The Department of Commerce’s Bureau of Industry and Security (BIS) requested public comments on existing foreign policy-based export controls maintained under Section 6 of the Export Administration Act (EAA) through a Federal Register notice published October 13, 2005 (70 FR 59678). Comments were solicited from all six of the Department’s Technical Advisory Committees (TACs), which advise BIS, as well as from the President’s Export Council Subcommittee on Export Administration. Comments also were solicited from the public through the BIS Web page. BIS requested comments on how existing foreign policy controls have affected exporters and the overall public. The notice invited public comments about issues such as the effectiveness of controls when foreign availability exists; whether the goals of the controls can be achieved through other means such as negotiations; the compatibility of the controls with the overall U.S. policy toward a country in question; the effect of controls on U.S. economic performance; and the ability to enforce the controls.
The comment period closed on November 14, 2005. BIS received 4 responses from the following organizations: Airbus North America Holdings, Inc.; Global Textile Partner Greenville, Inc.; National Electrical Manufacturers Association, and Sun Microsystems. BIS has made all comments received available for review in the BIS Freedom of Information Act Reading Room available on the BIS Web page. BIS also makes the comments available for public review upon request. This Appendix summarizes the comments received.
On October 17, 2005, Airbus North America Holdings, Inc. submitted a request to clarify a section reference in Part 744 of the Export Administration Regulations. The commentator pointed out a typographical error in Part 744.7(b)(2) which directs readers to a non-existent paragraph (e). Specifically, the commentator requested to confirm that the reference to “the commodities described in paragraph (e)” in Section 744.7(b)(2) should actually be a reference to paragraph (3), not (e).
On November 7, 2005, Global Textile Partner Greenville, Inc. submitted comments stating that foreign policy controls harm U.S. companies that manufacture widely available products and do little to effect embargoed countries because such countries can freely obtain the goods from other manufacturers. The commentator also notes that unilateral controls assist foreign competitors by building a brand preference and perception of reliable supply from these competitors.
On November 10, 2005, the National Electrical Manufacturers Association submitted comments stressing that the U.S. Government should give greater consideration to the effect of its export control and sanctions policies on the competitiveness of U.S. companies. The commentator noted that the U.S. Government should look to multilateral controls and should review existing controls to determine whether the cost to U.S. jobs and industries outweighs their effectiveness. Additionally, a more deliberative framework for imposing economic sanctions by Congress and the Executive Branch should be established.
On November 11, 2005, Sun Microsystems submitted comments noting two areas where foreign-policy based controls have resulted in competitive damage to U.S. companies without providing a policy advantage: Enhanced Proliferation Control Initiative (EPCI) “Catch-All” controls and Anti-Terrorism (AT) controls. With respect to EPCI end-use controls, the commentator states that such controls are (1) overly broad; (2) not effective in ensuring that particular entities do not receive non-listed items because these items can easily be obtained elsewhere globally; and (3) impose substantial compliance costs on U.S. companies. The commentator recommends that the EPCI related end-use controls only apply to certain geographic areas and a narrow technological scope. The commentator also opposes the extension of catch-all controls to other end-uses, such as conventional military end-uses.
With respect to AT controls, the commentator states that the items subject to AT controls do not demonstrate a clear export control objective and are out of date. In particular, in the area of information technology, controls have not been adjusted in over a decade to accommodate technological advances. The commentator specifically cites the controls applicable to computers and notes that the current parameters under Export Control Classification Number (ECCN) 4A994 are set at Composite Theoretical Performance of 6, while the Wassenaar limit has been at 190,000 for some time. Additionally, the Wassenaar limit is expected to soon be based on a new metric and control approach. As a general matter, the commentator recommends that AT controls be reviewed in order to better determine the objective of the control and notes that most items caught by these controls are available from other sources worldwide. With respect to computer products in particular, the commentator recommends that mass market computer products be excluded from AT controls and that controls be based on the new metric under consideration in Wassenaar.