Pursuant to Section 6(j) of the Export Administration Act (the Act), the Secretary of State has designated six countries – Cuba, Iran, Libya, North Korea, Sudan, and Syria – as nations with governments that have repeatedly provided support for acts of international terrorism.
Effective December 28, 1993, the Acting Secretary of State determined that the United States would control five categories of dual-use items subject to multilateral controls to certain sensitive end-users under Section 6(j) of the Act, because these items meet the criteria set forth in Section 6(j)(1)(B) of the Act. Specifically, the Acting Secretary determined that these items, if exported to military, police, or intelligence organizations, or to other sensitive end-users in a designated terrorist-supporting country, could make a significant contribution to that country’s military potential or could enhance its ability to support acts of international terrorism. As a result, any such export is subject to a 30-day congressional notification period prior to approval. The Acting Secretary also advised that the United States would continue to control exports and reexports to designated state sponsors of terrorism of other items not specifically included in the five categories for general foreign policy purposes under Section 6(a) and would still review such exports against the Section 6(j) standard on a case-by-case basis. These controls are identified in the Export Administration Regulations (EAR) as anti-terrorism (AT) controls.
On March 22, 2005, the Department of Commerce published in the Federal Register an amendment to the Export Administration Regulations to implement further changes in export controls with respect to Libya (70 FR 70 FR 14387). The amendment defines the policies and requirements related to items subject to the Export Administration Regulations that were shipped to Libya in violation of the U.S. embargo (i.e., “installed base items”). Under §764.2(e) of the EAR, no person may order, buy, remove, conceal, store, use, sell, loan, dispose of, transfer, transport, finance, forward, or otherwise service, in whole or in part, any item exported or to be exported from the United States, or that is otherwise subject to the EAR, with knowledge that a violation of the EAR has occurred. The Department, in consultation with the Departments of State and Defense, decided to institute a policy through which exporters could overcome the prohibition in order to support U.S. industry in Libya. As explained in the rule, persons can overcome the prohibition through submission of a report, if the installed base items concerned fall within a defined group of low-level items, or through submission of a license application for technologically sophisticated installed base items. The rule also makes certain clarifications regarding the license review policy for the export and reexport of certain items to Libya and the availability of certain license exceptions for use in shipments to Libya.
On November 16, 2005, the Department of Commerce published in the Federal Register an amendment to the Export Administration Regulations to implement additional changes in export controls with respect to Libya (70 FR 69432). Changes in the rule included the creation of a new license exception to allow the shipment of certain items controlled on the Commerce Control List to U.S. persons in Libya. As a result of the amendment, nine entries controlled on the Commerce Control List for anti-terrorism reasons only became eligible for shipment to Libya under new License Exception “U.S. Persons Libya (USPL)” when shipped to U.S. persons in Libya for their use. These entries are ECCNs: 2A994 (portable generators), 5A992 (encryption hardware), 5D992 (information security software not controlled by 5D002), 9A990 (diesel engines); and certain items under ECCNs 3A991 (electronic devices), 3A992 (electronic equipment), 3B992 (test and inspection equipment for electronic components), 4A994 (computers), and 5A991 (telecommunications equipment).
Pursuant to the 1993 determination of the Acting Secretary of State, and subsequent action consistent with such determination, certain items are controlled pursuant to Section 6(j) of the Act, while others are controlled pursuant to Section 6(a), and, therefore, require a license for anti-terrorism (AT) reasons for export or reexport to the designated terrorist-supporting countries, as appropriate. The Department of Commerce refers all license applications for items controlled for AT reasons to the Department of State for review. Transactions involving exports or reexports of items controlled pursuant to Section 6(j) to military or other sensitive end-users in designated terrorist-supporting countries are subject to a general policy of denial. The applicable controls are contained in the listed EAR sections.
With respect to items controlled pursuant to Section 6(a) (including exports or reexports of certain items even to non-sensitive end-users), a determination must be made regarding whether the requirements of Section 6(j) apply. If the Secretary of State determines that the particular export “could make a significant contribution to the military potential of the destination country, including its military logistics capability, or could enhance the ability of such country to support acts of international terrorism,” the Department of Commerce and the Department of State must notify the appropriate congressional committees 30 days before issuing a license, consistent with the provisions of Section 6(j) of the Act. Transactions not subject to such requirements are generally reviewed on a case-by-case basis.
However, as described further in Chapter 5, the United States maintains comprehensive embargoes on exports and reexports to Cuba, Iran, Sudan, and Syria. As a result, the U.S. Government reviews license applications for exports and reexports of most items to these countries under a general policy of denial, with certain very limited exceptions. The Department of Commerce continues to maintain AT controls with respect to these countries, though such controls and the related licensing policies are secondary to the comprehensive embargoes in place.
Pursuant to Section 6(j) of the Act, the Department of Commerce requires a license for the export or reexport of certain items to military or other sensitive end-users in all six designated terrorist-supporting countries for AT reasons.
Pursuant to Section 6(a) of the Act, the Department of Commerce requires a license for the export of certain items to all six designated terrorist-supporting countries for AT reasons, and for the reexport of certain items to all six designated terrorist-supporting countries for AT reasons. Certain other items are controlled pursuant to Section 6(a) of the Act, requiring a license for reexport to Libya, Syria, Cuba, and North Korea for AT reasons. Certain items are controlled pursuant to Section 6(a) of the Act, requiring a license for export or reexport to Iran and Sudan for AT reasons. Certain other items are controlled pursuant to Section 6(a) of the Act, requiring a license for export to Iran and Libya for AT reasons. Certain items are controlled pursuant to Section 6(a) of the Act, requiring a license for export or reexport to North Korea for AT reasons. Also pursuant to Section 6(a) of the Act, the Department of Commerce requires a license for the export or reexport to Iraq, or transfer within Iraq, of certain items for AT reasons. All export control classification number (ECCN) entries marked as controlled for AT reasons continue in force.
Anti-terrorism controls are intended to prevent acts of terrorism and to distance the United States from nations that have repeatedly supported acts of international terrorism and from individuals and organizations that commit terrorist acts. The controls demonstrate U.S. resolve not to trade with nations or entities that fail to adhere to acceptable norms of international behavior. The policy provides the United States with the means to control any U.S. goods or services that might contribute to the military potential of designated countries and to limit the availability of such goods for use in support of international terrorism. U.S. foreign policy objectives also are furthered by ensuring that items removed from multilateral regime lists continue to be controlled to designated terrorist-supporting countries. With respect to exports and reexports to Cuba, Iran, Sudan, and Syria, anti-terrorism controls are maintained as part of broader U.S. embargoes discussed in Chapter 5.
On July 30, 2004, the Department of Commerce published a rule defining the new license requirements and licensing policies for Iraq, consistent with the lifting of the comprehensive unilateral embargo (69 FR 46069). At the time of publication of the rule, Iraq was on the list of designated terrorist-supporting countries. Iraq was formally removed from that list on October 7, 2004. At this time, pursuant to Section 6(a) of the Act, the Department continues to require a license for export or reexport to Iraq, or transfer within Iraq, of certain items for AT reasons. The Department will move to amend the EAR and lift the anti-terrorism-based licensing requirements on items destined to Iraq in the near future, and replace them with regional stability (RS) controls. Eight entries on the Commerce Control List currently controlled for AT reasons only to Iraq will be controlled instead for RS reasons. These eight entries are export classification numbers (ECCNs) 0B999 (Specific processing equipment such as hot cells and glove boxes suitable for use with radioactive materials), 0D999 (Specific software for neutronic calculations, radiation transport calculations, and hydrodynamic calculations/modeling), 1B999 (Specific processing equipment such as electrolytic cells for fluorine production and particle accelerators), 1C992 (Commercial charges containing energetic materials, n.e.s.), 1C995 (Certain mixtures and testing kits), 1C997 (Ammonium Nitrate), 1C999 (Specific Materials, n.e.s.), and 6A992 (Optical Sensors, not controlled by 6A002). These items will, therefore, continue to require a license for export and reexport to Iraq, and transfer within Iraq. As discussed in Chapter 5, the Department continues to administer U.S. compliance with the United Nations arms embargo on Iraq.
In response to Libya’s renunciation of terrorism and abandonment of its weapons of mass destruction programs, the United Nations terminated its sanctions on September 12, 2003. The United States terminated sanctions under the Iran Libya Sanctions Act (ILSA), with respect to Libya, and under the International Emergency Economic Powers Act in April and September 2004, in response to Libya's steps to dismantle its weapons of mass destruction programs and MTCR-class missiles. Libya, however, remains designated as a state sponsor of terrorism. The United States continues to work on a bilateral and trilateral (with Libya and the United Kingdom) basis to resolve our remaining concerns and to continue to improve the relationship between the two countries. While the relationship remains under review, U.S. export control initiatives in Libya remain incremental.
Under the U.S.-North Korea 1994 Agreed Framework, North Korea agreed to freeze and eventually dismantle its nuclear program in exchange for heavy fuel oil shipments and the construction of two light water reactors. In December 2002, the Executive Board of the Korean Peninsula Energy Development Organization (KEDO), comprised of the United States, South Korea, Japan, and the European Union, suspended oil shipments to North Korea after discovering that North Korea failed to comply with its commitments under the Agreed Framework, the Nuclear Nonproliferation Treaty (NPT), North Korea’s safeguards agreement with the International Atomic Energy Agency (IAEA), and the Joint North-South Declaration on the Denuclearization of the Korean Peninsula, by pursuing an enriched uranium nuclear program for nuclear weapons. As of December 1, 2003, KEDO’s Executive Board suspended the North Korea light water reactor program for a period of one year in response to North Korea’s nuclear activities. On November 26, 2004, the Board agreed to extend the suspension through November 30, 2005. Currently there is a general consensus to terminate KEDO and the light water reactor project.
In 2005, six-party talks resumed with the goal of obtaining a commitment from North Korea to abandon its nuclear weapons programs and to return to the NPT and the IAEA safeguards. On September 19, a Joint Statement was released announcing North Korea’s initial agreement with these goals and outlining the steps that the other five parties will take as the process continues. The Joint Statement marked North Korea’s first commitment to fully abandon all of its nuclear programs and recommit to international oversight. As corresponding measures, the other five parties committed to identifying ways to address North Korea’s energy needs. The United States also affirmed that it does not have nuclear weapons on the Korean Peninsula and does not intend to attack or invade North Korea. The United States also agreed to seek the normalization of bilateral relations with North Korea, within the context of denuclearization and subject to bilateral policies.
Although negotiations with North Korea are ongoing, the Department’s AT controls remain in effect because of unresolved issues concerning North Korea’s continuing support of international terrorism. The purpose of the controls is to restrict the import of equipment useful in enhancing the military or terrorist-supporting capabilities of the regime. The controls also address other U.S. foreign policy concerns, including nonproliferation, human rights, and regional stability.
1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has determined that these controls are likely to achieve the intended foreign policy purpose, in light of other factors, including the availability of these AT-controlled items from other countries. He has further determined that the foreign policy purpose cannot be achieved through negotiations or other alternative means. Although widespread availability of comparable goods from foreign sources limits the effectiveness of these controls, the controls do restrict access by these countries and persons to U.S.-origin commodities, technology, and software, and demonstrate U.S. determination to oppose and distance the United States from international terrorism.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these controls are compatible with U.S. foreign policy objectives and specifically with overall U.S. policy toward the designated terrorist-supporting countries. The Secretary has further determined that the extension of these controls will not have any significant adverse foreign policy consequences. These controls affirm the U.S. commitment to restrict the flow of items and other forms of material support to countries, individuals, or groups for terrorist purposes.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to these controls is not likely to render the controls ineffective, nor will any adverse reaction by other countries be counter-productive to U.S. foreign policy interests. Most countries are generally supportive of U.S. efforts to fight terrorism and stop the proliferation of weapons of mass destruction in countries of concern.
The United States, in parallel with its obligations as a member of the United Nations, maintained a comprehensive trade embargo on Iraq for 13 years, from 1990 until 2003. On May 22, 2003, the United Nations Security Council issued Resolution 1483, lifting most sanctions on Iraq. The Council also called on the United Nations to assist the Iraqi people in a range of activities including humanitarian relief, reconstruction, infrastructure rehabilitation, legal and judicial reform, and human rights.
As the result of continuing concerns, including the security situation and the presence of insurgent groups and terrorist factions in Iraq, the United States continues to maintain a narrow range of AT controls on Iraq. Although many countries concur that the current security situation in Iraq is destabilizing, few maintain controls similar to those implemented by the United States. Nonetheless, there has been no active opposition by other countries to these continued very limited controls that would render the controls ineffective or would otherwise be counterproductive to U.S. foreign policy interests.
Following the Berlin disco bombing of 1986, the United States imposed broad unilateral economic sanctions on Libya. The UN and the EU also imposed sanctions, in 1992, after Libya was implicated in the bombing of Pan Am flight 103 over Lockerbie, Scotland. In 1999, the UN suspended its sanctions after Libya handed over two suspects for trial, and, in 2003, lifted them after Libya met remaining UN Security Council demands related to the Lockerbie bombing. Following Libya's renunciation of weapons of mass destruction and MTCR-class missiles in December 2003, and subsequent cooperation with the United States, the UK, and the international community to rid itself of these programs, the United States lifted its ILSA and IEEPA-based economic sanctions in April and September 2004. Most recently, the EU lifted most of its remaining sanctions against Libya, including lifting of the EU arms embargo.
Although both international and U.S. relations with Libya have improved greatly, the United States continues to retain its AT controls on Libya. Though many other states share U.S. concerns about Libya's remaining ties to terrorism, few countries continue to maintain controls similar to those implemented by the United States. Nonetheless, there has been no active opposition by other countries to these continued very limited controls that would render the controls ineffective or would otherwise be counterproductive to U.S. foreign policy interests.
The United States maintained a comprehensive trade embargo against North Korea for 50 years, until 1994. In general, the U.S. allies have largely acted in concert with the United States to deny North Korea strategic equipment and technology. The easing of U.S. sanctions toward North Korea and the removal of some U.S. controls in June 2000 were echoed by other Western countries. U.S. allies will likely follow the United States’ lead regarding strategic trade with North Korea until North Korea places further limits on its weapons proliferation and military activities.
4. Economic Impact on United States Industry. The Secretary has determined that the 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 AT controls maintained on designated terrorist-supporting countries as a whole have had some impact on U.S. industry. The impact of such controls is described further below, with respect to countries not presently subject to a comprehensive embargo. The economic impact of comprehensive controls maintained on Cuba, Iran, Sudan, and Syria, countries subject to unilateral U.S. embargo, is described further in Chapter 5. On the whole, the impact on U.S. industry is modest while stopping state sponsorship of terrorism is a very high priority of the U.S. Government.
Although the security situation and the presence of insurgents in Iraq, among other issues, continue to be of concern to the United States, the United States fully supports Iraq’s reconstruction and economic revival. Current licensing policy and requirements reflect the complex and challenging environment in Iraq.
From May of 2003 through May of 2004, U.S. exports to Iraq were worth $432.2 million, an increase of $398.7 million from the same time period in calendar years 2002 and 2003. In
Calendar Year 2004 (most recent full year Census trade data), U.S. exports to Iraq were valued at $856.4 million. In addition to foodstuffs, other leading categories of exports included generators; trucks, buses, and special purpose vehicles; telecommunications equipment; computers; and other industrial machines.
Since licensing jurisdiction for Iraq was returned to the Department of Commerce, the majority of license applications received have been for equipment in support of or for use in the reconstruction of Iraq and training activities for its police and military. The Department expects that the number and diversity of applications will increase as more U.S. companies begin working in Iraq. In Fiscal Year 2005, the Department issued 100 licenses for exports and reexports valued at $206.2 million to Iraq. No applications for licenses were denied. According to Census trade data, total U.S. exports to Iraq for Fiscal Year 2005 totaled $1.19 billion. In sum, the remaining controls on trade with Iraq have only a very limited impact on U.S. industry while defeating the insurgency remains a top U.S. foreign policy interest.
The suspension of some IEEPA-based sanctions against Libya on April 23, 2004, and the Department of Commerce's publication of a regulation revising export licensing requirements and policies for the export and reexport of items subject to the EAR on April 29, 2004, coupled with the subsequent lifting of all IEEPA-based sanctions on September 20, 2004, has had a significant positive impact on U.S. industry. That is because the U.S. Government no longer requires a license for most items for Libya's leading import sectors (food, manufactured goods, and many products for the petroleum industry). In Fiscal Year 2005, the Department approved 191 licenses for Libya valued at $1.042 billion, rejected only six applications valued at $549,685, and returned without action 86 applications valued at $267 million.
The long-term duration of the embargo makes measuring the impact of the remaining controls difficult, as there is little history to suggest what the dollar value of U.S. trade would be, absent export controls (see Table 1). Libya’s total annual imports average around $6 billion. On the basis of information received from exporters, the Department of Commerce anticipates that there is significant opportunity in Libya for a broad array of U.S. goods.
Number of Applications / Notifications
Total Value in U.S. Dollars
U.S. export sanctions on North Korea have had a minimal impact on U.S. industry. North Korea’s total imports average about $1-2 billion per year, with the primary imports including petroleum, cooking coal, machinery and equipment, and grain. The CIA World Factbook estimates that North Korean imports totaled $2.1 billion (est.) in 2003 (the most recent year for which figures are available). North Korea’s leading sources of imports in 2004 were China (32.9 percent), Thailand (10.7 percent) and Japan (4.8 percent).
Based on U.S. Census Bureau statistics, total U.S. exports to North Korea, although far below the levels of other countries, generally increased with the signing of the U.S.-North Korea Agreed Framework in October 1994. Exports rose from only $179,730 in 1994 to between $3 and $4 million annually from 1995 through 1998. In 1999, U.S. exports to North Korea nearly tripled to $11.3 million. However, in 2000, U.S. exports dropped to $2.7 million and in 2001, U.S. exports were only $700,000. The vast majority of these exports were shipments of food. In 2002, U.S. exports to North Korea totaled $25 million, the vast majority of which were in the form of cereals (60 percent) and animal/vegetable fats (20 percent). The level of exports dropped to $8.0 million in 2003 with dairy products and animal fats accounting for over half of exports, followed by charity donations and cereals. In 2004 (the most recent year available), the level of exports rose to $23.8 million with corn and wheat together accounting for over half of exports followed by unmanufactured agricultural industry products and other foodstuffs.
Export license applications approved by the U.S. Government for North Korea increased from six licenses in Fiscal Year 1994 to an annual average of 38 licenses in the Fiscal Year 1995-99 period (see Table 2). However, since Fiscal Year 2000, the Department has approved only a handful of licenses per year. Three licenses were approved for North Korea in Fiscal Year 2005 with a total value of $15,665; no applications were rejected and five applications valued at $507,749 were returned without action.
On September 17, 1999, President Clinton announced his decision to ease some of the sanctions maintained against North Korea. The sanctions easing was implemented in June 2000, making most U.S. consumer goods eligible for export without a license to North Korea. This accounts for the decline in license applications for North Korea since Fiscal Year 2000, as the majority of the humanitarian and low-level consumer items formerly requiring a license became eligible to be shipped without a license.
Number of Applications
Total Value in U.S. Dollars
Trade with North Korea would likely be quite low even if controls were lifted, given the state of the North Korean economy and, further, exports of EAR99 items are generally not controlled. Any cost to the U.S. economy of limiting exports to North Korea of items controlled on the Commerce Control List for anti-terrorism reasons is far outweighed by the critical foreign policy goal of containing the threat of North Korean support for terrorism.
5. Effective Enforcement of Controls. The Secretary has determined the United States has the ability to effectively enforce these controls. Because of the well-publicized involvement of these countries in acts of international terrorism, there is public knowledge of and support for U.S. controls, which facilitates enforcement. The large number of items exported in normal trade to other countries, including some aircraft items and consumer goods that have many producers and end-users around the world, creates innumerable procurement opportunities for brokers, agents, and front companies working for these countries. In addition, differences in export laws and standards of evidence for violations complicate law enforcement cooperation between countries.
Nonetheless, the overriding foreign policy objective of maintaining these controls outweighs the difficulties of effective enforcement. The Department of Commerce views these controls as a key enforcement priority, and uses regular outreach efforts and other programs to keep businesses informed of concerns, gather leads on activities of concern, and conduct sentinel visits to verify end-use and end-users of U.S. commodities. The Department is moving to implement a strong program to address procurement by or for designated terrorist-supporting countries. This program includes enhanced agent training, development of a targeted outreach program to familiarize U.S. businesses with concerns, and close cooperation with lead agencies working on terrorism issues.
On April 13, 2005, Infocom Corporation and its principals, Bayan, Ghassan, Basman, Hazim, and Ihasan Elashi were convicted of dealing in the funds of a Specially Designated Terrorist, a high-ranking member of Hamas. This was the second of two trials for Infocom and the Elashis. The first trial, completed in July 2004, resulted in convictions for conspiring to export computers and computer equipment to Libya and Syria. One of the Infocom principals was also convicted in 2002 for violating a BIS Temporary Denial Order (TDO) and was sentenced to 48 months imprisonment. Sentencing in the current cases is pending. The Office of Export Enforcement of the Bureau of Industry and Security jointly conducted this investigation as a member of the North Texas Joint Terrorism Task Force.
In June 2005, Wilden Pump and Engineering Co., LLC (Wilden), of Grand Terrace, California, agreed to pay a $700,000 civil penalty and to the imposition of a three-year denial of export privileges to settle charges in connection with unauthorized exports of diaphragm pumps to Iran, the People's Republic of China, Syria, and the United Arab Emirates. The denial of export privileges is suspended for two years provided Wilden does not violate the EAR during the suspension period. The majority of the pumps exported is controlled for export and re-export due to concerns that they could be used in chemical and biological weapons proliferation.
In June 2005, E.D. Bullard of Cynthiana, Kentucky, agreed to pay a $330,000 civil penalty to settle charges in connection with unauthorized exports and re-exports of thermal imaging cameras to various destinations. In June 2005, Bullard Gmbh, of Bonn, Germany agreed to pay a $36,000 civil penalty to settle charges that it resold, reexported, and transferred thermal imaging cameras to Austria, France, and Switzerland in violation of the EAR. In addition, Bullard was charged with making false statements on Shipper's Export Declarations in connection with many of the shipments. These cameras are controlled for antiterrorism, national security, non-proliferation, regional stability, and United Nations reasons.
In an October 13, 2005, Federal Register notice (70 FR 59678), the Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign policy-based export controls. Comments were solicited from all six of the Department’s Technical Advisory Committees, as well as from the President’s Export Council Subcommittee on Export Administration. Comments also were solicited from the public via the BIS website. The comment period closed on November 14, 2005, and four comments were received. Two comments pertained to AT controls.
One comment advocated the need for the U.S. Government to give greater consideration to the effect of export controls and sanctions policies on the competitiveness of U.S. companies, but did not specifically cite anti-terrorism controls. The commentator advocated the pursuit of multilateral controls and a review of current policies to ensure that the cost to U.S. jobs and industry does not outweigh such policies’ effectiveness.
The second comment expressed concern over the current range of items subject to anti-terrorism controls, noting that the control of such items fails to demonstrate a clear export control objective and that the control parameters are extremely outdated. In particular, the commentator noted that in relation to information technology, the control parameters have not been revised in over ten years and are, therefore, technologically obsolete. The commentator cited the controls applicable to computers as an example, noting that Export Control Classification Number 4A994 uses Composite Theoretical Performance of 6 as its control parameter, while the Wassenaar limit is currently 190,000 and may soon change to a new parameter. The commentator advocated a review of anti-terrorism controls in order to define the controls’ objective. With respect to computers in particular, the commentator advocated the exclusion of mass-market computer products from anti-terrorism controls, and the implementation of the new control parameters currently under review in Wassenaar.
A detailed review of all comments received can be found in Appendix I.
The United States continues to consult with a number of countries, both on a bilateral and a multilateral basis, on activities of designated terrorist-supporting countries. In general, most countries are supportive of U.S. anti-terrorism efforts but do not implement export control programs similar to that of the United States.
The United States has ongoing consultations with both other countries and Iraq. Iraq is no longer designated as a terrorist-supporting country and the Department will, in the near future, revise AT controls on Iraq and base them on Regional Security considerations. The Department of State has the lead in ongoing discussions with other countries to coordinate a common approach that will affect foreign availability of controlled items.
The United States consults on an ongoing basis with other countries regarding Libya’s change in policy as well as the remaining concerns about Libyan behavior. The United States also has extensive bilateral discussions with Libya on a broad array of issues. The Department of State has the lead in ongoing discussions with other countries to coordinate a common approach that will affect foreign availability of controlled items.
The United States is consulting with its regional allies regarding anti-terrorism controls on North Korea. In December 2002, the United States and its partners in the NSG drafted a “Watch List” of items not currently controlled by the NSG, in response to disclosures regarding North Korea’s nuclear program. These items do not meet the licensing threshold of the NSG export control regime; however, these items may make a material contribution to nuclear activities of concern. Many of the items on the “Watch List” are already controlled by the U.S. Government unilaterally for anti-terrorism reasons. Although the expanded “Watch List” is not intended to be the basis of expanded NSG controls, it has increased the scrutiny by our NSG partners of proposed exports of items that are not NSG-controlled but that the United States controls for anti-terrorism reasons. As of December 1, 2003, KEDO’s Executive Board suspended the North Korean light water reactor program for a period of one year in response to North Korea’s nuclear activities. In November 2004, the Board extended the suspension through November 30, 2005. In 2005, six-party talks with North Korea were reinitiated, with sessions held over the summer, in September and in November. Currently, however, there is a general consensus to terminate KEDO and the light water reactor program.
The United States has taken a wide range of diplomatic, political, and security-related steps, in addition to economic measures such as export controls, to persuade certain countries to stop their support for terrorist activities. The methods that the United States uses against a country, terrorist organization, or individual vary and are dictated by the circumstances prevailing at any given time. In general, the United States believes that maintenance of AT controls is an appropriate method to demonstrate the obligation of each of the designated terrorist-supporting countries to act against terrorist elements within their jurisdiction or control.
The foreign availability provision does not apply to items determined by the Secretary of State to require control under Section 6(j) of the Act.(1) Congress specifically excluded AT controls from foreign availability assessments otherwise required by the Act, due to the value of such controls in emphasizing the U.S. position on countries supporting international terrorism. However, the Department of Commerce has considered foreign availability of items controlled to designated terrorist-supporting countries under Section 6(a). Although there are numerous foreign sources for commodities similar to those subject to control, the continued maintenance of sanctions by many other countries limits foreign availability for some destinations more than for others. In addition, the continued U.S. Government anti-terrorism controls serve foreign policy interests that override the impact of foreign availability.
1. Provisions pertaining to foreign availability do not apply to export controls in effect before July 12, 1985, under sections 6(i) (International Obligations), 6(j) (Countries Supporting International Terrorism), and 6(n) (Crime Control Instruments). See the Export Administration Amendments Act of 1985, Public Law 99-64, section 108(g)(2), Stat. 120, 134-35. Moreover, sections 6(i), 6(j), and 6(n) require that controls be implemented under certain conditions without consideration of foreign availability.