[Public Papers of the Presidents of the United States: George H. W. Bush (1992, Book I)]
[March 31, 1992]
[Pages 518-520]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 518]]

Message to the Congress Reporting on the National Emergency With Respect 
to Export Controls

March 31, 1992
To the Congress of the United States:
    1. On September 30, 1990, in Executive Order No. 12730, I declared a 
national emergency under the International Emergency Economic Powers Act 
(``IEEPA'') (50 U.S.C. 1701, et seq.) to deal with the threat to the 
national security and foreign policy of the United States caused by the 
lapse of the Export Administration Act of 1979, as amended (50 U.S.C. 
App. 2401, et seq.), and the system of controls maintained under that 
Act. In that order I continued in effect, to the extent permitted by 
law, the provisions of the Export Administration Act of 1979, as 
amended, the Export Administration Regulations (15 C.F.R. 768, et seq. 
(1991)), and the delegations of authority set forth in Executive Order 
No. 12002 of July 7, 1977, Executive Order No. 12214 of May 2, 1980, and 
Executive Order No. 12131 of May 4, 1979, as amended by Executive Order 
No. 12551 of February 21, 1986.
    2. I issued Executive Order No. 12730 pursuant to the authority 
vested in me as President by the Constitution and laws of the United 
States, including IEEPA, the National Emergencies Act (``NEA'') (50 
U.S.C. 1601, et seq.), and section 301 of title 3 of the United States 
Code. At that time, I also submitted a report to the Congress pursuant 
to section 204(b) of IEEPA (50 U.S.C 1703(b)). Section 204 of IEEPA 
requires follow-up reports, with respect to actions or changes, to be 
submitted every 6 months. Additionally, section 401(c) of the NEA 
requires that the President, within 90 days after the end of each 6-
month period following a declaration of a national emergency, report to 
the Congress on the total expenditures directly attributable to that 
declaration. This report, covering the 6-month period from October 1, 
1991, to March 31, 1992, is submitted in compliance with these 
requirements.
    3. Since the issuance of Executive Order No. 12730, the Department 
of Commerce has continued to administer the system of export controls, 
including antiboycott provisions, contained in the Export Administration 
Regulations. In administering these controls, the Department has acted 
under a policy of conforming actions under Executive Order No. 12730 to 
those required under the Export Administration Act, insofar as 
appropriate.
    4. Since my last report to the Congress, there have been several 
significant developments in the area of export controls:
    --In light of the ongoing changes occurring in Eastern Europe and 
the former Soviet Union, the Department of Commerce has been working 
with officials of Bulgaria, Czechoslovakia, Hungary, Poland, and 
republics of the former Soviet Union to implement and strengthen their 
export control systems, including pre-license inspections and post-
shipment verifications. We are also engaged in activities with these 
countries to assist in the prevention of proliferation of weapons of 
mass destruction and corresponding technology. These developments will 
allow for enhanced and much-needed trade in high technology items and 
other commodities in the region, while helping to prevent unauthorized 
shipments or uses of such items.
    --In my last report I noted that, following negotiations with our 
Coordinating Committee (COCOM) partners that produced a streamlined Core 
List of truly strategic items subject to multilateral national security 
controls, the Department of Commerce implemented a new Commerce Control 
List (CCL), effective September 1, 1991 (56 F.R. 42824, August 29, 
1991). During the current reporting period, the Department issued a 
conforming regulation, effective January 7, 1992, to bring the CCL into 
line with special country- and commodity-based controls. In this action, 
foreign policy provisions in the Export Administration Regulations (EAR) 
were revised to adjust and expand controls on Iran and Syria. Controls 
affecting countries designated by the Secretary of State as supporting 
international terrorism were also revised, with Iraq added

[[Page 519]]

and Yemen deleted from the list. Additionally, the transfer from the 
Department of State to the Department of Commerce of licensing 
jurisdiction over certain civil aircraft inertial navigation equipment 
was implemented (57 F.R. 4553, February 6, 1992).
    --Our efforts to address the threat to the national security and 
foreign policy interests of the United States posed by the spread of 
weapons of mass destruction and missile delivery systems remain ongoing. 
In this vein, we continue to work with our major trading partners to 
strengthen export controls over goods, technology, and other forms of 
assistance that can contribute to the spread of nuclear, chemical, and 
biological weapons and missile systems:
    The United States has been working with its partners in the 
            22-nation Australia Group (AG) to harmonize export controls 
            related to the proliferation of chemical and biological 
            weapons (CBW). At the December 1991 meeting, the 
            participants agreed to control the export of certain 
            biological organisms and CBW-related equipment. The list 
            considered for possible adoption by the AG in this effort is 
            nearly identical to the draft submitted by the United 
            States.
    Additionally, the 27-nation Nuclear Suppliers Group, in 
            which the United States participates, is expected formally 
            to establish a multilateral regime to control nuclear-
            related, dual-use items along the lines of the nuclear 
            referral list currently administered by the Department of 
            Commerce.
    In the area of supercomputers, we have agreed on a 
            supercomputer safeguard regime with Japan and will be 
            negotiating with our European trading partners to expand 
            this regime. Supercomputer exports involve sensitive 
            national security and foreign policy interests such as 
            cryptology, strategic defense, and submarine warfare; the 
            multilateral safeguard regime is therefore intended to 
            establish uniform and effective international policies and 
            procedures to protect supercomputers from unauthorized end-
            uses and end-users.
    Developments in the Missile Technology Control Regime (MTCR) 
            include revision of the MTCR control list or ``Annex,'' and 
            the inclusion of missiles capable of delivering all weapons 
            of mass destruction within the scope of the MTCR, not just 
            those capable of delivering nuclear weapons, which were 
            originally designated as the focus of the regime.
    --In response to commitments made by the People's Republic of China 
(PRC) to adhere to the MTCR nonproliferation guidelines, on February 21, 
1992, the Department of State announced my decision to remove special 
missile sanctions imposed upon the PRC for the activities of Chinese 
entities involved in missile technology proliferation. As a result, 
certain sanctions, including restrictions on the export of high-
performance computers, are being removed. Other controls affecting the 
PRC, such as those implemented following Tiananmen Square, remain in 
place.
    --Finally, our enforcement efforts have continued unabated:
    During this 6-month reporting period, record civil 
            penalties, totalling in excess of $3.5 million, were 
            assessed in export control enforcement cases. The companies 
            against which the penalties were imposed include the Digital 
            Equipment Corporation; Ecosphere International; Everex 
            Systems, Inc., and its subsidiary Everex Systems (Far East); 
            and Kobe Argentina, the Argentine subsidiary of a U.S. 
            company that was involved in the first case in which both 
            export control and antiboycott violations were alleged.
    On December 19, 1991, special agents from the Department of 
            Commerce's Bureau of Export Administration arrested a French 
            businessman in New York on charges of diverting two 
            shipments of aviation oil valued at over $2 million to Cuba. 
            A German company and two of its executives were also 
            indicted in connection with the diversion scheme. In 
            addition, an American company and two of its executives were 
            indicted and charged with falsifying

[[Page 520]]

            shipping documents, having knowledge of the diversion, and 
            failing to report the diversion to authorities.
    On February 18, 1992, the Department of Commerce charged 
            L.A. Gear, Inc., an athletic footwear manufacturer, with 46 
            violations of the antiboycott provisions of the Export 
            Administration Act and Regulations. The Department alleged 
            that, in July 1987 and January 1990, the company complied 
            with boycott requests from a Middle Eastern customer, 
            resulting in antiboycott violations including knowingly 
            agreeing to refuse to do business with other persons in 
            response to a boycott-based requirement, furnishing 
            prohibited boycott-related information, and failure to 
            report receipt of boycott-related requests.
    5. The expenses incurred by the Federal Government in the 6-month 
period from October 1, 1991, to March 31, 1992, that are directly 
attributable to the exercise of authorities conferred by the declaration 
of a national emergency with respect to export controls were largely 
centered in the Department of Commerce, Bureau of Export Administration. 
Expenditures by the Department of Commerce are anticipated to be 
$20,254,000, most of which represents wage and salary costs for Federal 
personnel.
    6. The unrestricted access of foreign parties to U.S. goods, 
technology, and technical data, and the existence of certain boycott 
practices of foreign nations, in light of the expiration of the Export 
Administration Act of 1979, continue to constitute an unusual and 
extraordinary threat to the national security, foreign policy, and 
economy of the United States. I shall continue to exercise the powers at 
my disposal to retain the export control system, including the 
antiboycott provisions, and will continue to report periodically to the 
Congress.

                                                             George Bush

The White House,
March 31, 1992.