[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.

[[Page 379]]

  
        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

[[Page 380]]

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.