Where Industry and Security Intersect
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This chapter discusses the Department of Commerce's implementation of comprehensive and partial embargoes maintained by the U.S. Government, either unilaterally or to implement U.N. Security Council (UNSC) Resolutions.
The Department of Commerce administers the U.S. embargo on arms-related items to Rwanda and a comprehensive ban on exports to persons designated under Executive Order 13088, as amended by Executive Order 13192 (Slobodan Milosevic, certain family members and close associates, and persons under open indictment by the International Tribunal for the Former Yugoslavia).
The U.S. Government maintains a number of embargoes on countries that also impact the Department of Commerce's export control programs. Specifically, the U.S. Government maintains comprehensive economic embargoes against Cuba, Iran, Iraq, Libya, and Sudan (five of the seven countries designated by the Secretary of State as state sponsors of international terrorism). The export controls maintained by the Department of Commerce on Cuba, Iran, Libya, Sudan, and Iraq are discussed in detail in Chapter 4. The U.S. Government also implements trade sanctions on certain foreign countries and foreign entities, consistent with UNSC Resolutions. The Treasury Department's Office of Foreign Assets Control (OFAC) administers UNSC mandated sanctions on Iraq, (1) and certain designated entities, including the Taliban, (2)
Al Qaida, and the National Union for the Total Independence of Angola (UNITA). These embargoes are not discussed in detail in this report.
The Department of Commerce removed special controls that had been imposed on the export and reexport of arms-related items to the Federal Republic of Yugoslavia (Serbia and Montenegro) (FRY), consistent with the UNSC termination of the arms embargo on the FRY. On November 25, 2002, the Department of Commerce published a rule removing the license denial policy that applied to exports and reexports of arms-related items (military-related items on the International Munitions List, as well as items controlled for crime control and regional stability reasons) to the FRY. Proposed exports of these items are now reviewed on a case-by-case basis. Prior to this action, the Department of Commerce maintained a ban on such arms-related exports to the FRY consistent with UNSC Resolution 1160 of March 3, 1998.
The UNSC terminated the arms embargo in September 2001.
The UNSC imposed an arms embargo on Rwanda on May 17, 1994. In 1995, the UNSC suspended the application of the arms embargo to the Government of Rwanda if items were shipped through specified points of entry, and later terminated (effective September 1, 1996) the application of these restrictions on sales or supplies to the Government of Rwanda. The sale or supply of such arms and arms-related materiel to non-governmental forces in Rwanda remains prohibited.
The U.S. Government requires a license for foreign policy purposes for the export or reexport by a U.S. person to any end-user in Rwanda of all arms and arms-related materiel of all types, regardless of origin, including weapons and ammunition, military vehicles and equipment, paramilitary police equipment and spare parts for these items. The U.S. Government also requires a license for the use of any U.S. aircraft or vessel to supply or transport any such items to Rwanda. The U.S. Government has a general policy of denial for export or reexport of controlled items to Rwanda. However, proposed exports or reexports to the Government of Rwanda are reviewed on a case-by-case basis.
Comprehensive restrictions are maintained on persons designated pursuant to Executive Order 13088, as amended by Executive Order 13192 of January 17, 2001, and persons under open indictment by the International Criminal Tribunal for the Former Yugoslavia.
The controls on arms-related items to Rwanda remain in place to prevent any U.S. contribution to potential conflict and to conform to United Nations-mandated sanctions. In addition, the restrictions on all items subject to the EAR to persons designated pursuant to Executive Order 13088, as amended by Executive Order 13192 (associates of Slobodan Milosevic and indictees of the International Criminal Tribunal for the Former Yugoslavia) are maintained to support the implementation and enforcement of sanctions on these persons and efforts to bring them to justice for their alleged war crimes.
1. Probability of Achieving Intended Foreign Policy Purpose. The Secretary has determined that these controls are likely to achieve the intended foreign policy purpose. The restrictions have denied these persons and nations certain trade relations with the United States and other nations. The controls continue to put pressure on these persons and the governments of these countries to modify their policies, since the U.S. Government and the U.N. will not lift these embargoes without a change in the unacceptable conduct that prompted the imposition of sanctions. In addition, the applicable controls may serve to reduce the potential for conflict.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these controls are compatible with U.S. foreign policy objectives. The controls complement U.S. foreign policy in other aspects of U.S. relations with these persons and countries. They encourage these persons and the governments of these countries to modify their policies with the goal of improving relations with the United States. These controls are consistent with U.S. foreign policy goals of promoting peace and stability, preventing weapons proliferation, and human rights abuses.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to these controls is not likely to render the controls ineffective. The arms embargo on Rwanda is consistent with the U.N. objectives; the U.S. Government has received no significant objections to these controls, as they are mandates of the UNSC. In addition, the sanctions on entities associated with Slobodan Milosevic and indictees of the International Criminal Tribunal for the Former Yugoslavia have multinational support.
4. Economic Impact on United States Industry. The Secretary has determined that any adverse effect of these controls on the economy of the United States, including on the competitive position of the United States in the international economy, does not exceed the benefit to United States foreign policy objectives. The arms embargo on Rwanda has had little impact on U.S. industry. U.S. exports to Rwanda were $17.4 million in 2001, of which about half was comprised of agricultural and forest products. Much of the remainder was various types of electrical and mechanical equipment. The Department of Commerce received one license application valued at $30,000 for non-arms related items to Rwanda during FY 2002, which was approved. The economic impact of restrictions on associates of Slobodan Milosevic and indictees of the International Criminal Tribunal for the Former Yugoslavia should have little, if any, economic impact.
5. Effective Enforcement of Control. The Secretary has determined the United States has the ability to effectively enforce these controls. Controls on exports to embargoed and sanctioned countries, including those discussed in this chapter, raise a number of challenges. These include the need to concentrate limited resources on priority areas, developing new strategies to limit reexport violations, strengthening the cooperative relationship with other law enforcement agencies in the United States and overseas, and maintaining a consistent outreach effort to help limit U.S. business vulnerability. Overall, the embargoes are generally understood and supported by the U.S. public. Voluntary cooperation from most U.S. exporters is expected.
The Department of Commerce published a notice in the Federal Register on September 27, 2002 requesting public comments on its foreign policy-based export controls. A notice was also published on the Bureau of Industry and Security's Web page. The comment period closed on November 29, 2002. A detailed review of comments received is available in Appendix I.
Most countries support international efforts to stabilize Rwanda and to prevent further ethnic conflict and regional instability. The U.S. Government works closely with allies to support the new government in Yugoslavia and stabilize the situation in the Balkans. The restrictions imposed on Milosevic associates and indictees of the International Tribunal for the Former Yugoslavia are intended to prevent the destabilization of the new government in Serbia and the diversion of resources.
The U.S. Government imposes embargoes and sanctions in an effort to make the strongest possible statement against a particular country's policies. Restrictions on exports can supplement other actions that the U.S. Government takes to change the behavior of the target countries, including severing diplomatic relations, banning imports into the United States, seeking U.N. denunciations, and curtailing or discouraging bilateral educational, scientific or cultural exchanges. U.S. Government embargoes and sanctions complement diplomatic measures and continue to be used to influence the behavior of these countries.
The foreign availability of items controlled under Section 6(a) has been considered by the Department of Commerce. In general, numerous foreign sources of commodities and technology similar to those subject to these controls are known, especially for items controlled by the U.S. Government. However, the arms embargoes against certain Rwandan entities, and comprehensive sanctions against Milosevic entities and other sanctioned persons have significant multilateral support.
1. To reinforce Department of the Treasury-administered controls, the Department of Commerce has made it a violation of the Export Administration Regulations to export or reexport to Iran or Iraq any item that is subject to Treasury's regulations and also subject to the EAR without Treasury authorization. In addition, on May 31, 2002, the Department of Commerce published a rule subjecting Iraq to anti-terrorism controls with respect to certain chemicals and chemical mixtures controlled under ECCNs 1C350, 1C355, and 1C395. It should also be noted that the Department of Commerce has also taken action to prevent diversion from third countries to Iraq. Specifically, the Department of Commerce issued General Order No. 3 in December 2000 to require a license to export or reexport items on the Commerce Control List to Shaykh Hamad Bin Ali Bin Jaber Al-thani, a citizen of Qatar, to the Gulf Falcon Group. Ltd., an entity located in Doha, Qatar, or to related entities located in Sharjah, United Arab Emirates. The Shaykh donated a U.S.-origin aircraft to Iraq in November 2000 in violation of U.N. sanctions. The license requirement allows the U.S. Government to review proposed exports and reexports to the Shaykh and to the listed entities on a case-by-case basis to determine whether there is a risk of diversion contrary to U.S. or international law.
2. Executive Order 13129 of July 4, 1999, blocked the property of and prohibited most trade with the Taliban or involving the territory of Afghanistan controlled by the Taliban. On January 24, 2002, the Department of State issued a notice modifying the description of "territory of Afghanistan controlled by the Taliban" that was in Executive Order 13129. It has now been determined that the Taliban no longer controls any territory in Afghanistan. Therefore, the comprehensive controls formerly maintained on exports from the United States and by persons subject to U.S. jurisdiction to the territory of Afghanistan controlled by the Taliban are no longer in effect. The U.S. Government still maintains an embargo on the Taliban and associated blocked persons, wherever they are located, as well as Al Qaida and other designated terrorist persons.