and those
on the ground. We all remember with horror the terrible 1992 crash,
resulting from a failed part, of an El-Al plane into an Amsterdam
apartment complex. All 4 crew and an estimated 70 Amsterdam residents
were killed. The risks are real for U.S. citizens traveling to
embargoed countries, or making up part of United Nations delegations.
Citizens of U.S. allies are at risk. And not least of all, innocent
citizens of embargoed countries are particularly vulnerable.
Under current law, the administration has some flexibility to allow
flight safety exports to nations such as Sudan and Syria. However,
exports to Iran or Iraq require a presidential waiver--a process that
takes years and is rarely invoked. The difficulty of obtaining such a
waiver has meant that U.S. manufacturers cannot provide critical flight
safety parts or information to those nations.
The managers' amendment addresses this humanitarian issue while
retaining the integrity of the embargo. It provides that aircraft
equipment exports to comply with safety requirements for commercial
passenger aircraft may be authorized on a case-by-case basis. It is
tightly circumscribed: it applies only to parts for civil aircraft used
for commercial passengers, and it requires a case-by-case analysis.
Senators Dodd, Bond, Murray, and Roberts are keenly interested in
this provision and should be commended for addressing this critical
humanitarian problem.
Mr. SARBANES. Madam President, this managers' amendment has been
carefully worked over. I do not think there is any matter of
controversy in it. I am prepared to go to adoption of the managers'
amendment.
The PRESIDING OFFICER. Is there further debate? If not, the question
is on agreeing to amendment No. 1530.
The amendment (No. 1530) was agreed to.
Mr. SARBANES. I move to reconsider the vote.
Mr. GRAMM. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. SARBANES. Madam President, we are prepared to go to third reading
of the bill, and then there are going to be some comments. If we can go
to third reading of the bill.
Mr. THOMPSON. Madam 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. GRAMM. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRAMM. Madam President, I simply want to make a closing statement
on this important bill. I begin by thanking the chairman of the
committee, Senator Sarbanes, for his leadership, and Senator Johnson
for the work, they have done on the bill. I especially want to thank
Senator Enzi for his indispensable leadership on this bill; it is no
understatement to say that we would not be here today were it not for
Senator Enzi's leadership on this bill for the past two years.
I have had the privilege of serving in the Senate now going into my
18th year, and I have never seen a Senator do the things Senator Enzi
has done on this bill--in terms of being willing to meet the various
agencies involved in export administration, sitting for endless hours
and watching how the process works, and doing something we seldom do in
this line of work: learn how the process works practically. We are
often not willing to spend the time or get our hands dirty. The quality
of the bill before us is due in very large part to Senator Enzi, and I
want to publicly and personally thank him for his leadership. It sets a
new standard for what a Senator ought to be in terms of hard work
behind the scenes, getting the facts, understanding the mechanism. We
like to deal with theory and leave the practical matters up to somebody
else. That is not the way Senator Enzi does business.
I thank our two colleagues, Senator Thompson and Senator Kyl. Maybe
people listening to this debate wonder why I would thank them, given
that we have some fundamental disagreements, but good law is made by
basically trying to accommodate people who do not agree with you while
maintaining your principles. I think, quite frankly, they have improved
the bill.
Counting the two changes that Senator Sarbanes, Senator Enzi and I
agreed to this morning, we have made 61 changes in this bill in trying
to build a consensus. I believe the product we have produced is a
quality product, it will stand the test of time, and it will work.
The points I want to make are: In listening to some of the critics,
one may have gotten the idea that somehow this bill lessens our
commitment to national security. We have an apparent conflict in
America between our desire to produce and sell items that embody high
technology, and we want to produce and sell them because the country
that develops new technology creates new jobs and creates the best
jobs.
So, while we want to be the world leader in that technology, we have
a conflicting goal in wanting to prevent would-be adversaries and
dangerous people from getting technology that can be used to harm us or
to harm our interests. That is what this bill is about.
Today, 99.4 percent of the applications for a license are granted.
When a process is saying ``yes'' 99.4 percent of the time, it is a
nonsense process.
We have about 10 times as many items on this controlled list as we
should have. We need to build a higher fence around a smaller number of
items, and when people knowingly violate the law and transfer this
technology we ought to come down on them like a ton of bricks.
Under this bill, the penalties can run into the tens of millions of
dollars and people can end up going to prison for life. Those are
pretty stiff sentences.
We have put together an excellent bill. It represents a compromise
between two competing national goals. It is legislation at its best.
Many times we claim bipartisanship on bills when they really are not
totally bipartisan. This bill is about as bipartisan as anything we
have ever done on the Banking Committee since I have been in the
Senate, and I think it represents good law.
It is supported by the President. We have some 80 Members of the
Senate who have voted basically to maintain the position. I am very
proud of it, and I commend it to my colleagues. This is a good bill we
can be proud of.
I am ready to vote, and I yield the floor.
The PRESIDING OFFICER (Mr. Corzine). The Senator from Nevada.
Mr. REID. Mr. President, we are now in agreement on the unanimous
consent request I will now propound.
I ask unanimous consent that a vote on final passage of S. 149 occur
at 4:00 p.m. today, with rule 12, paragraph 4 being waived; that no
substitute amendments be in order; that the committee substitute
amendment be agreed to; the motion to reconsider be laid upon the
table, and that the time until 4:00 be divided between the majority and
minority for morning business, with the exception of 8 minutes prior to
the 4:00 p.m. vote, which would allow Senators Enzi, Gramm, Sarbanes,
and Thompson each to have 2 minutes prior to the vote.
The PRESIDING OFFICER. Is there objection?
Mr. THOMPSON. Reserving the right to object.
Mr. REID. If the Senator would withhold, our able staff indicated I
misread
[[Page S9138]]
this. It is right before my eyes, so if I could just repeat this.
The vote will occur at 4:00 p.m. today, with rule 12, paragraph 4
being waived; that no other amendments be in order; that the committee
substitute amendment be agreed to; the motion to reconsider be laid
upon the table; the time until 4:00 p.m. be divided between the
majority and minority for morning business, with the final 8 minutes
prior to 4:00 p.m. being allotted to Senators Enzi, Gramm, Sarbanes,
and Thompson each allowed to speak 2 minutes prior to the vote on the
bill.
Mr. THOMPSON. Mr. President, reserving the right to object, I do
believe it would be appropriate to divide the final few minutes equally
between the proponents and the opponents.
Mr. REID. That would be very fine. So what we say is 4 minutes for
the opposition and 4 minutes for those propounding passage of the
legislation be divided equally.
Mr. THOMPSON. Further, I want to take a few minutes right now in
morning business or as a part of this UC, either one.
Mr. REID. I say to my friend that will be certainly appropriate. We
will get this unanimous consent request agreed to and the Senator can
have lots of time. Senator Torricelli wants 15 minutes, but we will be
glad to wait until the Senator from Tennessee has completed his
statement.
Mr. THOMPSON. That is satisfactory to me.
The PRESIDING OFFICER. Is there objection to the request as modified?
Without objection, it is so ordered.
The PRESIDING OFFICER. The committee substitute, as amended, is
agreed to and the motion to reconsider is laid upon the table.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
Mrs. FEINSTEIN. Mr. President, I rise today in support of the Export
Administration Act of 2001 and urge its passage.
Congress has not reauthorized the Export Administration Act on a
permanent basis since 1990, and for close to a decade the export of
dual-use goods--items with both civilian and possible military
applications--have been governed in an ad hoc way by the President
using Executive orders under the International Emergency Economic
Powers Act and without a comprehensive regime in place to monitor
exports.
Such an approach creates obvious problems in trying to assure that
the proper balance is struck between the need of U.S. businesses to be
competitive in the international economy and the need to prevent
sensitive technologies that have military applications from falling
into the wrong hands.
The Export Administration Act will allow the U.S. government to
effectively focus attention and exert control over sensitive
technologies that have military implications, improve the export
control process, and enhance national security.
The major provisions of the Export Administration Act of 2001 will:
Give the President the power to establish and conduct export control
policy, and direct the Secretary of Commerce to establish and maintain
the Commerce Control List of items that could jeopardize U.S. national
security and to oversee the licensing process for items on the Control
list.
Authorize the President to impose national security controls to
restrict items that would contribute to the military potential of
countries in a manner detrimental to U.S. national security, directing
the Secretary of Commerce, with the concurrence of the national
security agencies and departments, to identify items to be included on
a National Security Control List. This strengthens the hand of the
national security agencies in the export licensing process by giving
them for the first time a formal procedure by which to be involved in
this process.
Provide specific control authority based on the end-use or end-user
for any item that could contribute to the proliferation of weapons of
mass destruction.
Authorize the President to set aside ``foreign availability'' or
``mass-market'' determinations in the interests of national security,
and establish an Office of Technology Evaluation to gather, coordinate
and analyze information necessary to make to these determinations.
Establish procedures for the referral and processing of export
license applications, and establish an interagency dispute resolution
process to review all export license applications that are the subject
of disagreement.
Declare it U.S. policy to seek and participate in existing
multilateral export control regimes that support U.S. national security
interests, and to seek to negotiate and enter into additional
multilateral agreements. Given the wide availability of some of these
dual-use items, multilateral agreements are critical to assure that
they do not fall into the wrong hands.
Establish new criminal and civil penalties for knowing and willful
violations of the export procedures.
By streamlining and bringing transparency to the licensing process
this legislation, then, strikes a good balance between assuring that
the export licensing process is good for trade, the U.S. economy, and
jobs, and national security concerns.
This legislation is supported by the President and has been endorsed
by the Secretary of Defense, by the Secretary of State, and by the
President's National Security Adviser. It also has the support, I
believe, of the majority of my colleagues.
Mr. President, I urge the Senate to move forward with passage of the
Export Administration Act.
Mr. BINGAMAN. Mr. President, I rise today in strong support of S.
149, the Export Administration Act of 2001. From my perspective,
consideration of this legislation is long overdue. Congress has
extended the Export Administration Act on a temporary basis since 1984,
and in doing so has completely ignored the extraordinary changes in
technology that have occurred in that timeframe. Current export control
policy, formulated during the Cold War several decades ago, no longer
fits either the current global context or our specific national
security needs. It is time to bring U.S. law into conformity with
international reality.
Over the past year I have been involved in two high-level advisory
panels that have carefully examined the existing U.S. export control
regime. The first was a study group focusing on Enhancing Multilateral
Export Controls for U.S. National Security, and was sponsored by the
Henry L. Stimson Center and the Center for Strategic for International
Studies. The second consisted of two study groups, one on Technology
and Security in the 21st Century and one Computer Exports and National
Security, sponsored entirely by the Center for Strategic for
International Studies. Each of these groups concluded that existing
export control policy and procedures are outdated, unsound,
ineffective, unrealistic, and counterproductive. Taken as a whole, they
impede coordination between the U.S. government agencies responsible
for export control policy, they hinder our efforts to cooperate with
our most important allies, they ignore the new threats and
opportunities in the international system, they expend significant
human and financial resources insulating easily available technologies,
they limit the ability of our best companies to innovate and compete
and, in the final analysis, they harm our military and commercial
national security interests.
The studies I have mentioned offered a range of extremely important
policy recommendations, but fundamental to them are three important
overarching conclusions, all of which are relevant to the debate at
hand.
The first conclusion is that globalization has resulted in what the
Defense Science Board has previously called a ``leveling'' of access to
technology and the capacity of the United States to obtain and control
technologies critical to its national interest. This concept suggests
that access to commercial technology is now universal, and its use for
both commercial and military ends is largely unconstrained. Enabling
technologies necessary for modern warfare, examples being
semiconductors, computer hardware and software, simulation and
surveillance devices, advanced telecommunications, and so on, are
available to nearly any country that wishes to access them, ally and
adversary alike. The result of these changes is an export control
regime that is, to quote the Defense Science Board, ``for all practical
purposes ineffective at manipulating global access to dual-use
technology and . . . only marginally more successful in the
conventional
[[Page S9139]]
weapons arena.'' This is the context within which we debate export
control reform today, and these are the changes that the proposed
legislation is trying to address.
The second overarching conclusion is that is that we need to put
higher fences around much smaller, but more critical, sets of
technologies. Because access to advanced technology and technical
capabilities have spread so widely and because research and development
is now global in nature, it is time that we focus our efforts at export
control on limited technologies that directly affect our national
security. In particular, we should concentrate on protecting and
developing the software and databases that sustain and strengthen our
military superiority. The primary objective in the current export
control regime is to prevent potential adversaries from obtaining
technological components that would allow them to develop weapons
systems and manage warfare in a more effective fashion. Unfortunately,
this objective is still considered rational, this in spite of the
radical changes that have occurred in the international political
economic environment. Commercial computers that can be obtained online
or through retail outlets can now perform the vast majority of
battlefield applications. As a result, a coherent and compelling
argument can be made that we need to concentrate on controlling the
technologies that will allow advanced components to be integrated into
effective systems. This should be one of our primary considerations as
we reconsider export control, and this is one of the goals the proposed
legislation is trying to achieve.
The final overarching conclusion is that it is time that we begin
creating a new international framework that will allow more effective
export control between the United States and its allies. Changes in
advanced technology and the global environment has undercut or weakened
existing agreements, and we must begin creating a foundation upon which
new cooperative mechanisms can be established. In the recent past, much
of this required change has been blocked by the United States, the
primary reason being that its export control system was based on
measures, computer MTOPS being the most salient example, that are no
longer relevant in the current international environment and are not
adhered to by our allies. Regulatory reform in the United States must
occur before new international frameworks can be established, and this
is one of the goals the proposed legislation is trying to address.
There are those among my colleagues who would argue that even if the
international system has changed to this extent, even if globalization
has changed the international equation, the United States has a moral
obligation to limit access to certain key technologies for a specific
group of countries. The example used most frequently on the Senate
floor is China, but certainly other countries could be inserted in its
place.
Let me state here that I would not disagree that certain countries
should be singled out as potential threats to the United States and
technology limited to the extent that it is feasible to do so. But the
proposed legislation accomplishes this objective. The arguments on the
Senate floor that the proposed legislation somehow diminishes our
capacity to control sensitive and critical technologies is specious at
best. On the contrary, many levels of restrictions remain in place to
protect U.S. national security interests. What the proposed legislation
does do is provide the U.S. government with the flexibility and focus
to address concerns over advanced technology and adapt to changes in
the current international environment.
It is time that we change our anachronistic system of export control.
This legislation reflects several years of hard work on the part of my
colleagues, and I believe it represents a balanced and strategic
approach to the problems at hand. The legislation was voted out of the
Banking Committee by a 19-1 vote. As the statements on the floor will
attest, the legislation has the bi-partisan support of most of the
Members of the Senate. President Bush supports it, as does all the
relevant officials in his Administration. President Clinton supported
it, as did all the relevant officials in his Administration. It is
supported by a broad range of organizations, many of which are led by
key officials from previous Democratic and Republican Administrations.
However, with that said, I find it disappointing that the legislation
has not addressed the important issue of U.S. commercial satellites and
space-related component exports. The Defense Authorization Act for FY
1999 moved responsibility for export licensing of these items from the
Department of Commerce to the Department of State. By doing so,
communications satellite and space-related items were placed on the
U.S. Munitions List, effecting a crippling blow to the U.S. aerospace
industry. It makes timely deliveries to overseas customers and our
allies nearly impossible, and excludes commercial satellite sales from
competitive rate financing offered by the Export-Import Bank. While our
U.S. companies may find themselves hard-pressed to find institutions to
provide reasonable financing for foreign customers, their competitors
may not. Last year, the Aerospace Industries Association claimed
satellite exports had fallen over 40 percent in the period from late
1999 to early 2000, and the forecast was for the trend to get
continually worse. I certainly hope this issue is addressed in the
upcoming conference.
We have examined the issue of export control many times over. It is
time to recognize the importance of export control reform to the
national interest of the United States and pass this legislation.
Mr. LEAHY. Mr. President, I want to express my support for S. 149,
the Export Administration Act of 2001. I want to commend Senators
Sarbanes, Gramm, Johnson, and Enzi for crafting a balanced, bipartisan
bill that brings long-overdue clarity to the regulation of dual-use
exports. This bill removes several unnecessary restrictions on exports
that only hinder international trade, puts in place a system to track
and license those technologies that have the potential to impact
national security, and establishes realistic penalties and sanctions
for violations of these regulations.
I am pleased that the managers of the bill have accepted the
amendment that Senator Biden and I proposed that will place controls on
the export of items that are used to perpetrate acts of torture. The
``torture trade'' is a critical problem that has received too little
attention from policymakers, the public, and the press. Too often,
companies have exported items, apparently designed for security or
crime control purposes, that are actually used to torture people by
some of the most inhumane methods imaginable. Amnesty International
reports that, over the past decade, more than 80 U.S. companies have
been involved in the manufacture, marketing, and export of these types
of items, like thumbscrews and electro-shock stun belts, which have
been used to commit human rights abuses around the world.
The Leahy-Biden amendment is a modest step to improve the
transparency, oversight, and accountability associated with the trade
in these items. It builds on existing regulations and requires a
license, subject to the approval of the Secretary of Commerce and the
concurrence of the Secretary of State, before such items can be
exported. It also contains an annual reporting requirement to disclose
the aggregate number of licenses to export these items that were
granted during the previous year.
This amendment is designed to make sure that certain goods and
technologies are not used to commit acts of torture and other human
rights abuses. While our amendment moves us in the right direction, I
recognize that more can and should be done. Representatives Hyde and
Lantos have included an amendment in their version of the bill which
contains additional protections that could be very helpful in
curtailing the torture trade. I strongly urge the conferees to take a
serious look at the Hyde-Lantos amendment when determining the final
outcome of the Export Administration Act.
Finally, I believe that the Administration should work with other
nations to develop strict standards of export controls for these items.
I understand that the European Union is in the process of doing this,
and our government should encourage and support that effort.
Mr. FEINGOLD. Mr. President, I will oppose the pending legislation to
reauthorize the Export Administration Act.
[[Page S9140]]
I agree with the bill's proponents and with the Administration that we
should have a statutory export control process. I am concerned,
however, that the process provided for in this legislation is far too
relaxed and could be harmful to our national security--the very
security that the EAA is supposed to protect.
I commend the Senator from Tennessee, Mr. Thompson, and the Senator
from Arizona, Mr. Kyl, for their leadership on this important issue.
It is troubling that the debate on this important piece of national
security legislation has revolved around what is good for American
business rather than on what is necessary to protect the national
security interests of this country.
As a number of our colleagues have said during this debate, the
purpose of the EAA is not to promote U.S. exports. The purpose of the
EAA is to protect the national security of the United States, which may
mean barring certain types of sensitive technology from being exported.
I fear that this bill tips the scale dangerously in favor of expanded
commerce at the expense of our national security.
I disagree with the argument put forth by some during this debate
that the foreign availability and mass market provisions included in
this bill are key to ensuring that American companies can compete in
the foreign market. Just because other countries choose to make a dual-
use product available to international buyers does not mean the United
States should as well. We should do everything we can to stem the flow
of potentially dangerous dual-use technology around the world. We
should not use the questionable export decisions of other countries to
justify selling products that could be used to harm our country.
There is nothing wrong with having a deliberative process for
considering applications to export dual-use technologies. I disagree
with the contention that so many in the affected industries have
advanced--that the licensing process puts them at a disadvantage
because they have to wait for the licensing process to be completed
before they can export the technology. This is not a race. And the
object of the EAA is not to unduly delay the approval of export
licenses. We should consider carefully each license application. I fear
that this bill, and in particular its provisions regarding mass market
and foreign availability determinations and the export of high
performance computers, will have the practical effect of rendering our
export control process meaningless.
Supporters of this bill argue that American businesses need the
relaxed controls included in this bill in order to compete in the
international marketplace. That is not the case. The vast majority of
export license applications submitted to the Department of Commerce are
approved. The purpose is to ensure that sensitive technology does not
fall into the wrong hands.
Other countries look to the United States for guidance on such issues
as export controls and non-proliferation efforts. If we relax controls
on dual-use items because other countries are selling them, we are
following, not leading. Just last week, the United States imposed
sanctions on a Chinese company that transferred missile technology to
Pakistan. The administration reportedly has told the Chinese Government
that one of the conditions to having these sanctions lifted is for the
Chinese to develop a system of export controls to regulate the transfer
of sensitive technology. It is curious that the Senate is debating
relaxing U.S. control of dual-use technology--a move the administration
supports--at the same time the administration is calling on the Chinese
Government to implement export controls.
I think we have to examine closely all sides of this issue, and again
I want to thank Senator Kyl and Senator thompson for the outstanding
work they have done to bring concerns about this legislation to the
fore.
The fact is that there is a great deal of pressure from the super
computer industry to pass this legislation. I don't say that to impugn
the motives of any Member who supports this bill, because we are having
an honest debate here about different points of view. But I do think
it's important for the American people to understand who some of the
strong supporters of this legislation are, so I would like to take a
moment to Call the Bankroll on this issue.
The computer industry has a huge stake in the passage of EAA. They
want a relaxation of the export controls on supercomputers, and they
are lobbying hard for their cause. And, as is usually the case,
lobbying means donating big money, and that means donating soft money
to the party committees. In this case, the computer industry gave $20.5
million in soft money during the 2000 election cycle. The industry
ranked seventh in overall donations in the last cycle, a meteoric rise
for an industry that ranked 55th in donations a decade earlier. This is
clearly an industry that has learned how to play the soft money game,
and play it well.
I'll just name three soft money donors in the industry who are
pushing for passage of EAA:
Unisys Corporation and its executives gave more than $142,000 in soft
money in the 2000 election cycle;
Sun Microsystems gave more than $24,000 in soft money during the last
cycle; and
United Technologies and its subsidiaries gave a whopping $338,300 in
soft money in the 2000 election cycle.
As I said, this is in no way a comprehensive list, since the industry
gave more than $20 million in soft money during the last cycle. But I
point out these donations now because they are relevant to this
debate--and relevant to the way many Americans view this debate, and so
many others like it here on the Senate floor.
When wealthy interests are allowed to give an unlimited amount of
money to a political party, it makes the American people question us
and the work we do. And I can think of few issues where the public
might be more disturbed by the potential influence of soft money than
an issue like this one, where national and international security are
at stake. Whether or not soft money clouds our own judgment, it clouds
the public's judgement of each and every one of us.
I want to reiterate my opposition to this legislation. We can and
should do more to protect the national security interests of the United
States.
I will vote against this bill, and I urge my colleagues to do the
same.
Mr. BIDEN. Mr. President, it has been 16 years since the United
States Congress last enacted re-authorizing legislation governing our
controls on the export of dual-use technology, those items suited for
both civilian and military uses. For much of the past 7 years, the
President has been forced to exercise emergency powers to maintain
dual-use export controls following the expiration of the 1979 Export
Administration Act. This temporary exercise of authority has limited
the penalties the Federal Government can enforce on export control
violators and has opened up existing export controls to a series of
legal challenges.
It is high time, therefore, that the Senate act on S. 149, a bill to
re-authorize the Export Administration Act. I look forward to the
passage of this bill and the creation of a modern system of export
controls.
We owe this to U.S. companies, which deserve a rational and
predictable framework of export controls. We owe this to our friends
and allies, who look to the U.S. export control system as a model in
devising their own systems. And, most importantly, we owe this to our
national security, we cannot rely forever on an ad hoc system that
metes out insufficient penalties and is based on shaky legal ground.
Export controls exist, first and foremost, for reasons of national
security. The United States must not export items when the item or the
end-user may contribute to the proliferation of weapons of mass
destruction, strengthen the military capabilities of those who would
oppose us, or otherwise endanger U.S. national security. A
comprehensive export control system is just as important to preserving
America's freedom and security as a strong military.
But export controls also exist to facilitate the free trade of goods
and services, an essential building block of our international economy.
The future growth of our economy and a leading global role for U.S.
industry require a vital export market.
I think all of us can agree that national security considerations
must always come first in devising export controls. We can all agree
that such controls should not be so arbitrary as to
[[Page S9141]]
stifle legitimate trade. We may differ, however, on where we draw the
line in balancing these two opposing considerations.
Export controls can also serve another purpose. They can help
reaffirm America's global leadership on human rights. Let me take this
opportunity to commend Senators Sarbanes and Enzi for accepting an
amendment proposed by Senator Leahy and me in this regard. The
managers' amendment to S. 149 will tighten the controls on the export
of items expressly designed for torture or especially susceptible to
use in torture.
We are talking about items such as stun guns and shock batons, leg
cuffs and restraint chairs. Yes, some of these items can have
legitimate law enforcement uses and are in fact employed in a manner
that does not abuse human rights. That is why this amendment would
continue to allow their export, but make them subject to the licensing
process and require the specific concurrence of the State Department as
well as the approval of the Commerce Department.
The items covered by this amendment are devices that governments
around the world too often use in suppressing political dissidents and
ethnic opposition. This amendment requires the U.S. government to
license each and every export of such items. It will help ensure that
the United States does not indirectly contribute to the torture of
individuals by engaging in the unlicensed trade of items used for
torture. It is my hope that the Commerce and State Departments, working
together, will see to it that licensed exports of these items are
permitted only to those countries whose governments carry unblemished
human rights records.
I once again thank Senators Sarbanes and Enzi for accepting this
amendment, and especially Senator Leahy, who is once again a champion
of human rights and with whom I am always delighted to work.
During this debate, a group of Senators, led by my good friends
Senator Thompson and Senator Kyl, has led an intense effort against S.
149. They argue that this bill fundamentally favors commercial equities
over our national security interests. They are skeptical that the
Commerce Department, which is responsible for cultivating U.S. business
interests around the world, can play an impartial role in weighing
national security considerations.
Truth be told, I have shared some of their concerns. That's why I am
pleased that the floor managers have reached a compromise with Senators
Thompson and Kyl. This compromise includes amendments to S. 149 to: 1.
enhance the discretionary authority of the Commerce Department to deny
export licenses to another country when it is blocking legitimate post-
shipment verifications of sensitive exports and 2. tighten the
definition of foreign availability determinations which can exempt
items from export controls. These changes to S. 149 approved today
offer real improvements to this bill.
I plan to vote for S. 149. On the whole, this bill takes the right
steps to bring our export controls for dual-use technologies into the
21st century. Is it a perfect bill? No. The House International
Relations Committee, in marking up this bill last month, approved
dozens of amendments, on a bipartisan basis. I would hope, therefore,
to see further improvement of this bill in conference.
But now is not the time for delay on S. 149. The Senate has a duty to
pass this legislation and to restore stability and predictability to
our export control system for sensitive dual-use technologies.
Mr. WARNER. Mr. President, I rise today to address an issue that is
critical to the national security of our Nation: the adequate control
of the export of sensitive technologies. I have been active in this
debate for the past 2 years, together with Senators Helms, Shelby,
McCain, Thompson, and Kyl. We have worked with our colleagues on the
Banking Committee, particularly Senators Gramm, Sarbanes, and Enzi, to
craft a bill that protects our Nation's security, while at the same
time allowing for appropriate commercial activity.
In April, I reluctantly objected to the motion to proceed to S.149,
the Export Administration Act. At that time, I thought it was premature
for the Senate to consider this bill until we had received detailed
information from the Administration on this issue. I believe the Senate
is now in a position to act on this important legislation.
I have tried for the past 2 years to work in a conscientious way with
all parties to resolve the differences over this legislation. These
differences have cut to the very essence of how the United States plans
to protect its national security in an era of rapid globalization and
proliferation of technology.
My goal in this debate has been to strike the proper balance between
national security and commercial interests. As we all know, the high
tech industry in the United States is currently second to none. We must
ensure our domestic industry remains competitive without limiting
access to new markets. Considering the rate at which technology becomes
obsolete, being the first to deliver a product to a market is crucial.
And while we cannot completely abandon national security concerns in
favor of industry, we must not unnecessarily hinder the ability of our
high tech companies to compete on the world stage. That is what I
believe we have accomplished with this bill.
This is a complicated issue that cuts across the jurisdiction of six
Senate Committees. Five Committee Chairmen with responsibility for
national security matters in the U.S. Senate have continuously worked
to improve this bill--myself as chairman of the Armed Services
Committee, Senator Shelby of the Intelligence Committee, Senator
Thompson of the Governmental Affairs Committee, Senator Helms of the
Foreign Relations Committee, and Senator McCain of the Commerce
Committee. In addition, Senator Kyl has been a leading participant in
our discussions with the Banking Committee, the committee of primary
jurisdiction.
The higher penalties and increased enforcement authority, the
authority to require enhanced controls on items that need to be
controlled for national security reasons, the requirement for the
Department of Commerce to notify the Department of Defense of all
commodity classifications are examples of progress made on the national
security front.
I have great respect for the tireless efforts and dedication of my
distinguished Banking committee colleagues, Senator Gramm and Senator
Enzi, in creating the EAA of 2001. I thank them for meeting with me and
others several times throughout the past two years to listen to our
concerns with balancing national security matters with economic
interests. I hope these concerns will remain a priority for all of us.
In this year's version of the EAA, the Banking Committee has included
additional national security protections at the urging of the
administration. As the debate on these issues has shown, there were
concerns about the last administration's record in protecting some of
our vital technology. A new administration is able to look at old
problems with a fresh approach. It is in that context that the
administration reviewed this bill at the request of myself, Senators
McCain, Shelby, Thompson, Helms and Kyl. The National Security Advisor
and three cabinet Secretaries were intimately involved in this review.
As a result, the administration proposed a series of legislative
changes that the Banking Committee has included in the bill that
is before us.
Once these changes were made and the administration was actively
engaged on the issue, the question then became a technical matter of
how the administration would implement the statute. When the Senators
expressing concerns regarding this bill were briefed on the results of
the administration's review, we were informed that an interagency
agreement had been achieved on how the administration would enhance
national security controls during the course of implementing the EAA.
Under the administration's proposal, we were informed that some
national security protection that we had sought in the past would be
included in the executive order that implements S. 149. Thus began a
dialogue with the administration to come up with a better understanding
of how this bill would be implemented.
My past concerns with earlier versions of EAA were based on concerns
expressed by the Department of
[[Page S9142]]
Defense. Last year, DOD provided the Senate Armed Services Committee
with specific legislative changes that were necessary in their
judgement to fix last year's EAA bill. This included addressing issues
related to a national security carve-out or enhanced controls,
commodity classifications, the enhanced proliferation control
initiative, and deemed exports.
The Bush administration shares the concerns of the previous
administration but has chosen to pursue some needed changes
administratively. In this regard, I ask unanimous consent that a copy
of a letter I received from Secretary of Commerce Evans be made a part
of the legislative record. This letter provides some insight into the
administration's interpretation of the bill language and commits the
administration to implementing, for example, a ``disciplined and
transparent process for escalating and deciding disputes'' on commodity
classifications.
I am satisfied with the response that the administration has given me
that they can work within the confines of this statute to protect
national security. I trust that this administration will be able to do
so. The Congress will, however, need to provide diligent oversight to
ensure that this administration will conform to the high national
security standards that they have set for themselves. When the EAA
comes up for renewal in three years time, we may have to be more
stringent in putting explicit national security protections in statute
rather than leaving it to the discretion of the administration.
I want to thank my colleagues on the Intelligence, Foreign Relations,
Commerce and Governmental Affairs Committees. These Members have worked
over the last two years to improve this bill and ensure that our
national security interests are protected. I know the job isn't
finished yet. It has just begun and I will stand with my colleagues to
ensure that our export control process is designed and operated to
ensure that weapons of mass destruction do not get into the wrong
hands.
It is time for the Congress to act on this bill. There is a need to
reauthorize the EAA. The national security protections such as the
national security carve out, increased penalties for export control
violations, and greater visibility for the DOD over commodity
classifications are positive steps. We need to lock in these
improvements and work to ensure that nonproliferation concerns are
protected and strengthened and that vital technology is protected. And
we need to allow our domestic industry to compete in the world market
without unnecessary and outmoded restrictions.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Secretary of Commerce,
Washington, DC, July 31, 2001.
Hon. John Warner,
U.S. Senate,
Washington, DC.
Dear Senator Warner: In light of our mutual interest in the
Export Administration Act of 2001 (S. 149), I would like to
address several issues related to S. 149 that I understand
were raised by your staff in a recent discussion with
Administration officials.
As you know, the Administration carefully reviewed S. 149.
As a result of that review, the Administration recommended a
number of amendments to the Senate Committee on Banking,
Housing and Urban Affairs which were incorporated into the
bill. Accordingly, the Administration strongly supports S.
149. We believe that the bill provides the proper framework
for regulating the export of sensitive items consistent with
our national security, foreign policy, and economic
interests. For your convenience, I have enclosed an analysis
that addresses in detail the issues raised by your staff.
I also understand that your staff asked about the
Department's response to a recent report by the General
Accounting Office (GAO) regarding controls on exports to
Canada of items that could contribute to missile
proliferation. The Department will shortly issue a proposed
rule amending the licensing requirements applicable to
exports to Canada. This new rule will address the issue
raised by the GAO.
I appreciate your continued interest in the Export
Administration Act of 2001. I look forward to working on the
passage of this bill to ensure that the protection of
national security is given the highest priority in the dual-
use export control system process.
If you have any further questions, please call me or Brenda
Becker, Assistant Secretary for Legislative and
Intergovernmental Affairs, at (202) 482-3663.
Warm regards,
Donald L. Evans.
Enclosure.
____
Administration View on National Security Aspects of S. 149
The Administration supports S. 149 because it sustains the
President's broad authority to protect national security. S.
149 actually provides greater authority for the President to
control dual-use exports than current law, the Export
Administration Act of 1979 (EAA). S. 149 significantly raises
the penalties for export control violations and contains
other provisions that enhance the U.S. government's ability
to enforce the law effectively. Higher penalties and
increased enforcement authority will deter those who might
otherwise endanger U.S. national security through illicit
exports.
foreign availability/mass market and parts and components
The bill does give exporters the right to ask the
government to determine whether items are foreign or mass
market available. However, the bill also gives the President
several ways to continue controls on such items, if
necessary, for national security reasons. In addition, S. 149
provides more authority than the existing law to require
enhanced controls on such parts and components as needed to
protect national security.
role of department of defense and other departments
The bill provides a significant role for the Department of
Defense in the licensing process, including:
--giving the Secretary of Defense concurrence authority in
identifying items to be controlled for national security
reasons. This is a greater role than Defense has under
existing law because the scope of the national security
control list under the bill is significantly greater than
under current law.
--requiring the Secretary of Commerce to refer all license
applications to the Secretaries of Defense and State for
their review and recommendations. The bill also authorizes
all reviewing departments, for the first time in statute, to
escalate a proposed licensing decision to the President.
--requiring the Department of Commerce, for the first time
in statute, to notify the Department of Defense of all
commodity classification requests.
--requiring the Department of Commerce, for the first time
in statute, to fully consider any intelligence information
relevant to a proposed export when considering a license
application.
--enabling the President to continue the longstanding
procedure whereby the Office of Management and Budget ensures
the concurrence of the Departments of State and Defense, and
other agencies as appropriate, on regulations issued by
Commerce pursuant to the act. This procedure allows the
Departments of State and Defense to concur on regulations
affecting their interests without requiring concurrence on
regulations those departments may not wish to review.
--continuing the President's authority to require a license
for transfers of controlled items to foreign nationals within
the United States and requiring State and Defense's
concurrence on such licenses.
Regarding restrictions on the President's delegation of
authority, such restrictions are limited and apply only to
those areas not appropriately delegated to any one agency.
Restricting decisionmaking authority to the President, in
these very limited circumstances, ensures that all
interests--including national security--will be fully
considered.
As officials from the Departments of State and Defense
testified at the House International Relations Committee on
July 11, the provisions of S. 149 protect the President's
authority to safeguard U.S. national security.
proposed executive order
Interagency review of export license applications is
conducted under Executive Order 12981, as amended. Under this
executive order, the Departments of Defense, State and Energy
have the right to review all license applications submitted
to the Department of Commerce. The only applications that
these departments do not review are those they choose not to,
such as applications to export crude oil.
S. 149 partially codifies Executive Order 12981 and
provides the Administration the flexibility to structure an
appeals process that will preserve the existing authorities
of both the Departments of Defense and State. For example,
the current executive order establishes an assistant
secretary-level interagency working group to hear appeals of
decisions made at lower levels. This group already is an
integral part of the licensing process and the Administration
plans to keep it so. Any new executive order promulgated
after the passage of a new EAA would not alter Defense's
current ability to review and object to license applications.
S. 149 also requires Commerce, for the first time in
statute, to notify Defense of all commodity classification
requests Commerce receives. The Administration has committed
to implement by executive order a process by which all these
commodity classification requests will be reviewed by
Defense, with a disciplined and transparent process for
escalating and deciding disputes. The Administration will
brief Congress about all of the processes provided for in S.
149 as they are implemented.
Mr. SHELBY. Mr. President, I rise today in order to reiterate my
concerns over the Export Administration Act of 2001.
There is little doubt that this bill will pass. The writing is on the
wall.
[[Page S9143]]
However, with all due respect to the administration and to my
colleagues on the Banking Committee, I have and will continue to oppose
S. 149.
Neither I nor Senators Thompson, Kyl, Helms or McCain desire to
impede American business entities in their pursuit of new markets. I
for one tend to agree with President Calvin Coolidge, who said that,
``The chief business of the American people is business.'' Every
Senator here today is an advocate for enhanced trade and for helping
U.S. industry to export its goods and services. Exports bring
prosperity to this Nation's companies and work to its citizens. If my
advocacy for the U.S. technology industry were the sole basis upon
which my decision on this legislation was to be based, I could easily
change my past position and support passage of the Export
Administration Act, or EAA as it is known. However, the other basis
upon which the EAA should be measured is its effect upon the national
security of the United States.
Earlier this summer, I was inspired when I listened as one of my
colleagues, who had not previously supported my position on the EAA,
publicly and emphatically stated, and I paraphrase, that when it comes
to the difficult question of promoting trade or preserving national
security, we must err on the side of national security.
That balance is the crux of this week's debate. We should not support
a measure that could, as written, result in harm to Americans by
technology developed and sold by Americans.
The pending bill addresses the control of ``dual use'' technology,
that is, technology that has both commercial and military applications.
Most commonly, our current export controls entail a licensing process
for the export of most dual use technologies. Rather than prohibit
exports outright, we generally ensure that we can determine which
countries are receiving technology and keep track of anomalies in
exporting so that we can measure whether technology is being put to
military use. The EAA also regulates which countries will be permitted
to import U.S. dual-use technologies. Generally, U.S. companies are not
permitted to export dual use products to countries like Iran and Iraq.
This bill is an attempt to rewrite our export control laws to make
them more rational. I too believe that this nation needs new export
laws to meet today's trade realities. However, this effort must not
open the floodgates for our dual use technology to be exported, without
the ability for the U.S. Government to follow where that technology
goes and its ultimate application.
For an export control regime to function properly, it must provide
for a balancing of the commercial benefits involved--which are
generally obvious, easily-quantified, concentrated, and immediate--with
the national security concerns, which are typically shrouded in
secrecy, difficult to quantify, diffuse, and long-term in nature. In
this equation, national security can easily get the short end of the
stick.
Not everything is shrouded in secrecy. In accordance with Section 721
of the 1997 Intelligence Authorization Act, twice a year the Director
of Central Intelligence submits a report on trends in the proliferation
of weapons technologies. Part of the report is unclassified. The report
identifies key suppliers of dual use missile, nuclear, and conventional
arms technologies, as well as dual-use biotechnology and chemical
technology. Nations such as China and Russia are identified as key
suppliers. They export their technology to the likes of Iraq, Iran,
Libya, Syria, Sudan, Pakistan and India. The report received last
winter detailed a continuing and significant problem.
Regarding Iran, the report states, and I quote:
Tehran expanded its efforts to seek considerable dual use
biotechnical materials, equipment, and expertise from
abroad--primarily from entities in Russia and Western
Europe--ostensibly for civilian uses. We judge that this
equipment and know-how could be applied to Iran's biological
warfare program. Outside assistance is both important and
difficult to prevent, given the dual-use nature of the
materials, the equipment being sought, and the many
legitimate end uses for these items.
Regarding Iraq, the report indicates that Saddam Hussein is utilizing
all means to acquire dual-use technology. The report states:
Iraq has attempted to purchase numerous dual-use items for,
or under the guise of, legitimate civilian use. This
equipment, in principle subject to UN scrutiny, also could be
diverted for weapons of mass destruction purposes. In
addition, Iraq appears to be installing or repairing dual-use
equipment at chemical weapons related facilities.
With respect to India, ``India continues to rely on foreign
assistance for key missile and dual-use technologies where it still
lacks engineering or production expertise in ballistic missile
development.'' The report goes on to cite Russia and Western Europe as
the primary conduits of India's missile related technology.
As stated in the Report, Pakistan received significant assistance
from Communist China for its ballistic missile program in the early
part of last year. As recently as this past weekend, the administration
was forced to impose sanctions on the China Metallurgical Equipment
Corporation for selling missile technology to Pakistan. The corporate
entity in Pakistan which received the technology was also sanctioned. I
know this has been and continues to be an issue of great concern to
Senator Thompson. I commend him for his efforts to publicize Communist
China's blatant disregard for its pledge not to support foreign nuclear
missile programs.
The report did contain one note of optimism, which I believe is also
directly applicable to today's debate. Nations such as Libya and Iran
continued to attempt to acquire needed materials for weapons of mass
destruction in Western Europe. They had some success in the first half
of 2000, but the CIA report states that, ``Increasingly rigorous and
effective export controls and cooperation among supplier countries have
led the other foreign WMD programs to look elsewhere for many
controlled dual-use goods.'' The point is, that while we cannot stop
all proliferation, a rigorous export control regime can be effective in
diffusing the spread of potentially threatening dual-use technology.
Mr. President, the problem is real. I believe it is a significant
statement when the Chairmen and now Ranking Members of the Senate Armed
Services Committee, the Foreign Relations Committee, the Intelligence
Committee, the Committee on Governmental Affairs and the Subcommittee
on Technology, Terrorism and Government Information, have serious
issues with the protections this legislation provides our national
security. I am deeply disappointed that the new administration was not
able to support reasonable amendments which would address the national
security equities which we have highlighted. I am concerned that the
interests of the high tech business community have replaced reasonable
consideration of our dual use export control regime.
Technologies which are exported today can and will have to be dealt
with by this Nation's national security apparatus. Consequently, I urge
my colleagues to support the amendments of Senators Thompson, Kyl,
Helms, and others, which will strengthen S. 149 with respect to
national security. They are only a handful of the changes which should
be made to this bill but they will serve to give the Defense Department
and the State Department a more level playing field in the export
control process from which to protect national security.
There is a proper balance between promoting business and preserving
the national security. This bill does not strike that balance. As a
conferee, I am hopeful that in conference, I can work with the members
of the House, especially Chairman Hyde and continue these efforts to
tilt the balance in favor of national security.
Mr. President, I ask unanimous consent to print in the Record
entitled ``Report to Congress on the Acquisition of Technology Relating
to Weapons
of Mass Destruction and Advanced
Conventional Munitions, 1 January through 30 June 2000.''
There being no objection, the material was ordered to be printed in
the Record, as follows:
Unclassified Report to Congress on the Acquisition of Technology
Relating to Weapons of Mass Destruction and Advanced Conventional
Munitions, 1 January Through 30 June 2000
The Director of Central Intelligence (DCI) hereby submits
this report in response to a Congressionally directed action
in Section
[[Page S9144]]
721 of the FY 97 Intelligence Authorization Act, which
requires:
``(a) Not later than 6 months after the date of the
enactment of this Act, and every 6 months thereafter, the
Director of Central Intelligence shall submit to Congress a
report on
(1) the acquisition by foreign countries during the
preceding 6 months of dual-use and other technology useful
for the development or production of weapons of mass
destruction (including nuclear weapons, chemical weapons, and
biological weapons) and advanced conventional munitions; and
(2) trends in the acquisition of such technology by such
countries.''
At the DCI's request, the DCI Nonproliferation Center (NPC)
drafted this report and coordinated it throughout the
Intelligence Community. As directed by Section 721,
subsection (b) of the Act, it is unclassified. As such, the
report does not present the details of the Intelligence
Community's assessments of weapons of mass destruction and
advanced conventional munitions programs that are available
in other classified reports and briefings for the Congress.
Acquisition by Country
As required by Section 721 of the FY 97 Intelligence
Authorization Act, the following are summaries by country of
acquisition activities (solicitations, negotiations,
contracts, and deliveries) related to weapons of mass
destruction (WMD) and advanced conventional weapons (ACW)
that occurred from 1 January through 30 June 2000. We
excluded countries that already have substantial WMD
programs, such as China and Russia, as well as countries that
demonstrated little WMD acquisition activity of concern.
Iran
Iran remains one of the most active countries seeking to
acquire WMD and ACW technology from abroad. In doing so,
Tehran is attempting to develop an indigenous capability to
produce various types of weapons--chemical, biological, and
nuclear--and their delivery systems. During the reporting
period, the evidence indicates reflections of determined
Iranian efforts to acquire WMD-and ACW-related equipment,
materials, and technology focused primarily on entities in
Russia, China, North Korea, and Western Europe.
Iran, a Chemical Weapons Convention (CWC) party, already
has manufactured and stockpiled several thousand tons of
chemical weapons, including blister, blood, and choking
agents, and the bombs and artillery shells for delivering
them. During the first half of 2000, Tehran continued to seek
production technology, training, expertise, equipment, and
chemicals that could be used as precursor agents in its
chemical warfare (CW) program from entities in Russia and
China.
Tehran expanded its efforts to seek considerable dual-use
biotechnical materials, equipment, and expertise from
abroad--primarily from entities in Russia and Western
Europe--ostensibly for civilian uses. We judge that this
equipment and know-how could be applied to Iran's biological
warfare (BW) program. Iran probably began its offensive BW
program during the Iran-Iraq war, and it may have some
limited capability for BW deployment. Outside assistance is
both important and difficult to prevent, given the dual-use
nature of the materials, the equipment being sought, and the
many legitimate end uses for these items.
Iran sought nuclear-related equipment, material, and
technical expertise from a variety of sources, especially in
Russia. Work continues on the construction of a 1,000-
megawatt nuclear power reactor at Bushehr that will be
subject to International Atomic Energy Agency (IAEA)
safeguards. In addition, Russian entities continued to
interact with Iranian research centers on various activities.
These projects will help Iran augment its nuclear technology
infrastructure, which in turn would be useful in supporting
nuclear weapons research and development. The expertise and
technology gained, along with the commercial channels and
contacts established--even from cooperation that appears
strictly civilian in nature--could be used to advance
Iran's nuclear weapons research and development program.
Beginning in January 1998, the Russian Government took a
number of steps to increase its oversight of entities
involved in dealings with Iran and other states of
proliferation concern. In 1999, it pushed a new export
control law through the Duma. Russian firms, however, faced
economic pressures to circumvent these controls and did so in
some cases. The Russian Government, moreover, failed to
enforce its export controls in some cases regarding Iran.
China pledged in October 1997 not to engage in any new
nuclear cooperation with Iran but said it would complete
cooperation on two nuclear projects: a small research reactor
and a zirconium production facility at Esfahan that Iran will
use to produce cladding for reactor fuel. As a party to the
Nuclear Nonproliferation Treaty (NPT), Iran is required to
apply IAEA safeguards to nuclear fuel, but safeguards are not
required for the zirconium plant or its products.
Iran claims that it is attempting to establish fuel-cycle
capabilities to support its civilian energy program. In that
guise, it seeks to obtain turnkey facilities, such as a
uranium conversion facility that, in fact, could be used in
any number of ways to support fissile material production
needed for a nuclear weapon. We suspect that Tehran most
likely is interested in acquiring foreign fissile material
and technology for weapons development as part of its overall
nuclear weapons program.
During the first half of 2000, entities in Russia, North
Korea, and China continued to supply the largest amount of
ballistic missile--related goods, technology, and expertise
to Iran. Tehran is using this assistance to support current
production programs and to achieve its goal of becoming self-
sufficient in the production of ballistic missiles. Iran
already is producing Scud short-range ballistic missiles
(SRBMs) and has built and publicly displayed prototypes for
the Shahab-3 medium-range ballistic missile (MRBM). In
addition, Iran's Defense Minister in 1999 publicly
acknowledged the development of a Shahab-4, originally
calling it a more capable ballistic missile than the Shahab-3
but later categorizing it as solely a space launch vehicle
with no military applications. Iran's Defense Minister also
has publicly mentioned a ``Shahab 5,'' although he said that
development had not yet begun. Such statements, made against
the backdrop of sustained cooperation with Russian, North
Korean, and Chinese entities, strongly suggest that Tehran
intends to develop a longer range ballistic missile
capability.
Iran continues to acquire conventional weapons and
production technologies from Russia and China. During the
first half of 2000, Iran received five Mi-171 utility
helicopters from Russia under a 1999 contract, and it began
licensed production of Russian Konkurs (AT-5) antitank guided
missiles. Iran also claims to be producing a new manportable
surface-to-air missile knows as Misagh-1, which resembles
China's QW-1 MANPAD system. Tehran also has been able to
keep operational at least part of its existing fleet of
Western-origin aircraft and helicopters supplied before
the 1979 Iranian Revolution and continues to develop
limited capabilities to produce armor, artillery, tactical
missiles, munitions, and aircraft with foreign assistance.
Iraq
Since Operation Desert Fox in December 1998, Baghdad has
refused to allow United Nations' inspectors into Iraq as
required by Security Council Resolution 687. In spite of
ongoing UN efforts to establish a follow-on inspection regime
comprising the UN Monitoring, Verification, and Inspection
Commission (UNMOVIC) and the IAEA's Iraq Action Team, no UN
inspections occurred during this reporting period. Moreover,
the automated video monitoring system installed by the UN at
known and suspect WMD facilities in Iraq is no longer
operating. Having lost this on-the-ground access, it is more
difficult for the UN or the US to accurately assess the
current state of Iraq's WMD programs.
We do not have any direct evidence that Iraq has used the
period since Desert Fox to reconstitute its WMD programs,
although given its past behavior, this type of activity must
be regarded as likely. We assess that since the suspension of
UN inspections in December of 1998, Baghdad has had the
capability to reinitiate both its CW and BW programs within a
few weeks to months. Without an inspection monitoring
program, however, it is more difficult to determine if Iraq
has done so.
Since the Gulf war, Iraq has rebuilt key portions of its
chemical production infrastructure for industrial and
commercial use, as well as its missile production facilities.
It has attempted to purchase numerous dual-use items for, or
under the guise of, legitimate civilian use. This equipment--
in principle subject to UN scrutiny--also could be diverted
for WMD purposes. Since the suspension of UN inspections in
December 1998, the risk of diversion has increased. Following
Desert Fox, Baghdad again instituted a reconstruction effort
on those facilities destroyed by the US bombing, including
several critical missile production complexes and former
dual-use CW production facilities. In addition, Iraq appears
to be installing or repairing dual-use equipment at CW-
related facilities. Some of these facilities could be
converted fairly quickly for production of CW agents.
UNSCOM reported to the Security Council in December 1998
that Iraq also continued to withhold information related to
its CW program. For example, Baghdad seized from UNSCOM
inspectors an Air Force document discovered by UNSCOM that
indicated that Iraq had not consumed as many CW munitions
during the Iran-Iraq war in the 1980s as had been declared by
Baghdad. This discrepancy indicates that Iraq may have hidden
an additional 6,000 CW munitions.
In 1995, Iraq admitted to having an offensive BW program
and submitted the first in a series of Full, Final, and
Complete Disclosures (FFCDs) that were supposed to reveal the
full scope of its BW program. According to UNSCOM, these
disclosures are incomplete and filled with inaccuracies.
Since the full scope and nature of Iraq's BW program was not
verified, UNSCOM assessed that Iraq continues to maintain a
knowledge base and industrial infrastructure that could be
used to produce quickly a large amount of BW agents at any
time, if needed.
Iraq has continued working on its L-29 unmanned aerial
vehicle (UAV) program, which involves concerting L-29 jet
trainer aircraft originally acquired from Eastern Europe. It
is believed that Iraq may have been conducting flights of the
L-29, possibly to test system improvements or to train new
pilots. These refurbished trainer aircraft are believed to
have been modified for delivery of chemical or, more likely,
biological warfare agents.
[[Page S9145]]
We believe that Iraq has probably continued low-level
theoretical R&D associated with its nuclear program. A
sufficient source of fissile material remains Iraq's most
significant obstacle to being able to produce a nuclear
weapon.
Iraq continues to pursue development of SRBM systems that
are not prohibited by the United Nations and may be expanding
to longer range systems. Authorized pursuit of UN-permitted
missiles continues to allow Baghdad to develop technological
improvements and infrastructure that could be applied to a
longer-range missile program. We believe that development of
the liquid propellant Al-Samoud SRBM probably is maturing and
that a low-level operational capability could be achieved in
the near team. The solid-propellant missile development
program may now be receiving a higher priority, and
development of the Ababil-100 SRBM and possibly longer range
systems may be moving ahead rapidly. If economic sanctions
against Iraq were lifted, Baghdad probably would increase its
attempts to acquire missile-related items from foreign
sources, regardless of any future UN monitoring and
continuing restrictions on long-range ballistic missile
programs. Iraq probably retains a small, covert force of
Scud-type missiles.
North Korea
P'yongyang continues to acquire raw materials from out-of-
country entitles needed for its WMD and ballistic missile
programs. During this time fame, North Korea continued
procurement of raw materials and components for its ballistic
missile programs from various foreign sources, especially
through firms in China. We assess the North Korea is capable
of producing and delivering via munitions a wide variety of
chemical and biological agents.
During the first half of 2000, P'yongyang sought to procure
technology worldwide that could have applications in its
nuclear program, but we do not know of any procurement
directly linked to the nuclear weapons program. We assess
that North Korea has produced enough plutonium for at
least one, and possibly two, nuclear weapons. The United
States and North Korea are nearing completion on the joint
project of canning spent fuel from the Yongbyon complex
for long-term storage and ultimate shipment out of the
North in accordance with the 1994 Agreed Framework. That
reacher fuel contains enough plutonium for several more
weapons.
North Korea continues to seek conventional arms. It signed
a contract with Russia during this reporting period.
Libya
Libya has continued its efforts to obtain ballistic
missile-related equipment, materials, technology, and
expertise from foreign sources. Outside assistance is
critical to its ballistic missile development programs, and
the suspension of UN sanctions last year has allowed Tripoli
to expand its procurement effort. Libya's current capability
remains limited to its aging Scud B missiles, but with
continued foreign assistance it may achieve an MRBM
capability--a long-desired goal.
Libya remains heavily dependent on foreign suppliers for
precursor chemicals and other key CW-related equipment.
Following the suspension of UN sanctions in April 1999,
Tripoli reestablished contacts with sources of expertise,
parts, and precursor chemicals abroad, primarily with Western
Europe. Libya still appears to have a goal of establishing an
offensive CW capability and an indigenous production
capability for weapons. Evidence suggests Libya also is
seeking to acquire the capability to develop and produce BW
agents.
Libya continues to develop its nascent nuclear research and
development program but still requires significant foreign
assistance to advance to a nuclear weapons option. The
suspension of sanctions has accelerated the pace of
procurement efforts in Libya's drive to rejuvenate its
ostensibly civilian nuclear program. In early 2000, for
example, Tripoli and Moscow renewed talks on cooperation at
the Tajura Nuclear Research Center and discussed a potential
power reactor deal. Should such civil-sector work come to
fruition, Libya could gain opportunities to conduct weapons-
related R&D.
Following the suspension of UN sanctions, Libya has
negotiated deals--reported to be worth up to $100 million,
according to Russian press--with Russian firms for
conventional weapons, munitions, and upgrades and
refurbishment for its existing inventory of Soviet-era
weapons.
Syria
Syria sought CW-related precursors and expertise from
foreign sources during the reporting period. Damascus already
has a stockpile of the nerve agent sarin, and it would appear
that Syria is trying to develop more toxic and persistent
nerve agents. Syria remains dependent on foreign sources for
key elements of its CW program, including precursor chemicals
and key production equipment. It is highly probable that
Syria also is developing an offensive BW capability.
We will continue to monitor the potential for Syria's
embryonic nuclear research and development program to expand.
During the first half of 2000, Damascus continued work on
establishing a solid-propellant rocket motor development and
production capability with help from outside countries.
Foreign equipment and assistance to its liquid-propellant
missile program, primarily from North Korean entities, but
also from firms in Russia, have been and will continue to be
essential for Syria's effort. Damascus also continued its
efforts to assemble--probably with considerable North Korean
assistance--liquid fueled Scud C missiles.
Syria continues to acquire ACW--mainly from Russia and
other FSU suppliers--although at a reduced level from the
early 1990s. During the past few years, Syria has received
Kornet-E (AT-14), Metis-M (AT-13), Konkurs (AT-5), and
Bastion-M (AT-10B) antitank guided missiles, RPG-29 rocket
launchers, and small arms, according to Russian press
reports. Damascus has expressed interest in acquiring Russian
Su-27 and MiG-29 fighters and air defense systems, but its
outstanding debt to Moscow and inability to fund large
purchases have hampered negotiations, according to press
reports.
Sudan
During the reporting period, Sudan sought to acquire a
variety of military equipment from various sources. Khartoum
is seeking older, less expensive weapons that nonetheless are
advanced compared with the capabilities of the weapons
possessed by its opponents and their supporters in
neighboring countries in the long-running civil war.
In the WMD arena, Sudan has been developing the capability
to produce chemical weapons for many years. In this pursuit,
it has obtained help from entities in other countries,
principally Iraq. Given its history in developing chemical
weapons and its close relationship with Iraq, Sudan may be
interested in a BW program as well.
India
India continues its nuclear weapons development program,
for which its underground nuclear tests in May 1998 were a
significant milestone. The acquisition of foreign equipment
could benefit New Delhi in its efforts to develop and
produce more sophisticated nuclear weapons. India obtained
some foreign assistance for its civilian nuclear power
program during the first half of 2000, primarily from
Russia.
India continues to rely on foreign assistance for key
missile and dual-use technologies, where it still lacks
engineering or production expertise in ballistic missile
development. Entities in Russia and Western Europe remained
the primary conduits of missile-related technology transfers
during the first half of 2000. New Delhi Flight-tested three
short-range ballistic missiles between January and June
2000--the Prithvi-II in February and June, and the Dhanush in
April.
India continues an across-the-board modernization of its
armed forces through ACW, mostly from Russia, although many
of its key programs have been plagued by delays. During the
reporting period, New Delhi continued negotiations with
Moscow for 310 T-90S main battle tanks Su-30 fighter aircraft
production, A-50 Airborne Early Warning and Control (AWACS)
aircraft, Tu-22M Backfire maritime strike bombers, and an
aircraft carrier, according to press reports. India also
continues to explore options for leasing or purchasing
several AWACS systems from other entities. India has also
received its first delivery of Russian Krasnopol laser-guided
artillery rounds to be used in its Swedish-build FH-77 155-mm
howitzers, negotiated the purchase of unmanned aerial
vehicles form Israel, and considered offers for jet trainer
aircraft from France and the United Kingdom.
Pakistan
Chinese entities continued to provide significant
assistance to Pakistan's ballistic missile program during the
first half of 2000. With Chinese assistance, Pakistan is
rapidly moving toward serial production of solid-propellant
SRBMs. Pakistan's development of the two-state Shaheen-II
MRBM also requires continued Chinese assistance. The impact
of North Korea's assistance throughout the reporting period
is less clear.
Pakistan continued to acquire nuclear-related and dual-use
equipment and materials from various sources--principally in
Western Europe. Islamabad has a well-developed nuclear
weapons program, as evidence by its first nuclear weapons
tests in late May 1998. Acquisition of nuclear-related goods
form foreign sources will remain important if Pakistan
chooses to develop more advanced nuclear weapons. China,
which has provided extensive support in the past to
Islamabad's nuclear weapons and ballistic missile programs,
in May 1996 pledged that it would not provide assistance to
unsafeguarded nuclear facilities in any state, including
Pakistan. We cannot rule out, however, some continued
contacts between Chinese entities and entities involved in
Pakistan's nuclear weapons development.
Pakistan continues to rely on China and France for its ACW
requirements. Pakistan received eight upgraded Mirage III/V
fighters from France and continued negotiations to purchase
an additional 50 F-7 fighters from China.
Egypt
Egypt continues its effort to develop and produce ballistic
missiles with the assistance of North Korea. This activity is
part of a long-running program of ballistic missile
cooperation between these two countries.
Key Suppliers
Russia
Despite overall improvements in Russia's economy, the
state-run defense and nuclear industries remain strapped for
funds, even as
[[Page S9146]]
Moscow looks to them for badly needed foreign exchange
through exports. We remain very concerned about the
nonproliferation implications of such sales in several areas.
Monitoring Russian proliferation behavior, therefore, will
remain a very high priority.
Russian entities during the reporting period continued to
supply a variety of ballistic missile-related goods and
technical know-how to countries such as Iran, India, China,
and Libya. Iran's earlier success in gaining technology and
materials from Russian entities accelerated Iranian
development of the Shahab-3 MRBM, which was first flight-
tested in July 1998. Russian entities during the first six
months of 2000 have provided substantial missile-related
technology, training, and expertise to Iran that almost
certainly will continue to accelerate Iranian efforts to
develop new ballistic missile systems.
Russia also remained a key supplier for civilian nuclear
programs in Iran, primarily focused on the Bushehr Nuclear
Power Plant project. With respect to Iran's nuclear
infrastructure, Russian assistance enhances Iran's ability to
support a nuclear weapons development effort. By its very
nature, even the transfer of civilian technology may be of
use in Iran's nuclear weapons program. We remain concerned
that Tehran is seeking more than a buildup of its civilian
infrastructure, and the Intelligence Community will be
closely monitoring the relationship with Moscow for any
direct assistance in support of a military program.
In January, Russia's cabinet approved a draft cooperative
program with Syria that included civil use of nuclear power.
Broader access to Russian scientists could provide
opportunities to solicit fissile material production
expertise if Syria decided to pursue a nuclear weapons
option. In addition, Russia supplied India with material for
its civilian nuclear program during this reporting period.
President Putin in May amended the presidential decree on
nuclear exports to allow the export in exceptional cases
of nuclear materials, technology, and equipment to
countries that do not have full-scope IAEA safeguards,
according to press reports. The move could clear the way
for expanding nuclear exports to certain countries that do
not have full-scope safeguards, such as India.
During the first half of 2000, Russian entities remained a
significant source of dual-use biotechnology, chemicals,
production technology, and equipment for Iran. Russia's
biological and chemical expertise make it an attractive
target for Iranians seeking technical information and
training on BW- and CW-agent production processes.
Russia continues to be a major supplier of conventional
arms. It is the primary source of ACW for China and India, it
continues to supply ACW to Iran and Syria, and it has
negotiated new contracts with Libya and North Korea,
according to press reports.
The Russian Government's commitment, willingness, and
ability to curb proliferation-related transfers remain
uncertain. The export control bureaucracy was reorganized
again as part of President Putin's broader government
reorganization in May. The Federal Service for Currency and
Export Controls (VEK) was abolished and its functions assumed
by a new department in the Ministry of Economic Development
and Trade. VEK had been tasked with drafting the implementing
decrees for Russia's July 1999 export control law; the status
of these decrees is not known. Export enforcement continues
to need improvement. In February 2000, Sergey Ivanov,
Secretary of Russia's Security Council, said that during
1998-99 the government had obtained convictions for
unauthorized technology transfers in only three cases. The
Russian press has reported on cases where advanced equipment
is simply described as something else in the export
documentation and is exported. Enterprises sometimes falsely
declare goods just to avoid government taxes.
North Korea
Throughout the first half of 2000, North Korea continued to
export significant ballistic missile--related equipment and
missile components, materials, and technical expertise to
countries in the Middle East, South Asia, and North Africa.
P'yongyang attaches a high priority to the development and
sale of ballistic missiles, equipment, and related
technology. Exports of ballistic missiles and related
technology are one of the North's major sources of hard
currency, which fuel continued missile development and
production.
China
During this reporting period, the Chinese have continued to
take a very narrow interpretation of their bilateral
nonproliferation commitments with the United States. In the
case of missile-related transfers, Beijing has repeatedly
pledged not to sell Missile Technology Control Regime (MTCR)
Category I systems but has not recognized the regime's key
technology annex. China is not a member of the MTCR.
Chinese missile-related technical assistance to Pakistan
continued to be substantial during this reporting period.
With Chinese assistance, Pakistan is rapidly moving toward
serial production of solid-propellant SRBMs. Pakistan's
development of the two-stage Shaheen-II MRBM also requires
continued Chinese assistance. In addition, firms in China
provided missile-related items, raw materials, and/or
assistance to several other countries of proliferation
concern--such as Iran, North Korea, and Libya.
Chinese entities have provided extensive support in the
past to Pakistan's safeguarded and unsafeguarded nuclear
programs. In May 1996, Beijing pledged that it would not
provide assistance to unsafeguarded nuclear facilities. We
cannot rule out some continued contacts between Chinese
entities and entities associated with Pakistan's nuclear
weapons program. China's involvement with Pakistan will
continue to be monitored closely.
With regard to Iran, China confirmed that work associated
with two remaining nuclear projects--a small research reactor
and a zirconium production facility--would continue until the
projects were completed. The intelligence Community will
continue to monitor carefully Chinese nuclear cooperation
with Iran.
Prior to the reporting period, Chinese firms had supplied
CW-related production equipment and technology to Iran. The
US sanctions imposed in May 1997 on seven Chinese entities
for knowingly and materially contributing to Iran's CW
program remain in effect. Evidence during the current
reporting period shows Iran continues to seek such assistance
from Chinese entities, but it is unclear to what extent these
efforts have succeeded. In June 1998, China announced that it
had expanded its CWC-based chemical export controls to
include 10 of the 20 Australia Group chemicals not listed on
the CWC schedules.
Western Countries
As was the case in 1998 and 1999, entities in Western
countries in 2000 were not as important as sources for WMD-
related goods and materials as in past years. However, Iran
and Libya continue to recruit entities in Western Europe to
provide needed acquisitions for their WMD programs.
Increasingly rigorous and effective export controls and
cooperation among supplier countries have led the other
foreign WMD programs to look elsewhere for many controlled
dual-use goods. Machine tools, spare parts for dual-use
equipment, and widely available materials, scientific
equipment, and specialty metals were the most common items
sought. In addition, several Western countries announced
their willingness to negotiate ACW sales to Libya.
Trends
As in previous reports, countries determined to maintain
WMD and missile programs over the long term have been placing
significant emphasis on insulating their programs against
interdiction and disruption, as well as trying to reduce
their dependence on imports by developing indigenous
production capabilities. Although these capabilities may not
always be a good substitute for foreign imports--particularly
for more advanced technologies--in many cases they may prove
to be adequate. In addition, as their domestic capabilities
grow, traditional recipients of WMD and missile technology
could emerge as new suppliers of technology and expertise.
Many of these countries--such as India, Iran and Pakistan--do
not adhere to the export restraints embodied in such supplier
groups as the Nuclear Suppliers Group and the Missile
Technology Control Regime.
Some countries of proliferation concern are continuing
efforts to develop indigenous designs for advanced
conventional weapons and expand production capabilities,
although most of these programs usually rely heavily on
foreign technical assistance. Many of these countries--unable
to obtain newer or more advanced arms--are pursuing upgrade
programs for existing inventories.
The PRESIDING OFFICER. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed for a third reading and was read
the third time.
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