[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

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        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.