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CHAPTER 9

High Performance Computers

(Section 742.12)

Export Control Program Description and Licensing Policy

On April 24, 2006 , the Department published a rule in the Federal Register (71 FR 20876) that updated the U.S. policy on high performance computer (HPC) exports and implemented a new formula for calculating computer performance. This rule removed XP as a reason for control from the Export Administration Regulations (EAR) and removed MT (Missile Technology) controls from Export Control Classification Numbers (ECCNs) for HPCs. HPCs will continue to be controlled for National Security (NS) and Anti-Terrorism (AT) reasons. The Secretary has determined that XP export controls do not enhance license requirements or license review policies that are already in place under the NS controls described in Section 742.4 of the EAR, the AT controls described in Part 742, or any other controls in the EAR. The Secretary has determined further that the burden of XP controls outweighs their benefit. With this rule, XP controls are removed from the scope of future reporting under Section 6(f) of the Export Administration Act (EAA).

The United States still maintains NS and AT controls on HPCs in recognition of the strategic and proliferation significance of HPCs, including related software and technology. Such controls are adjusted from time to time to reflect advances in computer technology and expanding worldwide availability. The Export Administration Regulations (EAR) set forth special provisions for exports and reexports of HPCs and related software and technology.

HPCs are computer systems with performance exceeding the licensing threshold defined in ECCN 4A003.b on the Commerce Control List (Supp. No. 1 to Part 774 of the EAR). The current performance threshold in ECCN 4A003.b is 0.75 WT (weighted teraFLOPS) for digital computers. Licensing requirement for HPCs vary according to destination, end-user, and end-use, and are applied unless a License Exception is available.

At the current control level, digital computers with an Adjusted Peak Performance (APP) not exceeding 0.75 WT may, in nearly all cases, be exported and reexported No License Required (NLR) to all destinations except embargoed and sanctioned destinations (Country Group E:1, see Supp. No.1 to Part 740 of the EAR).

A license for export is required for NS and AT reasons for exports and reexports of HPCs, including electronic assemblies and specially designed components, to Computer Tier 3 (“Tier 3”) countries. License Exception Adjusted Peak Performance (LE APP) is available for exports or reexports of HPCs to countries in “Tier 1.” The countries that comprise Computer Tiers 1 and 3 are listed in Section 740.7 of the EAR. On June 3, 2006 , Bulgaria was moved from Computer Tier 3 and placed in Computer Tier 1 (71 FR 20876 ( Apr. 24, 2006 )).

A license is also required for AT reasons for exports and reexports of computers having an APP value equal to or greater than 0.00001 WT to Computer Tier 4 (“Tier 4”) countries. The Tier 4 countries are Cuba , Iran , North Korea , Sudan , and Syria , as listed in Section 742.12 of the EAR. On August 31, 2006 , Libya was moved from Computer Tier 4 and placed in Computer Tier 3. (71 FR 51714). See Chapters 4 and 5 of this report for additional foreign policy controls that may apply to exports of computers to Tier 4 countries.

In Fiscal Year 2006, the Department of Commerce approved twenty-two license applications for export of computers listed under Export Control Classification Number (ECCN) 4A003, with a total value of nearly $77.6 million. In Fiscal Year 2006, there were no denials of HPCs to Computer Tier 3 countries, nor were there any denials of other computer items to other destinations based on issues specific to computer policy. In Fiscal Year 2006, the total export of all computers from the United States was worth approximately $55.8 billion. Those HPCs that required a license for export represented about 1.4 percent of that total.