[Public Papers of the Presidents of the United States: George H. W. Bush (1992-1993, Book II)]
[September 25, 1992]
[Pages 1650-1654]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 1650]]


Message to the Congress Reporting on the National Emergency With Respect 
to Export Control Regulations
September 25, 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 April 1, 1992, to 
September 30, 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 and enforce the system of export 
controls, including antiboycott provisions, contained in the Export 
Administration Regulations. In administering these controls, the 
Department has acted under a policy of conforming actions under 
Executive Order No. 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:
    --As the nations of Central Europe and the former Soviet Union 
continue their progress towards democracy and market economies, United 
States Government experts have been working with officials of Albania, 
Bulgaria, the Czech and Slovak Federal Republic, Hungary, Poland, 
Romania, the Baltic States, and many republics of the former Soviet 
Union to implement and strengthen their export control systems, 
including pre-license inspections and post-shipment verifications. These 
developments will facilitate enhanced trade in high technology items and 
other commodities in the region, while helping to prevent unauthorized 
shipments or uses of such items. At the same time, we have been engaged 
in activities with the Central and Eastern European countries to assist 
in the prevention of proliferation of weapons of mass destruction and 
corresponding technology.
    A significant result of these activities was the removal of Hungary 
from the list of proscribed destinations to the list of free world 
destinations on May 1, 1992, thereby liberalizing export controls with 
respect to Hungary and easing the burden on exporters dealing with 
Hungary. This action should facilitate a significant increase in exports 
and reexports to Hungary. (57 F.R. 19805, May 8, 1992.)
    --Working diligently with our Coordinating Committee (COCOM) 
partners to streamline multilateral national security controls, we are 
pleased to report the following important developments:
    --Elimination of nearly all individual license requirements for 
        exports to

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        COCOM and cooperating countries, enabling exporters to ship 
        items without prior agency approval. (57 F.R. 18819, May 1, 
        1992.)
    --Elimination of most U.S. reexport authorizations for U.S.-origin 
        goods going from COCOM and cooperating countries to most third 
        countries, except when destined to a country or region of 
        proliferation concern. (57 F.R. 18817, May 1, 1992.)
    --Liberalized licensing requirements on exports to Hong Kong and New 
        Zealand, following their designation as COCOM cooperating 
        destinations. (57 F.R. 19334, May 5, 1992.)
    --At the June 1992 High-Level Meeting in Paris, in response to a 
        proposal from former Secretary of State James Baker, our COCOM 
        allies agreed to establish a new ``COCOM Cooperation Forum'' 
        (CCF) to include the 17 members of COCOM, the newly independent 
        states of the former Soviet Union (NIS), and most recently other 
        Central and Eastern European nations. The CCF hopes to engage 
        these nations in further establishing controls for sensitive 
        goods and technologies, and to provide an impetus for wider 
        access by those countries to controlled items. The first High-
        Level Meeting of the CCF is scheduled for late November of this 
        year.
    --Also at the June High-Level Meeting, the COCOM partners agreed to 
        significantly liberalize export controls on telecommunications 
        exports to the NIS, which should facilitate rapid and reliable 
        telecommunications between the NIS and the West, as well as 
        modern, cost-effective domestic telecommunications systems.
    --The Department of Commerce also recently revised the regulations 
governing the Distribution License procedure, thereby allowing expanded 
use of this special license and eliminating many current prior-approval 
requirements. The Distribution License, which permits multiple exports 
of controlled items to approved consignees in eligible countries without 
prior review of individual transactions, is used by approximately 125 of 
the largest exporters to export computers and other items to many 
countries. (57 F.R. 18815, May 1, 1992.)
    --In my last report, I noted that the Department of Commerce issued 
a conforming regulation to bring the Commerce Control List (CCL) into 
line with special country- and commodity-based controls. In this action, 
the transfer from the State Department to the Commerce Department of 
licensing jurisdiction over certain civil aircraft inertial navigation 
equipment was implemented. (57 F.R. 4553, February 6, 1992.) This 
transfer of items formerly included in the State Department's U.S. 
Munitions List (USML) to the CCL is ongoing. The majority of overlaps 
between the USML and the CCL were eliminated in the April 25, 1992, 
amendment to the USML. (57 F.R. 15227.) In the future, certain 
commercial telecommunications satellites, imaging technologies, and 
navigational technologies will be removed from the USML and added to the 
CCL.
    --We are continuing 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. As such, we have been working 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.
    --At the June 1992 meeting of the 22-nation Australia Group (AG), a 
        consortium of nations that seeks to prevent the proliferation of 
        chemical and biological weapons (CBW), the delegates agreed to 
        establish a refined common control list for exports of dual-use 
        biological equipment and to increase from 50 to 54 the number of 
        precursor chemicals subject to control. The Commerce Department 
        is in the process of publishing rules reflecting the changes to 
        conform the U.S. list to the AG list.
    --The United States has also been a key participant in the ongoing 
        Chemical Weapons Convention (CWC) negotiations in Geneva, 
        Switzerland. On September 3 the Conference on Disarmament, which 
        is the drafting body for the CWC, forwarded to the United Na-

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        tions General Assembly, a draft CWC, which includes a 
        prohibition on the design, development, production, or use of 
        chemical weapons, as well as destruction of chemical weapons 
        production facilities and stockpiles. The United States strongly 
        supports these provisions.
    --In April, the 27-nation Nuclear Suppliers Group (NSG), in which 
        the United States participates, formally established a 
        multilateral regime to control nuclear-related dual-use items 
        similar to the nuclear-referral list currently administered by 
        the Department of Commerce. The Department is working to publish 
        a rule to conform the U.S. list with the NSG list.
    --At the June-July plenary session in Oslo, the Missile Technology 
        Control Regime (MTCR) members welcomed Greece, Ireland, 
        Portugal, and Switzerland to their ranks, bringing the total 
        membership to 22 nations. The MTCR members also agreed to amend 
        the Guidelines and Equipment and Technology Annex to ensure 
        adequate control of delivery systems for all types of weapons of 
        mass destruction--including chemical and biological weapons, as 
        well as nuclear weapons. The MTCR partners expect to have the 
        revised Guidelines in effect by the end of October 1992.
    --The Commerce Department has also participated in implementation of 
        missile technology sanctions imposed by the Department of State 
        under Title XVII of the National Defense Authorization Act for 
        FY 1991 (Public Law 101-510). Sanctions, which include denial of 
        export licenses, have been imposed on the following foreign 
        entities: ARMSCOR (South Africa), Changgwang Credit Corporation 
        (North Korea), China Great Wall Industry Corporation (PRC), 
        China Precision Machinery Import-Export Corporation (PRC), 
        Glavkosmos (Russia), Indian Space Research Organization (ISRO-
        India), Lyongaksan Machineries and Equipment Export Corporation 
        (North Korea), Ministry of Defense (Syria), Ministry of Defense 
        and Armed Forces Logistics (Iran), Space and Upper Atmosphere 
        Research Commission (SUPARCO-Pakistan), and Syrian Scientific 
        Research Center a/k/a Centre d'Etudes et Recherches Scientifique 
        (Syria). The sanctions imposed in June 1991 on the two Chinese 
        entities were recently waived.
    --In the area of supercomputers we have established a supercomputer 
        safeguard regime with Japan, and we are negotiating with our 
        European trading partners to expand this regime. Under the 
        provisions published in May, exports of supercomputers to Canada 
        do not require a license, exports to Japan may be made under 
        General License GCT, and both Distribution Licenses and 
        individual validated licenses are available for exports to many 
        Western European destinations with only minimum safeguards. 
        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, without unnecessarily 
        burdening U.S. exporters. (57 F.R. 20963, May 18, 1992.)
    --At the beginning of the year, I announced the lifting of the U.S. 
        embargo against Cambodia in response to the United Nations-
        directed comprehensive political settlement of the decades-long 
        Cambodian conflict. In April the Commerce Department issued a 
        rule removing Cambodia from the list of embargoed countries and 
        revising licensing policies and procedures affecting Cambodia 
        and Laos to allow these countries to receive general license 
        treatment for exports and reexports of many items. (57 F.R. 
        11576, April 6, 1992.)
    --More recently, the Department issued a rule permitting commercial 
        exports of humanitarian goods--including food, building 
        materials, and health and educational items to Vietnam, under a 
        new

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        general license. This liberalization in export control policy is 
        consistent with the step-by-step process for normalizing 
        relations with Vietnam, and should further reduce paperwork and 
        expand trade to benefit America's exporters. (57 F.R. 31658, 
        July 17, 1992.)
    --Finally, our enforcement efforts are proceeding apace as we 
continue to enforce export controls vigorously. The export control 
provisions of the Export Administration Regulations are enforced jointly 
by the Commerce Department's Office of Export Enforcement and the U.S. 
Customs Service. Both of these agencies investigate allegations and, 
where appropriate, refer them for criminal prosecution by the Justice 
Department. Additionally, the Commerce Department has continued its 
practice of imposing significant administrative sanctions for 
violations, including civil penalties and denial of export privileges.
    --Commerce's Office of Export Enforcement (OEE) has continued its 
        vital preventive programs such as pre-license checks and post-
        shipment verifications, export license review, and on-site 
        verification visits by teams of enforcement officers in many 
        countries. The OEE has also continued its outreach to the 
        business community to assist exporters with their compliance 
        programs and to solicit their help in OEE's enforcement effort. 
        The OEE has initiated its well-received Business Executive 
        Enforcement Team (BEET) to enhance interaction between the 
        regulators and the regulated.
    --The OEE has also initiated a new program--the Strategic and Non-
        proliferation Enforcement Program (SNEP)--which targets critical 
        enforcement resources on exports to countries of concern in the 
        Middle East and elsewhere.
    --In one of many successful enforcement efforts, following his plea 
        of guilty to several counts of an indictment charging him with 
        violating U.S. export control laws, Don Danesh, an Iranian 
        national doing business in the United States, was sentenced to 
        serve 12 months in jail and placed on supervised probation for 
        an additional 36 months. Danesh's associate, Ray Amiri, also an 
        Iranian national doing business in the United States, is 
        expected to be sentenced in the near future following his guilty 
        plea. In developments related to the criminal case, on May 29, 
        1992, the Acting Assistant Secretary for Export Enforcement 
        renewed an order temporarily denying the export privileges of 
        Amiri, his company, and Danesh. (57 F.R. 24242, June 8, 1992.)
    --In the last 6 months, the Department has continued to enforce the 
        antiboycott law vigorously. The Office of Antiboycott Compliance 
        (OAC) is fully staffed with 30 full-time employees, and OAC has 
        doubled the level of civil penalties it seeks to impose within 
        the statutory $10,000 per violation maximum. The total dollar 
        amount of civil penalties imposed so far in fiscal year 1992 
        approaches $2 million, the second largest amount in the history 
        of the program.
    --During this 6-month reporting period, significant civil penalties 
        were assessed against several companies in antiboycott 
        compliance cases. Among them, by Order of May 19, 1992, L.A. 
        Gear, Inc., was assessed a civil penalty of $404,000 to settle 
        allegations that the company complied with boycott requests from 
        a customer in Kuwait and that it failed to report its receipt of 
        boycott requests. On August 12, 1992, the Bank of Baroda, one of 
        India's largest banks, was assessed a civil penalty of $502,000 
        to settle allegations that it implemented letters of credit 
        containing prohibited boycott conditions and that it failed to 
        report its receipt of boycott requests. After reviewing data 
        related to the financial condition of the bank, the Department 
        agreed to suspend payment of $227,000 of the $502,000 civil 
        penalty.
    5. The expenses incurred by the Federal Government in the 6-month 
period from April 1, 1992, to September 30, 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

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Administration. Expenditures by the Department of Commerce are 
anticipated to be $19,186 million, most of which represents program 
operating costs, wage and salary costs for Federal personnel, and 
overhead expenses.
    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,
September 25, 1992.