Dr. Alexander Aghayan & Associates, Inc.
THE WHITE HOUSE Office of the Press
For Immediate Release February 1, 2000
FACT SHEET Export Controls on Computers
The President today announced an update of U.S. export controls on computers that will promote our national security, enhance the effectiveness of our export control system, and ease unnecessary regulatory burdens on both government and industry. Today's announcement is President Clinton's fourth revision to U.S. export control parameters since 1993. This action reflects the Clinton Administration's efforts to ensure effective controls on militarily sensitive technology while taking into account the increased availability of commodity products, such as servers and workstations, of which millions are manufactured and sold worldwide every year. The Administration's computer export controls are designed to permit the government to calibrate control levels and licensing conditions depending upon the national security or proliferation risk posed at a specific destination, to enhance U.S. national security by ensuring controls on computer exports are effective, and to minimize impediments to legitimate computer exports, which will help preserve the technological lead of the U.S. computer industrial base.
As directed by the President in July 1999, the Administration has conducted a review of our computer export controls that took into account (1) advancements in computing technology since mid-1999, (2) our security, nonproliferation and other national security interests, and (3) the need for a policy that would remain effective for at least six months.
This review found that advancements continue in the power and capabilities of widely available computing systems, reflecting the exponential growth in individual microprocessor speeds that has occurred since 1995. The speed of the general purpose microprocessor used in standard personal computers and business applications today has increased by a factor of eight since the Administration's 1995 decision took effect. This growth will continue - U.S. companies plan commercial sales of individual "chips" rated over 5000 MTOPS by late 2000.
Moreover, while there are military (the term "military" encompasses nuclear, chemical, biological, missile or conventional military end-users/uses) applications across a range of MTOPS levels, the national security agencies have reaffirmed their previous conclusion that there is no definitive line that separates levels of computing power on the basis of their usefulness for military applications. In light of this finding, the advances in basic computing technologies, and the problems inherent in trying to control commodity level items, the Administration has determined that widespread commercial availability of computers with performance capabilities up to 12,500 MTOPS makes that a realistic and enforceable control level.
The Revised Controls The revised controls announced today maintain the four country groups announced in 1995, but amends the countries in, and control levels for, Tier 2 and Tier 3 as follows:
Tier I (Western Europe, Japan, Canada, Mexico, Australia, New Zealand, Hungary, Poland, the Czech Republic and Brazil): Exports without an individual license are permitted for all computers (i.e. there is no prior government review).
Tier II (South and Central America, South Korea, ASEAN, Slovenia, most of Africa): Exports without an individual license are permitted up to 20,000 MTOPS with record-keeping and reporting as directed; individual licenses (requiring prior government review) are needed above 20,000 MTOPS.
Today's decision will raise the individual licensing level from 20,000 MTOPS to 33,000 MTOPS immediately.
The President's decision today will move Romania from Tier 3 to Tier 2. As required by the National Defense Authorization Act of 1998, this decision requires a 120-day congressional notification before it becomes effective.
Tier III (India, Pakistan, all Middle East/Maghreb, the former Soviet Union, China, Vietnam, Central Europe): Based on President Clinton's July 1999 decision, exports are permitted without an individual license up to 6,500 MTOPS, and require individual licenses for military end-uses and end-users above that figure. Exports without an individual license are permitted for civil end-users between 6,500 MTOPS and 12,300 MTOPS, with exporter record keeping and reporting as directed. Individual licenses are required for all end-users above 12,300 MTOPS.
The President's decision today will maintain the current two-level system for civilian and military/proliferation end-users. The decision will raise the individual licensing levels from 6,500 to 12,500 MTOPS for military end-users and from 12,300 to 20,000 MTOPS for civilian end-users.
The Commerce Department will immediately raise the licensing level for civilian end-users and will raise the licensing level for military end-users in six months, at the same time as it adjusts the level that triggers the NDAA notification requirement, which is discussed below. The 1998 National Defense Authorization Act (NDAA), P.L. 105-85, imposed a requirement for companies to provide the Commerce Department with prior notice of exports for systems above 2,000 MTOPS to all Tier 3 end-users. U.S. export control agencies have 10 days to inform the company if it must apply for a license. The President's July 1999 decision raised the NDAA notification level to 6,500 MTOPS; that decision became effective on January 23, 2000 (the end of the 180-day Congressional notification period.)
The President's decision today will raise the NDAA notification level from 6,500 MTOPS to 12,500 MTOPS. The President will advise the appropriate Congressional committees of his decision to raise the NDAA notification level. By law, Congress has six months to review this decision, after which the change to NDAA notification level will go into effect.
The Administration will continue to review the licensing levels and the NDAA notification level to determine if further adjustments are warranted. Given anticipated significant increases in individual microprocessor performance in the near term, the Administration will review these levels by April 2000 to determine if further adjustments are warranted.
Tier IV (Iraq, Iran, Libya, North Korea, Cuba, Sudan, and Syria). There are no planned changes for Tier IV, current policies continue to apply (i.e. the United States will maintain a virtual embargo on computer exports). For all these groups, reexport and retransfer provisions continue to apply.
The revised controls will become effective when they are implemented in formal Commerce Department regulations. We will continue to implement the Enhanced Proliferation Control Initiative (EPCI), which provides authority for the government to block exports of computers of any level in cases involving exports to end-uses or end-users of proliferation concern or risks of diversion to proliferation activities. Criminal and civil penalties apply to EPCI violators. In addition, the Department of Commerce will continue to add to its list of published entities of concern as a means of informing exporters of potential proliferation and other security risks. The Department will remind exporters of their duty to check suspicious circumstances and inquire about end-uses and end-users. Exporters are advised to contact the Department of Commerce if they have any concern with the identity or activities of the end-users. The Commerce Department also will work to expand its efforts -- through public seminars and consultations with companies -- to keep industry regularly informed regarding problem end-users and programs of proliferation concern. Microprocessor Controls.
In addition to revising computer export controls, the Administration revised controls on general-purpose microprocessors on November 26, 1999 by raising the control level from 1900 MTOPS to 3500 MTOPS. Export control agencies agree that general purpose or "mass market" microprocessors are not controllable because they are used in virtually all consumer and business personal computers, are highly portable, and are sold in very large quantities through multiple distribution channels worldwide. The November 26, 1999 change was made given the continuing increases in microprocessor technology. We will continue to review microprocessor technology and will adjust controls as necessary.
We also will continue to maintain controls on higher performance, general-purpose microprocessors that are sold in small quantities for high-end computer and other applications, and those application-specific microprocessors that have military applications and are sold in relatively small quantities.
Legislative Proposal. The National Defense Authorization Act of 1998 requires a six-month Congressional notice period if the President decides to raise the level that triggers the 10-day pre-export notification requirement for Tier 3 countries, and a four-month notice if the President decides to move a country out of Tier 3. The six-month notice period in particular limits our ability to respond quickly to rapid changes in technology. We will continue to work with Congress to change both waiting periods to one month. On a longer-term basis, we will work with Congress to adopt an approach that permits us to adjust our export controls in a predictable and timely manner when we are faced with the practical impossibility of controlling items so widely available that they amount to commodity items, like computers and microprocessors, which are sold by the hundreds of thousands and even millions.
Multilateral Coordination: The Administration is consulting with other nations in the context of our common controls on high performance computers, and with the members of the Wassenaar Arrangement -- the multilateral successor to COCOM, to ensure that they understand the basis for the changes in controls. We are committed to working closely with them to adjust multilateral controls to reflect technological advances and collective security concerns. Our controls are consistent with the purposes of the Wassenaar Arrangement -- to deny arms and sensitive dual-use technologies to countries of concern, and to develop mechanisms for information sharing among the partners as a way to harmonize our export control practices and policies.
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