    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [April 27, 1993]
    [Pages 524-526]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 524]]

    Message to the Congress Reporting on the Continuation of Export Control
    Regulations
    April 27, 1993

    To the Congress of the United States:
        1. On September 30, 1990, in Executive Order No. 12730, President
    Bush 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, the President continued in
    effect, to the extent permitted by law, the provisions of the Export
    Administration Act of 1979, as amended, the Export Administration
    Regulations (15 C.F.R. 768 et seq.), and the delegations of authority
    set forth in Executive Order No. 12002 of July 7, 1977, 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. President Bush issued Executive Order No. 12730 pursuant to the
    authority vested in him 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, the President 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, 1992, to March 31, 1993, 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 the last report to the Congress, there have been several
    significant developments in the area of export controls:
        --United States Government experts have continued their efforts to
    implement and strengthen export control systems, including pre-license
    inspections and post-shipment verifications, in the nations of Central
    Europe and the former Soviet Union--notably Belarus, Bulgaria, the Czech
    Republic, Hungary, Kazakhstan, Poland, Romania, Russia, the Slovak
    Republic, and Ukraine, as they continue their progress towards democracy
    and market economies. We anticipate that 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. A key element of these efforts continues to be the
    prevention of proliferation of weapons of mass destruction and
    corresponding technology.
        --Working diligently with our Coordinating Committee (COCOM)
    partners to expand export control cooperation with the newly developing
    democracies of Central Europe and the former Soviet Union and to
    streamline multilateral national security controls, we are pleased to
    report the following important developments:
        --In their November 1992 High-Level Meeting, the COCOM partners took
            action to significantly liberalize export controls on certain
            telecommunications exports to the newly independent states (NIS)
            of the former Soviet Union and other Central European nations,
            which should facilitate rapid and reliable telecommunications
            between these nations and the West, as well as modern, cost-
            effective domestic telecommunications systems. This action was
            soon thereafter reflected in corresponding amendments to the
            Export Administration Regulation. (57 F.R. 61259, December 24,
            1992.)
        --Also in November, at the first High-Level ``COCOM Cooperation
            Forum'' (CCF) Meeting, which included the 17 members

    [[Page 525]]

            of COCOM, most of the newly independent states of the former
            Soviet Union (NIS), and other Central European nations, the
            United States announced an $11 million technical assistance
            package to assist in the elimination of nuclear arms, enhanced
            nonproliferation efforts, and export control development. The
            United States, in cooperation with the CCF, hopes to engage
            these nations in further establishing controls for trade in
            sensitive goods and technologies, and to provide an impetus for
            wider access by those countries to controlled items.
        --In the first 2 months of 1993, as a result of Bulgarian and
            Romanian commitments to undertake the establishment of effective
            export control systems, COCOM agreed to provide favorable
            consideration treatment for exports of strategic items to those
            countries. The Commerce Department is amending its regulations
            to reflect this development.
        --We are also 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 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:
        --As of December 1992, the Australia Group (AG), a consortium of
            nations that seeks to prevent the proliferation of chemical and
            biological weapons (CBW), increased its membership to 24, with
            the admission of Iceland and Sweden in 1991 and Argentina and
            Hungary in 1992. In addition, the delegates agreed to increase
            from 50 to 54 the number of precursor chemicals subject to
            control and to adopt a common list of controlled biological
            items. The Commerce Department published a rule implementing
            these measures. (57 F.R. 60122, December 18, 1992.) As of
            December 1992, the delegates also agreed to a refined common
            control list of dual-use biological equipment. The Commerce
            Department is in the process of publishing a rule reflecting the
            changes to conform the U.S. list to the AG list.
        --The United States was also a key participant in the Chemical
            Weapons Convention (CWC) negotiations in Geneva, Switzerland. On
            September 3, 1992, the Conference on Disarmament, which drafted
            the CWC, forwarded to the United Nations General Assembly a
            draft CWC, which includes a prohibition on the development,
            production, acquisition, stockpiling, use, or transfer of
            chemical weapons, as well as provides for destruction of
            chemical weapons production facilities and stockpiles. The
            Convention opened for signing in January of this year. The
            United States strongly supports these provisions and is working
            to implement them in harmony with our laws.
        --In December 1992, the 27-nation Nuclear Suppliers Group (NSG), in
            which the United States participates, continued its discussions
            on nuclear-related dual-use controls. The NSG list is 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. Also in
            December 1992, the NSG members agreed to procedures intended to
            standardize and improve the exchange of information among
            members.
        --At the March plenary session in Canberra, the Missile Technology
            Control Regime (MTCR) members welcomed Iceland as the newest
            partner, bringing the total membership to 23 nations. Argentina
            and Hungary were also accepted as members, subject to final
            arrangements agreed to by the MTCR partners. A licensing and
            enforcement officers conference will be held in June 1993 to
            provide an information exchange forum for all partners on
            implementation of the new extended Guidelines, which now cover
            missiles capable of delivering all weapons of mass destruction.
            Previously, the regime covered only missiles capable of
            delivering nuclear weapons. The future of the MTCR is likely to
            be a main agenda item for the next plenary session to be held in
            November 1993.
        --In the area of supercomputers, in 1991 the United States
            established a supercomputer safeguard regime with Japan. Since
            that time both countries have negotiated with European suppliers
            to expand this regime. Issues discussed at the March 1993 London
            meeting include the development of a com-

    [[Page 526]]

          mon licensing policy and security safeguards.
        --Finally, 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 further continued its well-received Business Executive
            Enforcement Team (BEET) to enhance interaction between the
            regulators and the regulated.
        --During this 6-month reporting period, OEE has continued its new
            program--the Strategic and Nonproliferation Enforcement Program
            (SNEP)--which targets critical enforcement resources on exports
            to countries of concern in the Middle East and elsewhere.
        --Two particularly important enforcement efforts during the past 6
            months in which OEE was involved resulted in the arrest and
            indictment of several individuals, including several foreign
            nationals. In one case, OEE special agents arrested an Iranian
            national, Reza Zandian, and an American citizen, Charles Regar,
            on charges that they conspired and attempted to export a
            computer to Iran without the required validated license. The
            computer, valued in excess of $2 million, was seized by the
            Commerce Department. The Department of Justice will seek
            forfeiture of the computer to the United States. In another
            case, a British citizen doing business in South Africa, David
            Brownhill, was arrested and charged with attempting to export
            polygraph and thermal imaging system equipment to South Africa
            without authorization. Both of these cases are currently pending
            trial.
        --In the last 6 months, the Commerce Department has also continued
            to enforce the antiboycott law vigorously. The Office of
            Antiboycott Compliance (OAC) maintains 30 full-time staff
            positions, 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 in
            fiscal year 1992 approaches $2,109,000, the second largest
            amount in the history of the program. This amount includes a
            civil penalty of $444,000 imposed in the first case alleging
            both antiboycott and export control violations.
        --One particularly significant antiboycott compliance case was
            recently concluded by an order of February 11, 1993. Under that
            order, William Hardimon was assessed a civil penalty of $54,000,
            and his export privileges were denied for 6 months. Hardimon
            allegedly refused to do business with another person in order to
            comply with an illegal Saudi Arabian requirement, complied with
            an illegal Kuwaiti boycott request, and failed to report the
            receipt of the boycott requests.
        5. The expenses incurred by the Federal Government in the 6-month
    period from October 1, 1992, to March 31, 1993, 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
    $17,897,000, most of which represents program operating costs, wage and
    salary costs for Federal personnel, and overhead expenses.

                                                          William J. Clinton

    The White House,
    April 27, 1993.