[Weekly Compilation of Presidential Documents Volume 29, Number 17 (Monday, May 3, 1993)]
[Pages 700-703]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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-

[[Page 701]]

      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 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

[[Page 702]]

      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 common 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

[[Page 703]]

      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.