    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [March 21, 1995]
    [Pages 378-380]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on Export Control Regulations
    March 21, 1995

    To the Congress of the United States:
        1. On August 19, 1994, in Executive Order No. 12924, 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, foreign policy, and economy 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.), and the
    delegations of authority set forth in Executive Order No. 12002 of July
    7, 1977 (as amended by Executive Order No. 12755 of March 12, 1991),
    Executive Order No. 12214 of May 2, 1980, Executive Order No. 12735 of
    November 16, 1990 (subsequently revoked by Executive Order No. 12938 of
    November 14, 1994), and Executive Order No. 12851 of June 11, 1993.
        2. I issued Executive Order No. 12924 pursuant to the authority
    vested in me as President by the Constitution and laws of the United
    States, including, but not limited to, IEEPA. 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 National Emergencies Act (NEA) (50
    U.S.C. 1601 et seq.) 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 August 19, 1994, to February 19, 1995, is submitted in
    compliance with these requirements.
        3. Since the issuance of Executive Order No. 12924, 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. 12924 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:

    Bilateral Cooperation/Technical Assistance

            As part of the Administration's continuing effort to encourage
    other countries to implement effective export controls to stem the
    proliferation of weapons of mass destruction, as well as certain
    sensitive technologies, the Department of Commerce and other agencies
    conducted a range of discussions with a number of foreign countries,
    including governments in the Baltics, Central and Eastern Europe, the
    Newly Independent States (NIS) of the former Soviet Union, the Pacific
    Rim, and China. Licensing requirements were liberalized for exports to
    Argentina, South Korea, and Taiwan, responding in part to their adoption
    of improved export control procedures.

    Australia Group

            The Department of Commerce issued regulations to remove controls
    on certain chemical weapon stabilizers that are not controlled by the
    Australia Group, a multilateral regime dedicated to stemming the
    proliferation of chemical and biological weapons. This change became
    effective October 19, 1994. In that same regulatory action, the
    Department also published a regulatory revision that reflects an
    Australia Group decision to adopt a multi-tiered approach to control of
    certain mixtures containing chemical precursors. The new regulations
    extend General License G-DEST treatment to certain categories of such
    mixtures.

    Nuclear Suppliers Group (NSG)

            NSG members are examining the present dual-use nuclear control
    list to both remove controls no longer warranted and to rewrite control
    language to better reflect nuclear proliferation concerns. A major item
    for revision involves machine tools, as the current language was
    accepted on an interim basis until agreement on more specific language
    could be reached.

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            The Department of Commerce has implemented license denials for
    NSG-controlled items as part of the ``no-undercut'' provision. Under
    this provision, denial notifications received from NSG member countries
    obligate other member nations not to approve similar transactions until
    they have consulted with the notifying party, thus reducing the
    possibilities for undercutting such denials.

    Missile Technology Control Regime (MTCR)

            Effective September 30, 1994, the Department of Commerce revised
    the control language for MTCR items on the Commerce Control List, based
    on the results of the last MTCR plenary. The revisions reflect advances
    in technology and clarifications agreed to multilaterally.

            On October 4, 1994, negotiations to resolve the 1993 sanctions
    imposed on China for MTCR violations involving missile-related trade
    with Pakistan were successfully concluded. The United States lifted the
    Category II sanctions effective November 1, in exchange for a Chinese
    commitment not to export ground-to-ground Category I missiles to any
    destination.

            At the October 1994 Stockholm plenary, the MTCR made public the
    fact of its ``no-undercut'' policy on license denials. Under this
    multilateral arrangement, denial notifications received from MTCR
    members are honored by other members for similar export license
    applications. Such a coordinated approach enhances U.S. missile
    nonproliferation goals and precludes other member nations from approving
    similar transactions without prior consultation.

    Modifications in Controls on Embargoed Destinations

        Effective August 30, 1994, the Department of Commerce restricted the
    types of commodities eligible for shipment to Cuba under the provisions
    of General License GIFT. Only food, medicine, clothing, and other human
    needs items are eligible for this general license.

            The embargo against Haiti was lifted on October 16, 1994. That
    embargo had been under the jurisdiction of the Department of the
    Treasury. Export license authority reverted to the Department of
    Commerce upon the termination of the embargo.

    Regulatory Reform

            In February 1994, the Department of Commerce issued a Federal
    Register notice that invited public comment on ways to improve the
    Export Administration Regulations. The project's objective is ``to make
    the rules and procedures for the control of exports simpler and easier
    to understand and apply.'' This project is not intended to be a vehicle
    to implement substantive change in the policies or procedures of export
    administration, but rather to make those policies and procedures simpler
    and clearer to the exporting community. Reformulating and simplifying
    the Export Administration Regulations is an important priority, and
    significant progress has been made over the last 6 months in working
    toward completion of this comprehensive undertaking.

    Export Enforcement

            Over the last 6 months, the Department of Commerce continued its
    vigorous enforcement of the Export Administration Act and the Export
    Administration Regulations through educational outreach, license
    application screening, spot checks, investigations, and enforcement
    actions. In the last 6 months, these efforts resulted in civil
    penalties, denials of export privileges, criminal fines, and
    imprisonment. Total fines amounted to over $12,289,000 in export control
    and antiboycott compliance cases, including criminal fines of nearly
    $9,500,000 while 11 parties were denied export privileges.

            Teledyne Fined $12.9 Million and a Teledyne Division Denied
    Export Privileges for Export Control Violations: On January 26 and
    January 27, Teledyne Industries, Inc. of Los Angeles, agreed to a
    settlement of criminal and administrative charges arising from illegal
    export activity in the mid-1980's by its Teledyne Wah Chang division,
    located in Albany, Oregon. The settlement levied criminal fines and
    civil penalties on the firm totaling $12.9 million and imposed a denial
    of export privileges on Teledyne Wah Chang.
        The settlement is the result of a 4-year investigation by the Office
    of Export Enforcement and the U.S. Customs Service. United States
    Attorneys offices in Miami and Washington, D.C., coordinated the
    investigation. The investigation determined that during the mid-1980's,
    Teledyne illegally exported nearly 270 tons of zirconium that was used
    to manufacture cluster bombs for Iraq.
        As part of the settlement, the Department restricted the export
    privileges of Teledyne's

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    Wah Chang division; the division will have all export privileges denied
    for 3 months, with the remaining portion of the 3-year denial period
    suspended.

            Storm Kheem Pleads Guilty to Nonproliferation and Sanctions
    Violations: On January 27, Storm Kheem pled guilty in Brooklyn, New
    York, to charges that he violated export control regulations barring
    U.S. persons from contributing to Iraq's missile program. Kheem arranged
    for the shipment of foreign-source ammonium perchlorate, a highly
    explosive chemical used in manufacturing rocket fuel, from the People's
    Republic of China to Iraq via Amman, Jordan, without obtaining the
    required validated license from the Department of Commerce for arranging
    the shipment. Kheem's case represents the first conviction of a person
    for violating section 778.9 of the Export Administration Regulations,
    which restricts proliferation-related activities of ``U.S. persons.''
    Kheem also pled guilty to charges of violating the Iraqi Sanctions
    Regulations.
        5. The expenses incurred by the Federal Government in the 6-month
    period from August 19, 1994, to February 19, 1995, 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
    $19,681,000 most of which represents program operating costs, wage and
    salary costs for Federal personnel and overhead expenses.

                                                          William J. Clinton

    The White House,

    March 21, 1995.