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A. a.(1)(a) i) a)SÓØØEFG(ÿÿ$˜˜Ìà0 àà à(ÿÿ$™™à0 àà0 àà à((ÿÿ$ššà0 àà0 àà0 àà à  ÿÿA_ekqw‡DocumentDocument StyleI.1.A.a.(1)(a)i)a)joÿÿ4Tech InitInitialize Technical StyleÓS€ J  1 .1 .1 .1 .1 .1 .1 .1 þSÓØØ ÿÿCuy±ÉåTechnicalTechnical Document Style11.11.1.11.1.1.11.1.1.1.11.1.1.1.1.11.1.1.1.1.1.11.1.1.1.1.1.1.1&ÿÿ$`ð`ð&ÿÿ$"ð"ðà0..àÌ&ÿÿ$ððà0..àÌ&ÿÿ$1«<þ6X9`("Courier 10cpiXôxþ6X@ɹ`7ûX@<ô6Nß9`(0Courier ItalicItalicXôxô6NßhÉez7ûXH(32Þ$©©Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  Ý(ÖÃ9 Z ‹6Times New Roman Regular($Ó$‘‘òòÚ  Ú0Ú  Úóó /Ô€fXkDXX9XÔÝ ƒmp¸ÿÝÓ  ÓÑ @ ÑÚ  Ú1Ú  Ú.Ý  Ýà0  àPursuant€to€Section€6(b)(2),€the€Department€is€required€to€consider€the€criteria€set€forth€inÐ ° ÐSection€6(b)(1)€when€extending€controls€in€effect€prior€to€July€12,€1985.€€In€addition,€theÏreport€must€include€the€elements€set€forth€in€Sections:€€6(f)(2)(A)€(purpose€of€theÏcontrols),€6(f)(2)(C)€(consultation€with€industry€and€other€countries),€6(f)(2)(D)Ï(alternative€means€attempted),€and€6(f)(2)(E)€(foreign€availability). {Ô€ÜXkDXX9XÔ2.à0  àPursuant€to€Section€6(b)(1),€the€Department€is€required€to€make€determinations€regardingÐ ° Ðthe€criteria€set€forth€therein€when€extending€controls€in€effect€after€July€12,€1985.€€TheÏreport€shall€also€contain€the€additional€information€required€in€Section€6(f)(2)(A),€(C)„(E)Ï(as€set€forth€in€endnote€1,€òòsupraóó.) ÒÔ€çXkDXX9XÔÚ  Ú3Ú  Ú.à0  àThere€may€be€limitations€in€assessing€the€economic€impact€of€certain€controls€because€ofÐ ° Ðthe€unavailability€of€data€or€because€of€the€prevalence€of€other€factors,€òòi.e.óó,€currencyÐ œì Ðvalues,€foreign€economic€activity,€or€foreign€political€regimes,€which€may€restrict€importsÏof€United€States€products€more€stringently€than€the€United€States€restricts€exports.  Ô€éXkDXX9XÔÚ  Ú4Ú  Ú.à0  àWhen€controls€are€implemented€without€the€imposition€of€corresponding€restrictions€byÐ ° Ðother€countries,€it€is€diffi‚cult€to€guard€against€reexports€from€third€countries€to€the€targetÏcountry,€to€secure€third€country€cooperation€in€enforcement€efforts,€and€to€detectÏviolations€abroad€and€initi‚ate€proper€enforcement€action.€€The€relative€ease€or€diffi‚culty€ofÏidentifying€the€movement€of€controlled€goods€or€technical€data€is€also€a€factor.€€ControlsÏon€items€that€are€small,€inexpensive,€easy€to€transport€or€conceal,€or€that€have€manyÏproducers€and€end„users,€are€harder€to€enforce.€12345678 ÿÿ3sy…‹“›¡2Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a))*+,-./0 ÿÿ3sy…‹“›¡4Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)!"#$%&'( ÿÿ3sy…‹“›¡3Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a) ÿÿ3sy…‹“›¡5Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)  ÿÿ3sy…‹“›¡6Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)3|x«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@<ô6Nß9`("CourierItalicXôxô6NßhÉez7ûXH(È$¡¡Ó  ÓÑ  Ñ d +DPDEEDHæ†x"(«<þ6X9`("Courier 10cpiXôxþ6X@É“8Å;X@(ÖÃ9 Z ‹6Times New Roman Regular«<þ6X9`("Courier 10cpiXôxþ6X@É“8Å;X@ ÿÿÿd«<þ6X9`("Courier 10cpiXôxþ6X@É“8Å;X@«<þ6X9`(Courieroman RegularXôxþ6X@ɹ`7ûX@<ô6Nß9`("CourierItalicegularXôxô6NßhÉez7ûXH%ô\  `$Times NewRomangularôôXô\  PŽ6G;ôP&ÿÿ0 d d(42p¸$¥¥Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  ÝÚ  Ú0Ú  Ú.«<þ6X9`(Courieroman RegularXôxþ6X@ɹ`7ûX@<ô6Nß9`("CourierItalicegularXôxô6NßhÉez7ûXH rÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€íXkDXX9XÔÚ  Ú5Ú  Ú.à0  àCertain€goods€and€technical€data€described€in€this€report,€whether€or€not€subject€to€foreignÐ ° Ðpolicy€controls,€may€also€require€a€license€for€certain€destinations€for€national€securityÏpurposes€in€accordance€with€Section€5€of€the€Act.<èÀ( 9Z &Courier RegularÔ(4(3$¤¤Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  Ýà  àòòÚ  Ú0Ú  Úóó \Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€ïXkDXX9XÔÚ  Ú6Ú  Ú.à0  àCitations€following€each€of€the€foreign€policy€control€programs€refer€to€those€sections€ofÐ ° Ðthe€Export€Administration€Regulations€(EAR),€15€CFR€Parts€730„772(730A„799A),€inÏwhich€the€control€program€is€described.TABLE A ¥Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€òXkDXX9XÔÚ  Ú7Ú  Ú.à0  àProvisions€pertaining€to€foreign€availability€are€not€applicable€to€export€controls€in€effectÐ ° Ðbefore€July€12,€1985€under€sections€6(i)€(International€Obliga‚tions),€6(j)€(CountriesÏSupporting€International€Terrorism),€and€6(n)€(Crime€Control€Instruments).€€ExportÏAdministration€Amendments€Act€of€1985,€Public€Law€No.€99„64,€section€108(g)(2),€99ÏStat.€120,€134„35.€€Moreover,€sections€6(i),€6(j),€and€6(n)€require€that€controls€beÏimplemented€under€certain€conditions€without€consideration€of€foreign€avail‚ability.€Ð (#(# Ð(#Ã$òòÚ  Ú0Ú  ÚóóLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5llll'þÿdxd````'ÿÿÈÈÈÈdxd«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@%ô\  `$Times NewRomanôôXô\  PŽ6G;ôP(ÿÿ$••ò òÚ  ÚÚ  Úó ó„…~{Aýÿ<< cÿÿ«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@<þ6X9`(CourierMPþ6X@ɹ`7û@z`lii:ìÿ2  õÿÿÿÿdƒLevel 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5(43ê$££Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  Ý( ³þ$’’ò òFigure€Ú  Ú2Ú  Úó óÔÔÔÔÔ«<þ6X9`(Courieroman RegularXôxþ6X@ɹ`7ûX@<ô6Nß9`("CourierItalicegularXôxô6NßhÉez7ûXH(ÖÃ9 Z ‹6Times New Roman Regular ÂÔ€øXkDXX9XÔ8.à0  àA€validated€license€is€required€under€Section€6(a)€for€all€computers€going€to€Sudan€orÐ ° ÐSyria€with€performance€of€6€CTPS€or€above. bÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€¥X@øXX9XÔÚ  Ú39Ú  Ú.à0  àThe€analysis€required€by€law€differs€for€Nuclear€Nonproliferation€controls.€€It€is€governedÐ Ô! Ðby€the€Nuclear€Nonproliferation€Act€of€1978.€€Therefore,€the€headings€under€this€sectionÏdiffer€from€the€rest€of€the€report. ÀÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€ðXkDXX9XÔÚ  Ú9Ú  Ú.à0  àSee€footnote€2€in€Section€1€of€this€report.а(#(# ЀTABLE ATABLE B ´Ý ƒmp¸%ÝÓ  ÓÚ  Ú10Ú  Ú.Ý  Ýà0  àÔ€üXkDXX9XÔMEED€Middle€East€Business€Weekly,€Vol.€39,€No.€19,€page€25€(May€12,€1995). &Ý ƒmp¸%ÝÓ  ÓÚ  Ú11Ú  Ú.Ý  ÝÔ€XkDXX9XÔà0  àThe€New€York€Times,€Section€D,€page€5.€Column€1,€article€by€Barnaby€J.€Feder€entitledÐ ° Ðð ðAn€Embargo€Is€Seen€to€Affect€Oil€Services€and€Farmers€Mostðð€(May€2,€1995).€TABLE CTABLE ATABLE BTABLE C ÷Ý ƒmp¸%ÝÓ  ÓÚ  Ú12Ú  Ú.Ý  Ýà0  àÔ€CXkDXX9XÔòòSizing€Up€U.S.€Export€Disincentivesóó€by€J.€David€Richardson,€Institute€for€InternationalÐ ° ÐEconomics,€page€130€(1993). éÝ ƒmp¸%ÝÓ  ÓÚ  Ú13Ú  Ú.Ý  Ýà0  àÔ€IXkDXX9XÔSisler,€Peter€F.,€ð ðIMF€Board€Cities€ððProgressðð€in€Sudan,ðð€òòWashington€Newsóó,€June€20,Ð ° Ð1995. ´Ý ƒmp¸%ÝÓ  ÓÚ  Ú14Ú  Ú.Ý  Ýà0  àÔ€LXkDXX9XÔU.S.€Department€of€State,€ð ðBackground€Notes€„€Sudan,ðð€June€20,€1995. Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý15Ô€RXkDXX9XÔÔ€QX2òXXRXkDÔ.à0  àÔ‡SXkDXXQX2òÔSee€footnote€3€in€Chapter€2€of€this€report.а(#(# ÐÔ#†QX2òXXSXkD€#Ôz`l$ôÿ«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@<þ6X9`(Courierô¡dþ6X@ɹ`7ûô@<þ6X9`(CourierMPþ6X@ɹ`7û@ Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÚ  Ú16Ú  Ú.à0  àÔ€XXkDXX9XÔCommercial€shipments€to€North€Korea€of€goods€intended€to€meet€basic€human€needs€areÐ ° Ðalso€permitted€under€a€license€on€a€case„by„case€basis.€€€€(ÖÃ9 Z ‹6Times New Roman Regular °Ý ƒmp¸%ÝÓ  ÓÚ  Ú17Ú  Ú.Ý  ÝÔ€ZXkDXX9XÔà0  àCuba:€Handbook€of€Trade€Statistics,€1995,€Central€Intelligence€Agency. Ý ƒmp¸%ÝÓ  ÓÚ  Ú18Ú  Ú.Ý  ÝÔ€\XkDXX9XÔà0  àLicense€approvals€are€authorizations€to€export€and€do€not€necessarily€correspond€directlyÐ ° Ðto€the€volume€of€actual€shipments€within€1995.Table_AªCUBA.WPGÿWPC°°0*x-¶j'Ù93Ø'°°°°,,51ÿÿÿ3+'ÿÿÿ€$]$Œ €äŒ 5¤åx›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá0€ €ä$ 5’åf›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1€ €äí$í 5€åT›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá2€ €äÜ $Ü  5n åB ›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá3€ €äÉ $É  5\ å0 ›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá4€ €ä¸ $¸  5J å›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá5€ €ä¥$¥ 58å ›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá6€ €ä“$“ 5%åù›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá7€ €ä$ 5åè›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá8€ €äo$o 5åÕ›Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá9€ €ä]$] ¿ðåĜԀ|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá10€ €b b Ò €ÜÜÒ €WWÒ €ÑÑÒ €LLÒ w ¿L “Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1989 ò ¿Ç“Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1990 m¿B“Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1991 翼“Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1992 b¿7“Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá1993 -Çj'Ù½Ô€888ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿáááCuban€Imports€and€Exports,€1989-1993 ×…#©Ô€ãããÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááá(Million€U.S.€$) H!½$‘ŸÔ€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿáááLegend “¶QŠÔ€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿáááYear ɧ”{ŸÔ€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿáááVolume  #ÆÛ#ššÔ€|||ÔÔG€%ä2¼`HelveticaGÔá ááÿÿÿááÿÿÿááဠ ,€ @&ÀÀ 00ÀÀ 005 1ª3ÿÿÿàãa a »ã»à^ ÛÛ^ àÙVV0 Ù0 àSÑÑFSFàÎKKžÎžà´Ï% Ï% %´% ™ Y#á Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ªááÿÿÿááÿÿÿááªáImports !,ˆU"UˆU"U&ÀÀÀÀ3333 3333ÀÀÀÀ3333 33335!1ªàa Þ Þ wa wàÛYYŠ ÛŠ àVÓÓê Vê àÑNNÑàKÉÉKà´&% &% |´| ™ de#8 Ô€|||ÔÔG€%ä2¼`HelveticaGÔá ªááÿÿÿááÿÿÿááªáExports BÝ ƒ…ê#ÝÓ  ÓÝ  ÝÌà@¾¾ žàFigure€1 ôÝ ƒmp¸%ÝÓ  ÓÚ  Ú19Ú  Ú.Ý  ÝÔ€^XkDXX9XÔà0  àð ðForeign€Investors€Finding€Cuba€More€Comfortable„With€U.S.€Away,ðð€òòThe€WashingtonÐ ° ÐPostóó,€September€12,€1995. ¶Ý ƒmp¸%ÝÓ  ÓÚ  Ú20Ú  Ú.Ý  ÝÔ€`XkDXX9XÔà0  àòòCuba:€Handbook€of€Trade€Statistics,€1995óó,€Central€Intelligence€Agency.«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@<ô6Nß9`("CourierItalicXôxô6NßhÉez7ûXH ÿÝ ƒmp¸%ÝÓ  ÓÚ  Ú21Ú  Ú.Ý  ÝÔ€bXkDXX9XÔà0  àHohn,€Y.T.€Kuark,€ð ðA€Comparative€Study€of€Foreign€Trade€in€North€and€South€Korea,ððÐ ° ÐUniversity€of€Denver,€March€1992,€p.€21.(43ê$§§Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  Ý èÝ ƒmp¸%ÝÓ  ÓÚ  Ú22Ú  Ú.Ý  ÝÔ€dXkDXX9XÔà0  àNoland,€Marcus,€ð ðThe€North€Korean€Economy,ðð€Institute€for€International€Economics,Ð ° ÐJuly€1995,€p.€26. ³Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€lXkDXX9XÔÚ  Ú25Ú  Ú.à0  àThough€the€Libyan€Sanctions€Regulations€encompass€the€restrictions€in€the€EAR€onÐ ° Ðexports€from€generally€the€United€States€to€Libya,€all€the€Department€of€CommerceÏcontrols€are€being€extended.€€These€controls€can€be€reevaluated€in€the€event€the€IEEPAÏauthorities€are€revoked.Ð (#(# Ð Ý ƒmp¸%ÝÓ  ÓÚ  Ú23Ú  Ú.Ý  ÝÔ€fXkDXX9XÔà0  àFlake,€L.€Gordon,€ð ðInternational€Economic€Linkages€of€North€Korea,ðð€Korea€EconomicÐ ° ÐInstitute€of€America,€May€26,€1995,€p.€2.Table_CTABLE A °Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€jXkDXX9XÔÚ  Ú24Ú  Ú.à0  àSee€endnote€3€in€Chapter€2.а(#(# Ð üÝ ƒmp¸%ÝÓ  ÓÚ  Ú26Ú  Ú.Ý  Ýà0  àÔ€oXkDXX9XÔð ðWhoððs€Punishing€Whom?;€Trade€Bans€Are€boomerangs,€U.S.€Companies€Say,ðð€òòTheÐ ° ÐNew€York€Timesóó,€September€11,€1996.«<þ6X9`(Courieroman RegularXôxþ6X@ɹ`7ûX@ øÝ ƒmp¸%ÝÓ  ÓÚ  Ú27Ú  Ú.Ý  ÝÔ€rXkDXX9XÔà0  àð ðHouse€Passes€Measure€Against€Foreign€Firms€Investing€in€Iranian,€Libyan€Oil,ððÐ ° ÐòòWashington€Postóó,€July€24,€1996. œÚ  Ú28Ú  Ú.à0  àÔ€vXkDXX9XÔÔ€wXkDXXvXkDÔSee€endnote€3€in€Chapter€2.а(#(# Ð º29.Ô€|XkDXX9XÔà0  àExports€to€Australia€Group€member€countries€are€exempt€from€these€foreign€policyÐ ° Ðcontrols.€Until€recently,€Turkey,€as€a€NATO€member€country,€was€exempt€from€theseÏcontrols.€€Turkey,€however,€is€not€a€member€of€the€AG€and€has€not€adopted€AG„¼comparable€export€controls.€€Therefore,€the€United€States€imposed€controls€on€chemicalÏprecursor€exports€to€Turkey€on€October€19,€1994. %Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý30.Ô€XkDXX9XÔà0  àThe€Middle€East€region€is€understood€to€include€Bahrain,€Egypt,€Iraq,€Israel,€Jordan,Ð ° ÐKuwait,€Lebanon,€Libya,€Oman,€Qatar,€Saudi€Arabia,€Syria,€United€Arab€Emirates,€andÏYemen. °Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý31.Ô€‚XkDXX9XÔà0  àSouthwest€Asia€is€understood€to€include€Afghanistan,€India,€Iran,€and€Pakistan. &Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý32.Ô€…XkDXX9XÔà0  àThis€area€includes€Armenia,€Azerbaijan,€Belarus,€Estonia,€Georgia,€Kazakhstan,Ð ° ÐKyrgyzstan,€Latvia,€Lithuania,€Moldova,€Russia,€Tajikistan,€Turkmenistan,€Ukraine€andÏUzbekistan.€ Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý33.Ô€ŠXkDXX9XÔà0  àCuba,€Iran,€Iraq,€Libya,€North€Korea,€Sudan€and€Syria€have€been€designated€as€countriesÐ ° Ðsupporting€international€terror‚ism.€€See€endnote€1€in€Chapter€4€of€this€report.€€€«<þ6X9`("Courier 10cpiXôxþ6X@É“8Ç;X@«<ô6Nß9`(0Courier ItalicItalicXôxô6NßhÉez7ûXH«<þ6X9`("Courier 10cpiegularXôxþ6X@É“8Á;X@ £Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý34Ô€XkDXX9XÔ.à0  àThe€Commerce€Department€first€imposed€foreign€policy€controls€on€microorganismsÐ ° Ðuseful€in€weapons€development€on€February€23,€1989.€€On€July€5,€1992,€the€DepartmentÏrevised€these€export€controls€to€conform€with€the€list€of€microorganisms€agreed€to€by€theÏcountries€participating€in€the€Australia€Group. ŒÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý35.Ô€XkDXX9XÔà0  àSee€endnote€34€in€Section€8€of€this€report. ŒÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý36.Ô€—XkDXX9XÔà0  àSee€endnote€35€in€Section€8€of€this€report. ‹Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý37Ô€šXkDXX9XÔ.à0  àSee€endnote€3€in€Chapter€8€of€this€report. ‹Ý ƒ_È!ÝÓ  ÓÑ @ ÑÝ  Ý38Ô€XkDXX9XÔ.à0  àSee€endnote€4€in€Chapter€8€of€this€report. ù«<þ6X9`("Courier 10cpiegularXôxþ6X@É“8Ç;X@<ô6Nß9`(.Courier 10cpiItalicXôxô6NßhÉŠ Ç;XH'ÈÈÈÈdxd(ÖÃ9 Z ‹6Times New Roman RegularUTable_A«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@%ô\  `$Times NewRomanôôXô\  PŽ6G;ôP(43ê$¦¦Ý ƒ_È!ÝÓ  ÓÑ  ÑÝ  ÝÿU‹ÿÀÀÀ(ÖÃ9 Z ‹6Times New Roman Regular bÝ ƒ_È!ÝÓ  ÓÑ @ ÑÝ  ÝÔ€äXkDXX9XÔÚ  Ú39Ú  Ú.à0  àThe€analysis€required€by€law€differs€for€Nuclear€Nonproliferation€controls.€€It€is€governedÐ ° Ðby€the€Nuclear€Nonproliferation€Act€of€1978.€€Therefore,€the€headings€under€this€sectionÏdiffer€from€the€rest€of€the€report.ßÌ /ÀÀÀBEKOTKB _Ý ƒÙê&ÝÓ  ÓÝ  ÝDecember€2,€1996ÌÌRomanððs€comment:ÌÌÓ  Ó2.€€Under€foreign€availability,€I€suggest€that€you€quote€theÏlanguage€from€the€EO,€including€the€fact€that€Sec€DOC€hasÏdiscretion€to€consider€foreign€availability.ÌÌThe€bolded€portion,€except€for€the€first€sentence,€is€takenÏdirectly€from€the€executive€order.€€«<þ6X9`("Courier 10cpiXôxþ6X@É“8Ç;X@«<þ6X9`(CourierXôxþ6X@ɹ`7ûX@%ô\  `$Times NewRomanôôXô\  PŽ6G;ôP(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÖÃ9 Z ‹6Times New Roman RegularlS ÿÿ,29[1]Right-Aligned Paragraph NumbersàÐ..àÔ2ÔÔ3  Ô€ˆà°..°àà0..àÌlf ÿÿ,29[2]Right-Aligned Paragraph Numbersà..ààÐ` ..` àÔ2ÔÔ3  Ô€ˆà..àà0` ..` àÌly ÿÿ,29[3]Right-Aligned Paragraph Numbersà..àà` ..` ààи ..¸ àÔ2ÔÔ3  Ô€ˆà` ..` àà0¸ ..¸ àÌ(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman RegularlŒ 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Ô€ˆàh..hàà0À..ÀàÌlÅ ÿÿ,28[7]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..ÀààÐ..àÔ2ÔÔ3  Ô€ˆàÀ..Ààà0..àÌlØ ÿÿ,28[8]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..Ààà..ààÐp..pàÔ2ÔÔ3  Ô€ˆà..àà0p..pàÌlS ÿÿ,27[1]Right-Aligned Paragraph NumbersàÐ..àÔ2ÔÔ3  Ô€ˆà°..°àà0..àÌlf ÿÿ,27[2]Right-Aligned Paragraph Numbersà..ààÐ` ..` àÔ2ÔÔ3  Ô€ˆà..àà0` ..` àÌly ÿÿ,27[3]Right-Aligned Paragraph Numbersà..àà` ..` ààи ..¸ àÔ2ÔÔ3  Ô€ˆà` ..` àà0¸ ..¸ àÌlŒ ÿÿ,27[4]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ ààÐ..àÔ2ÔÔ3  Ô€ˆà¸ ..¸ àà0..àÌlŸ ÿÿ,27[5]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààÐh..hàÔ2ÔÔ3  Ô€ˆà..àà0h..hàÌl² ÿÿ,27[6]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÐÀ..ÀàÔ2ÔÔ3  Ô€ˆàh..hàà0À..ÀàÌlÅ ÿÿ,27[7]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..ÀààÐ..àÔ2ÔÔ3  Ô€ˆàÀ..Ààà0..àÌlØ ÿÿ,27[8]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..Ààà..ààÐp..pàÔ2ÔÔ3  Ô€ˆà..àà0p..pàÌlS ÿÿ,26[1]Right-Aligned Paragraph NumbersàÐ..àÔ2ÔÔ3  Ô€ˆà°..°àà0..àÌlf ÿÿ,26[2]Right-Aligned Paragraph Numbersà..ààÐ` ..` àÔ2ÔÔ3  Ô€ˆà..àà0` ..` àÌly ÿÿ,26[3]Right-Aligned Paragraph Numbersà..àà` ..` ààи ..¸ àÔ2ÔÔ3  Ô€ˆà` ..` àà0¸ ..¸ àÌlŒ ÿÿ,26[4]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ ààÐ..àÔ2ÔÔ3  Ô€ˆà¸ ..¸ àà0..àÌlŸ ÿÿ,26[5]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààÐh..hàÔ2ÔÔ3  Ô€ˆà..àà0h..hàÌl² ÿÿ,26[6]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÐÀ..ÀàÔ2ÔÔ3  Ô€ˆàh..hàà0À..ÀàÌlÅ ÿÿ,26[7]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..ÀààÐ..àÔ2ÔÔ3  Ô€ˆàÀ..Ààà0..àÌlØ ÿÿ,26[8]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..Ààà..ààÐp..pàÔ2ÔÔ3  Ô€ˆà..àà0p..pàÌlS ÿÿ,30[1]Right-Aligned Paragraph NumbersàÐ..àÔ2ÔÔ3  Ô€ˆà°..°àà0..àÌlf ÿÿ,30[2]Right-Aligned Paragraph Numbersà..ààÐ` ..` àÔ2ÔÔ3  Ô€ˆà..àà0` ..` àÌly ÿÿ,30[3]Right-Aligned Paragraph Numbersà..àà` ..` ààи ..¸ àÔ2ÔÔ3  Ô€ˆà` ..` àà0¸ ..¸ àÌlŒ ÿÿ,30[4]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ ààÐ..àÔ2ÔÔ3  Ô€ˆà¸ ..¸ àà0..àÌlŸ ÿÿ,30[5]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààÐh..hàÔ2ÔÔ3  Ô€ˆà..àà0h..hàÌl² ÿÿ,30[6]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÐÀ..ÀàÔ2ÔÔ3  Ô€ˆàh..hàà0À..ÀàÌlÅ ÿÿ,30[7]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..ÀààÐ..àÔ2ÔÔ3  Ô€ˆàÀ..Ààà0..àÌlØ ÿÿ,30[8]Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÀ..Ààà..ààÐp..pàÔ2ÔÔ3  Ô€ˆà..àà0p..pàÌdS ÿÿ$7Right-Aligned Paragraph NumbersàÐ..àÔ2ÔÔ3  Ô€ˆà°..°àà0..àÌÌdf ÿÿ$8Right-Aligned Paragraph Numbersà..ààÐ` ..` àÔ2ÔÔ3  Ô€ˆà..àà0` ..` àÌÌB=ÿÿ$9Document StyleÌà..àò òÔ2ÔÔ3  Ô€Ô  ÔÔ  ÔÌó ófy ÿÿ&10Right-Aligned Paragraph Numbersà..àà` ..` ààи ..¸ àÔ2ÔÔ3  Ô€ˆà` ..` àà0¸ ..¸ àÌÌfŒ ÿÿ&11Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ ààÐ..àÔ2ÔÔ3  Ô€ˆà¸ ..¸ àà0..àÌÌfŸ ÿÿ&12Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààÐh..hàÔ2ÔÔ3  Ô€ˆà..àà0h..hàÌÌf² ÿÿ&13Right-Aligned Paragraph Numbersà..àà` ..` àภ..¸ àà..ààh..hààÐÀ..ÀàÔ2ÔÔ3  Ô€ˆàh..hàà0À..ÀàÌÌfÅ 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NumbersI.A.1.a.(1)(a)i)a)ùúû ÿÿ5u{‡•£29Right-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)«<þ6X9`("Courier 10cpiXôxþ6X@ÉÁ;X@(ÈhH  Z ‹6Times New Roman Regular<þ6X9`("Courier 10cpiHÌ +ÀÀÀBEKOTKBä ÙÝ ƒÙê&ÝÓ  ÓÝ  ÝDecember€2,€1996ÌÌComment€from€Roman:ÌÌÓ  Óð ð1.€€Under€purpose€of€controls,€you€may€want€to€borrow€fromÐ L  Ðlanguage€used€in€an€NSA€affidavit€that€describes€purposes€ofÏU.S.€export€controls.€This€may€give€you€some€supplementaryÏlanguage€to€what€you€have€already.€€I€will€send€you€the€textÏin€a€separate€E€mail.ððÐ l@ ÐÌThe€bolded€portion€of€this€paragraph€is€from€Romanððs€forwardedÏe„mail(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹4Times New Roman Italic(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular(ÈhH  Z ‹6Times New Roman Regular"ù- ù´6Times New Roman Regular§…¨ÑMüÿ << deUU…Level 1Level 2Level 3Level 4Level 5(n$––ò ò(Ú  Ú1Ú  Ú)ó óx…†Ñ›&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKKÝ ƒ_È!ÝÓ  ÓÑ  ÑÝ  ÝØØÙÙÔ‡XkDXX9XÔÔ‡ j!XXkDÔò òØØÑ€ŸÑÑ8€ ÿ, XXdðdÈ8Ñà@á á ìàIII.€€Foreign›€Policy€Export€Controlsó óÔ#†XkDX! jq#ԈР° ÐÌÔ‡¼R{»XXkDÔò ò1.€Introductionó óÔ#†XkDX»¼R{_#ÔÐ Ø( ЀÌà  àExport€controls€maintained€for€foreign€policy€purposes€require€annual€extensionÏaccording€to€Section€6€of€the€Export€Administration€Act€of€1979,€as€amended€(the€Act).€€SectionÏ6(f)€of€the€Act€requires€that€a€report€be€submitted€to€the€Congress€for€the€controls€to€be€extended.€ÏSection€6(b)€of€the€Act€requires€the€Department€of€Commerce€to€include€in€the€report€certainÏconsiderationsœ× ƒS ×Ý ƒR$ÓÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×›€and€determina‚tionsØØ× ƒU ×Ý ƒR$ÓÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€on€the€criteria€estab‚lished€in€that€section.€€This€reportÐ ˆ Ø Ðcomplies€with€all€the€require‚ments€set€out€in€the€Act€for€extending€or€imposing€for‚eign€policyÏcontrols.€€ÌÌà  àThe€Department€of€Commerce€is€acting€under€the€authority€conferred€by€Executive€OrderÏNo.€12924€of€August€19,€1994€and€continued€by€notice€of€August€14,€1995€and€August€14,€1996.€ÏTherein€the€President,€by€reason€of€the€lapse€of€the€Act,€invoked€his€authority,€includ‚ingÏauthority€under€the€Inter‚national€Emergency€Economic€Powers€Act,€to€continue€in€ef‚fect€theÏsystem€of€controls€that€had€been€maintained€under€the€Act.€€Under€a€policy€of€conforming€actionsÏunder€the€Executive€Order€to€those€under€the€Act,€the€Depart‚ment€of€Commerce,€insofar€asÏappropriate,€is€following€the€provisions€of€Section€6€of€the€Act€in€ex‚tend‚ing€controls.ÌÌà  àAll€foreign€policy€con‚trols€in€effect€on€December€31,€1996€are€being€extended.€The€actionÏto€extend€the€current€con‚trols€is€taken€at€the€recommendation€of€the€Sec‚retary€of€State.€€AsÏfurther€required€by€the€Act,€foreign€policy€con‚trols€remain€in€ef‚fect€for€replacement€parts€and€forÏparts€contained€in€goods€subject€to€such€controls.€€The€controls€administered€in€accor‚dance€withÏproce‚dures€estab‚lished€pursuant€to€Section€309‚(c)€of€the€Nuclear€Non„Prolifera‚tion€Act€of€1978Ïlikewise€remain€in€effect.€€ÌÌà  àEach€chapter€that€follows€describes€a€particular€category€of€foreign€policy€con‚trols€andÏdetails€modifications€that€have€taken€place€over€the€past€year.€€ÌÌà  àMost€of€the€statistical€data€pre‚sented€in€the€report€are€based€on€fiscal€year€export€licens‚ingÏstatistics.€€That€data€was€generat‚ed€from€the€Commerce€computer€automated€system€that€is€usedÏto€process€and€track€export€license€activity.€€There€are€certain€limitations€in€gat‚hering€data€fromÏthe€system€that€are€due€to€the€tabu‚lating€procedures€used€by€the€computer€in€accounting€forÏoccasional€license€applica‚tions€that€list€more€than€one€country€of€destination,€or€are€amendmentsÏto€ap‚proved€applications.€€In€ad‚dition,€the€data€in€the€report€are€based€on€values€con‚tained€inÏexport€licenses€issued€by€the€Department.€€They€do€not€necessarily€represent€the€val‚ues€of€actualÏshipments€made€against€those€licenses.€€In€many€cases,€an€exporter€may€ship€only€a€portion€of€theÏval‚ue€of€an€approved€license.ÌÌà  àWhenever€worldwide€statistical€data€was€used,€the€figures€are€from€calendar€year€1995.€ÏFigures€from€1996€were€unavailable€at€the€time€the€report€was€compiled.ÌÐ à+0'* Ðà  àIn€addition,€please€note€the€numbering€system€of€the€Commerce€Control€List€(CCL).€€OnÏMarch€25,€1996€Commerce€published€in€the€òòFederal€Registeróó€a€comprehensive€revision€of€theÐ œì ÐExport€Administration€Regulations€(EAR).€€As€part€of€this€revision,€the€CCL€was€also€changedÏto€accord€with€the€numbering€system€of€the€European€Union.€€Among€other€things,€the€unifiedÏnumbering€system€aids€enforcement€officers.€€Since€both€the€old€and€new€regulations€were€inÏeffect€until€December€31,€1996€when€the€old€regulations€became€invalid,€this€report€notes€bothÏnumbering€systems€when€referring€to€the€CCL.€€The€new€numbers€are€listed€first.€€The€oldÏnumbers€are€in€parenthesis€with€the€letter€ð ðAðð€following€the€number.ÌÌà@àà!ìàò òHighlights€of€1996ó óˆÐ ü L  ÐÌà  àThere€were€four€major€changes€œin€the›€Commerce€export€control€œprograms›€during€1996.€ÏThe€first€was€in€January€1996€when€Commerce€published€a€regulation€implementing€theÏPresidentððs€October€6,€1995€announcement€of€a€major€reform€of€computer€export€controls.€€TheÏPresident€announced€a€liberalization€of€export€controls€on€all€computers€to€countries€in€NorthÏAmerica,€most€of€Western€Europe,€and€parts€of€Asia.€€For€certain€other€countries,€including€manyÏin€Latin€America€and€Central€and€Eastern€Europe,€this€rule€also€liberalized€export€controls€onÏcomputers.€€For€the€former€Soviet€Union,€China€and€certain€other€countries,€the€United€StatesÏfocused€export€controls€on€computers€intended€for€military€and€proliferation€end„uses€or€users,Ïand€eased€controls€on€exports€of€computers€to€civilian€customers.€€Finally,€there€were€no€changesÏin€current€policy€for€computer€shipments€to€terrorist€countries,€with€the€exception€of€the€additionÏof€Sudan€to€ECCNs€4A994€(4A94A),€4D994€(4D94A),€4E994€(4E94A),€and€Computer€Tier€4€(aÏgrouping€of€terrorist€countries,€for€the€purpose€of€computer€controls).€€This€decision€streamlinedÏlicense€requirements€for€U.S.€computers€that€are,€or€will€be€in€the€next€two€years,€widelyÏavailable€in€the€international€market€place.ÌÌà  àAs€mentioned€above,€on€March€25,€1996€Commerce€published€in€the€òòFederal€Registeróó€aÐ ¨ø Ðcomprehensive€revision€of€the€EAR.€€This€publication€only€made€minor€changes€to€exportÏœcontrol€policy;›€however,€it€clarified€the€language€of€the€regulations,€simplified€their€applicationÏand€generally€makes€the€regulations€more€user„friendly.€€This€fulfils€a€goal€of€the€TradeÏPromotion€Coordinating€Committee,€as€stated€in€its€report€to€Congress€entitled€ð ðToward€aÏNational€Export€Strategy.ðð€€ÌÌà  àOn€October€21,€1996€Commerce€published€a€rule€in€the€òòFederalóó€òòRegisteróó€acceptingÐ #l! Ðjurisdiction€œfor›€certain€commercial€communications€satellites€and€certain€hot€section€technologyÏfor€the€development€and€production€of€commercial€aircraft€engines€transferred€from€the€U.S.ÏœMunitions›€List.€€The€Secretary€of€Commerce€imposed€new€foreign€policy€controls€on€these€itemsÏwith€the€concurrence€of€the€Secretary€of€State,€in€the€belief€that€these€controls€are€necessary€toÏfurther€significantly€the€foreign€policy€of€the€United€States.€€These€commodities€are€alsoÏcontrolled€multilaterally€by€the€Wassenaar€Arrangement€whose€members€include€most€of€theÏother€producers€of€these€œcommodities.›Ìâ âÐ |*Ì%) Ðà  àIn€December€œ1996,€Commerce›€published€a€rule€in€the€òòFederal€Registeróó€implementing€theÐ ° Ðâ âVice€Presidentððs€October€1€announcement€on€encryption€export€controls.€€Export€licensingÏjurisdiction€for€commercial€encryption€items€was€transferred€from€the€State€Department€to€theÏCommerce€Department.€The€U.S.€Government€allows€the€export€under€a€licensing€exception€ofÏrecoverage€encryption€hardware€and€software.€€For€encryption€software,€a€two„year€relief€periodÏallows€the€export€of€products€with€up€to€a€56„bit€key€length€encryption€capability€after€a€one„timeÏreview,€and€is€contingent€upon€industry€commitments€to€build€and€market€future€products€thatÏsupport€key€recovery€and€key€management€infrastructure.€€The€Administrationððs€initiativeÏsupports€the€growth€of€electronic€commerce,€increases€the€security€of€information,€and€sustainsÏthe€economic€competitiveness€of€U.S.€encryption€product€manufacturers€during€the€transition€to€aÏkey€management€infrastructure€with€key€recovery.ÌÌà  àIn€addition€to€the€major€events€listed€above,€there€were€other€events€affecting€CommerceÏexport€controls,€especially€regarding€embargoed€countries.€€Following€the€shootdown€of€U.S.Ïcivilian€aircraft€by€Cuban€military€aircraft€in€February€1996,€the€President€ordered€the€groundingÏof€U.S.€flights€to€Cuba.€€The€ban€also€applies€to€temporary€sojourn€flights€that€previously€wereÏallowed€under€validated€licenses€for€humanitarian,€journalistic,€or€other€approved€purposes.€€TheÏPresident€allowed€one€flight€carrying€humanitarian€relief€aid€from€the€United€States€to€fly€directlyÏto€Cuba€in€October€1996€œwhen›€Cuba€was€struck€by€hurricane€ð ðLili.ðð€ÌÌà  àThe€Cuban€Liberty€and€Democratic€Solidarity€(LIBERTAD)€Act€(Public€Law€104„114)Ïwas€signed€into€law€on€March€12,€1996.€€œTitle€I€of€the›€legislation,€among€other€things,€codifiesÏthe€embargo,€amends€the€telecommunications€provision€of€the€Cuban€Democracy€Act€(CDA),Ïand€authorizes€the€President€to€assist€independent€non„governmental€groups€in€Cuba€and€toÏestablish€an€exchange€of€news€bureaus€between€the€United€States€and€Cuba.€€The€Act€did€notÏimpact€current€Commerce€licensing€of€exports€of€humanitarian€aid€to€Cuba€under€the€CDA.€€œThe›ÏPresident€decided€on€July€16€to€allow€Title€III€of€the€Act€to€take€effect,€thereby€establishingÏpotential€civil€liability€for€persons€trafficking€in€expropriated€property€in€Cuba,€claims€to€whichÏare€owned€by€U.S.€nationals.€€The€President,€however,€suspended€the€right€of€individuals€to€fileÏsuit€for€civil€damages€in€U.S.€courts.€€Title€œIII›€requires€the€President€to€decide€whether€to€renewÏthe€suspension€every€six€months.€€The€suspension€was€designed€to€encourage€our€allies€to€workÏwith€the€United€States€on€promoting€democracy€in€œCuba.€€Ô#†9XtXXXkDR#ÔÔ‡ÓXkDXX9XtÔTitle€IV€of€the€Act€provides€for€theÐ D!” Ðexclusion€from€the€United€States€of€persons€engaged€in€trafficking€in€confiscated€property€inÏCuba€to€which€U.S.€nationals€own€claims,€as€well€as€immediate€family€members€and€agents€ofÏsuch€firms.€€Ô#†9XtXXÓXkDa&#ÔÔ‡XkDXX9XtÔ›€Ð $X" ÐÌà  àOn€March€5,€1996€Commerce€amended€the€EAR€to€reflect€the€imposition€of€additionalÏeconomic€sanctions€on€Iran€as€a€result€of€the€issuance€of€Executive€Order€12959€on€May€6,€1995.€ÏThe€Executive€Order€delegates€responsibility€for€implementing€sanctions€imposed,€inter€alia,Ïunder€the€authority€of€the€International€Emergency€Economic€Powers€Act,€to€the€Department€ofÏthe€Treasuryððs€Office€of€Foreign€Assets€Control€(OFAC),€including€restrictions€on€exports€andÏcertain€reexports.€€The€controls€on€exports€and€reexports€to€Iran€under€the€Export€AdministrationÏRegulations€continue€to€apply.€€To€avoid€duplication,€however,€application€for€an€export€orÐ h+¸&* Ðreexport€subject€to€both€the€EAR€and€OFACððs€Iran€Transactions€Regulations€are€made€to€OFAC.€ÏIf€OFAC€authorizes€an€export€or€reexport,€no€separate€authorization€from€BXA€is€necessary.€ÏThis€rule€makes€clear€that€enforcement€action€may€be€taken€under€the€EAR€with€respect€to€anÏexport€or€reexport€prohibited€both€by€the€EAR€and€by€the€Executive€Order€and€not€authorized€byÏOFAC.€€ÌÌà  àOn€August€5,€1996€the€President€signed€into€law€the€Iran€and€Libya€Sanctions€Act€ofÏ1996.€€The€threats€posed€by€Iran€and€Libya€are€serious€and€urgent.€€By€limiting€the€ability€ofÏthese€countries€to€develop€their€petroleum€resources,€this€act€aims€to€induce€Iran€and€Libya€toÏchange€their€behavior,€and€to€restrict€the€funds€they€have€available€to€develop€weapons€of€massÏdestruction€and€support€terrorism.€€If€there€is€a€determination€that€sanctionable€activity€hasÏoccurred,€the€President€must€choose€two€among€six€sanctions,€one€of€which€is€export€sanctions.€€€ÌœÌ›à  àAs€consequence€of€the€1995€General€Framework€Agreement€for€Peace€in€Bosnia€andÏHerzegovina,€sanctions€on€the€former€Yugoslavia€have€ended.€€In€January€œ1996,›€OFACÏsuspended€sanctions€prospectively€on€all€financial€and€trade€transactions€with€the€FederalÏRepublic€of€Yugoslavia€(Serbia€and€Montenegro)€and€areas€of€Croatia.€€Concurrently€withÏOFACððs€action,€Commerce€reassumed€licensing€responsibilities€for€exports.€€Trade€and€financialÏtransactions€with€Serb„controlled€areas€of€Bosnia€were€similarly€authorized€prospectively€in€MayÏ1996.€€The€United€Nations€Sanctions€Committee€had€suspended€these€sanctions€on€NovemberÏ22,€1995€and€terminated€them€on€October€1,€1996.€€Former€Republic€of€Yugoslavia€assets€remainÏblocked,€however,€until€provision€is€made€to€address€claims€or€encumbrances€with€respect€toÏsuch€property€interests,€including€claims€of€the€successor€states€of€the€former€Yugoslavia.€€ÌÌà  àThe€United€Nations€terminated€the€restrictions€on€the€sale€of€arms€and€related€material€toÏthe€Government€of€Rwanda€September€1,€1996.€€Originally,€the€United€Nations€imposed€theseÏrestrictions€through€Resolution€918€in€1994.€€In€August€œ1995,›€the€United€Nations€suspended€theÏrestrictions€for€a€year€with€the€expectation€of€terminating€the€controls€if€Rwanda€remainedÏpeaceful€for€the€year.€€Since€the€Rwandan€government€remained€stable,€the€U.N.€restrictions€onÏthe€Government€of€Rwanda€were€terminated.€However,€the€U.S.€restrictions€on€the€sale€or€supplyÏof€arms€and€related€material€to€non„governmental€forces€for€use€in€Rwanda€are€still€in€effect.ÌÌà  àOn€December€9,€1996,€the€United€Nations€approved€a€long„delayed€oil„for„food€deal€thatÏpermits€Iraq€to€export€specified€amounts€of€petroleum€for€the€first€time€since€the€United€NationsÏimposed€sanctions€on€Iraq€in€1990€to€punish€it€for€invading€Kuwait.€€The€agreement,€whichÏrepresents€a€partial€lifting€of€the€sanctions,€permits€Iraq€to€sell€$2€billion€worth€of€oil€over€sixÏmonths€and€œuse›€the€money€to€buy€food,€medicine€and€other€humanitarian€supplies€to€help€easeÏwidespread€hunger€and€illness.€€This€program€is€administered€by€the€Department€of€TreasuryððsÏOffice€of€Foreign€Assets€œControl.ÌÌà  àOn€December€10,€1996,€the€National€Security€Council€(NSC)€reformed€the€ð ðinformed€byððÏâ âprocess€under€EPCI€by€placing€it€within€the€interagency€review€structure€for€export€licenses.€Ð |*Ì%) ÐThis€initiative€which€was€proposed€by€Commerce,€will€improve€the€transparency€and€timelinessÏof€the€ð ðinformed€byðð€process.›Ìâ âÌÓ  Óò òContents€and€Format€of€the€Re‚portó óÐ tÄ ÐÓ  ÓÌà  àA€two-part€structure€is€used€in€this€report€to€identify€and€report€on€foreign€policy€exportÏcontrols€administered€by€the€Department€of€Commerce.€€ÌÌòòPart€OneÔ& Ä Ô:€Export€Control€Pro‚gram€Descrip‚tion€and€Licensing€PolicyóóÐ  ` ÐÌà  àThis€part€defines€the€export€controls€main‚tained€for€a€particular€Ô'Ä S9Ôforeign€policy€pur‚poseÏthat€are€imposed€or€extended€for€the€year€1997.€€The€licens‚ing€requirements€and€policy€applicableÏto€a€particular€con‚trol€are€described€in€this€sec‚tion.€ÌÌòòPart€Two:€€Analysis€of€Control€as€Required€by€Section€6(f)€of€the€ActóóÐ ˜è  ÐÌà  àThis€part€outlines€the€consid‚erations€or€determinations,€as€required€by€Section€6(f)(2)€ofÏthe€Act,€on€the€purpose€of€the€control,€criteria,€alternative€means,€consul‚tation€efforts,€andÏforeign€availability.€€For€each€control€program,€the€Depa‚rtment's€conclusions€are€based€on€theÏfollowing€required€cri‚teria:€€ÌÌò òA.€€The€Purpose€of€the€Controlòòó óÐ  \ ÐóóÌà  àThis€section€provides€the€for‚eign€policy€purpose€and€rationale€for€each€particular€con‚trol.ÌÌò òB.€€Considerations€and/or€De‚terminations€of€the€Secretary€of€Commerce:€€ó óÐ ¼  ÐÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€€This€section€con‚sid‚ers€orÐ ”ä Ðdetermines€whether€such€controls€are€likely€to€achieve€the€intended€foreign€policy€purpose,€inÏlight€of€other€fac‚tors,€including€the€availabili‚ty€from€other€coun‚tries€of€the€goods€or€technologyÏsubject€to€control,€and€whether€the€for‚eign€policy€purpose€cannot€be€achieved€through€negotiaƒ¼tions€or€other€alternative€means.ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€This€sec‚tion€considers€or€deter‚minesÐ #l! Ðwhether€the€controls€are€com‚patible€with€foreign€policy€objectives€of€the€United€States€and€withÏoverall€United€States€policy€toward€the€country€or€the€proscribed€end„use€subject€to€the€controls.ÌÌ3.à  àòòReaction€of€Other€Coun‚tries.óó€€This€section€considers€or€determines€whether€the€reac‚tionÐ Ì&"% Ðof€other€countries€to€the€extension€of€such€export€con‚trols€by€the€United€States€is€likely€to€renderÏthe€con‚trols€ineffective€in€achieving€the€intended€foreign€policy€pur‚pose€or€to€be€counterƒ¼productive€to€other€United€States€foreign€policy€interests.Ìâ âÐ |*Ì%) Ð4.à  àòòEconomic€Impact€on€United€States€In‚dustry.óó€€This€section€considers€or€deter‚mines€if€theÐ ° Ðâ âeffect€of€the€controls€on€the€export€performance€of€the€Unit‚ed€States,€its€com‚petitive€po‚sition€inÏthe€internation‚al€econo‚my,€the€international€rep‚utation€of€the€Unit‚ed€States€as€a€reliable€supplierÏof€goods€and€technology,€or€the€economic€well-being€of€individual€United€States€companies€andÏtheir€em‚ployees€and€com‚munities€exceeds€the€benefit€to€United€States€foreign€policy€objec‚tives.× ƒV ×Ý ƒR$ÓÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×Ð `° ÐÌ5.à  àòòEnforcement€of€Control.óó€€This€section€considers€or€determines€the€ability€of€the€UnitedÐ 8 ˆ ÐStates€to€enforce€the€controls.€€Some€enforcement€problems€are€common€to€all€for‚eign€policyÏcontrols.× ƒW ×Ý ƒR$ÓÝòòÚ  Ú4Ú  ÚóóÝ  Ý×  ×€€Others€are€associ‚ated€with€only€one€or€a€few€controls.€€Each€individu‚al€control€hasÐ  ` Ðbeen€assessed€to€determine€if€it€has€presented,€or€is€ex‚pected€to€present,€an€uncharacteristicÏenforcement€problem.€€If€no€enforcement€problems€as‚sociated€with€a€particular€con‚trol€areÏknown€or€expected,€other€than€those€dis‚cussed€in€footnote€4,€the€statement€"no€enforcementÏproblems€apart€from€those€discussed€in€endnote€4€have€been€identi‚fied"€is€used.ÌÌò òC.€€Consultation€with€Industryó óÐ ˜è  ÐÌà  àThis€section€is€a€discussion€of€the€re‚sults€of€consultations€with€industry€lead‚ing€up€to€theÏextension€or€imposition€of€controls.€€It€also€includes€com‚ments€pro‚vided€to€BXA€by€theÏTechnical€Advisory€Committees€(TACs);€such€comments€are€attributed€to€the€TAC€unless€othƒ¼erwise€indicated.ÌÌò òD.€€Consultation€with€Other€Countriesó óÐ  \ ÐÌà  àThis€section€reflects€con‚sultations€on€the€control€with€countries€that€cooperate€with€theÏUnited€States€on€multilat‚eral€controls,€as€well€as€with€other€countries€as€appropriate.ÌÌò òE.€Alternative€Meansó óÐ ¨ø ÐÌà  àThis€section€specifies€the€nature€and€results€of€any€alternative€means€attempted€toÏaccomplish€the€foreign€policy€purpose,€or€the€reasons€for€extending€the€controls€with‚outÏattempting€any€such€alternative€means.ÌÌò òF.€€Foreign€Availabilityó óÐ 0"€  ÐÌà  àThis€section€considers€the€availability€from€other€coun‚tries€of€goods€or€technolo‚gyÏcomparable€to€those€subject€to€the€proposed€export€control.€It€also€describes€the€nature€andÏresults€of€the€efforts€made€pursuant€to€section€6(h)€of€the€Act€to€secure€the€cooper‚ation€of€foreignÏgovern‚ments€in€con‚trolling€the€foreign€availabil‚i‚ty€of€such€comparable€goods€or€technolo‚gy.€€InÏaccordance€with€the€Act,€foreign€availability€considerations€do€not€apply€to€export€controls€inÏeffect€prior€to€June€12,€1985,€to€controls€main‚tained€for€human€rights€and€anti„terrorism€reasons,Ïor€to€controls€in€support€of€the€in‚ternational€obligations€of€the€United€States.̜Р |*Ì%) ЛÌÓ  Óò òGeneral€Comments€from€Industryó óÐ œì ÐÓ  ÓÌà  àDetailed€comments€submitted€by€indus‚try€are€provided€in€the€Appendix€to€this€report.ÌÌà  àNearly€all€comments€from€industry€emphasized€the€need€for€multilateral€controls,€ratherÏthan€unilateral€controls.€€Last€year,€nearly€all€comments€made€this€same€statement.€€TheirÏperception€is€that€unilateral€controls€do€not€impair€the€target€country's€ability€to€acquireÏcomparable€items.€€Industry€encourages€the€use€of€means€other€than€trade€sanctions€in€dealingÏwith€problematic€countries.€€However,€one€company€said€that€they€recognize€the€President's€rightÏto€impose€unilateral€foreign€policy„based€controls€on€certain€countries.€€œÌ›€€ÌœÔ‡¼R{»XXkDÔò ò2.›€Crime€Control/Human€Rights€[Sec‚tions€742.7(776A.14)]œ× ƒo ×Ý ƒR$ÓÝòòÚ  Ú5Ú  ÚóóÝ  Ý×  ×›€œ× ƒs ×Ý ƒR$ÓÝòòÚ  Ú6Ú  ÚóóÝ  Ý×  כРÀ  Ðó óÔ#†XkDX»¼R{ Q#ÔÌœòòà@1 1 ìàò òóóExport›€Control€Program€Description€and€Licensing€Policyó óˆÐ À  ЀÌà  àThe€control€on€crime€control€items,€required€by€Section€6(n)€of€the€Act,€is€promptedÏprimarily€by€hu‚man€rights€concerns€in€various€parts€of€the€world.€ÌÌA.à  àòòCrime€Control€Items.óó€€A€license€is€required€to€export€crime€control€and€detectionÐ \¬ Ðinstruments€and€equipment€and€relat‚ed€technical€data€to€any€destination,€except€NATO€members,ÏAustralia,€Japan€and€New€Zealand.€€ÌÌà  àòòImplements€of€Torture.óó€€A€license€is€required€to€export€specially€designed€implements€ofÐ  \ Ðtorture€and€thumbscrews€to€any€destination.Ìà0  àà0` (#(#àÐ ` (#` (# ÐB.à  àòòCrime€Control€Items.óó€€Applications€for€licenses€will€generally€be€considered€favorably€onÐ Ð  Ða€case-by-case€basis,€unless€there€is€evidence€that€the€government€of€the€im‚porting€country€mayÏhave€violated€internationally€recognized€human€rights€and€that€the€judicious€use€of€exportÏcontrols€would€be€helpful€in€deterring€the€development€of€a€consis‚tent€pattern€of€violations€or€inÏdis‚tancing€the€United€States€from€such€violations.ÌÌà  àòòImplements€of€Torture.óó€€Applications€for€licenses€will€generally€be€denied.Ð X"¨  ÐÌC.à  àFollowing€the€military€crackdown€by€the€People's€Republic€of€China€(PRC)€in€June€1989,Ð 0$€" Ðthe€United€States€im‚posed€constraints€on€the€export€of€certain€items€on€the€Commerce€Con‚trolÏList(CCL).€€Section€902(a)(4)€of€the€For‚eign€Relations€Authorization€Act€for€FY€1990„1991,ÏPublic€Law€101„246,€sus‚pends€the€issuance€of€licenses€under€Section€6(n)€of€the€Act€for€theÏexport€of€any€crime€control€or€detection€instru‚ments€or€equipment€to€the€PRC.€€The€suspensionÏmay€be€terminated€only€if€the€President€re‚ports€that€China€has€made€progress€on€a€program€ofÏpolitical€reform€or€that€it€is€in€the€national€inter‚est€of€the€United€States€to€terminate€the€suspenƒ¼sion.ÌÐ +à&* ÐD.à  àApplications€for€licenses€for€light€arms€and€crowd€control€items€to€Indonesia€will€beÐ ° Ðdenied,€consistent€with€Section€582€of€the€Foreign€Operations,€Export€Financ‚ing€and€RelatedÏPrograms€1995€Appro‚priations€and€1994€Supplemen‚tal€Appro‚priations€Act€(Public€Law€103„¼306)€and€Administration€policy.ÌÌE.à  àThe€Department€of€State€annually€com‚piles€a€volume€of€òòCountry€Re‚ports€on€HumanÐ L œ ÐRights€Practicesóó.€€This€report€is€prepared€in€accordance€with€Sections€116(d)€and€502B(b)€of€theÐ 8 ˆ ÐForeign€Assistance€Act€of€1961,€as€amended,€and€is€submitted€to€the€Congress.€€The€factualÏsituation€presented€in€this€report€is€a€significant€element€in€licensing€recommendations€made€byÏthat€Department.€€€œÌ›Ìœòòò òà@Y Y ìàóóAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€the€Actó óˆÐ Ô$  ÐÌòòA.€€The€Purpose€of€the€ControlóóÐ ¬ü  ÐÌà  àòòCrime€Control€Items.óó€€The€purpose€is€to€ensure€that€United€States-origin€police€equipmentÐ „Ô  Ðis€not€export‚ed€to€countries€whose€governments€do€not€respect€internationally„recognized€humanÏrights.€€Denial€of€export€license€applications€to€such€countries€distances€the€United€States€fromÏhuman€rights€violations€and€sends€a€concrete€signal€about€United€States€human€rights€con‚cerns€toÏthe€government€of€the€importing€country.ÌÌà  àòòImplements€of€Torture.óó€€The€purpose€is€to€ensure€that€U.S.„origin€implements€of€tortureÐ  \ Ðare€not€exported€to€any€destination,€in€order€to€distance€the€United€States€from€human€rightsÏviolations€and€to€send€a€concrete€signal€about€U.S.€human€rights€concerns€to€the€internationalÏcommunity.Ìà0  àÐ (#(# ÐòòB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Com‚merce:óóÐ ¨ø ÐÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€€Because€of€the€lack€ofÐ €Ð Ðcomplementary€controls€on€the€part€of€other€producer€nations,€these€controls€are€of€limitedÏeffectiveness€in€altering€for‚eign€government€conduct€where€the€item€is€avail‚able€outside€theÏUnited€States.€€Neverthe‚less,€the€control€does€serve€to€restrict€access€to€U.S.-origin€goods€inÏsituations€where€human€rights€are€being€violated€and€has€symbolic€impor‚tance€in€distancing€theÏUnited€States€from€those€violations.ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€This€control€program€is€fully€consistentÐ ô$D # Ðwith€U.S.€policy€in€sup‚port€of€internationally€recognized€human€rights,€as€expressed€byÏsuccessive€Adminis‚trations€and€by€Congress.€ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€These€controls€are€unique,€serve€a€distinct€foreign€policyÐ ¤(ô#' Ðpurpose€and€arise€out€of€deep‚ly€held€human€rights€convictions.€€Reac‚tions€of€other€countries€doÏnot€render€them€ineffec‚tive.ÌÐ h+¸&* Ð4.à  àòòEconomic€Impact€on€United€States€In‚dustry.óó€€€In€FY€1996€€1,706€applications€wereÐ ° Ðapproved€to€all€destinations€for€all€crime€control€commodities,€at€a€total€dollar€value€ofÏ$215,906,267.€€There€are€two€items€not€included€in€this€analysis,€fingerprint€computers€underÏECCN€4A003(4A03)€and€police„model€infrared€viewers€under€6A002(6A02).€€These€items€areÏalso€controlled€for€crime€control€reasons,€but€are€not€included€due€to€the€difficulty€of€extracting€aÏsmall€number€of€items€controlled€in€a€CCL€sub„paragraph€from€the€œdatabase.Ì›Ìà@' ' ìàCRIME€CONTROL€LICENSING€FY€1996ˆÌÌÔ*wƒq`tddd Xdd Xdd X°(#°(#wÔÔ,ždd ÔÔ,ždd ÔÔ,ždd ÔÔ,ždd ÔÔ+  ÔÐ  ü L  ÐItemÐ  ` °  ÐECCNÐ  ` °  ÐApplicationsÏApprovedÐ  Lœ  Ð$€ValueÐ  ` ° ÐShotgunsÐ  Ì  Ð0A984(0A84)Ð 7- Ì  |“@1247‰|“@‰7Ð1247Ð 7-+Ì  |“@1247 |“@ 7Ð$€67,404,867Ð  Ì  ÐHelmets/ÌHandcuffsÐ  8ˆ  Ð0A982(0A82)Ð 6, Lœ  `h@195‰`h@‰6Ѐ195Ð 6,*Lœ  `h@195 `h@ 6Ð$€€6,836,690Ð  Lœ  ÐTear€GasÐ  ¸ Ð1A984(1A84)Ð 6, ¸ g@184‰g@‰6Ѐ184Ð 6,*¸ g@184 g@ 6Ð$€€2,224,929Ð  ¸ ÐVoice€Print€I.D.Ð  8ˆ Ð3A980(3A80)Ð ) 8ˆ # ‰‰)Ѐ€€0Ð )8ˆ #  )Ð$€€€€€€€€€€0Ð  8ˆ ÐPolygraphsÐ  ¸  Ð3A981(3A81)Ð 5+ ¸!  ÀS@79‰ÀS@‰5Ѐ€79Ð 5+)¸"  ÀS@79 ÀS@ 5Ð$139,349,781Ð  ¸# ÐCrime€ScienceÌLabsÐ  $t% Ð9A980(9A80)Ð 4* 8ˆ&  ð?1‰ð?‰4Ѐ€€1Ð 4*(8ˆ'  ð?1 ð? 4Ð$€€€€€90,000Ð  8ˆ( ÐTorture€Implements/ÌThumbscrewsÐ  à* Ð0A983(0A83)*Ì€€€€€(0A82)*Ð ) à, # ‰‰)Ѐ€€0Ð )¤ô- #  )Ð$€€€€€€€€€€0Ð ¤ô.  ÐÌÌ*€The€old€ECCN€0A82,€which€previously€encompassed€police€helmets€and€shields,€leg€irons,Ïshackles,€handcuffs,€and€straight€jackets,€specially€designed€implements€of€torture,€andÏthumbscrews,€was€divided€into€two€separate€ECCNs€in€œ1995.›ÌÌà  àOf€the€applications€for€shotguns€(0A984/0A84),€47€were€denied€in€FY€1996,€with€a€totalÏvalue€of€$2,946,568.€€The€denied€applications€were€destined€for€a€variety€of€countries€includingÏVietnam,€Nigeria,€Indonesia,€and€several€other€Central€American,€Asian,€African,€and€EasternÏEuropean€countries.ÌÌà  àThe€existence€of€these€controls€could€negatively€impact€U.S.€suppliers€because€they€mustÏcomply€with€licensing€regulations€requiring€time€and€incurring€administrative€costs,€while€someÏforeign€competitors€do€not€control€this€equipment.€€Moreover,€some€crime€control€exports€areÏdenied,€such€as€shotguns€valued€at€$2,946,568€in€FY€1996,€representing€a€loss€of€potential€salesÏfor€U.S.€firms.€€However,€the€U.S.€Government€affirms€that€human€rights€violations€cannot€beÏoverlooked€for€economic€gain.Ð l+¼&> Ї5.à  àòòEnforcement€of€Control.óó€€No€specific€enforce‚ment€problems€have€been€identified€inÐ ° Ðconnection€with€crime€control€items€or€implements€of€torture.€€For€the€most€part,€the€affectedÏcommodities€are€readily€recogniz‚able.€€In€the€case€of€items€controlled€unilat‚erally,€enforcementÏcoop‚eration€from€other€countries€and€control€over€reexports€is€difficult.ÌÌœòòC.›€€Consultation€with€Industryò òóóÐ L œ Ðó óÌà  àòòCrime€Control€Items.óó€€€Commerce€has€not€received€any€comments€from€industry€on€crimeÐ $ t Ðcontrol€items;€however,€Commerce€has€received€several€letters€from€the€public€regarding€anÏAmnesty€International€Report€charging€that€the€U.S.€Government€is€licensing€crime€control€itemsÏthat€are€being€used€by€foreign€governments€for€human€rights€abuses.€€Commerce€takes€this€matterÏvery€seriously€and€is€currently€looking€at€ways€to€improve€the€licensing€of€crime€control€items€forÏlegitimate€police/military€activity€and€to€prevent€the€misuse€of€these€items€by€human€rightsÏviolators.€œÌ›Ìà  àòòImplements€of€Torture.óó€€Commerce€received€many€letters€from€the€public€questioningÐ „Ô  Ðimplements€of€torture€and€why€this€category€appeared€on€the€Commerce€Control€List€(CCL).€ÏImplements€of€torture€appear€on€the€list€to€notify€exporters€that€these€are€controlled€œcommoditiesÏand€may€not€be€exported€without€the€explicit€permission€of€the€U.S.€Government.›€€In€1995ÏCommerce€created€a€new€ECCN€for€implements€of€torture€and€thumbscrews€and€removed€themÏfrom€the€category€of€crime€control€equipment.€€Commerce€also€added€a€new€section,Ï742.11(776A.19),€to€the€Regulations,€to€emphasize€that€implements€of€torture€are€subject€to€aÏpolicy€of€denial.€€Commerce€also€extended€controls€on€implements€of€torture€to€all€œdestinations.€ÏNo€applications€were€approved€for€these€items€in€1996.›ÌÌòòD.€€Consultation€with€Other€Coun‚triesóóÐ ¼  ÐÌà  àMany€other€supplier€countries€have€not€placed€similar€controls€on€their€exports€of€crimeÏcontrol€and€detection€equipment.€€The€United€Kingdom€and€Canada€are€examples€of€countriesÏwho€do€maintain€controls€on€crime€control€commodities€that€are€similar€to€U.S.€controls.€€ÌÌòòE.€€Alternative€MeansóóÐ D!” ÐÌà  àExport€controls€on€crime€control€and€detection€equipment€are€required€pursuant€to€sectionÏ6(n)€of€the€Act.€€Alternative€means€are€not€likely€to€satisfy€this€require‚ment.€€The€United€StatesÏGovernment€frequently€uses€diplomatic€demarches,€sanctions,€and€other€means€to€convey€itsÏconcerns€about€the€human€rights€situation€in€various€countries.ÌÌòòF.€€Foreign€AvailabilityóóÐ ¸'#& ÐÌà  àThe€foreign€availability€provision€does€not€apply€to€section€6(n)€of€the€Act.œ× ƒu ×Ý ƒR$ÓÝòòÚ  Ú7Ú  ÚóóÝ  Ý×  ×›€€Con‚gressÐ )à$( Ðhas€recognized€the€usefulness€of€these€controls€in€supporting€United€States€policy€on€humanÏrights€issues,€foreign€availability€œnotwithstanding.Ð  h+¸&* ÐÔ‡¼R{»XXkDÔò ò3.›€€Regional€Stability€[Sec‚tion€742.6(776A.16)]ó óÔ#†XkDX»¼R{+#ÔÐ ° ÐÌÌœà@1 1 ìàò òExport›€Control€Program€Description€and€Licensing€Policyó óˆÐ œì ÐÌà  àThis€control€has€traditionally€covered€vehicles€specially€designed€or€modified€for€militaryÏpurposes€and€certain€dual„use€com‚modities€that€can€be€used€to€manufac‚ture€military€equipment.ÏCertain€goods€and€technologies€were€transferred€to€the€CCL€from€the€State€Department's€UnitedÏStates€Munitions€List€in€1993€and€are€controlled€for€regional€stability€reasons.€€This€process€ofÏtransferring€items€from€State€Department€jurisdiction€to€Commerce€Department€jurisdiction€isÏcontinuing.ÌÌœA.›à  àA€license€is€required€for€foreign€policy€purposes€to€export€mili‚tary€vehicles€and€certainÐ è8  Ðcommod‚ities€used€to€manufacture€military€equipment€to€all€destinations€except€member€na‚tionsÏof€NATO,€Australia,€Japan€and€New€Zealand.€€Applications€for€export€licens‚es€for€such€itemsÏwill€generally€be€con‚sidered€favorably,€on€a€case„by„case€basis,€unless€the€export€would€contribƒ¼ute€significantly€to€the€destabilization€of€any€region.ÌÌB.à  àItems€formerly€on€the€United€States€Munitions€List€transferred€to€the€Commerce€ControlÐ pÀ ÐList€(CCL)€include€certain€image€intensifier€tubes,€infrared€focal€plane€arrays,€plus€certainÏnavigation€systems€technology€for€inertial€naviga‚tion€systems,€gyroscopes€and€acceler‚ometers.€€AÏlicense€is€re‚quired€for€export€to€all€destinations€except€Canada.€€All€license€applications€for€theseÏitems€will€be€reviewed€on€a€case„by„case€basis€to€determine€whether€the€export€could€contribute,Ïdirectly€or€indirectly,€to€a€country's€military€capa‚bilities€in€a€manner€that€would€destabilize€orÏalter€a€region's€military€balance€contrary€to€the€foreign€policy€interests€of€the€United€States.€ÌÌœà@Y Y ìàò òAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€the€Actó óˆÐ Ð  ÐÌòòA.€€The€Purpose€of€the€ControlóóÐ ¨ø ÐÌà  àThis€control€provides€an€effective€mech‚anism€for€the€United€States€to€moni‚tor€the€exportÏof€the€noted€items€in€order€to€€restrict€their€usage€in€instances€where€regional€stability€or€militaryÏbalance€would€be€ad‚versely€affected.ÌÌòòB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Commerce:óóÐ 0$€" ÐÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policyóó€òòPurposeóó.€€This€control€en‚ables€theÐ &X!$ ÐUnited€States€to€restrict€the€use€or€availability€of€certain€sensitive€goods€and€technologies€in€areasÏwhere€regional€stability€or€military€balance€could€be€adversely€af‚fected,€thus€achieving€in‚tendedÏforeign€policy€purposes.Ìâ âÐ ¸)%( Ð2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€This€control€is€consistent€with€UnitedÐ ° ÐStates€foreign€policy€goals,€including€promoting€peace€and€stability€and€preventing€U.S.€exportsÏthat€might€contribute€to€weapons€production€or€military€capabilities€in€areas€of€concern.Ìâ âÌ3.à  àòòReaction€of€Other€Countries.óó€€A€num‚ber€of€other€countries€limit€exports€of€items€andÐ `° Ðtechnologies€with€military€applicability€to€areas€of€concern,€recognizing€that€such€equipmentÏcould€adversely€affect€regional€stability€and€military€balance.€€ÌÌ4.à  àòòEconomic€Impact€on€United€States€In‚dustryóó.€Regional€Stability€controls€encompass€twoÐ  ` Ðmajor€groups€of€items.€€The€first€group€consists€of€commodities€that€do€not€require€a€validatedÏlicense€when€destined€for€NATO€countries,€Australia,€Japan,€or€New€Zealand.€€The€CCL€entriesÏthat€fall€under€this€category€are€9A018.b€(9A18A.b),€vehicles€specifically€designed€or€modifiedÏfor€military€purposes,€and€0A018.c€(0A18A.c),€specially€designed€component€parts€forÏammunition.€€œCommerce›€approved€100€IVLs€in€FY€1996€for€9A018.b(9A18A.b)€items,€with€aÏtotal€value€of€$53,298,952.€€There€were€no€denials€for€these€items.ÌÌà  àThe€second€group€consists€of€image€intensifier€tubes,€infrared€focal€plane€arrays,€andÏcertain€navigation€systems€technology.€€A€validated€license€is€required€for€export€to€allÏdestinations€except€Canada.€€These€items€are€controlled€under€ECCNs€1B018.a€(1B18A.a),Ï2B018€(2B18A),€6A002€(6A02),€6A003(6A03),€6D001€(6D21),€6E001€(6E01),€6E002€(6E02),Ï7D001€(7D01),€7E001€(7E01)(7E21),€7E002€(7E02),€7E101€(7E21).€€€In€FY€1996,€CommerceÏapproved€453€license€applications€for€these€commodities,€with€a€total€value€of€$51,020,448.ÌÌà  àThe€majority€of€these€applications€were€for€ECCNs€6A002€(6A02)and€6A003€(6A03)Ï(448€out€of€the€453€approvals€mentioned€above).€€Five€applications€were€denied€for€ECCNsÏ6A002(6A02)€and€6A003(6A03),€for€a€total€dollar€value€of€$1,760,143.€€Of€the€six€deniedÏapplications,€two€listed€the€country€of€ultimate€destination€as€China.€€The€remainder€had€beenÏdestined€for€India,€Algeria,€and€Croatia.€€Eighteen€applications€for€these€commodities€wereÏreturned€without€action.€ÌÌà  àOn€the€average,€license€applications€for€items€controlled€for€regional€stability€took€38„48Ïdays€for€processing€in€FY€1996.€ÌÌ5.à  àòòEnforcement€of€Control.óó€€Nearly€all€commodities€and€related€software€and€technologyÐ #l! Ðthat€are€subject€to€controls€for€regional€stability€purposes€are€also€subject€to€multilateral€controlsÏfor€either€national€security€or€missile€technology€reasons.€€This€coincidence€of€control€facilitatesÏthe€ability€to€detect€direct€exports€because€enforcement€personnel€do€not€require€additionalÏtraining€to€distinguish€national€security€or€missile€technology€controlled€items€from€thoseÏcontrolled€for€foreign€policy€purposes.€ÌœÐ  ¤(ô#' ÐòòC.›€€Consultation€with€IndustryóóÐ ° ÐÌà  àNone€of€the€industry€comments€received€on€the€extension€of€foreign€policy€controlsÏspecifically€addressed€the€regional€stability€controls.€€Various€elements€in€industry€have€beenÏconsulted€during€the€ongoing€transfer€to€Commerce€control€of€the€former€State€Department„¼licensed€Munitions€List€items.€€Industry€input€received€during€this€process€in€large€measureÏsupported€the€placing€of€these€items€under€Commerce€control,€and€encouraged€further€suchÏtransfers.ÌÌòòD.€€Consultation€with€Other€CountriesóóÐ ü L  ÐÌà  àCertain€items€controlled€by€the€United€States€for€regional€stability€purposes€are€beingÏcontrolled€by€the€members€of€the€Wassenaar€Arrangement.ÌÌòòE.€€Alternative€MeansóóÐ ˜è  ÐÌà  àThe€United€States€has€undertaken€a€wide€range€of€actions€to€support€and€encour‚ageÏregional€stability.€€Bilateral€and€multilat‚eral€diplomatic€means€have€been€used€to€discourageÏactions€that€destabilize€the€region€in€which€they€are€located.€The€United€States€has€specificallyÏencouraged€efforts€to€limit€the€flow€of€arms€and€mili‚tarily€useful€goods€to€regions€of€conflict€andÏtension.€€œÌÔ#†9XtXXXkD¢'#ÔÔ‡ÓXkDXX9XtÔÌòòF.€€Foreign€AvailabilityóóÐ øH ÐÌà  àThere€are€numerous€foreign€sources€for€the€military€vehicles€and€other€military€typeÏequipment€long€controlled€for€region‚al€stability€purposes.€€There€is€also€consid‚erable€foreignÏavailability€for€items€now€under€Commerce€Department€control€juris‚diction€but€previouslyÏcontrolled€by€the€State€Department.€€However,€nearly€all€commodities€and€related€software€andÏtechnology€that€are€subject€to€controls€for€regional€stability€purposes€are€also€subject€toÏmultilateral€controls€for€either€national€security€or€missile€technology€reasons.ÌÌÔ#†9XtXXÓXkDΚ#ÔÔ‡XkDXX9Xtԛ̜ò òÔ‡¼R{»XXkDÔ4.›€€Terrorist„Supporting€Countries€[Section€742.8,€742.9,€742.10(785A.4]Ô#†XkDX»¼R{“#Ôó óÐ 0"€  ÐÌœà@  ìàò òExport›€Control€Program€Description€And€Licensing€Policyó óˆÐ 0$€" ÐÌà  àThese€controls€reflect€U.S.€opposition€to€acts€of€international€terror‚ism,€as€well€as€addressÏother€United€States€for‚eign€policy€concerns.€€Pursuant€to€Sec‚tion€6(j)€of€the€Act,€the€Secretary€ofÏState€has€designated€Cuba,€Iran,€Iraq,€Libya,€North€Korea,€Sudan€and€Syria€as€nations€that€haveÏrepeatedly€provided€support€for€acts€of€international€terrorism.ÌÌà  àThe€United€States€maintains€comprehensive€economic€and€trade€embargoes€on€Cuba,ÏIran,€Iraq,€Libya€and€North€Korea.€€Export€control€elements€of€the€embargoes€against€Cuba€andÐ +à&* ÐNorth€Korea€are€administered€by€the€Department€of€Commerce€and€are€covered€in€Chapter€5.€ÏElements€of€the€controls€imposed€on€Libya€that€are€administered€by€Commerce€are€discussed€inÏChapter€6.€€Other€elements€of€these€embargoes€are€administered€by€the€Department€of€TreasuryÏand€are€not€discussed€in€this€report.€€The€comprehensive€embargo€on€Iran,€imposed€underÏExecutive€Order€No.12959€of€May€6,€1995,€and€the€United€Nations€Security€Council€mandatedÏembargo€on€Iraq€are€administered€by€the€Department€of€the€Treasury€and€are€also€not€addressedÏin€this€report.€€This€chapter€details€the€anti„terrorism€and€foreign€policy€controls€on€Iran,€SudanÏand€Syria.ÌÌà  àOn€April€24,€1996€the€President€enacted€the€ð ðAntiterrorism€and€Effective€Death€PenaltyÏAct€of€1996",€Public€Law€104„132.€€Section€321€of€the€Act€makes€it€a€criminal€offense,€except€asÏprovided€in€regulations€issued€by€the€Department€of€Treasury,€for€U.S.€persons€to€engage€inÏfinancial€transactions€with€the€governments€of€countries€which€support€international€terrorism.€€ÏIn€August€1996,€the€Treasury€Department€issued€the€ð ðTerrorism„Supporting€Countries€SanctionsÏRegulations.ðð€€Fundamentally,€as€the€United€States€already€had€comprehensive€trade€restrictionsÏon€Cuba,€North€Korea,€Iran,€Iraq€and€Libya,€this€change€did€not€have€a€substantial€impact€on€U.S.Ïexports€or€U.S.€export€license€requirements€to€these€countries.€€Under€the€Treasury€regulations,Ïcertain€financial€transactions€with€the€Governments€of€Syria€and€Sudan€are€prohibited€unlessÏspecifically€authorized€by€Treasury.€€The€new€regulations€for€Syria€and€Sudan€prohibit€U.S.Ïpersons€from€receiving€unlicensed€donations€and€from€engaging€in€financial€transaction€withÏrespect€to€which€œthe›€U.S.€person€knows€or€has€reasonable€cause€to€believe€that€the€transactionÏposes€a€risk€of€furthering€terrorist€acts€in€the€United€States.€€All€other€financial€transactions€areÏauthorized.€€Commerce€export€license€requirements€on€Sudan€and€Syria€are€maintained.€ÌÌà  àEffective€December€28,€1993,€the€Acting€Secretary€of€State€determined€that€fiveÏcategories€of€items€that€are€the€sub‚ject€of€multilateral€controls€were€to€be€controlled€to€certainÏsensitive€government€end„users€under€Section€6(j),€since€these€items€meet€the€criteria€set€forth€inÏSection€6(j)(1)(B).€€Specifically,€the€Acting€Secre‚tary€determined€that€these€items,€when€exportedÏto€military€or€other€sensitive€end„users€in€a€terrorist„designated€country,€could€make€a€significantÏcontribution€to€that€coun‚try's€military€potential€or€could€enhance€its€ability€to€support€acts€ofÏinter‚national€terror‚ism.€€These€anti„terrorism€controls€apply€to€œall€terrorism€list€countries.ÌÌà  àThe€Acting€Secretary€also€advised€that€other€items€not€specifically€controlled€underÏSection€6(j)€should€continue€to€be€controlled€for€general€foreign€policy€purposes€under€SectionÏ6(a)€to€terrorism€list€countries,€and€that€the€export€of€such€items€will€continue€to€be€reviewedÏprior€to€approval€to€evaluate€whether,€under€the€circumstances€of€the€application,€theÏrequirements€of€Section€6(j)€apply.€€These€measures€are€described€in€detail€below.€€This€reviewÏpractice€also€applies€in€the€review€of€all€exports€to€terrorist„desig‚nated€countries€regardless€of€theÏbasis€for€their€control.ÌÌà  àThe€Secretaries€of€State€and€Commerce€decided€to€impose€controls€on€Sudan€underÏSection€6(a)€to€correspond€to€Section€6(a)€controls€on€Iran€and€Syria.€€State€and€Commerce€alsoÏimposed€new€controls€on€explosive€device€detectors€to€Iran,€Syria,€and€Sudan.Ð h+¸&* Їà  àParagraph€A€below€reflects€the€Sec‚tion€6(j)€controls;€paragraph€B€reflects€the€Section€6(a)Ïcontrols€on€Iran,€Sudan,€and€Syria.€€ÌÌA.à  àThe€Acting€Secretary€of€State€deter‚mined,€effective€€December€28,€1993,€that€the€exportÐ tÄ Ðof€certain€categories€of€goods€and€technologies€when€destined€to€military,€police,€intelligenceÏentities€and€other€sensitive€end„users,€as€de‚termined€by€the€Department€of€State,€in€any€countryÏdesignated€under€Sec‚tion€6(j)€of€the€Act€as€a€country€that€has€repeatedly€provided€support€for€actsÏof€international€terrorism€"could€make€a€significant€contribution€to€the€military€potential€of€suchÏcountry,€including€its€military€logistics€capabili‚ty,€or€could€enhance€the€ability€of€such€country€toÏsupport€acts€of€inter‚national€terrorism."€€As€a€result€of€this€determination,€the€Secretaries€of€StateÏand€Commerce€will€notify€Congress€30€days€prior€to€the€issuance€of€any€li‚cense€for€the€export€ofÏany€item€from€the€five€categories€listed€below€to€sensitive€end„users€in€the€terrorist€countries.Ì€Ìà  àPursuant€to€Section€6(j)€of€the€Act,€a€validated€license€for€terrorist„designat‚ed€countries€isÏrequired€for€the€fol‚lowing€items€to€military€or€other€sensitive€end„users:ÌÌà0  àAll€items€subject€to€national€securi‚ty€controls,€except€comput‚ers€with€an€MTOP€levelÏunder€500€(WA);× ƒ ×Ý ƒR$ÓÝòòÚ  Ú8Ú  ÚóóÝ  Ý×  ×›Ð\¬(#(# ÐÌà0  àAll€items€subject€to€chemical€and€biological€weapons€proliferation€controls€(AG);Ð (#(# ÐÌ€à0  àAll€dual„use€items€subject€to€mis‚sile„proliferation€controls€(MTCR);Ð \(#(# ÐÌ€à0  àAll€items€subject€to€nuclear€weapons„proliferation€controls€(NRL);€and€Ðä4(#(# ÐÌ€à0  àAll€military„related€items€(items€controlled€by€CCL€entries€ending€with€the€number€18).м (#(# ЀÌB.à  àPursuant€to€Section€6(a)€of€the€Act,€the€following€categories€of€items€require€a€validatedÐ ”ä Ðlicense€for€Iran,€Sudan,€and€Syria€in€furtherance€of€United€States€foreign€policy.€€Exports€andÏcertain€reexports€to€Iran€are€also€subject€to€licensing€requirements€under€the€trade€and€investmentÏcomprehensive€embargo€administered€by€the€Department€of€the€Treasury€under€the€authority€ofÏthe€International€Emergency€Economic€Powers€Act.€€Li‚cense€applications€for€items€controlledÏunder€Section€6(a)€of€the€Act€are€reviewed€before€approval€to€deter‚mine€whether€theÏrequirements€of€Section€6(j)€apply.€€Whenever€the€Sec‚retary€of€State€determines€that€the€exportÏ"could€make€a€significant€con‚tribution€to€the€military€potential€of€such€country,€including€itsÏmilitary€logistics€capability,€or€could€enhance€the€ability€of€such€country€to€support€acts€ofÏinternational€terrorism,"€the€appropriate€congressional€committees€will€be€notified€30€days€beforeÏthe€license€is€issued.€€The€categories€of€items€are:ÌÌà0  àCategories€of€items€listed€in€paragraph€A€to€non„military€or€non„sensitive€end„users.Ð (#(# Ðà0  àComputers€with€a€CTP€level€under€500Ð (#(# Ðà0  àAircraft,€Including€Helicopters,€Engines€and€PartsÐ (#(# Ѐà0  àHeavy€Duty€On„Highway€TractorsÐh+¸&*(#(# Ѐà0  àOff„Highway€Wheel€Tractors€(>10€tons)а(#(# Ðà0  àCryptographic,€Cryptoanalytic€and€Cryptologic€EquipmentÐ (#(# Ðà0  àNavigation,€Direction€Finding€and€Radar€EquipmentÐ (#(# Ðà0  àElectronic€Test€EquipmentÐ (#(# Ѐà0  àMobile€Communications€Equip‚mentÐ`°(#(# Ðà0  àAcoustic€Underwater€Detection€EquipmentÐ (#(# Ðà0  àVessels€and€Boats€(Including€Inflat‚able€Boats)Ð (#(# Ðà0  àMarine€and€Submarine€EnginesÐ (#(# Ѐà0  àUnderwater€Photographic€Equip‚mentÐ `(#(# Ѐà0  àSubmersible€SystemsÐü L (#(# Ѐà0  àCNC€Machine€ToolsÐè 8 (#(# Ѐà0  àVibration€Test€EquipmentÐÔ$ (#(# Ѐà0  àCertain€Digital€Computers€(CTP>6)ÐÀ (#(# Ðà0  àCertain€Telecommunications€Trans‚mission€EquipmentÐ (#(# Ѐà0  àCertain€Microprocessors€(Clock€Speed€>25€Mhz)Иè (#(# Мà  àCertain›€Semiconductor€Manufac‚turing€EquipmentÌœà  àSoftware›€Specially€Designed€for€CAD/CAM€IC€ProductionÌà0  àPacket€SwitchesÐ (#(# Ðà0  àSoftware€Specially€Designed€for€Air€Traffic€Control€ApplicationsÐ (#(# Мà  àGravity›€Meters€(Static€Accuracy€<100€Microgal€or€with€Quartz€œElement)›Ì€à0  àCertain€Magnetometers€with€Sensi‚tivity€<1.0€nt€œrms€per›€root€HertzÐ p(#(# Ðà0  àCertain€Fluorocarbon€Com‚pounds€for€Cooling€Fluids€for€Radar€and€SupercomputersÐ (#(# Ðà0  àHigh„Strength€Organic€and€Inor‚ganic€Fibers€Ð (#(# Ðà0  àCertain€Machines€for€Gear„Cut‚ting€(Up€to€1.25€Meters)Ð (#(# Ðà0  àCertain€Aircraft€Skin€and€Spar€Milling€MachinesÐ (#(# Ðà0  àCertain€Manual€Dimensional€In‚spection€Machines€(Linear€Posi‚tioning€AccuracyÏœ3+L/300)›Ð (#(# Ðà0  àRobots€Employing€Feedback€Infor‚mation€in€Real€TimeÐ (#(# Ðà0  àExplosive€device€detectors,€used€in€airportsÐ (#(# ÐÌC.à0  àA€validated€license€for€foreign€policy€reasons€is€required€for€Iran€and€Sudan€for€theÐ X ¨ Ðfollowing€additional€items:Ð (#(# ÐÌà  àLarge€Diesel€Engines€(>400€hp)Ìà  àScuba€Gear€Ìà0  àPressurized€Aircraft€Breathing€EquipmentÐ (#(# ÐÌD.à0  àA€validated€license€for€foreign€policy€reasons€is€required€only€for€Iran€for€the€followingÐ Ì&"% Ðadditional€œitems:Ð ¸'#&(#(# Лà  àPortable€Electric€Power€GeneratorsÌÌE.à  àLicensing€Policy:Ð ˆØ ÐÌ1.à  àAll€items€requiring€a€license€for€Iran€for€national€security€or€foreign€policy€reasons€areÐ `° Ðsubject€to€a€policy€of€denial.€€All€exports€and€certain€specified€reexports€are€also€subject€to€theÏcomprehensive€trade€and€investment€embargo€administered€by€the€Department€of€Treasury.ÌÌ2.à  àApplications€for€export€to€Sudan€and€Syria€of€national€security€controlled€items€willÐ  ` Ðgenerally€be€denied€if€the€export€is€destined€to€a€military€or€other€sensitive€end„user€or€end„use.€ÏApplications€for€other€end„users€or€end„uses€in€Sudan€and€Syria€will€be€considered€on€a€case„by„¼case€basis.ÌÌ3.à  àAll€items€subject€to€chemical€and€biological€weapons€(CBW)€proliferation€controlsÐ ¬ü  Ðproposed€for€ex‚port€to€Sudan€and€Syria€will€generally€be€denied.ÌÌ4.à  àAll€items€subject€to€missile€tech‚nology€controls€proposed€for€ex‚port€to€Sudan€and€SyriaÐ pÀ Ðwill€gener‚ally€be€denied.Ì€Ì5.à  àApplications€for€export€to€Sudan€and€Syria€of€military„related€items€(CCL€entries€endingÐ 4„ Ðin€the€number€18)€will€generally€be€denied.ÌÌ6.à  àApplications€to€export€to€Sudan€and€Syria€nuclear€referral€list€items€will€generally€beÐ øH Ðdenied€for€military€end€use.€€For€civilian€end€use,€applications€will€be€considered€on€a€case„by„¼case€basis.ÌÌ7.à  àApplications€for€other€items€controlled€to€Sudan€and€Syria€for€foreign€policy€purposesÐ ¨ø Ðwill€carry€a€pre‚sumption€of€denial€to€mili‚tary€end„users€and€end„uses.€€For€other€end„users€andÏend„uses,€license€appli‚cations€will,€in€most€instances,€be€reviewed€on€a€case„by„case€basis.€€ÌÌ8.à  àApplications€for€export€and€reexport€to€Su‚dan€and€Syria€will€be€considered€on€a€case„by„Ð X ¨ Ðcase€basis€if:ÌÌà  àa.€€the€transaction€involves€the€reexport€to€Sudan€or€Syria€of€items€where€Sudan€or€SyriaÏwas€not€the€intended€ultimate€destina‚tion€at€the€time€of€original€export€from€the€United€States,Ïprovided€that€the€export€from€the€United€States€occurred€prior€to€the€appli‚cable€contract€sanctityÏdate;ÌÌà  àb.€€the€United€States€content€value€of€foreign„produced€com‚modities€is€20€percent€or€less;ÏorÌÌà  àc.€€the€commodities€are€medical€equipment.ÌÐ h+¸&* Ð9.à  àApplicants€wishing€to€have€contract€sanctity€considered€in€reviewing€their€applicationsÐ ° Ðmust€submit€adequate€documentation€demonstrating€the€existence€of€a€contract€that€pre„dates€theÏimposition€or€expansion€of€controls€on€the€item(s)€intended€for€export.ÌÌœà@7 7 ìàò òAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€The€Actó óˆÐ `° ÐÌA.€€The€Purpose€of€the€Control€ÌÌà  àThe€controls€concretely€distance€the€United€States€from€nations€that€have€repeat‚edlyÏsupported€acts€of€international€terror‚ism,€and€demonstrate€the€firm€re‚solve€of€the€United€StatesÏnot€to€conduct€unrestricted€export€trade€with€nations€that€do€not€adhere€to€acceptable€norms€ofÏinternational€behav‚ior.€€The€licensing€mechanism€provides€the€Department€with€the€means€toÏcontrol€any€significant€Unit‚ed€States€contribution€to€the€military€potential€of€designated€countriesÏand€to€limit€their€ability€to€support€international€terrorism.ÌÌà  àòòIran.óó€€These€controls€respond€to€continued€Iranian€sponsorship€of€terrorism.€€The€purposeÐ „Ô  Ðof€the€controls€is€to€restrict€equipment€that€would€be€useful€in€enhancing€Iran's€military€orÏterrorist„supporting€capabilities,€as€well€as€address€other€U.S.€foreign€policy€concerns,€includingÏhuman€rights,€non„proliferation€and€regional€stability.ÌÌà  àThe€controls€also€allow€the€United€States€to€prevent€shipments€of€U.S.„origin€equipmentÏfor€uses€that€could€pose€a€direct€threat€to€U.S.€interests.€€Iran€continues€to€support€groups€thatÏpractice€terrorism,€including€terrorism€to€disrupt€the€Middle€East€Peace€Process,€and€it€continuesÏto€kill€Iranian€dissidents€abroad.€€By€restricting€militarily€useful€items,€the€controls€demonstrateÏthe€resolve€of€the€United€States€not€to€provide€any€direct€or€indirect€military€support€for€Iran€andÏrespond€to€other€U.S.€foreign€policy€concerns.ÌÌà  àòòSyria.óó€€Although€there€is€no€evidence€of€direct€Syrian€Government€involvement€in€theÐ ”ä Ðplanning€or€implementing€of€terrorist€acts€since€1986,€Syria€continues€to€provide€support€and€safeÏhaven€to€groups€which€engage€in€terrorism.€The€groups€include€the€Popular€Front€for€theÏLiberation€of€Palestine€General€Command;€Hamas;€Hizballah;€the€Abu€Nidal€Organization;€theÏPopular€Front€for€the€Liberation€of€Palestine;€the€Demo‚cratic€Front€for€the€Liberation€ofÏPalestine;€the€Japanese€Red€Army;€the€Kurdistan€Workers€Party€(PKK);€DHKP/C€(formerlyÏknown€as€Dev€Sol);€and€the€Palestinian€Is‚lamic€Jihad.€€The€trade€con‚trols€reflect€U.S.€oppositionÏto€Syria's€support€and€safe„haven€to€terrorist€groups€and€prevent€a€significant€U.S.€contribution€toÏSyria's€military€capabilities.€€€ÌÌà  àòòSudanóó.€Evidence€indicates€that€Sudan€allows€the€use€of€its€territory€as€sanctuary€forÐ Ì&"% Ðterrorists€including€the€Abu€Nidal€Organiza‚tion,€Hizballah,€Hamas€and€Pal‚estinian€Islamic€Jihad.€ÏSafe€houses€and€other€facili‚ties€used€to€support€radical€groups€are€al‚lowed€to€exist€in€Sudan€withÏthe€apparent€approval€of€the€Sudanese€Government's€leadership.€€Further,€some€mili‚taryÏextremists€who€commit€acts€of€‚sabotage€in€neighboring€countries€receive€train‚ing€in€Sudan.€€TheÏexport€controls€demon‚strate€United€States€opposition€to€Sudan's€support€for€interna‚tionalÐ h+¸&* Ðterrorism€while€restricting€access€to€items€that€could€make€a€significant€contribu‚tion€to€Sudan'sÏmili‚tary€capability€or€ability€to€support€inter‚national€terrorism.€€ÌÌB.€Considerations€and/or€Determi‚na‚tions€of€the€Secretary€of€Com‚merce:œ× ƒ’ ×Ý ƒR$ÓÝòòÚ  Ú9Ú  ÚóóÝ  Ý×  כРtÄ ÐÌ1.à  àòò€Probability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€Although€avail‚ability€ofÐ L œ Ðcomparable€goods€from€foreign€sources€limits€the€economic€effects€of€these€controls,€they€areÏeffective€in€achieving€their€pur‚pose€of€restricting€access€of€these€coun‚tries€to€United€States„originÏcommodities€and€techni‚cal€data€and€in€demonstrating€the€determina‚tion€of€the€United€States€toÏoppose€and€distance€itself€from€acts€of€international€terrorism.€Judicious€applica‚tion€of€exportÏcontrols€in€conjunction€with€other€efforts€serves€to€enhance€the€overall€United€States€effort€toÏcombat€internation‚al€terrorism.€€In€extending€controls€toward€Iran,€Syria€and€Sudan,€the€SecretaryÏhas€determined€that€they€are€likely€to€achieve€the€intended€for‚eign€policy€purpose,€in€spite€ofÏsuch€other€factors€as€the€availabil‚ity€from€other€coun‚tries€of€comparable€items.ÌÌà  àòòIran.óó€€€The€controls€on€Iran€restrict€its€access€to€specified€items€of€U.S.„origin€that€couldÐ „Ô  Ðbe€used€to€threaten€U.S.€interests.€€The€United€States€has€sought,€and€will€continue€to€seek,€theÏcooperation€of€other€countries€in€cutting€off€the€flow€of€military€and€military„related€equipmentÏto€Iran.€ÌÌà  àòòSudan.óó€€The€controls€on€Sudan€affirm€the€commitment€of€the€United€States€to€op‚poseÐ  p Ðinternational€terrorism€by€limiting€Sudan's€ability€to€obtain€and€use€United€States„origin€items€inÏsupport€of€terrorist€or€military€activity.€€These€controls€send€a€clear€mes‚sage€to€Sudan€of€strongÏUnited€States€oppo‚sition€to€its€support€for€terror‚ist€groups.€€Ìà  àÌà  àòòSyria.óó€€These€controls€are€an€important€means€of€demonstrating€the€United€States'€resolveÐ ¼  Ðby€limiting€Syria's€ability€to€obtain€United€States-origin€items€that€could€be€used€to€supportÏterrorist€activities€or€con‚tribute€significantly€to€Syria's€military€potential.€€Although€other€nationsÏproduce€many€of€the€items€subject€to€United€States€anti„terrorism€controls,€this€does€not€obvi‚ateÏthe€need€to€send€a€strong€signal€to€the€Syrian€Govern‚ment€of€our€disapproval€of€support€forÏgroups€involved€in€terrorism.ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€In€extending€these€controls,€the€SecretaryÐ 0"€  Ðdetermined€that€they€are€compati‚ble€with€the€foreign€policy€objec‚tives€of€the€United€StatesÏtoward€nations€designated€as€supporters€of€terrorism.€€They€are€also€compatible€with€overallÏUnited€States€policy€toward€Iran,€Sudan€and€Syria.€€In€addition,€the€controls€are€consistent€withÏUnited€States€efforts€to€restrict€the€flow€of€items€that€could€be€used€for€military€or€terrorist€purƒ¼poses.ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€The€Unit‚ed€States€limits€the€extra„territorial€effects€of€theseÐ ¤(ô#' Ðcontrols€to€minimize€fric‚tions€with€friendly€countries.€€The€list€of€countries€designated€asÏsupporters€of€international€terrorism€is€revised€whenever€a€country's€record€warrants€its€removalÏfrom,€or€addi‚tion€to,€the€terrorist€country€list.€€In€1982,€Iraq€was€removed€while€Cuba€was€added.€Ð h+¸&* ÐIran€was€added€in€1984€and€North€Korea€in€1988.€€Iraq€in€1990€was€returned€to€the€list€and€theÏformer€People's€Democratic€Repub‚lic€(PDR)€of€Yemen€was€removed€following€its€unificationÏwith€the€Yemen€Arab€Republic.€€Sudan€was€added€in€1993.€€The€controls€are€applied€on€the€basisÏof€each€country's€record€regarding€support€for€repeated€acts€of€inter‚national€terrorism.ÌÌà  àThe€Secretary€has€determined€that€the€reaction€of€other€countries€to€the€exten‚sion€of€theÏcontrols€on€Iran,€Syria€and€Sudan€is€not€likely€to€render€the€controls€ineffective€in€achieving€theirÏintended€foreign€policy€purpose,€or€to€be€counter‚productive€to€United€States€foreign€policyÏinterests.ÌÌà  àòòIran.óó€€Regarding€the€controls€on€specific€product€categories,€other€countries€have€sharedÐ è 8  Ðthe€United€States'€concern€over€Iran's€support€of€terrorism,€human€rights€abuses,€attempts€toÏacquire€weapons€of€mass€destruction,€and€the€need€to€deny€access€to€equipment€that€could€beÏused€to€threaten€neutral€shipping.€€Thirty„two€other€countries€via€Wassenaar€have€recognized€IranÏas€a€country€whose€behavior€is€a€cause€of€concern.€€Some€nations€have,€on€the€other€hand,€raisedÏobjections€to€the€perceived€extra„territorial€reach€of€the€U.S.€foreign€policy€controls.ÌÌà  àòòSudan.óó€€The€controls€were€imposed€in€re‚sponse€to€credible€evidence€that€Sudan€isÐ \¬ Ðassisting€international€terrorist€groups.€€The€decision€to€designate€Sudan€a€state€sponsor€ofÏterrorism€reflects€an€assessment€of€the€facts€and€United€States€law.€€The€United€States€hasÏconsulted€with€key€allies€and€urged€them€to€do€whatever€is€possible€to€convince€Sudan€to€halt€itsÏsupport€for€terror‚ism.€€Some€have€made€their€disapproval€of€Sudan's€support€for€terrorism€knownÏin€other€ways.€€For€example,€the€Organization€of€African€Unity€(OAU),€in€an€unprecedentedÏaction€criticizing€a€member,€passed€a€resolution€in€September€1995€calling€on€Sudan€to€extraditeÏto€Ethiopia€three€suspects€charged€with€the€June€1995€assassination€attempt€against€PresidentÏMubarak€of€Egypt.€€In€1996,€the€United€Nations€Security€Council€adopted€three€resolutionsÏreaffirming€the€OAU€resolution€and€calling€on€Sudan€to€desist€from€supporting€terrorism.€ÏDiplomatic€and€travel€sanctions€were€imposed€in€May.ÌÌà  àòòSyria.óó€€The€controls€are€maintained€in€re‚sponse€to€Syria's€lack€of€concrete€steps€againstÐ l¼ Ðinternational€terrorist€groups€that€maintain€a€presence€in€Syria€and€Syrian„controlled€areas€ofÏLebanon.€€Some€coun‚tries€have€objected€to€the€extra„territorial€impact€inherent€in€reexportÏcontrols.€ÌÌà  àControls€were€instituted€against€Syria€after€it€was€designated€under€Section€6(j)€as€aÏœterrorist„supporting›€country€in€De‚cember€1979.€€Additional€export€controls€were€added€to€the€listÏalong€with€other€sanctions€in€November€1986,€following€findings€of€British€courts€that€SyrianÏoffi‚cials€in€London€and€Damascus€were€di‚rectly€involved€in€aiding€and€abetting€a€terrorist,€NizarÏHind‚awi,€in€his€attempt€to€place€a€bomb€on€an€El€Al€civilian€aircraft€at€London's€HeathrowÏAirport.€€In€No‚vember€1986,€in€reaction€to€the€same€court€findings,€the€European€Union,€with€theÏexception€of€Greece,€imposed€a€number€of€diplomat‚ic€and€security€sanctions€against€Syria.€€TheÏâ âUnited€Kingdom€also€broke€diplomat‚ic€relations€with€Syria€at€that€time,€but€reestablishedÐ |*Ì%) Ðrelations€in€November€1990.€€The€United€States€has€provided€EU€coun‚tries€with€specificÏinformation€on€the€purpose€and€scope€of€our€economic€sanc‚tions.€Ìâ âÌ4.à  àòòEconomic€Impact€on€U.S.€Industry.óó€€Ð tÄ ÐÌà  àòòIran.óó€€Iranððs€economy€consists€of€a€mixture€of€large€state„owned€enterprises,€small„scaleÐ L œ Ðservice€and€trading€firms,€and€agricultural€enterprises€organized€at€the€village€level.€€AlthoughÏthe€Iranian€Government€has€recently€taken€steps€to€decentralize€the€economy,€the€pace€of€changeÏhas€been€slow€because€of€significant€political€opposition€to€a€more€open€economy.€€IranÏexperienced€a€surge€in€imports€during€the€early€1990s€(e.g.,€imports€in€1992€totaled€$23.7Ïbillion).€€TheÌrecent€increase€in€imports,€coupled€with€the€governmentððs€financial€mismanagement,€hasÏproduced€economic€difficulties€for€Iran.€€At€the€end€of€1993,€Iranððs€foreign€debt€had€reachedÏnearly€$30€billion,€with€payments€almost€$8€billion€in€arrears.€€To€make€matters€worse,€IranððsÏearnings€from€oil€exports,€which€account€for€approximately€90€percent€of€Iranððs€export€revenues,Ïhave€been€hurt€by€declining€oil€prices.€€Other€economic€indicators€also€show€signs€of€a€troubledÏeconomy.€€In€1994,€for€example,€Iran€had€an€unemployment€rate€exceeding€30€percent€and€aÏconsumer€price€inflation€rate€that€hovered€around€35€percent.ÌÌà  àFrom€1991€through€1994,€U.S.€exports€to€Iran€totaled€almost€$2.2€billion€(total€derivedÏfrom€U.S.€Census€data),€making€the€U.S.€the€sixth€largest€exporter€(by€dollar€value)€to€IranÏduring€this€period.€€U.S.€exports€to€Iran€rose€sharply€in€the€early€1990s€after€Iran€lifted€certainÏimport€restrictions.€€From€a€total€of€only€$166€million€in€1990,€U.S.€exports€to€Iran€increased€toÏ$522€million€in€1991€and€rose€to€$744€million€in€1992.€€U.S.€exports€to€Iran€during€1993€droppedÏslightly€to€$613€million.€€In€1994,€however,€U.S.€exports€to€Iran€declined€sharply€to€$326€millionÏas€the€license€denial€policy€mandated€by€the€National€Defense€Authorization€Act€(NDAA)€of€FYÏ1993€began€to€make€a€significant€impact€on€U.S.€trade€with€Iran.€€U.S.€exports€to€Iran€fell€evenÏfurther€(to€$277€million)€in€1995€when€the€U.S.€imposed€a€total€trade€embargo€against€Iran.ÌÌà  àThe€passage€of€the€NDAA€of€FY€1993€appears€to€have€resulted€in€a€decline€in€U.S.Ïexports€to€Iran€of€between€$200€million€and€$300€million€per€year.€€Total€U.S.€exports€to€IranÏaveraged€$626€million€per€year€from€1991€through€1993,€but€only€$302€million€per€year€for€1994Ïand€1995.€€Much€of€this€decline€is€obviously€due€to€the€fact€that€Commerce,€in€accordance€withÏthe€provisions€of€the€NDAA€of€FY€1993,€did€not€approve€any€applications€for€Iran€in€FiscalÏYears€1995€or€1996.€€In€the€four€previous€fiscal€years€(i.e.,€FY€1991„94)€Commerce€approved€anÏaverage€of€$177€million€in€applications€to€Iran€each€year.€€Table€1€clearly€shows€the€significantÏimpact€of€the€NDAA€of€FY€1993.ÌÌà@„ „ ìàÔ& ( ÔTable€1:€Approved€Applications€to€Iran€(FY€1991„96)ˆÌÌÔ*ŽƒŠ`“ddždd ždd ždd ždd q`t°(#°(#ŽÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚ )à$( €€&ÐFiscal€YearÔ'(¸'öÔÐ 6€‚!ô)D%)"l‚ 6ÐNumber€of€ApplicationsÐ 6€‚!ô)D%*"l‚ 6ÐTotal€Value€in€U.S.€DollarsÐ UK$ô)D%+"  l‚ Ÿ@1991‰Ÿ@‰‹‹UÐ1991Ð mcAt+Ä&," Ÿ@1991 Ÿ@  @V@89‰@V@‰mЀ89Ð >42t+Ä&-"  @V@89 @V@ >Ð$€60,149,182Ð C9t+Ä&."  Ÿ@1992‰ Ÿ@‰‹‹CÐ1992Ð ndA”d"  Ÿ@1992  Ÿ@ ``@131‰``@‰nÐ131Ð ?53”d" ``@131 ``@ ?М$567,559,528›Ð C9”d" $Ÿ@1993‰$Ÿ@‰‹‹CÐ1993Ð mcAä" $Ÿ@1993 $Ÿ@  F@44‰F@‰mЀ44Ð >42ä"  F@44 F@ >Ð$€63,834,952Ð C9ä" (Ÿ@1994‰(Ÿ@‰‹‹CÐ1994Ð mcA” d" (Ÿ@1994 (Ÿ@  $@10‰$@‰mЀ10Ð >42” d"  $@10 $@ >Ð$€16,774,377Ð C9” d " ,Ÿ@1995‰,Ÿ@‰‹‹CÐ1995Ð aWA ä " ,Ÿ@1995 ,Ÿ@ # ‰‰aЀ€€0Ð 2(& ä " #  2Ð$0Ð C9 ä " 0Ÿ@1996‰0Ÿ@‰‹‹CÐ1996Ð aWA” d " 0Ÿ@1996 0Ÿ@ # ‰‰aЀ€€0Ð 2(&” d" #  2Ð$0Ð"” d"  "ÐÌÌà  àData€are€also€available€on€the€effects€of€the€total€trade€embargo€that€was€imposed€againstÏIran€in€1995.€€Of€the€$277€million€in€U.S.€exports€(not€on€the€Commerce€Control€List)€to€IranÏduring€1995,€almost€$223€million€occurred€during€the€first€six€months€of€the€year,€prior€to€theÏimposition€of€the€embargo.€€In€addition,€U.S.€exports€(not€on€the€Commerce€Control€List)€to€IranÏduring€the€first€half€of€1996€totaled€only€$0.3€million.€€The€result€of€the€1995€embargo,€therefore,Ïappears€to€have€been€an€additional€decline€in€trade€with€Iran€of€more€than€$200€million€per€year.€ÏTogether,€the€NDAA€of€FY€1993€and€the€1995€U.S.€embargo€have€caused€U.S.€trade€with€Iran€toÏdecline€by€more€than€$500€million€per€year.€€However,€even€in€1992€when€exports€to€Iran€wereÏhigh,€these€exports€comprised€œonlyññ€ññññ€ññññ0.ññ17%›€of€total€U.S.€exports€worldwide.€€In€1995€thatÏpercentage€dropped€to€.05%€of€total€U.S.€exports€worldwide.ÌÌà  àTable€2€lists€the€leading€categories€of€items€that€were€exported€from€the€U.S.€to€IranÏduring€the€years€1991€through€1995€(1995€data€available€from€1/95€through€11/95€only).€€TheseÏcategories€provide€at€least€a€general€indication€of€which€U.S.€economic€sectors€were€most€heavilyÏaffected€by€the€NDAA€of€FY€1993€and€the€1995€U.S.€embargo€against€Iran.ÌÌà@¢ ¢ ìàTable€2:€Top€U.S.€Exports€to€Iran€(1991„1995)ˆÌÌÔ*}ƒ‹`”dd( dd ( dd ( dd Š`“°(#°(#}ÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚  ð# €€&ÐS.I.C.€NumberÐ 6€‚!„ T$"l‚ 6ÐDescription€of€GoodsÐ 6€‚!„ T%"l‚ 6ÐTotal€Value€(U.S.€dollars)Ð UK$„ T&"  l‚ n«@3511‰n«@‰‹‹UÐ3511Ð MCA"Ô'" n«@3511 n«@ MÐTurbines€&€turbine€generatorÏsetsÐ ð"À)" Ð$322.5€millionÐ C9"Ô*" –«@3531‰–«@‰‹‹CÐ3531Ð MCAp$@+" –«@3531 –«@ MÐConstruction€machinery€&ÏpartsÐ \%,-" Ð$307.8€millionÐ C9p$@." š«@3533‰š«@‰‹‹CÐ3533Ð MCAÜ&¬ /" š«@3533 š«@ MÐOil€&€gas€field€equipmentÐ Ü&¬ 0" Ð$250.1€millionÐ C9Ü&¬ 1" ðŸ@2044‰ðŸ@‰‹‹CÐ2044Ð MCA\(,"2" ðŸ@2044 ðŸ@ MÐMilled€rice€&€byproductsÐ \(,"3" Ð$166.3€millionÐ C9\(,"4" À\@0115‰À\@‰‹‹CÐ0115Ð MCAÜ)¬#5" À\@0115 À\@ MÐCornÐ Ü)¬#6" Ð$137.4€millionÐ C9Ü)¬#7" r¦@2873‰r¦@‰‹‹CÐ2873Ð MCA\+,%8" r¦@2873 r¦@ MÐNitrogenous€fertilizersÐ \+,%9" Ð$124.2€millionÐ C9\+,%:" ­@3714‰­@‰‹‹CÐ3714Ð MCA”d" ­@3714 ­@ MÐMotor€vehicle€parts€&ÏaccessoriesÐ €P" Ð$€50.8€millionÐ C9”d"  ¦@2821‰ ¦@‰‹‹CÐ2821Ð MCA Ð"  ¦@2821  ¦@ MÐPlastics€materials€&€resinsÐ  Ð" Ð$€45.4€millionÐ C9 Ð" >­@3743‰>­@‰‹‹CÐ3743Ð MCA€ P" >­@3743 >­@ MÐRailroad€equipment€&€partsÐ € P " Ð$€42.7€millionÐ C9€ P " â«@3569‰â«@‰‹‹CÐ3569Ð MCA Ð " â«@3569 â«@ MÐGeneral€industrial€machineryÏ&€equipmentÐ ì ¼ " Ð$€41.8€millionÐ C9 Ð" æ«@3571‰æ«@‰‹‹CÐ3571Ð MCAl<" æ«@3571 æ«@ MÐElectronic€computersÐ l<" Ð$€33.1€millionÐ"l<" "ÐÌÌà  àThe€data€in€Table€2€indicate€that€the€impact€of€the€embargo€on€agricultural€and€oilÏindustry€sectors€are€expected€to€be€among€the€hardest€hit.€€However,€U.S.€exports€of€theÏcategories€of€items€listed€in€Table€2€totaled€roughly€$1.52€billion€for€the€period€from€1991Ïthrough€1995.€€This€amount€represents€approximately€0.06%€of€U.S.€exports€worldwide.ÌÌà  àAt€the€time€the€U.S.€embargo€on€Iran€took€effect,€U.S.€companies€had€received€nearlyÏ$200€million€worth€of€orders€for€oil€equipment€from€Iranian€oil€companies€„„€these€orders€can€noÏlonger€be€filled€because€of€the€embargo.œ× ƒ• ×Ý ƒR$ÓÝòòÚ  Ú10Ú  ÚóóÝ  Ý×  ×›€€The€embargo€is€also€expected€to€hurt€U.S.€corn€andÐ Ô¤ Ðrice€growers.€€U.S.€rice€exports€to€Iran€in€1995€were€expected€to€reach€200,000€metric€tons,Ïworth€nearly€$75€million,€and€corn€exports€were€expected€to€reach€almost€750,000€tons€duringÏthe€same€year.œ× ƒ– ×Ý ƒR$ÓÝòòÚ  Ú11Ú  ÚóóÝ  Ý×  ×›€€In€1993,€U.S.€exports€of€rice€to€Iran€(which€totaled€nearly€$60€million)Ð ˜h Ðrepresented€over€8€percent€of€total€U.S.€rice€exports€that€year.€€In€1992,€U.S.€exports€of€oil€andÏgas€equipment€to€Iran€(which€totaled€$123€million)€represented€over€3€percent€of€total€U.S.€oilÏand€gas€equipment€exports€for€the€year.ÌÌà  àAccording€to€foreign€trade€statistics€available€from€the€United€Nations,€the€leadingÏexporters€to€Iran€among€the€worldððs€major€industrial€nations€from€1990€through€1994€(the€mostÏrecent€period€for€which€such€data€are€available)€include€the€following€countries€(listed€inÏdescending€order€according€to€their€total€exports€to€Iran€from€1990„94):€Germany,€Japan,€Italy,ÏFrance,€the€United€Kingdom,€the€United€States,€Turkey,€South€Korea,€the€Netherlands,ÏBelgium/Luxembourg,€and€Sweden.€€The€United€States€was€the€sixth€largest€exporter€to€IranÏduring€this€period,€with€exports€of€nearly€$2.4€billion,€but€this€was€only€5%€of€the€total€amountÏof€Iranððs€œimports.›€€The€other€ten€countries€exported€more€than€$48€billion€in€goods€to€Iran€fromÏ1990€through€1994.€€Table€3,€below,€lists€the€leading€categories€of€goods€exported€to€Iran€by€theÏœther›€major€industrial€nations€(excluding€the€U.S.).€€These€categories€contain€roughly€70€percentÏof€the€goods€exported€from€the€major€industrial€nations€(excluding€the€U.S.)€to€Iran€during€thisÏperiod.ÌÌœà@} } ìàTable›€3:€Top€Exports€to€Iran€by€Major€Industrial€Nations(1990„94)ˆÌÐ ,ì%0 ÐÔ*}ƒŒ`—d d( dd ( dd ( dd ‹`”°(#°(#}ÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚ ° €€&ÐS.I.T.C.Ð 6€‚!d"l‚ 6ÐDescription€of€GoodsÐ 6€‚!d"l‚ 6ÐTotal€Value€(U.S.€dollars)Ð SI$d"  l‚  €R@74‰€R@‰‹‹SÐ74Ð KA?”ä"  €R@74 €R@ KÐGeneral€industrial€machineryÏ&€equipmentÐ €Ð" Ð$5.83€billionÐ A7”ä"  €S@78‰€S@‰‹‹AÐ78Ð KA? P"  €S@78 €S@ KÐRoad€vehiclesÐ  P " Ð$5.34€billionÐ A7 P "  R@72‰R@‰‹‹AÐ72Ð KA?€ Ð "  R@72 R@ KÐMachinery€specialized€forÏparticular€applicationsÐ l ¼ " Ð$4.93€billionÐ A7€ Ð"  ÀP@67‰ÀP@‰‹‹AÐ67Ð KA?ì <"  ÀP@67 ÀP@ KÐIron€&€steelÐ ì <" Ð$4.37€billionÐ A7ì <"  @S@77‰@S@‰‹‹AÐ77Ð KA?l¼ "  @S@77 @S@ KÐElectrical€machineryÐ l¼ " Ð$3.64€billionÐ A7l¼ "  ÀQ@71‰ÀQ@‰‹‹AÐ71Ð KA?ì< "  ÀQ@71 ÀQ@ KÐPower€generating€machineryÐ ì< " Ð$3.08€billionÐ A7ì< "  S@76‰S@‰‹‹AÐ76Ð KA?l¼ "  S@76 S@ KÐTelecommunications,€soundÏrecording€&€reproductionÏequipmentÐ D”" Ð$1.93€billionÐ A7l¼ "  @Q@69‰@Q@‰‹‹AÐ69Ð KA?Ä"  @Q@69 @Q@ KÐManufactures€of€metalsÐ Ä" Ð$1.54€billionÐ A7Ä"  @R@73‰@R@‰‹‹AÐ73Ð KA?D” "  @R@73 @R@ KÐMetalworking€machineryÐ D”!" Ð$1.52€billionÐ A7D”""  ÀU@87‰ÀU@‰‹‹AÐ87Ð KA?Ä#"  ÀU@87 ÀU@ KÐProfessional€scientific€&Ïcontrol€instrumentsÐ °%" Ð$1.39€billionÐ A7Ä&"  ÀR@75‰ÀR@‰‹‹AÐ75Ð KA?0€'"  ÀR@75 ÀR@ KÐOffice€&€automated€dataÏprocessing€machinesÐ l)" Ð$0.49€billionÐ"0€*" "ÐÌÌà  àA€comparison€of€the€top€foreign€exports€to€Iran€(as€shown€in€Table€3)€with€the€list€of€theÏtop€U.S.€exports€to€Iran€(as€shown€in€Table€2)€indicates€that€the€U.S.€has€been€in€directÏcompetition€with€Iranððs€other€major€trading€partners€in€such€areas€as€general€industrialÏmachinery,€motor€vehicles€and€motor€vehicle€parts,€power€generating€machinery,€measuring€andÏcontrolling€devices,€and€electronic€computers.€€This€is€also€true€of€other€categories€of€items€notÏlisted€in€Table€3,€such€as€plastics€and€resins,€transportation€equipment,€and€industrial€organicÏchemicals.€ÌÌà  àòòSyria.óó€€Syriaððs€economy€is€dominated€by€state„owned€and€operated€enterprises.€€In€theÐ p%À 4 Ð1960s,€the€government€pursued€policies€designed€to€expand€the€public€sector€and€imposed€tightÏcontrols€on€private€sector€activities.€€All€large€industries,€including€the€banking€and€insuranceÏsectors,€were€nationalized.€€During€the€1980s,€the€country€suffered€from€a€severe€foreignÏexchange€shortage€that€was€aggravated€by€a€sharp€decline€in€aid€from€other€Gulf€states.€€A€severeÏdrought€in€1989„90€placed€even€greater€strain€on€the€economy€by€forcing€the€government€toÏallow€significantly€higher€levels€of€food€imports.€€In€1989,€the€government€began€to€loosenÏcontrols€on€domestic€and€foreign€investment€in€order€to€encourage€economic€development.€€AÐ ä+4'; Ðnew€investment€law€was€passed€in€1991€and€the€government€has€gradually€increased€the€numberÏof€goods€that€the€private€sector€can€either€produce€or€import.€€Although€the€government€retains€aÏmonopoly€on€wheat€and€flour€imports,€such€items€as€rice,€sugar,€and€tea€may€now€be€imported€byÏthe€private€sector.ÌÌà  àSyriaððs€economy€began€to€improve€in€the€early€1990s,€largely€as€a€result€of€theÏgovernmentððs€economic€reforms€coupled€with€a€substantial€increase€in€oil€production,€theÏagricultural€sectorððs€recovery€from€1989€drought,€and€renewed€access€to€aid€from€other€ArabÏstates€following€Syriaððs€participation€in€the€Gulf€War€coalition€against€Iraq.€€From€1990€throughÏ1993,€Syriaððs€economy€experienced€average€annual€growth€rates€in€the€range€of€7€to€8€percent.€ÏOil€production€nearly€quadrupled€from€150,000€barrels€per€day€(bpd)€in€the€mid„1980s€to€almostÏ580,000€bpd€toward€the€end€of€1993.€€Syria€has€directed€billions€of€dollars€in€foreign€aid€that€itÏhas€received€since€the€Gulf€War€toward€rehabilitating€its€deteriorating€infrastructure.ÌÌà  àIn€spite€of€recent€gains,€Syriaððs€economy€is€still€burdened€with€numerous€inefficientÏpublic€sector€enterprises.€€The€government€continues€to€exercise€control€over€certain€strategicÏsectors€of€the€economy€such€as€oil€production,€electrical€power€generation,€banking,€and€wheatÏand€cotton€production.€€Oil€production€is€believed€to€have€peaked€and€is€expected€to€remain€atÏcurrent€levels€over€the€next€few€years.€€Lower€international€oil€prices€and€the€increasing€domesticÏdemand€for€petroleum€have€reduced€the€countryððs€oil€revenues.€€The€breakup€of€the€formerÏSoviet€Union€in€1989€eliminated€Syriaððs€largest€market€for€non„oil€exports€such€as€textiles€andÏlight€manufactured€goods.€€Although€exports€of€fruits€and€vegetables€have€increased€fivefoldÏsince€1988,€these€products€account€for€only€8€percent€of€the€countryððs€total€export€earnings.€€WithÏroughly€60€percent€of€Syriaððs€population€under€the€age€of€20,€unemployment€is€a€growingÏconcern.€€Syria€could€face€a€serious€water€shortage€by€the€end€of€the€century,€unless€steps€areÏtaken€to€revise€the€countryððs€water€policies.ÌÌà  àNearly€two€decades€of€heavy€military€and€public€sector€investment€expenditures€have€leftÏSyria€with€a€heavy€debt€burden€and€a€poor€credit€rating.€€Most€of€this€debt,€about€11€billionÏdollars,€consists€of€military€debts€to€Russia,€with€an€additional€3€to€8€billion€dollars€being€owedÏto€other€trading€partners,€various€international€development€institutions,€and€a€number€of€bilateralÏdonors.ÌÌà  àSyriaððs€improved€economic€performance€since€1990€has€enhanced€its€prospects€as€aÏmarket€for€U.S.€exports.€€Syria€imported€approximately€$4.1€billion€in€goods€in€1993€(the€mostÏrecent€year€for€which€statistics€are€available),€including€foodstuffs€(21€percent€of€total€imports),Ïmetal€products€(17€percent),€and€machinery€(15€percent).€€The€best€prospects€for€exports€to€SyriaÏhave€been€agricultural€products€and€various€goods€and€services€related€to€the€development€ofÏSyriaððs€oil€fields.€€Although€this€will€continue€to€be€the€case,€the€departure€of€U.S.€explorationÏfirms€from€Syria€will€force€U.S.€oil€field€service€and€equipment€companies€to€concentrate€their€œÏarketing›€efforts€on€Syrian€and€foreign€oil€companies.€€Syria€will€also€require€capital€goods€toÏrehabilitate€its€public€utilities€and€state€enterprises.€€In€addition,€Syria€is€likely€to€importÏsignificant€quantities€of€light€industrial€equipment,€transportation€equipment,€and€computers.€Ð h+¸&* Їà  àFrom€1991€through€1995,€U.S.€exports€to€Syria€totaled€$976€million€(total€derived€fromÏU.S.€Census€data),€averaging€roughly€$195€million€per€year€and€falling€within€a€range€betweenÏ$166€million€and€$223€million€per€year€(1991:€$205€million;€1992:€$166€million;€1993:€$185Ïmillion;€1994:€$197€million;€and€1995:€$223€million).€€While€the€level€of€U.S.€exports€to€SyriaÏhas€remained€relatively€constant,€several€major€industrial€nations€have€significantly€increasedÏtheir€exports€to€Syria€in€recent€years.€€Foreign€trade€statistics€available€from€the€United€NationsÏindicate€that€total€exports€to€Syria,€by€the€ten€major€industrial€nations€(excluding€the€U.S.)€whoÏare€the€leading€exporters€to€Syria,€increased€by€nearly€50€percent€between€1990€and€1994.ÌÌà  àMost€of€the€leading€U.S.€exports€to€Syria€(by€dollar€value)€are€concentrated€in€certain€lowÏtechnology€areas€(e.g.,€agricultural€products€and€cigarettes)€that€are€not€affected€by€U.S.€foreignÏpolicy€controls€and€do€òònotóó€require€a€license€for€export€or€reexport€to€Syria,€or€are€in€areas€whereÐ Ô$  Ðthe€United€States,€historically,€has€been€dominant€in€the€world€market€(e.g.,€oil€and€gas€fieldÏequipment).€€Table€1€lists€the€U.S.€exports€to€Syria€that€exceeded€$10€million€during€the€periodÏfrom€1991€through€1995€(1995€data€available€from€1/95€through€11/95€only).ÌÌà@W W ìàTable€1:€€Top€U.S.€Exports€to€Syria€(1991„1995)ˆÌÌÔ*}ƒ‡`˜d d( dd ( dd ( dd Œ`—°(#°(#}ÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚ H˜ €€&ÐS.I.C.€NumberÐ 6€‚!¬ü"l‚ 6ÐDescription€of€GoodsÐ 6€‚!¬ü"l‚ 6ÐTotal€Value€(U.S.€dollars)Ð UK$¬ü"  l‚ š«@3533‰š«@‰‹‹UÐ3533Ð MCA,|" š«@3533 š«@ MÐOil€&€gas€field€equipmentÐ ,|" Ð$247.7€millionÐ C9,|" À\@0115‰À\@‰‹‹CÐ0115Ð MCA¬ü" À\@0115 À\@ MÐCornÐ ¬ü" Ѐ€$86.4€millionÐ C9¬ü" ~ @2111‰~ @‰‹‹CÐ2111Ð MCA,|" ~ @2111 ~ @ MÐCigarettesÐ ,|" Ѐ€$61.6€millionÐ C9,|" â«@3569‰â«@‰‹‹CÐ3569Ð MCA¬ü" â«@3569 â«@ MÐGeneral€industrial€machineryÏand€equipmentÐ ˜è!" Ѐ€$32.8€millionÐ C9¬ü"" 6 @2075‰6 @‰‹‹CÐ2075Ð MCAh#" 6 @2075 6 @ MÐSoybean€oil€&€byproductsÐ h$" Ѐ€$28.9€millionÐ C9h%" n«@3511‰n«@‰‹‹CÐ3511Ð MCA˜è&" n«@3511 n«@ MÐTurbine€&€turbine€generatorÏsetsÐ „ Ô(" Ѐ€$28.7€millionÐ C9˜è)" þ¬@3711‰þ¬@‰‹‹CÐ3711Ð MCA"T*" þ¬@3711 þ¬@ MÐMotor€vehicles€&€passengerÏcar€bodiesÐ ð"@," Ѐ€$26.9€millionÐ C9"T-" Ø¡@2284‰Ø¡@‰‹‹CÐ2284Ð MCAp$À." Ø¡@2284 Ø¡@ MÐThread€&€handwork€yarnsÐ p$À/" Ѐ€$19.4€millionÐ C9p$À0" à©@3312‰à©@‰‹‹CÐ3312Ð MCAð%@!1" à©@3312 à©@ MÐBlast€furnace,€steel€works,€&Ïrolling€mill€productsÐ Ü&,"3" Ѐ€$17.2€millionÐ C9ð%@!4" ¦@2824‰¦@‰‹‹CÐ2824Ð MCA\(¬#5" ¦@2824 ¦@ MÐManmade€fibersÏ(noncellulosic)Ð H)˜$7" Ѐ€$16.8€millionÐ C9\(¬#8" –«@3531‰–«@‰‹‹CÐ3531Ð MCAÈ*&9" –«@3531 –«@ MÐConstruction€machinery€andÏparts€thereforÐ ´+';" Ѐ$13.9€millionâ âÐ C9È*&<" ­@3714‰­@‰‹‹CÐ3714Ð MCA”d" ­@3714 ­@ MÐâ âMotor€vehicle€parts€&ÏaccessoriesÐ €P" Ѐ€$12.8€millionÐ C9”d" Ò«@3561‰Ò«@‰‹‹CÐ3561Ð MCA Ð" Ò«@3561 Ò«@ MÐPumps€&€pumpingÏequipment€(except€fluidÏpower€pumps)Ð Ø ¨" Ѐ€$11.8€millionÐ C9 Ð " :ª@3357‰:ª@‰‹‹CÐ3357Ð MCAX ( " :ª@3357 :ª@ MÐNonferrous€metal€wire€&Ïcable€(drawn€&€insulated)Ð D  " Ѐ€$11.5€millionÐ C9X ( " ê­@3829‰ê­@‰‹‹CÐ3829Ð MCAÄ”" ê­@3829 ê­@ MÐMeasuring€&€controllingÏdevicesÐ °€ " Ѐ€$11.2€millionÐ"Ä”"  "ÐÌÌà  àWhile€total€U.S.€exports€to€Syria€have€remained€relatively€stable€in€recent€years,€withÏonly€incremental€increases€in€total€exports€to€Syria€for€every€year€following€1992,€the€value€ofÏlicensed€exports€to€Syria€has€increased€significantly€during€the€last€three€years.€€In€FY€1996,ÏCommerce€approved€80€licenses€for€Syria,€totaling€$81,006,877.€€As€shown€in€Table€2,€theseÏfigures€represent€a€significant€increase€over€FY€1991,€when€only€eight€licenses€were€approvedÏwith€a€total€value€of€$1,041,504.ÌÌà@\ \ ìàTable€2:€€Approved€Licenses€for€Syria€(FY€1991€to€FY€1996)ˆÌÌÔ*}ƒˆ`™dd( dd ( dd ( dd ‡`˜°(#°(#}ÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚ ðÀ €€&ÐFiscal€YearÐ 6€‚!T$"l‚ 6ÐTotal€ApplicationsÏApprovedÐ 6€‚!@"l‚ 6ÐTotal€ValueÐ T$  Ð(in€U.S.€dollars)Ð ^T$@!"  l‚ Ÿ@1991„„‰Ÿ@‰‹‹^Ð1991Ð lbAÀ"" Ÿ@1991 Ÿ@   @8‰ @‰lЀ€8Ð =31À#"   @8  @ =Ð$€€1,041,504Ð LBÀ$"  Ÿ@1992„„‰ Ÿ@‰‹‹LÐ1992Ð mcA@%"  Ÿ@1992  Ÿ@  ?@31‰?@‰mЀ31Ð >42@&"  ?@31 ?@ >Ð$46,366,527Ð LB@'" $Ÿ@1993„„‰$Ÿ@‰‹‹LÐ1993Ð ndAÀ (" $Ÿ@1993 $Ÿ@ €Z@106‰€Z@‰nÐ106Ð ?53À )" €Z@106 €Z@ ?Ð$42,896,103Ð LBÀ *" (Ÿ@1994„„‰(Ÿ@‰‹‹LÐ1994Ð ndA@"+" (Ÿ@1994 (Ÿ@ àd@167‰àd@‰nÐ167Ð ?53@"," àd@167 àd@ ?Ð$76,379,096Ð LB@"-" ,Ÿ@1995„„‰,Ÿ@‰‹‹LÐ1995Ð ndAÀ#." ,Ÿ@1995 ,Ÿ@ `a@139‰`a@‰nÐ139Ð ?53À#/" `a@139 `a@ ?Ð$68,298,135Ð LBÀ#0" 0Ÿ@1996„„‰0Ÿ@‰‹‹LÐ1996Ð mcA@%1" 0Ÿ@1996 0Ÿ@  T@80‰T@‰mЀ€80Ð >42@%2"  T@80 T@ >Ð$81,006,877Ð"@%3"  "ÐÌà  àThe€majority€of€items€that€BXA€licensed€for€export€to€Syria€during€the€period€covered€byÏTable€2€fall€within€the€categories€of€aircraft€parts€and€components,€digital€computers,€and€certainÏelectronic€devices€controlled€only€for€foreign€policy€reasons.€€BXA€denied€40€applications€forÏSyria€from€FY€1991€through€FY€1996;€these€applications€had€a€total€value€of€$26.7€million.Ìâ âÐ ø*È$8 Ðà  àAccording€to€foreign€trade€statistics€available€from€the€United€Nations,€the€leadingÏâ âexporters€to€Syria€among€the€worldððs€major€industrial€nations€from€1990€through€1994€(the€mostÏrecent€period€for€which€such€data€are€available)€include€the€following€countries€(listed€inÏdescending€order€according€to€their€total€exports€to€Syria€from€1990„94):€Germany,€Italy,€France,ÏJapan,€Turkey,€the€United€States,€Belgium/Luxembourg,€the€United€Kingdom,€the€Netherlands,ÏSouth€Korea,€and€Spain.€€The€United€States€was€the€sixth€largest€exporter€to€Syria€during€thisÏperiod,€with€exports€of€nearly€$0.91€billion.€€The€other€ten€countries€combined€for€more€thanÏ$9.4€billion€in€exports€to€Syria€from€1990€through€1994.€€Table€3,€below,€shows€the€categories€ofÏgoods€for€which€exports€to€Syria€by€the€major€industrial€nations€(excluding€the€U.S.)€exceededÏ$250€million.€€These€categories€contain€roughly€65€percent€of€the€goods€exported€from€the€majorÏindustrial€nations€(excluding€the€U.S.)€to€Syria€during€this€period.ÌÌœà@d d ìàTable›€3:Top€Exports€to€Syria€by€Major€Industrial€Nations(1990„94)ˆÌÌÔ*}ƒ‰`šdd( dd ( dd ( dd ˆ`™°(#°(#}ÔÔ,( dd ÔÔ,( dd ÔÔ,( dd ÔÔ+  ÔÐ &€‚ ˜è  €€&ÐS.I.T.C.€NumberÐ 6€‚!üL "l‚ 6ÐDescription€of€GoodsÐ 6€‚!üL "l‚ 6ÐTotal€Value€(U.S.€dollars)Ð SI$üL "  l‚  €S@78‰€S@‰‹‹SÐ78Ð KA?|Ì"  €S@78 €S@ KÐRoad€vehiclesÐ |Ì" Ð$972.6€millionÐ A7|Ì"  R@72‰R@‰‹‹AÐ72Ð KA?üL"  R@72 R@ KÐMachinery€specialized€forÏparticular€applicationsÐ è8" Ð$828.2€millionÐ A7üL"  @P@65‰@P@‰‹‹AÐ65Ð KA?h¸"  @P@65 @P@ KÐTextile€yarn,€fabrics,€&Ïmade„up€articlesÐ T¤" Ð$783.1€millionÐ A7h¸"  ÀP@67‰ÀP@‰‹‹AÐ67Ð KA?Ô$"  ÀP@67 ÀP@ KÐIron€&€steelÐ Ô$" Ð$705.4€millionÐ A7Ô$"  €R@74‰€R@‰‹‹AÐ74Ð KA?T¤ "  €R@74 €R@ KÐGeneral€industrial€machineryÏ&€equipmentÐ @"" Ð$690.9€millionÐ A7T¤#"  @04‰@‰‹‹AÐ04Ð KA?À$"  @04 @ KÐCereals€&€cereal€preparationsÐ À%" Ð$561.4€millionÐ A7À&"  ÀQ@71‰ÀQ@‰‹‹AÐ71Ð KA?@'"  ÀQ@71 ÀQ@ KÐPower€generating€machineryÏ&€equipmentÐ , |)" Ð$511.3€millionÐ A7@*"  @S@77‰@S@‰‹‹AÐ77Ð KA?¬!ü+"  @S@77 @S@ KÐElectrical€machinery,Ïapparatus,€&€appliancesÐ ˜"è-" Ð$451.7€millionÐ A7¬!ü."  @06‰@‰‹‹AÐ06Ð KA?$h/"  @06 @ KÐSugars,€sugar€preparations€&ÏhoneyÐ %T 1" Ð$350.6€millionÐ A7$h2"  S@76‰S@‰‹‹AÐ76Ð KA?„&Ô!3"  S@76 S@ KÐTelecommunications€&Ïsound€recording€&Ïreproduction€equipmentÐ \(¬#6" Ð$293.9€millionÐ"„&Ô!7" "ÐÌâ âÐ d*´%8 Ðà  àA€number€of€the€top€export€categories€listed€in€Table€3€(e.g.,€road€vehicles,€iron€and€steel,Ïtextile€yarn,€specialized€machinery,€cereals,€and€industrial€machinery)€were€dominated€by€only€aÏhandful€of€countries€(e.g.,€Germany,€Japan€France,€Italy,€South€Korea,€and€Turkey).Ìâ âÌà  àAlthough€U.S.€exports€to€Syria€represent€only€a€small€portion€of€total€U.S.€exports€(e.g.,ÏU.S.€exports€to€Syria€of€$750€million€from€1991€through€1994€represented€only€0.04€percent€ofÏtotal€U.S.€exports€during€that€period),€analysts€such€as€J.€David€Richardson,€Visiting€Fellow€atÏthe€Institute€for€International€Economics€and€Professor€of€Economics€in€the€Maxwell€School€ofÏCitizenship€and€Public€Affairs€at€Syracuse€University,€recently€estimated€that€U.S.€unilateralÏforeign€policy€controls€on€Syria€had€a€cost€for€U.S.€businesses€ð ðin€the€neighborhood€ofÌ$0.2€billion€to€$0.3€billion€annually.ððœ× ƒ› ×Ý ƒR$ÓÝòòÚ  Ú12Ú  ÚóóÝ  Ý×  כРè 8  ÐÌÑ€` „„` ÑÑPÈÑà  àòòSudan.óó€€Sudan€has€a€very€sluggish€economy€largely€due€to€continuing€civil€war€in€theÐ À  Ðsouth.€€The€country€suffers€from€soaring€inflation€rates€of€over€50€percent€per€year€and€aÏdeclining€annual€per€capita€income.€€At€$375€in€1994,€it€was€among€the€worldððs€lowest.œ× ƒœ ×Ý ƒR$ÓÝòòÚ  Ú13Ú  ÚóóÝ  Ý×  ×›€Ð ˜è  ÐSudanððs€inadequate€transportation€system€is€also€a€major€hindrance€to€economic€development.€ÏSudan€receives€very€little€economic€assistance€from€the€worldððs€donor€countries.€€It€has€beenÏineligible€for€assistance€from€the€International€Monetary€Fund€(IMF)€since€1984€and€remains€theÏworldððs€largest€debtor€to€the€IMF,€with€accumulated€arrears€of€over€$1.3€billion.€€SudanÏcontinues€to€suffer€from€a€severe€shortage€of€foreign€exchange,€as€imports€exceed€exports€byÏmore€than€two€to€one.œ× ƒ ×Ý ƒR$ÓÝòòÚ  Ú14Ú  ÚóóÝ  Ý×  ×›€€The€countryððs€desperate€economic€situation€is€not€expected€to€improveÐ  p Ðin€the€near€future.€€Ì€Ìà  àIn€conclusion,€the€overall€impact€on€U.S.€industry€of€U.S.€unilateral€export€sanctions€onÏSudan€is€negligible.€€Sudanððs€poor€economic€performance€over€the€past€decade€has€prevented€theÏcountry€from€importing€a€significant€amount€of€goods€from€any€supplier,€including€the€UnitedÏStates.€€The€little€amount€that€is€imported€by€Sudan€by€and€large€does€not€require€an€individualÏvalidated€license€and€is€therefore€not€affected€by€the€sanctions.€€Many€other€markets€exist€forÏprohibited€U.S.€exports€which€should€counter€the€effects€of€any€potential€losses.€€ÌÌ5.à  àòòEnforcement€of€Control.óó€€In€extending€these€controls€on€Iran,€Sudan€and€Syria,€theÐ X ¨ ÐSecretary€has€determined€that€the€United€States€has€the€ability€to€enforce€the€controls.€€SpecialÏenforcement€problems€with€these€controls€involve€exports€and€reexports€of€aircraft€and€parts.€ÏThe€fact€that€aircraft€and€parts€are€not€controlled€to€most€other€countries,€including€to€many€inÏthe€region,€creates€the€potential€of€shipments€from€other€sources.ÌÌà  àòòIran.óó€€The€expansion€of€controls€on€exports€to€Iran€in€1987€imposed€new€licensingÐ à%0!$ Ðrequirements€on€a€large€number€of€items€that€may€be€sent€to€most€other€destinations€without€aÏlicense€or€using€a€licensing€exception,€including€some€aircraft€items€and€"consumer"€goods€thatÏhave€many€producers€and€end„users€around€the€world.€€Detection€and€enforcement€cooperationÏand€control€of€reexports€may€be€particularly€difficult€with€respect€to€these€items.€€However,Ïenforcement€of€the€controls€on€direct€exports€to€Iran€is€aided€by€the€general€negative€publicÏperception€of€Iran.Ð h+¸&* Їà  àòòSudan.óó€€Controls€on€Sudan€have€not€caused€major€enforcement€problems.€€The€UnitedÐ ° ÐStates€has€a€limited€number€of€direct€exports€and€reexports€of€controlled€items€to€Sudan.€€AnyÏenforcement€problems€would€likely€be€in€the€area€of€enforcement€cooperation€and€control€overÏreexports€since€most€other€countries€have€not€imposed€controls€comparable€to€those€imposed€byÏthe€United€States.ÌÌà  àòòSyria.óó€€Few€enforcement€problems€have€been€identified€for€the€direct€export€of€controlledÐ 8 ˆ Ðitems€to€Syria.€€The€problems€that€are€most€likely€to€occur€will€be€in€the€area€of€enforcementÏcooperation€and€control€over€reexports,€particularly€for€items€that€are€available€to€manyÏdestinations€under€a€general€license.ÌÌC.€€Consultation€with€IndustryÌÌà  àCommerce€received€several€comments€concerning€sanctions€imposed€in€retaliation€forÏacts€of€terrorism.€€The€main€complaint€was€the€unilateral€nature€of€these€sanctions€and€the€loss€toÏU.S.€business€as€a€result.€€One€manufacturer€of€commercial€jet€transports€stated€that€theirÏcompany€deplores€acts€of€terrorism€of€which€their€airplanes€and€the€passengers€on€them€are€oftenÏthe€targets.€€However,€because€of€the€unilateral€nature€of€U.S.€controls,€the€U.S.€manufacturer€isÏoften€prevented€from€even€supporting€those€old€aircraft€that€predate€sanctions€with€certified€partsÏand€regular€updates€of€safety€items.€€Aircraft€owners€are€compelled€to€get€new€equipment€fromÏforeign€manufacturers€thereby€bypassing€U.S.€sanctions€and,€in€some€cases,€compromisingÏpassenger€safety.€€Consequently,€jobs€and€sales€are€lost€to€overseas€competition€which€faces€noÏcomparable€constraints.ÌÌà  àAnother€commentor€stated€that€the€only€effect€of€these€unilateral€controls€is€to€precludeÏU.S.€companies€from€competing€in€the€marketplace.€€The€same€commentor€complained€about€theÏdollar€amount€of€computer€shipments€that€U.S.€industry€has€not€had€an€opportunity€to€competeÏfor.€€ÌÌD.€€Consultation€with€Other€CountriesÌÌà  àThe€United€States€continues€to€con‚sult€with€the€international€community,€particular‚ly€keyÏallies,€regarding€Syria's€support€for€terrorism.€€ÌÌà  àThe€United€States€has€also€consulted€with€other€nations€regarding€Sudan's€support€forÏterrorism,€as€well€as€its€dismal€human€rights€record€and€the€need€for€better€Sudanese€cooperationÏon€humanitarian€relief€efforts€by€internation‚al€organizations€operating€within€Sudan.€€SpecificÏinforma‚tion€has€been€provided€to€interested€coun‚tries€on€the€justification€for€designating€Sudan€aÏstate€sponsor€of€terrorism€while€urging€them€to€do€what€they€can€to€influence€Sudan's€behaviorÏfavorably.€œÌÌE.›€€Alternative€MeansÌÐ h+¸&* Ðà  àIn€efforts€to€persuade€countries€sup‚porting€terrorism€to€drop€their€backing€for€terroristÏactivities,€the€United€States€Gov‚ernment€has€taken€a€wide€range€of€diplo‚matic,€political,€andÏsecurity„related€steps,€in€addition€to€economic€measures€such€as€export€controls.€€The€exactÏcombination€has€varied€according€to€circumstances€and€judg‚ments€as€to€the€best€approaches€at€aÏparticu‚lar€time.€€ÌÌà  àThe€existing€controls€on€Sudan€generally€reflect€the€concerns€that€led€to€the€United€StatesÏdecision€to€place€it€on€the€terrorism€list,€including€the€use€of€Suda‚nese€territory€as€a€sanctuary€forÏterrorist€organizations€and€the€training€in€Sudan€of€militant€extremists€who€com‚mit€hostile€acts€inÏneighboring€coun‚tries.€€Those€controls€altogether€will€take€into€consider‚ation€Sudan'sÏhumanitarian€needs€and€gener‚ally€focus€on€items€that€could€reasonably€make€a€significant€contriƒ¼bution€to€Sudan's€military€capability€or€ability€to€support€terrorism.€€ÌÌà  àThe€Syrian€Government€consistently€disavows€any€involvement€with€acts€of€internationalÏterrorism,€despite€evidence€of€direct€past€Syrian€involvement.€€There€is€no€evidence€that€SyrianÏofficials€have€been€directly€involved€in€planning€or€executing€terrorist€attacks€since€1986.€€InÏ1994,€Syr‚ia's€involvement€centered€on€its€support€for,€and€its€providing€safe€haven€to,€groupsÏwhich€engage€in€terrorism.€€Maintaining€these€controls€is€an€appropri‚ate€way€to€remind€Syria€ofÏits€obligations€to€act€against€terrorist€elements€whenever€it€has€the€capa‚bility€to€do€so.ÌÌF.€€Foreign€AvailabilityÌÌà  àThe€foreign€availability€provision€does€not€apply€to€items€determined€by€the€Secre‚tary€ofÏState€to€require€control€under€Sec‚tion€6(j)€of€the€Act.œ× ƒž ×Ý ƒR$ÓÝòòÚ  Ú15Ú  ÚóóÝ  Ý×  ×›€€Cogni‚zant€of€the€value€of€such€controls€inÐ ä4 Ðem‚phasizing€the€United€States€position€to‚ward€countries€supporting€international€terrorism,ÏCongress€specifically€excluded€them€from€foreign€availability€assessments€otherwise€required€byÏthe€Act.€€However,€the€foreign€availability€of€the€items€controlled€to€terrorist„designatedÏcountries€under€Sec‚tion€6(a)€has€been€con‚sidered€by€the€Department.€€In€general,€numerous€forƒ¼eign€sources€of€commodities€similar€to€those€subject€to€these€controls€are€known.€€As€discussedÏin€the€section€on€Economic€Impact€(see€B(4)€above),€other€countries€appear€to€be€supplying€SyriaÏwith€equipment€that€the€United€States€will€not€license€to€Syria.€€Foreign€availability€is€not€anÏissue€for€Sudan€because€of€its€poor€economy.€€€€œÌÌÔ‡¼R{»XXkDÔò ò5.›€œ€Embargoed›€Countries€[Section€746(785A.1)]ó óÔ#†XkDX»¼R{Ú˜#ÔÐ #l! ÐÌœà@1 1 ìàò òExport›€Control€Program€Description€and€Licensing€PolicyˆÐ %l # Ðó óÌà  àThe€United€States€maintains€compre‚hensive€economic€embargoes€against€Cuba,€Iran,ÏIraq,€Libya€and€North€Korea‚‚‚.€€(Cuba,€Iran,€Iraq,€Libya€and€North€Korea€are€five€of€the€sevenÏcountries€designated€by€the€Secretary€of€State€as€supporters€of€acts€of€international€terrorism.)€ÏThe€United€States€maintains€arms€embargoes€on€Liberia,€Rwanda€and€Somalia.€€The€UnitedÏStates€maintains€an€embargo€on€the€supply€of€both€arms€and€petroleum€products€to€UNITA€inÏAngola.Ð +à&* Їà  àThe€embargoes€against€Cuba€and€North€Korea€are€administered€jointly€by€the€TreasuryÏand€Commerce€Departments,€under€the€Trading€With€the€Enemy€Act€of€1917,€the€CubanÏDemocracy€Act,€the€EAA,€and€other€statutes€and€will€be€discussed€in€detail€in€this€chapter.€€ÌÌà  àThe€embargoes€against€Iran,€Iraq,€Libya€and€UNITA€are€administered€by€the€TreasuryÏDepartment€under€the€Interna‚tional€Emergency€Economic€Powers€Act€(IEEPA)€and,€in€someÏcases,€the€United€Nations€Participation€Act.€€The€embargoes€against€these€countries€are€notÏfurther€detailed€in€this€report.€€Commerce€administers€reexports€to€Libya,€so€Libya€is€discussed€inÏdetail€in€Chapter€6€of€this€report.€€The€arms€embargo€against€Rwanda€is€administered€jointly€byÏthe€State€and€Commerce€Departments.Ìœà@rrìàò òSummary›€of€1996€Changesó óˆÐ è 8  ÐÌà  àòòThe€Former€Yugoslavia.óó€€By€Presidential€Determination€No.€96„7€(December€27,€1995)Ð À  Ðand€subsequent€Treasury€regulations,€the€United€States€suspended€sanctions€prospectively€on€allÏfinancial€and€trade€transactions€with€the€Federal€Republic€of€Yugoslavia€and€certain€areas€ofÏCroatia,€effective€January€16,€1996.€€Concurrent€with€Treasuryððs€regulations,€CommerceÏreassumed€licensing€responsibility€for€exports.€€Trade€and€financial€transactions€with€Serb„¼controlled€areas€of€Bosnia€were€similarly€authorized€prospectively€effective€May€10,€1996.€ÏFederal€Republic€of€Yugoslavia€and€Bosnian€Serb„controlled€assets€blocked€prior€to€theÏsuspension,€however,€remain€blocked.ÌÌà  àThe€United€Nations€Security€Council€terminated€sanctions€against€the€Federal€RepublicÏof€Yugoslavia€and€the€Bosnian€Serb€forces,€effective€October€1,€1996.€€The€resolutionÏterminating€sanctions,€however,€reaffirms€the€continued€blocking€of€Federal€Republic€ofÏYugoslavia€assets€potentially€subject€to€conflicting€claims,€including€successor€state€claims,€untilÏprovision€is€made€to€address€them.ÌÌà  àòòIran.óó€€On€March€5,€1996€Commerce€amended€the€EAR€to€reflect€the€imposition€ofÐ ”ä Ðadditional€economic€sanctions€on€Iran€as€a€result€of€the€issuance€of€Executive€Order€12959€onÏMay€6,€1995.€€The€Executive€Order€delegates€responsibility€for€implementing€sanctions€imposed,Ïinter€alia,€under€the€authority€of€the€International€Emergency€Economic€Powers€Act,€to€theÏDepartment€of€the€Treasuryððs€Office€of€Foreign€Assets€Control€(OFAC),€including€restrictions€onÏexports€and€certain€reexports.€€The€controls€on€exports€and€reexports€to€Iran€under€the€ExportÏAdministration€Regulations€continue€to€apply.€€To€avoid€duplication,€however,€application€for€anÏexport€or€reexport€subject€to€both€the€EAR€and€OFACððs€Iran€Transactions€Regulations€are€madeÏto€OFAC.€€If€OFAC€authorizes€an€export€or€reexport,€no€separate€authorization€from€BXA€isÏnecessary.€€This€rule€makes€clear€that€enforcement€action€may€be€taken€under€the€EAR€withÏrespect€to€an€export€or€reexport€prohibited€both€by€the€EAR€and€by€the€Executive€Order€and€notÏauthorized€by€OFAC.€€ÌÌà  àOn€August€5,€1996€the€President€signed€into€law€the€Iran€and€Libya€Sanctions€Act€ofÏ1996.€€The€threats€posed€by€Iran€and€Libya€are€serious€and€urgent.€€By€limiting€the€ability€ofÏthese€countries€to€develop€their€petroleum€resources,€this€act€aims€to€induce€Iran€and€Libya€toÐ h+¸&* Ðchange€their€behavior,€and€to€restrict€the€funds€they€have€available€to€develop€weapons€of€massÏdestruction€and€support€terrorism.€€If€there€is€a€determination€that€sanctionable€activity€hasÏoccurred,€the€President€must€choose€two€among€six€sanctions,€one€of€which€is€export€sanctions.€€€ÌœÌ›à  àòòRwanda.óó€€The€United€Nations€terminated€the€restrictions€on€the€sale€of€arms€and€relatedÐ `° Ðmaterial€to€the€Government€of€Rwanda€September€1,€1996.€€Originally,€the€United€NationsÏimposed€these€restrictions€through€Resolution€918€in€1994.€€In€August€1995€the€United€NationsÏsuspended€the€restrictions€for€a€year€with€the€expectation€of€terminating€the€controls€if€RwandaÏremained€peaceful€for€the€year.€€Since€the€Rwandan€government€remained€stable,€the€U.N.Ïrestrictions€on€the€Government€of€Rwanda€were€terminated.€However,€the€U.S.€restrictions€onÏthe€sale€or€supply€of€arms€and€related€material€to€non„governmental€forces€for€use€in€Rwanda€areÏstill€in€effect.ÌÌà  àòòCuba.óó€€Following€the€shootdown€of€U.S.€civilian€aircraft€by€Cuban€military€aircraft€inÐ ¬ü  ÐFebruary€1996,€the€President€ordered€the€grounding€of€U.S.€flights€to€Cuba.€€The€ban€also€appliesÏto€temporary€sojourn€flights€that€previously€were€allowed€under€validated€licenses€forÏhumanitarian,€journalistic,€or€other€approved€purposes.€€The€President€allowed€one€flight€carryingÏhumanitarian€relief€aid€from€the€United€States€to€fly€directly€to€Cuba€in€October€1996€hen€CubaÏwas€struck€by€hurricane€ð ðLili.ðð€ÌÌà  àThe€Cuban€Liberty€and€Democratic€Solidarity€(LIBERTAD)€Act€(Public€Law€104„114)Ïwas€signed€into€law€on€March€12,€1996.€€The€legislation,€among€other€things,€codifies€theÏembargo,€amends€the€telecommunications€provision€of€the€Cuban€Democracy€Act€(CDA),€andÏauthorizes€the€President€to€assist€independent€non„governmental€groups€in€Cuba€and€to€establishÏan€exchange€of€news€bureaus€between€the€United€States€and€Cuba.€€The€Act€did€not€impactÏcurrent€Commerce€licensing€of€exports€of€humanitarian€aid€to€Cuba€under€the€CDA.€ÌÌà  àòòIraq.óó€€On€December€9,€1996,€the€United€Nations€approved€a€long„delayed€oil„for„foodÐ ”ä Ðagreement€that€permits€Iraq€to€export€specified€amounts€of€petroleum€for€the€first€time€since€theÏUnited€Nations€imposed€sanctions€on€Iraq€in€1990€for€invading€Kuwait.€€The€agreement,€whichÏrepresents€a€partial€and€temporary€lifting€of€the€sanctions,€permits€Iraq€to€sell€$2€billion€worth€ofÏoil€over€six€months€and€use€some€of€the€proceeds€from€the€sale€of€oil€to€buy€food,€medicine€andÏother€humanitarian€supplies€to€help€ease€widespread€hunger€and€illness.€€This€program€isÏadministered€by€the€Department€of€Treasuryððs€Office€of€Foreign€Assets€Control.ÌÌà  àòòNorth€Korea.óó€à ¸ àThe€United€States€is€committed€to€the€further€relaxation€of€economicÐ ô$D # Ðsanctions€against€North€Korea€provided€there€is€verified€progress€on€the€nuclear€issue€and€otherÏareas€of€œconcern.Ì›Ìà  àThe€following€paragraphs€outline€the€licensing€policies€for€Cuba€and€North€Korea:ÌÌA.à  àA€license€is€required€for€for‚eign€policy€purposes€for€export€to€Cuba€and€North€Korea€ofÐ |*Ì%) Ðall€commodities€and€techni‚cal€data,€òòexceptóó:Ð h+¸&* Ї1.€€Technical€data€generally€available€to€the€public€and€informational€materials;ÌÌ2.€€some€types€of€personal€baggage,€crew€baggage,€vessels€and€certain€aircraft€on€temporaryÏsojourn,€ship€stores€(except€as€prohibited€by€the€CDA€to€Cuba)€and€plane€stores€under€certain€cirƒ¼cumstances;ÌÌ3.€€certain€foreign„origin€items€in€transit€through€the€United€States;€ÌÌ4.€€shipments€for€United€States€Govern‚ment€personnel€and€agencies;€ÌÌ5.€€gift€parcels€not€exceeding€$400€for€North€Korea€of€commodities€such€as€food,€clothingÏ(non-military),€medi‚cines,€and€other€items€normally€given€as€gifts€by€an€individual;€andÌÌ6.€€gift€parcels€not€exceeding€$200€for€Cuba€limited€to€clothing€(non„military),€vitamins,€seeds,Ïmedicines,€medical€supplies€and€devices,€hospital€supplies€and€equipment,€equipment€for€theÏhandicapped,€personal€hygiene€items,€veterinary€medicines€and€sup‚plies,€fishing€equipment€andÏsupplies,€soap„making€equipment,€certain€radio€equipment,€and€batteries€for€such€equip‚ment.€ÏThere€are€no€frequency€or€dollar€value€limits€on€food€contained€in€gift€parcels€to€Cuba.ÌÌ(NOTE:€Cash€donations€from€U.S.€citizens€for€humanitarian€assistance,€channeled€through€U.N.Ïagencies,€the€International€Federation€of€the€Red€Cross€(IFRC)€and€U.S.€Non„governmentÏOrganizations;€and€humanitarian€related€commodities€sourced€in€third€countries€and€donated€toÏNorth€Korea€through€the€above€organizations€are€licensed€by€OFAC.)€ÌÌB.à  àApplications€for€licenses€will€generally€be€denied;€however,€applications€will€beÐ Ð  Ðconsidered€on€a€case-by-case€basis€for:ÌÌ1.€€non-commercial€exports€to€meet€basic€human€needs;œ× ƒ¤ ×Ý ƒR$ÓÝòòÚ  Ú16Ú  ÚóóÝ  Ý×  ×›€Ð ”ä Ð(Applications€will€also€be€considered€for€the€export€to€the€North€Korea€of€telecommunicationsÏequipment€and€transactions€related€to€the€implementation€of€the€Agreed€Framework.€€SuchÏtransaction€are€directly€related€to€the€liberalizations€that€took€place€in€January€1995.)ÌÌ2.€€exports€to€Cuba€from€foreign€coun‚tries€of€non-strategic€foreign„made€products€containing€20Ïpercent€or€less€United€States-origin€parts,€compo‚nents€or€materials,€provided€the€ex‚porter€is€not€aÏUnited€States„owned€or€controlled€subsidiary€in€a€third€country;€ÌÌ3.€€exports€to€Cuba€of€telecommunica‚tions€equipment,€to€the€extent€permit‚ted€as€part€of€aÏtelecommunications€project€approved€by€the€Federal€Com‚munica‚tions€Commission,€necessary€toÏdeliver€a€signal€to€an€international€telecommu‚nications€gateway€in€Cuba.ÌÌC.à  àApplications€for€exports€of€donated€and€commercially„supplied€medi‚cine/medical€itemsÐ )à$( Ðto€Cuba€will€be€reviewed€on€a€case„by„case€basis€and€shall€not€be€restricted,€except:ÌÐ h+¸&* Ð1.€€to€the€extent€such€restrictions€would€be€permitted€under€Section€5(m)€of€the€ExportÏAdministration€Act€of€1979€or€Section€203(b)(2)€of€the€IEEPA;ÌÌ2.€€in€a€case€in€which€there€is€a€reasonable€likelihood€that€the€item€to€be€exported€will€be€used€forÏpurposes€of€torture€or€other€human€rights€abus‚es;ÌÌ3.€€in€a€case€in€which€there€is€a€reasonable€likelihood€that€the€item€to€be€exported€will€beÏreexported;€orÌÌ4.€€in€a€case€in€which€the€item€to€be€exported€could€be€used€in€the€produc‚tion€of€anyÏbiotechnological€product;€and€ÌÌ5.€€in€a€case€where€it€is€deter‚mined€that€the€United€States€Govern‚ment€is€unable€to€verify,€by€on„¼site€inspection€and€other€appropriate€means,€that€the€item€to€be€exported€will€be€used€for€œtheÏpurpose›€for€which€it€was€intended€and€only€for€the€use€and€benefit€of€the€Cuban€people,€but€thisÏexception€shall€not€apply€to€dona‚tions€of€medicine€for€humanitarian€purposes€to€aÏnongovernmental€organi‚zation€in€œCuba.Ô#†9XtXXXkDn#ÔÔ‡QXkDXX9XtÔÔ‡Q¼R{»XQXkDÔÐ pÀ ÐÔ#†9¼] »»Q¼R{aÄ#ÔÔ#†9XtX »9¼]€Ä#ÔÔ‡XkDXX9XtÔÌà  àThe€following€paragraphs€outline€the€licensing€policy€for€Rwanda:ÌÌA.à  àA€license€is€required€for€foreign€policy€purposes€for€export€to€non„governmental€€forcesÐ  p Ðfor€use€in€Rwanda€of€all€arms€and€related€material€of€all€types,€regardless€of€origin,€includingÏweapons€and€ammunition,€military€vehicles€and€equipment,€paramilitary€police€equipment,€andÏspare€parts€for€such€items.€€This€requirement€applies€to€exports€by€any€person€from€U.S.Ïterroritory€or€by€any€U.S.€person€in€any€foreign€country€or€other€location€to€Rwanda.€€A€license€isÏalso€required€for€the€use€of€any€U.S.€aircraft€or€vessel€to€supply€or€transport€any€such€items€toÏnon„governmental€forces€for€use€in€Rwanda.ÌÌB.à  àApplications€for€export€or€reexport€to€Rwanda€of€Crime€Control€and€DetectionÐ €Ð ÐCommodities€will€generally€be€denied€to€non„governmental€forces.ÌÌ1.à  àApplications€for€export€or€reexport€to€Rwanda€of€any€ECCN€ending€in€ð ð18"€generallyÐ D!” Ðwill€be€denied.ÌÌ2.à  àThere€will€be€a€general€policy€of€denial€for€export€of€other€listed€items.›Ð $X" ÐÌœà@7 7 ìàò òAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€The€Actó óˆÐ à%0!$ ÐÌà  àThe€embargoes€on€exports€to€Cuba€and€North€Korea€have€been€administered€under€theÏAct€and€other€statutes,€and€are€consistent€with€the€Trea‚sury€Department€sanctions€adopted€underÏthe€Trading€with€the€Enemy€Act,€as€amended.€€The€latter€authority€continues€in€effect€by€virtue€ofÏSections€101(b)€and€(c),€and€207,€of€Public€Law€95-223€and€has€been€extended€annually€by€theÏPresident,€pursuant€to€na‚tional€interest€determina‚tions.Ð h+¸&* ЇA.€€The€Purpose€of€the€ControlÌÌà  àOriginally,€the€embargoes€on€each€of€these€countries€were€imposed€òòinter€aliaóó€for€foreignÐ ˆØ Ðpolicy€purposes.€€Although€the€original€circumstances€that€prompted€the€imposition€of€controlsÏhave€changed,€present€circumstances€require€that€these€controls€continue.€€The€objec‚tive€of€theÏembargoes€is€to€demonstrate€the€unwill‚ingness€of€the€United€States€to€maintain€normal€trade€withÏthese€coun‚tries€until€they€take€steps€to€improve€their€behavior€and€relations€with€the€UnitedÏStates.ÌÌà  àòòCuba.óó€€This€embargo€came€at€a€time€when€Cuban€actions€seriously€threatened€the€sta‚bilityÐ ü L  Ðof€the€Western€hemisphere€and€the€Cuban€Government€had€expropriated€proper‚ty€from€UnitedÏStates€citizens€with‚out€com‚pensation.€€Because€of€its€support€for€insur‚gent€groups€that€haveÏengaged€in€terrorism,€Cuba€was€designated€as€a€sup‚porter€of€terrorism€under€Section€6(j)€of€theÏAct€in€March€1982.€€Sanctions€against€Cuba€will€be€reduced€in€carefully€calibrated€ways€only€inÏresponse€to€positive€steps€by€Cuba€toward€political€and€economic€reform.ÌÌà  àòòNorth€Korea.óó€€North€Korea€continues€to€maintain€its€offensive€military€capability€and€toÐ pÀ Ðsuppress€human€rights.€The€plant‚ing€of€a€bomb€aboard€a€South€Korean€airliner€by€North€KoreanÏagents€in€No‚vember€1987€prompted€the€initial€designa‚tion€in€January€1988€of€North€Korea€as€aÏsupporter€of€international€terrorism,€under€Section€6(j)€of€the€Act.€€ÌÌB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Commerce:ÌÌ1.à  àòòProbability€of€Achieving€Intended€For‚eign€Policy€Purpose.óó€€€œFor€Cuba€and€North€Korea,Ð ä4 Ðthe›€embargoes€have€denied€these€nations€the€substantial€benefits€of€normal€trade€relations€withÏthe€United€States.€€The€controls€continue€to€put€pres‚sure€on€the€governments€of€these€countries€toÏmodify€their€policies,€since€the€embargoes€will€not€be€lifted€until€a€general€improve‚ment€inÏrelations€is€achieved.€€œFor€Rwanda,€to€fulfill€U.S.€obligations€under€an€international€armsÏembargo€mandated€by€the€United€Nations€Security€Council€and€help€end€the€fighting€and€theÏkilling€of€innocent€civilians.Ì›Ì2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.ó󀀜For€Cuba€and€North€Korea,€the›€controlsÐ D!” Ðare€a€useful€com‚plement€to€œU.›€œS.›€foreign€policy€in€other€aspects€of€our€relations€with€theseÏcountries.€€They€encourage€the€govern‚ments€to€modify€their€policies,€thereby€improving€theirÏrelations€with€the€United€œStates.€€€For€Rwanda,€these€controls€are€consistent€with€U.S.€foreignÏpolicy€goals€of€promoting€peace€and€stability€and€preventing€human€rights€abuses.›ÌœÌ3.›à  àòòReaction€of€Other€Countries.óó€€Although€most€countries€recognize€the€right€of€the€Unit‚edÐ Ì&"% ÐStates€to€determine€its€own€foreign€policy€and€security€concerns,€many€countries,€particularly€theÏEuropean€Union,€Canada€and€Mexico€are€strongly€opposed€to€the€Helms„Burton€Act€and€to€theÏIran€and€Libya€Sanctions€Act.€They€view€these€acts€as€unjustifiable€interference€in€theirÏâ âcommercial€relations€with€Cuba,€Iran€and€œLibya.€€The€U.S.€arms€embargo€to€non„governmentalÐ |*Ì%) Ðforces€for€use€in€Rwanda€is€consistent€with€the€objectives€of€the€members€of€the€United€Nations;Ïno€signficant€objections€to€U.S.€controls€have€been€noted.€›Ìâ âÌ4.à  àòòEconomic€Impact€on€United€States€In‚dustry.óó€€Ð tÄ ÐÌà  àòòCuba.óó€€The€U.S.€Census€Bureau€reports€that€total€U.S.€exports€to€Cuba€in€CY€1995Ð L œ Ðamounted€to€$5.85€million,€up€from€$4.39€million€in€1994€and€$2.5€million€in€1993.€€TheÏincrease€may€be€attributed€to€increased€exports€of€donations€of€food,€medicines,€and€medicalÏsupplies€to€meet€humanitarian€needs.€€U.S.€exports€comprise€a€tiny€percentage€of€worldwideÏexports€to€Cuba,€which€totaled€about€$2€billion€in€1995,€down€slightly€from€$2.02€billion€inÏ1994.€€The€figures€for€1993€and€1992€were€$1.9€billion€and€$2.2€billion€respectively.× ƒ¦ ×Ý ƒR$ÓÝòòÚ  Ú17Ú  ÚóóÝ  Ý×  ×€€Ð è 8  ÐÌà  àA€license€is€required€for€the€export€and€re„export€of€virtually€all€U.S.„origin€commoditiesÏand€technical€data€to€Cuba.€€In€fiscal€year€1995€the€Bureau€of€Export€Administration€(BXA)Ïapproved€83€license€applications€(for€81€exports€and€2€re„exports),€with€a€total€value€of€overÏ$592€million.€€Excluding€licenses€for€the€value€of€aircraft€on€temporary€sojourn€to€Cuba€(whichÏrequire€export€licenses),€BXA€approved€licenses€for€shipments€totaling€over€$540€million€forÏhumanitarian€aid€in€the€form€of€food,€medicine,€and€medical€supplies€(68€licenses),€gift€parcelsÏ(7),€and€transiting€aircraft€(5).€€ÌÌà  àSeven€export€applications€and€two€re„export€applications€totaling€$10.1€million€wereÏreturned€without€action.€€Three€export€license€applications€totaling€$1.9€million€were€denied.Ì̜Р ä4 Ðà@  ìàTable›€œ1.€€Export›€License€Applications€Approved€for€Cuba,€FY€1995× ƒ§ ×Ý ƒR$ÓÝòòÚ  Ú18Ú  ÚóóÝ  Ý×  ׈Ð ° ÐÔ‡ÍbXXkDÔÌÔ*qƒ¡¨ d d( dd ( dd ( dd ‰`š°(#°(#qÔÔ,P”d ÔÔ,td ÔÔ,Àt” ÔÔ+  ÔÐ /€lll :Š €Ç€‚‚„„/ÐType€of€ExportÐ ;€l`l*Ç"lll „„;ÐNo.€of€ApplicationsÐ =€l`ll*Ç"l`l „„=ÐDollar€ValueÐ Q€`lB*Ç" 0 Ç l`ll €ò€‚m‚ƒƒ„„QÐHumanitarian€AidÐ 0€``!R`l „„0Ð68Ð =€``l*R3`` „„=Ð400,686,880ˆÐ Q€`lB*RU m ò ``l €ò€‚m‚ƒƒ„„QÐGift€parcelsÐ 0€``! ] `l „„0Ð7Ð =€``l* ] 3`` „„=Ð140,000,300ˆÐ Q€`lB* ] U m ò ``l €ò€‚m‚ƒƒ„„QÐAircraft€Transiting€CubaÐ 0€``! h `l „„0Ð5Ð =€``l* h 3`` „„=Ð51,893,600ˆÐ Q€`lB* hU m ò ``l €ò€‚m‚ƒƒ„„QÐOtherÐ 0€``!# s`l „„0Ð3Ð =€``l*# s3`` „„=Ð157,033ˆÐ O€`ll>*# sU m ò ``l €"€‚m‚„„OÐTotal:Ð I€``l8. ~`ll  @„„ˆ2‚ˆIÐ83Ð k€``llX6. ~32‚  @ ``l  @„„ˆ2‚ˆkÐ$592,737,813ˆÐQGE. ~U2‚  @ m0 "  ``ll QÐÌÌÔ#†XkDXÍb'à#Ôà  àCuba's€economy€remains€in€a€severe€depression€as€a€result€of€the€loss€of€massive€amountsÐ 8ˆ  Ðof€economic€aid€from€the€former€Soviet€Bloc.€€In€1989„93,€GDP€declined€by€about€40€percentÏand€import€capability€fell€by€about€80€percent,€which€is€reflected€in€the€figures€for€annual€importsÏand€exports€during€the€same€period€(see€Figure€1).ÌÌßt€©«>.*x  `À0*x€@@EO Ô<³ é # <‡ ÔÌ{ tßâ °‡ °‡ °(#°(#âÌÌÌÌÌÌÌÌÌÌÌÌÌÌ̜⠰(#°(#°‡ °‡ âSource:›€The€World€Factbook€1994.ÌÌà  àCuba€has€signed€investment-guarantee€treaties€with€a€number€of€countries,€includingÏMexico,€Canada,€Spain,€Italy,€Britain,€and€Russia.€€Two€more€are€planned€for€France€and€theÏ13-member€Caribbean€Community€(Caricom).€€In€September€1995,€the€Cuban€national€assemblyÏamended€the€law€governing€foreign€investment€to€create€free€trade€zones,€speed€approvalÏprocesses,€allow€foreign€firms€to€own€majority€stakes,€and€open€previously€restricted€sectors,Ïsuch€as€real€estate€and€banking,€to€foreign€participation.ÌÌà  àCuba's€leaders€pin€their€hopes€for€economic€recovery€on€generating€massive€foreignÏinvestment,€which€Cuba€is€actively€courting,€with€the€goal€of€developing€òòindigenousóó€productionÐ à)0%4 Ðof€as€many€òòimport„substitutingóó€products€as€possible.€€According€to€Cuban€government€figures,Ð Ì*&5 Ðthere€are€212€joint€ventures€underway,€worth€about€$2€billion.€€U.S.€sources€estimate€that€$4.9Ð ¸+'6 Ðbillion€in€foreign€investment€has€been€announced,€of€which€$556€million€had€been€formallyÏcommitted.× ƒ¬ ×Ý ƒR$ÓÝòòÚ  Ú19Ú  ÚóóÝ  Ý×  ×€€Much€of€this€investment€is€in€long„term€infrastructure€projects€that€will€commit€theÐ œì ÐCubans€to€import€supporting€equipment€and€supplies€from€the€foreign€partners'€countries€forÏyears€to€come.€€The€Cuban€economy's€slow€recovery€could€receive€a€serious€setback€from€theÏHelms„Burton€Act€if€the€threat€of€legal€action€in€the€United€States,€or€exclusion€from€the€UnitedÏStates,€gives€pause€to€potential€investors.€ÌÌà  àCuba's€principal€imports€during€1994€were€fuels€($720.0€million),€food€products€($430Ïmillion),€machinery€($240€million),€semi„finished€goods€($215€million),€and€chemical€productsÏ($175€million).€€In€1994,€Russia€provided€$209.6€million€of€fuels;€Mexico€provided€$67.0Ïmillion.€€France€provided€$104.7€million€in€food€products;€China€$42.5€million;€Canada€$30.5Ïmillion;€The€Netherlands€$30.2€million.€€Spain€provided€$85.9€million€in€machinery;€Italy€$19.8Ïmillion;€China€$16.5€million;€France€$15.4€million;€Canada€$15.0€million.€€Spain€provided€$74.9Ïmillion€in€semi„finished€goods;€Mexico€31.9€million;€China€$20.1€million;€Russia€$17.4.€€SpainÏprovided€$32.4€million€in€chemical€products;€Mexico€$27.1€million;€China€$23.2€million;€theÏU.K.€$12.8€million.× ƒ® ×Ý ƒR$ÓÝòòÚ  Ú20Ú  ÚóóÝ  Ý×  ×Ð „Ô  ÐÌà  àCuban€imports€from€most€major€exporting€nations€have€declined€in€recent€years€(seeÏTable€2)€along€with€the€Cuban€economy's€declining€ability€to€produce€goods€for€export€andÏgenerate€foreign€exchange€reserves.€€Among€major€trading€partners,€only€Mexico,€Spain€andÏFrance€exported€more€to€Cuba€in€1994€than€in€1989.€€Canadian€and€Chinese€exports€rose€sharplyÏin€1990€but€have€since€declined€steadily.€€Contrary€to€this€trend,€French€exports€to€Cuba€haveÏmore€than€doubled€since€1989.€€Since€1992€French€exports€to€Cuba€consisted€primarily€ofÏfoodstuffs,€which€comprised€83€percent€of€total€French€exports€to€Cuba€in€1993.€€Grains€aloneÏcomprised€62€percent€of€the€1993€total.€€ÌÌà  àThe€overall€economic€impact€on€U.S.€industry€of€the€U.S.€unilateral€trade€embargo€isÏsignificant€in€view€of€the€historical€U.S.€dominance€of€the€Cuban€market€and€the€provenÏadvantage€of€U.S.€suppliers'€proximity€to€Cuba,€but€is€diminished€considerably€by€Cuba's€steadilyÏdecreasing€import€potential.€€A€chronically€depressed€economy,€limited€currency€reserves,€and€aÏlimited€capacity€to€generate€hard€currency€severely€curtail€Cuba's€ability€to€import€foreignÏproducts.€€Trade€with€an€economically€revitalized€Cuba€could€threaten€large€numbers€of€U.S.Ïjobs€in€certain€sectors.€€Even€in€its€present€impoverished€state,€Cuba€could€imperil€U.S.€jobs€ifÏtrade€restrictions€are€lifted.ÌÌà  àIn€general,€the€U.S.€regions€and€economic€sectors€most€affected€by€the€trade€embargo€areÏsouthern€Florida€(particularly€the€port€area€of€Tampa),€producers€of€agricultural€products€andÏother€exports€of€other€products€that€benefit€from€the€cost€advantages€of€U.S.„Cuba€proximityÏ(e.g.€perishable€agricultural€products).€€ÌÌà  àThe€Helms„Burton€Act€is€perceived€by€our€major€trading€partners€as€being€anÏimpermissible€extraterritorial€application€of€U.S.€law€that€violates€international€law,€and€U.S.Ïobligations€under€the€World€Trade€Organization€(WTO)€Agreement€and€the€North€AmericanÐ h+¸&* ÐFree€Trade€Agreement€(NAFTA)ððs€dispute€settlement€mechanism.€€The€European€CommunityÏ(EC)€has€brought€a€challenge€to€Helms„Burton€under€the€WTO€Agreement,€and€in€November€theÏWTO€Dispute€Settlement€Body€endorsed€creation€of€a€panel€to€hear€the€case.€€Panelists€have€notÏyet€been€selected.ÌÌà  àThe€EC,€Canada€and€Mexico€have€enacted€antidote€legislation€that€1)€blocks€complianceÏwith,€implementation€of,€or€enforcement€of€Helms„Burton€in€those€countries,€and€2)€provides€aÏmechanism€for€recovery€of€damages€(ð ðclawbackðð)€suffered€as€a€result€of€judgments€under€theÏHelms„Burton€Act€in€U.S.€courts.€€The€damages€that€may€be€recovered€under€the€antidote€lawsÏare€not€limited€to€judgments€in€U.S.€courts,€but€may€include€consequential€damages€that€resultÏfrom€the€application€of€Helms„Burton.ÌÌà  àHowever,€friction€between€the€United€States€and€the€European€Union€over€policy€towardÏCuba€has€diminished€substantially€with€adoption€by€the€Europeans€of€a€binding€policy€that€linksÏexpanded€ties€to€Cuba€to€improvements€in€human€rights€conditions€and€advances€towardÏdemocracy€by€President€Fidel€Castroððs€communist€government.€€The€United€States€viewed€theÏœannouncement›€that€EU€members€would€evaluate€future€relations€with€Cuba€according€to€theÏratification€and€observance€of€international€human€rights€conventions€as€an€affirmation€of€theÏinternational€communityððs€commitment€to€human€rights€and€democracy.ÌÌà  àòòNorth€Korea.óó€€North€Korea€remains€a€rigid€socialized€economy,€with€a€strong€emphasisÐ  p Ðon€self„reliance.€€The€agricultural€land€is€collectivized,€and€state„owned€industry€produces€95%Ïof€the€manufactured€goods.€€Heavy€industry,€including€arms€production,€is€emphasized€at€theÏexpense€of€consumer€goods.€€Despite€improvements€in€agricultural€methods,€North€Korea€has€notÏyet€become€self„sufficient€in€food€production;€indeed,€various€factors€have€resulted€in€chronicÏfood€shortages.€€Increasing€shortages€of€fuels€and€electric€power€have€resulted€in€idle€factories,Ïfewer€exportable€items,€and€less€hard€currency€to€buy€food€and€other€critical€items.€Additionally,Ïfactory€industrial€equipment€is€in€a€serious€state€of€disrepair€because€there€is€no€money€to€betterÏthe€industrial€facilities.€€North€Koreaððs€industrial€development€remains€15„25€years€behind€that€ofÏSouth€Korea.ÌÌà  àThe€political€ideology€of€national€self„reliance€and€independence€has€resulted€in€anÏinternational€trade€share€(exports€plus€imports)€of€only€12€percent€of€the€GDP,€well€below€theÏfigure€of€50„55€percent€observed€in€neighboring€South€Korea.€€Traditionally,€North€Korea€hasÏregarded€international€trade€as€a€necessary€evil.€Foreign€trade€has€been€conducted€mainly€toÏobtain€essential€imports.€€Exports€have€never€been€considered€for€economic€gains€in€employmentÏor€income,€but€as€a€means€to€finance€necessary€imports.× ƒ± ×Ý ƒR$ÓÝòòÚ  Ú21Ú  ÚóóÝ  Ý×  ×€€North€Koreaððs€total€imports€averageÐ à%0!$ Ðabout€$1„2€billion€per€year.ÌÌà  àThe€ð ðnecessaryðð€commodities€North€Korea€imports€include€petroleum,€grain,€coking€coal,Ïmachinery€and€equipment,€and€consumer€goods.€€As€reported€by€the€Korea€Trade€PromotionÏCorporation€(KOTRA),€North€Koreaððs€four€major€trading€partners€are€China,€Russia,€Japan€andÏSouth€Korea,€accounting€for€almost€70€percent€of€its€total€trade€(exports€plus€imports).€OtherÐ h+¸&* Ðsources€(1992€World€Trade€Database,€Major€Economic€Indicators€for€N.€Korea,€1993)€indicateÏIran€and€Hong€Kong€are€also€major€contenders€in€import€trade.€€Russian€imports,€once€a€strongÏportion€of€North€Korean€trade,€have€continued€to€decline€as€Russia€focuses€on€its€own€economicÏdifficulties,€and€China€has€supplanted€Russia€as€North€Koreaððs€economic€lifeline.€€ChinaððsÏimportance€in€North€Koreaððs€trade€is€in€all€probability€underestimated€in€available€statistics€asÏobservers€note€that€a€high€magnitude€($100€millions)€of€smuggling€occurs€between€the€twoÏcountries.× ƒ³ ×Ý ƒR$ÓÝòòÚ  Ú22Ú  ÚóóÝ  Ý×  ×Ð 8 ˆ М̛€Table€1€illustrates€the€current€trade€figures:× ƒµ ×Ý ƒR$ÓÝòòÚ  Ú23Ú  ÚóóÝ  Ý×  ×€€Ð  ` ÐÌÓ  Óà @ àà @` àà @¸ àà @ àà @h àò òTable€1.€€North€Korean€Trade€1994ó óÐ è 8  Ð(in€US$€millions)ÌÓL ÓÌÔ*}ƒ `·ŸrddP”d td Àt” ¡¨°(#°(#}ÔÔ,ždd ÔÔ,°dd ÔÔ,°dd ÔÔ,Üdd ÔÔ+  ÔÐ  ¬ü  €€Ðò òCountryó óÐ +!` "l +Ðò òImportsó óÐ 4*` "l „„4ÐExportsÐ 4*` "l „„4ÐTotalÐ 0&$` "  l 0Ѐ€ChinaÐ 6, à  z@425‰z@‰6Ѐ€€€€€425Ð WM*à  z@425 z@ àh@199‰àh@‰WЀ€€€€€€199Ð WM*à  àh@199 àh@ €ƒ@624‰€ƒ@‰WЀ€€€€€€€€624Ð 6,*à  €ƒ@624 €ƒ@ 6Ѐ€JapanÐ 6, ` @e@170‰@e@‰6Ѐ€€€€€170Ð WM*` @e@170 @e@ 0t@323‰0t@‰WЀ€€€€€€323Ð WM*` 0t@323 0t@ Ð~@493‰Ð~@‰WЀ€€€€€€€€493Ð 6,*` Ð~@493 Ð~@ 6Ѐ€South€KoreaÐ  à Ѐ€€€€€174*Ð  à Ѐ€€€€€€€21*Ð 6, à `h@195‰`h@‰6Ѐ€€€€€€€€195Ð 6,*à `h@195 `h@ 6Ѐ€RussiaÐ  ` Ѐ€€€€€115*Ð  ` Ѐ€€€€€€€€15*Ð 6, `  €a@140‰€a@‰6Ѐ€€€€€€€€140Ð ?5*`! €a@140 €a@ „„?ÐWorld€TotalsÐ I?à" Ô“@1269„„‰Ô“@‰IЀ€€€€1,269Ð j`4à# Ô“@1269 Ô“@ 8Š@839„„‰8Š@‰jЀ€€€€€€839Ð j`3à$ 8Š@839 8Š@ x @2108„„‰x @‰jЀ€€€€€€2,108ÐD:8à% x @2108  x @ DÐÌ(*€Ô‡ÍbXXkDÔKOTRA€trade€figures€at€this€time€do€not€give€import/export€values€for€these€countries.€€These€figures€are€derived€from€other€sources)Ð ˜è& ÐÔ#†XkDXÍbˆ#ÔÌà  àTrade€statistics€from€the€United€Nations€provide€more€detailed€information€on€NorthÏKorean€imports€from€many€developed€countries€(unfortunately€many€countries,€including€Russia,Ïdo€not€report€trade€to€the€United€Nations).€€The€top€five€exporters€to€North€Korea€in€1993Ïaccording€to€U.N.€data€were€China€($602€million),€Japan€($217€million),€India€($61€million),ÏGermany€($47€million),€and€Singapore€($38€million).€€€Other€major€exporters€were€Italy,€Ireland,Ïthe€Netherlands,€Brazil,€and€Thailand.€€China€supplies€most€of€North€Koreaððs€needs€for€grainsÏand€petroleum,€while€North€Koreaððs€imports€from€European€countries€predominantly€consist€ofÏchemicals€and€machinery,€and,€in€the€case€of€Germany,€motor€vehicles.€€Ten€German€companiesÏand€Germanyððs€Korean€Economic€Information€Bureau€reportedly€plan€to€establish€an€office€inÏ1995€to€promote€trade€with€North€Korea.€€From€Japan,€North€Korea€imported€mostly€textileÏgoods€and€vehicles;€many€of€the€textiles€were€apparently€re„exported€back€to€Japan€in€the€form€ofÏfinished€goods.€€Many€Japanese€companies€maintain€a€presence€in€North€Korea€awaiting€theÏpossibility€that€a€normalization€in€North€Korean„Japanese€relations€occurs€(dependent€upon€warÏreparations).ÌÌà  àIn€FY€1996,€Commerce€approved€39€validated€licenses€for€exports€to€North€Korea,Ïtotaling€œ$209,134,369.›€€(Two€licenses€valued€at€$4,026€were€denied.)€This€is€a€decrease€inÏlicense€approvals€of€more€than€one€billion€dollars€from€FY€1995,€but€FY€1995€was€an€exceptionÐ ,l'9 Ðin€that€there€were€license€approvals€for€larger€grain€shipments€of€$1€billion€or€more.€€TheÏcommodities€involved€are€almost€entirely€humanitarian€items:€milk,€grains,€etc.€which€are€used€toÏrelieve€increasing€famine,€and€assorted€medicinal€supplies€to€aid€victims€from€widespread€floodÏdamage.ÌÌà  àAccording€to€U.S.€Census€Bureau€statistics,€U.S.€exports€to€North€Korea€last€year€totaledÏonly€$5,008,000,€of€which€84%€was€cereal.€The€other€commodities€exported,€in€descending€orderÏby€value,€are€petroleum,€coking€coal,€machinery,€and€consumer€goods.€Overall,€North€KoreaÏrepresents€an€extremely€small€part€of€the€U.S.€exports€to€the€world€(0.00086%).€ÌÌà  àFull€implementation€of€the€October€21,€1994€U.S.„North€Korean€Agreed€Framework€willÏfacilitate€a€possible€broadening€of€bilateral€relationships€during€which€current€restrictions€on€U.S.Ïtrade€with€North€Korea€may€be€reduced.€€In€addition,€the€United€Statesðð€status€as€a€foundingÏmember€of€the€Korean€Peninsula€Energy€Development€Organization€(KEDO)€foreshadows€anÏincreasing€role€as€a€trading€partner€with€North€Korea.€€KEDO€is€the€international€organizationÏestablished€in€March€1995€to€implement€the€Agreed€Framework.€€Under€the€Agreed€Framework,ÏNorth€Korea€agreed€to€freeze€and€eventually€dismantle€its€existing€graphite„moderated€nuclearÏprogram.€€In€return,€KEDO€will€provide€North€Korea€with€two€light€water€reactors€(LWRs)Ïdeveloped€from€U.S.€technology.€€In€addition,€KEDO€is€providing€500,000€metric€tons€of€heavyÏfuel€oil€to€North€Korea€annually€until€the€first€LWR€plant€goes€on€line.€€Further€implementationÏof€the€provisions€of€the€Agreed€Framework€should€also€broaden€North€Koreaððs€economicÏcontacts€with€the€international€community€in€general.ÌÌà  àBecause€of€North€Koreaððs€strong€political€ideology€emphasizing€self„reliance,€U.S.€exportÏsanctions€have€generally€had€a€minimal€effect€on€U.S.€exports.€€In€the€absence€of€the€U.S.Ïembargo,€some€United€States€industries€(vehicles,€machinery,€chemicals)€could€have€potentialÏexport€sales€of€up€to€$50€million€per€year,€as€determined€by€current€trade€with€EuropeanÏsuppliers.€€Following€the€signing€of€the€nuclear€accord,€opportunities€for€limited€economicÏactivity€by€some€U.S.€companies€may€now€be€possible.€€Restrictions€on€travel€to€North€KoreaÏand€per€diem€expenditure€limits€have€been€liberalized.€€Permission€has€been€given€to€purchaseÏcertain€strategic€minerals€from€North€Korea,€and€special€licenses€will€be€granted€in€connectionÏwith€the€light€water€reactor€project,€ranging€from€technology€and€equipment€for€the€reactors€toÏthe€sale€and€transportation€of€oil€on€an€interim€basis.€€The€potential€for€some€profit€exists,€but€theÏsanctions€regime€and€the€inherent€risks€of€doing€business€in/with€a€command€economy€haveÏdiscouraged€most€U.S.€firms€from€doing€business€there.€ÌÌà  àUnderstanding€that€it€must€tap€world€markets€to€satisfy€critical€economic€needs,€NorthÏKorea€has€established€the€Rajin„Sonbong€Free€Trade€zone€to€promote€trade€with€other€countries.€ÏHowever,€the€North€Korean€leaders€appear€fearful€of€too€much€foreign€influence,€thus€the€tradeÏzone€remains€in€a€high„security€area,€limiting€access€to€markets.€Additionally,€at€present€this€areaÏhas€a€lack€of€infrastructure.€However,€if€the€trade€zone€is€at€all€successful,€U.S.€firms€could€be€atÏa€disadvantage€vis„a„vis€other€nations€due€to€U.S.€economic€œsanctions.ÌÐ h+¸&* Ðà  àòòRwanda.óó€€The€arms€embargo€has€had€very€little€impact€on€U.S.€industries.›Ð ° ÐÌ5.à  àòòEnforcement€of€Control.óó€€The€problems€associated€with€detecting€unauthorized€exports€toÐ ˆØ Ðembargoed€countries€are€more€difficult€than€with€other€export€controls,€because€the€controls€onÏexports€to€embargoed€countries€cover€virtually€all€U.S.„origin€goods,€including€consumer€itemsÏthat€do€not€attract€enforcement€attention,€either€in€the€United€States€or€overseas.€€However,€in€theÏcase€of€direct€exports,€an€embargo€against€a€small€number€of€countries€is€easier€to€enforce,Ïbecause€the€concept€of€a€total€embargo€is€generally€understood€and€supported€by€the€public.€€WeÏcan€count€on€voluntary€cooperation€from€most€U.S.€exporters.€€Further,€a€total€embargo€requiresÏlittle€expertise€to€differentiate€between€those€goods€that€are€and€those€that€are€not€subject€toÏcontrol.€ÌÌà  àœòòCuba.óó€€Controls›€on€exports€under€the€CDA€of€non„U.S.„origin€goods€from€foreignÐ À  Ðsubsidiaries€of€U.S.€firms€present€certain€enforcement€difficulties.€€Foreign€governments€haveÏshown€little€inclination€to€cooperate€with,€and€indeed€some€hostility€to,€our€enforcement€efforts.€ÏOn€the€other€hand,€the€Department€has€the€authority€to€deny€export€privileges€of€firms€andÏindividuals€overseas€who€violate€U.S.€controls.€€While€a€denial€order€can€be€very€effective,€use€ofÏthat€enforcement€tool€against€a€violator€of€CDA„based€controls€can€be€expected€to€provokeÏstrong€reaction€from€the€home€country€of€the€firm€which€is€the€object€of€the€œorder.ÌÌà  àòòRwanda.óó€€No€significant€enforcement€problems€have€occured€or€are€foreseen.›Ð  p ÐÌC.€€Consultation€with€IndustryÌÌà  àComments€received€by€Commerce€from€industry€either€objected€to€the€unilateral€nature€ofÏU.S.€sanctions,€or€to€the€extraterritorial€reach€of€U.S.€sanctions,€particularly€in€the€Iran€and€LibyaÏSanctions€Act€of€August€1996€and€in€the€Helms„Burton€Act€of€March€1996.ÌÌà  àIn€particular,€industry€comments€asserted€that€the€extraterritorial€reach€of€U.S.€laws€andÏregulations€can€and€does€impact€the€reputation€of€U.S.€vendors€as€reliable€suppliers.€€AlthoughÏthere€is€much€interest€in€U.S.€technology,€customers€often€opt€for€a€comparable€offering€from€aÏforeign€competitor€because€of€the€constraints€imposed€by€U.S.€export€regulations.€€ÌÌD.€€Consultation€with€Other€Coun‚triesÌÌà  àThe€Administration€has€worked€hard€to€garner€support€from€other€countries€for€both€theÏHelms„Burton€Act€and€the€Iran€and€Libya€Sanctions€Act.€Ì̜Р ¸'#& ÐE.›€€Alternative€Means€€ÌÌà  àComprehensive€embargoes€are€designed€to€make€the€strongest€possible€statement€againstÏa€particular€country's€policies€by€imposing€the€harshest€trade€conditions€possible.€ÌÌà  àRestrictions€on€exports€supplement€other€actions€taken€by€the€United€States€GovernmentÏthat€are€intended€to€strength‚en€the€embargo.€€Among€the€more€promi‚nent€other€actions€that€canÏand€have€been€taken€are€severing€of€diplomatic€relations,€banning€imports€into€the€United€States,Ïseeking€United€Nations€denunciations€and€curtailing€or€discouraging€bilateral€educational,€scienƒ¼tific,€or€cultural€exchanges.ÌœÌF.›€€Foreign€AvailabilityÌÌà  àSince€Cuba€and€North€Korea€are€also€terrorist„designated€countries,€as€well€asÏembargoed,€the€foreign€availability€provision€does€not€apply€to€items€determined€by€the€Secre‚taryÏof€State€to€require€control€under€Section€6(j)€of€the€Act.œ× ƒ¸ ×Ý ƒR$ÓÝòòÚ  Ú24Ú  ÚóóÝ  Ý×  ×›€€Cognizant€of€the€value€of€suchÐ „Ô  Ðcontrols€in€emphasizing€the€U.S.€position€toward€coun‚tries€supporting€international€terrorism,ÏCongress€specifically€excluded€them€from€foreign€availability€assessments€otherwise€required€byÏthe€œAct.ÌÌà  àFor€Rwanda,€the€foreign€availability€provisions€of€the€Act€do€not€apply€to€export€controlsÏimposed€in€compliance€with€international€obligations€of€the€United€States€under€Section€6(i)€ofÏthe€Act.ÌÌÔ#†9XtXXXkDúÄ#ÔÔ€QXkDXX9XtÔÔ‡Q¼R{»XQXkDÔò ò6.›€Libya€[Section€746.4(785A.7)]ó óÔ#†QXkDX»Q¼R{ø7#ÔÐ Ð  ÐÌœà@  ìàò òExport›€Control€Program€Description€And€Licensing€Policyó óˆÐ Ð  ÐÌà  àOn€August€5,€1996€the€President€œsigned€into€law›€the€ð ðIran€and€Libya€œSanctions›€Act.ðð€€TheÏthreats€posed€by€Iran€and€Libya€are€serious€and€urgent.€€By€limiting€the€ability€of€these€countriesÏto€develop€their€petroleum€resources,€this€act€aims€to€induce€Iran€and€Libya€to€change€theirÏbehavior,€and€to€restrict€the€finances€they€have€available€to€develop€weapons€of€mass€destructionÏand€support€terrorism.€€The€President€can€œchoose€two€among›€œseven›€sanctions€to€disciplineÏviolators,€one€of€which€is€export€œsanctions.›€€œThe›€ð ðIran€and€Libya€Sanctions€Actðð€is€the€mostÏrecent€action€in€a€long€history€of€difficult€U.S.€relations€with€Libya.€ÌÌà  àIn€January€1986,€the€President€im‚posed€sanctions€against€Libya€under€the€authority€of€theÏœInternational€Emergency›€Economic€Powers€Act.€€The€Depart‚ment€of€the€Treasury€administers€theÏexport€restric‚tions€under€the€Libyan€Sanctions€Regula‚tions€(31€CFR€Part€550).€€Since€February€1,Ï1986,€œex‚ports›€from€the€United€States€and€transship‚ments€œvia€third€countries€to›€Libya€requireÏauthorization€in€the€form€of€a€general€or€specific€license€from€that€Departmentœ× ƒ´ ×Ý ƒR$ÓÝòòÚ  Ú25Ú  ÚóóÝ  Ý×  ×›.Ð ¸)%( Ðâ âÐ ¤*ô%) Ðà  àOn€November€14,€1991,€a€grand€jury€in€the€U.S.€District€Court€for€the€District€ofÏâ âColumbia€returned€an€indictment€against€two€Libyan€nationals€accused€of€sabotaging€Pan€AmÏ103.€€On€the€same€day,€Scottish€authorities€obtained€a€petition€warrant€for€the€two€Libyans€onÏsimilar€charges.ÌÌà  àOn€January€21,€1992,€the€United€Na‚tions€Security€Council€(UNSC)€adopted€Resolu‚tionÏ731,€which€condemned€the€bombings€and€urged€Libya€to€fully€and€effectively€respond€to€requestsÏthat€the€United€States,€the€United€Kingdom,€and€France€had€made€upon€it€in€connection€with€theÏinvestigation,€apprehension,€and€prosecution€of€those€responsible€for€the€bombings.€€On€MarchÏ31,€1992,€after€concluding€that€Libya€had€not€made€satisfactory€responses€to€such€requests,€theÏUNSC€adopted€Resolution€748,€which€imposed€mandatory€sanctions€on€Libya,€effective€AprilÏ15,€1992,€until€such€time€as€the€Security€Council€determined€that€Libya€œhad€complied›€with€theÏrequests€made€by€the€United€States,€the€United€Kingdom,€and€France,€and€renounced€terrorism.€ÏResolu‚tion€748€requires€U.N.€member€states€to€prohibit,€by€their€nationals€or€from€their€territory,Ïòòinter€aliaóó€the€supply€of€any€air‚craft€or€aircraft€compo‚nents€to€Libya€or€the€provision€of€engineerƒÐ ˜è  Ðing€and€mainte‚nance€servicing€of€Libyan€aircraft.€€Reso‚lution€748€also€re‚quires€mem‚ber€states€toÏprohibit,€by€their€nationals€or€from€their€œterritory,€the€provision€of›€arms€and€related€materi‚al€of€allÏtypes,€including€the€sale€or€transfer€of€weapons€and€ammunition,€military€vehi‚cles€andÏequipment,€paramili‚tary€police€equip‚ment€and€spare€parts€for€such€equip‚ment.€€Finally,ÏResolution€748€requires€member€states€to€deny€any€flight€in€their€airspace,€or€landing€or€takingÏoff€in€their€territory,€œby€aircraft€which€are€flying€to€or€from€Libya,›€to€prevent€operation€of€LibyanÏArab€Airlines€and€to€reduce€signifi‚cantly€Libyan€diplomatic€representa‚tion€abroad.€ÌÌà  àContinued€Libyan€non„compliance€with€UNSC€demands€resulted€in€the€adoption€by€theÏUNSC€of€Resolution€883€on€November€11,€1993,€which€imposed€additional€sanctions,€includingÏa€limited€assets€freeze,€œand›€provisions€closing€certain€gaps€in€the€civil€aviation€sanctions€whichÏhad€been€put€into€place€by€Resolution€748.€€The€Resolution€required€States€to€freeze€any€funds€orÏfinancial€resources€owned€or€controlled€by€the€Government€of€Libya€or€a€Libyan€undertaking€andÏensure€that€such€funds,€or€any€other€funds€or€financial€resources,€are€not€made€available€to€theÏGovernment€of€Libya€or€any€Libyan€undertaking.€€Also,€the€Resolution€required€member€states€toÏprohibit€the€provision€to€Libya,€by€their€nationals€or€from€their€territory€of€materials€des‚tined€forÏthe€con‚struction,€improvement€or€maintenance€of€Libyan€civilian€or€military€airfields€andÏassociated€facilities€and€equipment,€of€any€engineering€or€other€services€or€components€destinedÏfor€the€maintenance€of€any€Libyan€civil€or€mili‚tary€airfields,€with€certain€ex‚ceptions,€and€ofÏcertain€oil€terminal€and€refining€equip‚ment,€as€listed€in€the€Adden‚dum€to€this€chapter.€ÏFurthermore,€Resolution€883€required€that€States€immediately€close€all€Libyan€Arab€AirlinesÏoffices,€and€prohibit€any€commercial€transactions€with€Libyan€Arab€Airlines,€and€prohibit,€byÏtheir€nationals€or€from€their€territory,€the€entering€into€or€renewal€of€arrangements€for€the€makingÏavailable€for€operation€within€Libya€of€any€aircraft€or€aircraft€components.€ÌÌà  àLibya€is€one€of€the€countries€designat‚ed€by€the€Secretary€of€State€as€a€repeated€supporterÏof€acts€of€international€terror‚ism.ÌÐ h+¸&* Ðà  àThe€Department€of€Commerce€has€main‚tained€foreign€policy€controls€on€exports€andÏreexports€to€Libya€since€the€1970s.€€While€the€control€on€exports€to€Libya€under€the€ExportÏAdministration€Regulations€(EAR)€remain€in€effect,€the€Department€has€deter‚mined,€in€order€toÏavoid€duplicate€licensing€requirements,€that€licenses€issued€by€the€Treasury€De‚partment€for€directÏexports€and€transship‚ments€to€Libya€constitute€authorization€under€the€EAR.€€However,€exportsÏor€reexports€to€Libya€not€covered€by€the€Treasury€regula‚tions€continue€to€require€Commerce€auƒ¼thori‚zation.€€Requests€for€such€autho‚rization€are€reviewed€under€the€policies€set€forth€in€sectionsÏA€through€E€below.ÌÌà  àIn€December€1993,€the€President€in‚structed€the€Commerce€Department€to€rein‚force€theÏtrade€embargo€on€the€reexport€to€Libya€of€United€States„origin€items.€€The€Com‚merceÏDepartment€thereupon€tightened€licensing€policy€on€the€reexport€of€items€covered€by€UnitedÏNations€Security€Coun‚cil€Resolutions€748€and€883.ÌÌA.à  àReexport€authorization€is€required€for€foreign€policy€purposes€for€export€from€thirdÐ ˜è  Ðcountries€to€Libya€of€all€United€States-origin€goods€or€technical€data,€òòexceptóó€for:Ð „Ô  ÐÌ1.€€Medicine€and€medical€supplies;ÌÌ2.€€Food€and€agricultural€commodi‚ties;ÌÌ3.€€Items€permitted€under€certain€special€purpose€general€licenses;€andÌÌ4.€€The€foreign€non„strategic€prod‚ucts€of€United€States-origin€tech‚nical€data;€orÌÌ5.€€The€foreign€strategic€products€of€United€States-origin€technical€data€exported€from€the€UnitedÏStates€before€March€12,€1982.ÌÌB.à  àApplications€for€reexport€authorization€will€generally€be€denied€for:Ð €Ð ÐÌ1.€€Off-highway€wheel€tractors€of€carriage€capacity€of€10€tons€or€more,€except€for€exports€of€suchÏtractors€in€reasonable€quantities€for€civil€use,€to€the€extent€consis‚tent€with€U.N.€Resolution€883;ÌÌ2.€€aircraft€(including€helicopters),€and€specified€parts€and€accesso‚ries;ÌÌ3.€€other€commodities€and€related€technical€data€controlled€for€nation‚al€security€purposes,€includƒ¼ing€controlled€foreign„produced€prod‚ucts€of€United€States€techni‚cal€data€exported€from€the€Unitƒ¼ed€States€after€March€12,€1982,€and€oil€and€gas€equipment€and€related€technical€data€not€readilyÏavailable€from€non-United€States€sources;ÌÌ4.€€goods€and€technical€data€destined€for€the€Ras€Lanuf€Petrochemical€Processing€Complex,Ïâ âòòexceptóó€for€(a)€exports€or€reexports€pursuant€to€a€con‚tractual€arrangement€in€effect€prior€toÐ |*Ì%) ÐDecember€20,€1983;€and€(b)€the€reexport€of€goods€or€technology€already€outside€the€UnitedÏStates€on€December€20,€1983,€which€will€be€reviewed€on€a€case€by€case€basis;€andÌâ âÌ5.€€items€subject€to€UNSC€Resolu‚tion€748€of€March€30,€1992€(ef‚fective€April€5,€1992)€andÏResolu‚tion€883€of€November€11,€œ1993›€(effective€December€1,€œ1993).›ÌÌC.à  àExceptions€are€considered€on€a€case-by-case€basis€for:Ð 8 ˆ ÐÌ1.€€reexports€of€commodities€or€techni‚cal€data€involving€a€con‚tract€in€effect€prior€to€March€12,Ï1982,€where€failure€to€obtain€an€authori‚zation€would€not€excuse€perfor‚mance€of€the€contract;ÌÌ2.€€the€reexport€of€goods€or€technol‚ogy€subject€to€national€security€controls€already€outside€theÏUnit‚ed€States€on€March€12,€1982,€or€the€export€of€foreign€products€incorpo‚rating€such€items€asÏcom‚ponents;€orÌÌ3.€€the€use€of€United€States-origin€components€incorporated€in€for‚eign€origin€equipment€andÏconsti‚tuting€20€percent€or€less€by€value€of€that€equipment.ÌÌD.à  àAll€other€reexports€will€generally€be€approved,€subject€to€any€other€licensing€policiesÐ H˜ Ðapplicable€to€a€particular€transaction€and€subject€to€U.N.€Resolutions.ÌÌPart€Two:€€Analysis€Of€Con‚trol€As€Required€By€Section€6(f)€Of€The€ActÌÌA.€€The€Purpose€of€the€ControlÌÌà  àThe€purpose€of€export€and€reexport€controls€toward€Libya€is€to€demonstrate€United€StatesÏopposition€to,€and€to€dis‚tance€the€United€States€from,€that€nation's€support€for€acts€ofÏinternational€terrorism,€interna‚tional€subversive€activities,€and€intervention€in€the€affairs€ofÏneighboring€states.€€They€also€reinforce€implemen‚tation€of€United€Na‚tions€Security€CouncilÏresolutions.ÌÌB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Com‚merce:ÌÌ1.à  àòòProbability€of€Achieving€Intended€For‚eign€Policy€Purpose.óó€€The€controls€deny€to€LibyaÐ #l! ÐUnited€States-origin€nation‚al€security„controlled€items,€oil€and€gas€equipment€unavailable€fromÏoutside€sourc‚es,€and€items€for€the€Ras€Lanuf€Petro‚chemical€complex.€€The€controls€restrictÏLibyan€capability€to€use€United€States„‚origin€aircraft,€aircraft€compo‚nents€and€accessories,€andÏoff-highway€tractors€in€military€ventures,€especially€in€their€efforts€to€destabilize€nations€friendlyÏto€the€Unit‚ed€States.€€Most€recently,€reexport€prohibi‚tions€were€reinforced€for€certain€oil€termi‚nalÏand€refining€equipment,€plus€items€used€to€service€or€maintain€Libyan€aircraft€and€airfields.€€TheÏcombined€effect€of€these€controls€has€been€to€pre‚vent€a€Unit‚ed€States€contribution€to€Lib‚ya'sÏability€to€engage€in€activities€detrimental€to€United€States€for‚eign€policy.€€Further,€they€have€sentÏa€clear€signal€that€the€United€States€is€unwilling€to€permit€trade€in€light€of€Libya's€behavior.Ð h+¸&* Ї2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€Because€these€controls€are€in‚tended€toÐ ° Ðprevent€a€United€States€con‚tribu‚tion€to€Libyan€economic€activities,€and€force€Libya€to€abide€by€Ïinternational€law€and€thereby€diminish€Libya's€ability€to€under‚mine€regional€stability,€along€withÏits€sup‚port€for€international€terrorism,€they€are€consistent€with€United€States€foreign€policy€goalsÏand€with€policies€on€sales€to€Libya.ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€As€indicat‚ed€by€the€adoption€of€United€Na‚tions€Securi‚tyÐ 8 ˆ ÐCouncil€Resolutions€731,€748€and€883,€there€is€a€general€under‚standing€by€other€countries€of€theÏthreat€posed€by€Libya's€policies€of€subversion,€terrorism,€and€mili‚tary€aggression.€€When€the€bulkÏof€U.S.€controls€were€imposed€in€1986,€we€explained€our€policies€to€other€governments€andÏurged€them€to€adopt€comparable€poli‚cies.€There€was€some€favorable€response,€but€no€country€hasÏmatched€the€extent€of€United€States€controls.€€The€EU€and€the€seven€major€industrializedÏcountries€in€1986€approved€unanimous€steps€against€Libya€including€restrictions€on€LibyanÏofficials€in€Europe€and€a€ban€on€new€arms€sales.€€There€has€generally€been€good€implementationÏby€the€international€community€of€the€sanc‚tions€imposed€by€the€U.N.€Security€Coun‚cil.€€WeÏmonitor€all€trade€with€Libya€closely€and€bring€any€noncompliance€with€the€most€recent€U.N.Ïaction€swiftly€to€the€attention€of€appropriate€foreign€authori‚ties.€€€Ì€Ì4.à  àòòEconomic€Impact€on€United€States€In‚dustry.ó󀀜In›€FY€œ1996›€Commerce€issued€one€re„exportÐ H˜ Ðauthorization€for€commodities€valued€at€$19,692.€€Commerce€denied€applications€for€14€re„¼export€authorizations€for€commodities€valued€at€$8€million.€€Five€other€re„export€applicationsÏworth€$11.1€million€were€returned€without€action.€€U.S.„origin€products€comprised€a€minuteÏpercentage€of€Libyan€imports.€€The€U.S.€Census€Bureau€reports€that€total€U.S.€exports€to€Libya€inÏ1995€amounted€to€approximately€$241,000,€down€from€as€much€as€$310.2€million€in€œ1985.›€€ÌÌà  àU.S.€exports€to€Libya€have€declined€steadily€since€1975,€when€strong€sanctions€were€firstÏimposed.€€Since€then€export€authorizations€have€for€the€most€part€been€issued€only€for€shipmentsÏrequired€to€fulfill€pre„1982€contractual€obligations.€€Annual€U.S.€exports€and€re„exports€to€LibyaÏfell€from€$860€million€in€1979€to€less€than€$1€million€œannually€from€1987›€through€œ1994.€€€ÌÌà  àThe€Libyan€economy€depends€primarily€upon€revenues€from€the€oil€sector,€whichÏcontributes€practically€all€export€earnings€and€about€one„third€of€GDP.€€(Ô‡Qôº†õXQXkDÔSource:›€The€World€FactbookÐ D!” Ð1995.)€Ô#†QXkDXõQôº†}k#Ô€Windfall€revenues€from€the€rise€in€world€oil€prices€in€late€1990€improved€Libya's€foreignÐ 0"€  Ðpayments€position€and€resulted€in€a€current€account€surplus.€€The€non„oil€manufacturing€andÏconstruction€sectors,€which€account€for€about€20€percent€of€GDP,€have€expanded€fromÏprocessing€mostly€agricultural€products€to€include€petrochemicals,€iron,€steel,€and€aluminum.€ÏAlthough€agriculture€accounts€for€only€five€percent€of€GDP,€it€employs€about€20€percent€of€theÏlabor€force.€€Climatic€conditions€and€poor€soils€severely€limit€farm€output,€and€Libya€importsÏabout€75€percent€of€its€food€requirements.ÌÌà  àUN€sanctions€imposed€in€April€1992€have€not€yet€had€a€major€impact€on€the€economyÏbecause€Libya's€oil€revenues€generate€sufficient€foreign€exchange€that,€along€with€Libya's€largeÏcurrency€reserves,€sustain€food€and€consumer€goods€imports€as€well€as€equipment€for€the€œoil›Ð h+¸&* ÐÑÀ°Ñ€industry€and€ongoing€development€projects.€€In€1994,€Libyan€imports€totaled€$6.9€billion€(f.o.b.,Ïestimated),€compared€to€exports€of€$7.2€billion€(f.o.b.,€estimated).€€The€sanctions€have,€however,Ïmade€an€effect€in€painting€Libya€as€a€rogue€nation.ÌÌà  àLibya's€leading€trading€partners€in€1995€were€Italy€and€Germany,€which€were€Libya'sÏlargest€suppliers€of€imported€goods€as€well€as€Libya's€leading€export€markets.€€Nearly€all€ofÏLibya's€exports€to€these€two€countries€are€in€crude€oil.€€Germany€and€Italy€in€turn€have€investedÏheavily€in€Libyan€oil€production,€and€German€firms€plan€major€new€investment.€€Germany'sÏexports€to€Libya€consist€mainly€of€machinery€(30€percent€of€total€export€value)€and€agricultural„¼related€goods€(19€percent).€€The€remainder€are€largely€vehicles,€electrical/electronic€equipment,Ïmetal€stock,€and€chemical€processing€equipment.€€Italy€primarily€exports€refined€petroleumÏproducts,€cereal€products,€and€animal€feed.ÌÌà  àLibya's€principal€imports,€in€dollar€value,€from€all€major€industrialized€nations€include:€Ïcereals€and€cereal€products€(France,€Canada),€iron€and€steel€(Japan,€France,€Italy),€road€vehiclesÏ(Germany,€Japan),€general€industrial€machinery€and€equipment€(Germany,€U.K.),€specializedÏmachinery€(Germany,€Italy),€power€generating€machinery€(Germany),€chemical€materials€andÏproducts€(U.K.),€and€animal€feed€(Italy).ÌÌœÔ& Ø ÔTable›€œ1.›à0 ` àLibyan€Imports€from€Selected€Countries,€1990„95€(million€U.S.€$)Ð4„` (#` (# ÐÌÔ*‚ƒ­¶ drdždd °dd °dd Üdd  `·°(#°(#‚ÔÔ,L”d ÔÔ,Btd ÔÔ,Ftd ÔÔ,–td ÔÔ,–td ÔÔ,;td ÔÔ,=t” ÔÔ+  ÔÐ 7€lli"  \ €-€‚¨‚ƒƒ„„7ÐCountryÐ ?€l`i*´"lli „„?Ð1990Ð ?€l`i*´"l`i „„?Ð1991Ð ?€l`i*´"l`i „„?Ð1992Ð ?€l`i*´"l`i „„?Ð1993Ð ?€l`i*´"l`i „„?Ð1994Ð ?€l`li*´"l`i „„?Ð1995òò**óóÐ U€`lF*´" ¨ - l`li € €‚ˆ‚ƒƒ„„……UÐLeading€Industrialized€NationsÐ @€``l-"(x"`l „„@ÐÐ S€`l`B*(x" ˆ   ``l €€‚ˆ‚ƒƒ„„SÐCanadaÐ 2€```!œì`l` „„2Ð45ˆ.43Ð ;€```*œì U``` „„;Ð49ˆ.60Ð ;€```*œì!U``` „„;Ð66ˆ.85Ð ;€```*œì"U``` „„;Ð69ˆ.70Ð ;€```*œì#U``` „„;Ð48ˆ.61Ð =€```l*œì$U``` „„=Ðnˆ.a.Ð Q€`lB*œì%U ˆ  ```l € €‚ˆ‚ƒƒ„„QÐÔ'Ø4uÔFranceÐ 0€``! p&`l „„0Ð378ˆ.18Ð 9€``* p'U`` „„9Ð334ˆ.01Ð 9€``* p(U`` „„9Ð322ˆ.28Ð 9€``* p)U`` „„9Ð362ˆ.26Ð 9€``* p*U`` „„9Ð255ˆ.70Ð =€``l* p+U`` „„=Ð214ˆÐ Q€`lB* p,U ˆ  ``l € €‚ˆ‚ƒƒ„„QÐGermanyòò*óóÐ 0€``!”ä-`l „„0Ð751ˆ.18Ð 9€``*”ä.U`` „„9Ð691ˆ.43Ð 9€``*”ä/U`` „„9Ð609ˆ.22Ð 9€``*”ä0U`` „„9Ð761ˆ.85Ð 9€``*”ä1U`` „„9Ð638ˆ.48Ð =€``l*”ä2U`` „„=Ð466ˆÐ Q€`lB*”ä3U ˆ  ``l € €‚ˆ‚ƒƒ„„QÐItalyÐ 0€``! X4`l „„0Ð1,060ˆ.54Ð 9€``* X5U`` „„9Ð1,363ˆ.76Ð 9€``* X6U`` „„9Ð1,074ˆ.23Ð 9€``* X7U`` „„9Ð1,189ˆ.30Ð 9€``* X8U`` „„9Ðnˆ.a.Ð =€``l* X9U`` „„=Ð719ˆÐ Q€`lB* X:U ˆ  ``l € €‚ˆ‚ƒƒ„„QÐJapanÐ 0€``!|!Ì;`l „„0Ð137ˆ.05Ð 9€``*|!Ì<U`` „„9Ð138ˆ.53Ð 9€``*|!Ì=U`` „„9Ð140ˆ.15Ð 9€``*|!Ì>U`` „„9Ð152ˆ.06Ð 9€``*|!Ì?U`` „„9Ðnˆ.a.Ð =€``l*|!Ì@U`` „„=Ðnˆ.a.Ð Q€`lB*|!ÌAU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐU.K.Ð 0€``!ð"@B`l „„0Ð438ˆ.22Ð 9€``*ð"@CU`` „„9Ð451ˆ.47Ð 9€``*ð"@DU`` „„9Ð400ˆ.72Ð 9€``*ð"@EU`` „„9Ð411ˆ.42Ð 9€``*ð"@FU`` „„9Ð295ˆ.44Ð =€``l*ð"@GU`` „„=Ðnˆ.a.Ð Q€`lB*ð"@HU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐU.S.Ð 0€``!d$´I`l „„0Ðnˆ.a.Ð 9€``*d$´JU`` „„9Ð1ˆ.2Ð 9€``*d$´KU`` „„9Ð1ˆ.2Ð 9€``*d$´LU`` „„9Ð1ˆ.1Ð 9€``*d$´MU`` „„9Ð2ˆ.5Ð =€``l*d$´NU`` „„=Ðnˆ.a.Ð U€`lF*d$´OU ˆ  ``l € €‚ˆ‚ƒƒ„„……UÐOther€NationsÐ @€``l-"Ø%(!P"`l „„@ÐÐ Q€`lB*Ø%(!Q" ˆ  ``l € €‚ˆ‚ƒƒ„„QÐBelgium/Luxem¼burgÐ 0€``!8(ˆ#S`l „„0Ð148ˆ.25Ð 9€``*L'œ"TU`` „„9Ð153ˆ.05Ð 9€``*L'œ"UU`` „„9Ð96ˆ.58Ð 9€``*L'œ"VU`` „„9Ð151ˆ.68Ð 9€``*L'œ"WU`` „„9Ðnˆ.a.Ð =€``l*L'œ"XU`` „„=Ðnˆ.a.Ð Q€`lB*L'œ"YU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐChinaÐ 0€``!¬)ü$Z`l „„0Ðnˆ.a.Ð 9€``*¬)ü$[U`` „„9Ðnˆ.a.Ð 9€``*¬)ü$\U`` „„9Ð86ˆ.62Ð 9€``*¬)ü$]U`` „„9Ð45ˆ.24Ð 9€``*¬)ü$^U`` „„9Ð29ˆ.51Ð =€``l*¬)ü$_U`` „„=Ð23ˆÐ Q€`lB*¬)ü$`U ˆ  ``l € €‚ˆ‚ƒƒ„„QÐDenmarkÐ 0€``! +p&a`l „„0Ð36ˆ.15Ð 9€``* +p&bU`` „„9Ð24ˆ.44Ð 9€``* +p&cU`` „„9Ð17ˆ.89Ð 9€``* +p&dU`` „„9Ð20ˆ.72Ð 9€``* +p&eU`` „„9Ðnˆ.a.Ð =€``l* +p&fU`` „„=Ðnˆ.a.Ð Q€`lB* +p&gU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐGreeceÐ 0€``!”,ä'h`l „„0Ð67ˆ.02Ð 9€``*”,ä'iU`` „„9Ð68ˆ.49Ð 9€``*”,ä'jU`` „„9Ð62ˆ.11Ð 9€``*”,ä'kU`` „„9Ð64ˆ.87Ð 9€``*”,ä'lU`` „„9Ðnˆ.a.Ð =€``l*”,ä'mU`` „„=Ðnˆ.a.Ð Q€`lB*”,ä'nU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐIrelandÐ 0€``!@ˆ`l „„0Ð49ˆ.19Ð 9€``*@ˆU`` „„9Ð17ˆ.62Ð 9€``*@ˆU`` „„9Ð18ˆ.52Ð 9€``*@ˆU`` „„9Ð30ˆ.31Ð 9€``*@ˆU`` „„9Ðnˆ.a.Ð =€``l*@ˆU`` „„=Ðnˆ.a.Ð Q€`lB*@ˆU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐNetherlandsÐ 0€``!´ ü`l „„0Ð228ˆ.07Ð 9€``*´ ü U`` „„9Ð188ˆ.37Ð 9€``*´ ü U`` „„9Ð171ˆ.36Ð 9€``*´ ü U`` „„9Ð236ˆ.60Ð 9€``*´ ü U`` „„9Ðnˆ.a.Ð =€``l*´ ü U`` „„=Ðnˆ.a.Ð Q€`lB*´ üU ˆ  ``l € €‚ˆ‚ƒƒ„„QÐPortugalÐ 0€``!( p`l „„0Ð18ˆ.19Ð 9€``*( pU`` „„9Ð1ˆ.05Ð 9€``*( pU`` „„9Ð4ˆ.16Ð 9€``*( pU`` „„9Ð2ˆ.53Ð 9€``*( pU`` „„9Ðnˆ.a.Ð =€``l*( pU`` „„=Ðnˆ.a.Ð O€`ll>*( pU ˆ  ``l €=€‚ˆ‚„„OÐSpainÐ 2€``l!œ ä`ll „„2Ð65ˆ.63Ð ;€``l*œ äU``l „„;Ð68ˆ.41Ð ;€``l*œ äU``l „„;Ð38ˆ.87Ð ;€``l*œ äU``l „„;Ð76ˆ.51Ð ;€``l*œ äU``l „„;Ð118ˆ.80Ð =€``ll*œ äU``l „„=Ðnˆ.a.Ð:0.œ äU ˆ0 =  ``ll :ÐÌ*€à  à1990€figures€are€for€West€Germany.Ð ¤ì Ð**€à  àFirst€three€quarters€of€1995€only.€€œÐ Ø ÐÌSource:›€€Figures€for€1990€to€1994€are€from€United€Nations€Trade€Statistics,€as€reported€byÏexporting€countries.€€1995€figures€were€reported€by€the€U.S.€Embassy€in€œBonn.Ì›Ìà  àSo€far,€U.S.€unilateral€sanctions€are€believed,€even€by€some€of€their€critics,€to€have€hadÏonly€a€modest€effect€on€American€business€in€terms€of€lost€revenue.€€Unilateral€sanctions,€byÏvarious€estimates,€have€deprived€the€U.S.€economy€of€less€than€one-tenth€of€1€percent€of€theÏnation's€annual€income€in€recent€years.× ƒ¹ ×Ý ƒR$ÓÝòòÚ  Ú26Ú  ÚóóÝ  Ý×  ×€€€€Ð ð8& ÐÌœà  àIn€August€1996€the€President€signed€into€law€the€Iran€and€Libya€Sanctions€Act€of€1996€inÏan€effort€to€deny€Iran€and€Libya€the€ability€to€support€acts€of€international€terrorism€and€developÏweapons€of€mass€destruction.€€The€Act€requires€the€President€to€impose€certain€congressionally„¼mandated€economic€sanctions€against€any€U.S.€or€foreign€persons€investing€$40€million€or€moreÏin€Iranððs€or€Libyaððs€energy€sector€or€violating€certain€United€Nations€Security€Council€resolutionsÏagainst€Libya.€€The€sanctions€apply€only€to€new€investments€made€after€August€5,€1996€with€theÏgoal€of€ð ðdirectly›€and€significantlyðð€contributing€to€Iranððs€or€Libyaððs€ability€to€develop€theirÏpetroleum€œresources.›ÌÌà  àMost€foreign€governments€believe€that€the€Act€unfairly€inhibits€free€trade€and€access€toÏmarkets.€€Some€U.S.€business€groups,€including€the€European„American€Chamber€of€Commerce,Ïhave€denounced€the€bill€as€antithetical€to€U.S.€economic€interests€because€of€the€danger€ofÏforeign€government€retaliation.œ× ƒ» ×Ý ƒR$ÓÝòòÚ  Ú27Ú  ÚóóÝ  Ý×  ×Ð Ø# 4 ЛÌ5.à  àòòEnforcement€of€Control.óó€€It€is€not€possi‚ble€to€monitor€all€trade€with€Libya€in€non„strate‚gicÐ °%ø6 Ðitems.€€However,€it€appears€that,€in€light€of€the€widespread€perception€of€Libya€as€a€supporter€ofÏinternational€terrorism,€along€with€U.N.€sanctions,€there€is€substantial€voluntary€compliance€onÏthe€part€of€subsidiaries€of€U.S.€multinational€companies.€€The€controls€on€aircraft€traditionallyÏhave€posed€enforce‚ment€problems€because€in€reality€they€have€resulted€in€a€complete€embargo€ofÏall€reexports€of€aircraft€parts,€components€and€avionics,€including€the€servicing€of€U.S.„originÏaircraft,€or€foreign„manufactured€aircraft€with€any€U.S.€content.€€The€1992€and€1993€U.N.ÏSecurity€Council€Resolutions,€which€im‚posed€an€international€embargo€on€civil€aviation€items€toÏLibya,€assisted€the€Unit‚ed€States€in€its€efforts€to€maintain€these€con‚trols.€The€reexport€controls€onÐ -X%> Ðaircraft€parts€to€Libya€require€significant€enforce‚ment€and€diplomatic€resources.€€Com‚merce€willÏcon‚tinue€to€aggressively€enforce€all€controls€concerning€Libya.ÌÌC.€€Consultation€with€IndustryÌÌà  àCommerce€received€no€comments€on€Libya€from€the€request€for€public€comments.€ÏHowever,€past€industry€comments€indicated€that€the€controls€had€minimal€impact€on€the€LibyanÏoil€and€petrochemical€industry,€while€trade€between€the€United€States€and€Libya€had€beenÏvirtually€eliminated.€€The€most€recent€U.N.€action€calls€on€all€parties€to€prohibit€sales€of€certainÏoil„related€equip‚ment.ÌÌD.€€Consultation€with€Other€Coun‚triesÌÌà  àExtensive€consultation€with€other€na‚tions€has€taken€place€under€U.N.€aus‚pices.€€TheÏUnited€States€Government€also€intends€to€continue€consulting€friendly€governments€in€order€toÏachieve€full€com‚pliance€with€U.N.€sanctions.€ÌœÌE.›€€Alternative€Means€ÌÌà  àThese€controls€complement€diplomat‚ic€measures€that€have€been,€and€will€con‚tinue€to€beÏused€to€influence€Libyan€be‚havior.€€In€January€1986,€the€United€States€Government€established€aÏcomprehensive€trade€embargo€against€Libya€which€re‚mains€in€force.€€All€direct€trade€with€LibyaÏis€prohibited€and€certain€Libyan€Govern‚ment„owned€or€„con‚trolled€assets€subject€to€U.S.Ïjurisdiction„„estimated€at€$1€billion„„are€frozen€by€the€Department€of€Treasury.€ÌÌF.€€Foreign€AvailabilityÌÌà  àThe€foreign€availability€provision€does€not€apply€to€items€determined€by€the€Secre‚tary€ofÏState€to€require€control€under€Section€6(j)€of€the€Act.œ× ƒ¼ ×Ý ƒR$ÓÝòòÚ  Ú28Ú  ÚóóÝ  Ý×  ×›€€Cognizant€of€the€value€of€such€controls€inÐ €Ð Ðemphasizing€the€United€States€position€toward€coun‚tries€supporting€international€terrorism,ÏCongress€specifically€excluded€them€from€foreign€availability€assessments€otherwise€required€byÏthe€Act.€€The€foreign€avail‚ability€of€items€controlled€under€Section€6(a)€has€been€considered€byÏthe€Depart‚ment.€€In€general,€numerous€foreign€sourc‚es€of€commodities€similar€to€those€subject€toÏthese€controls€are€known,€especially€for€items€controlled€by€the€United€œStates.ÌÐ  $X" ЛÌÓ  ÓADDENDUMÌÓ  ÓÌà@òò!ìàòòReexports€to€LibyaˆÐ tÄ ÐóóÌà@ˆˆìàòòEffective€December€1,€1993óóˆÐ L œ ÐÌòòA.€€Oil€Terminal€and€Refining€EquipmentóóÐ $ t ÐÌ1.à  àPumps€of€medium€or€large€capacity€whose€capacity€is€equal€to€or€larger€than€350€cubicÐ ü L  Ðmeters€per€hour€and€drivers€(gas€turbines€and€electric€motors)€designed€for€use€in€theÏtransportation€of€crude€oil€and€natural€gas.€€ÌÌ2.à  àEquipment€designed€for€use€in€crude€oil€export€terminals,€as€follows:Ð ¬ü  ÐÌoà0  àLoading€buoys€or€single€point€moor‚ings;Ð„Ô (#(# Ðoà0  àFlexible€hoses€for€connection€between€underwater€manifolds€(plem)€and€single€pointÐ pÀ Ðmooring€and€floating€loading€hoses€of€large€sizes€(from€12„16€inch‚es);Ð (#(# Ðoà0  àAnchor€chains.€€€€ÐH˜(#(# ÐÌ3.à  àEquipment€not€specially€designed€for€use€in€crude€oil€export€terminals,€but€which€becauseÐ  p Ðof€its€large€capacity€can€be€used€for€this€purpose,€as€follows:ÌÌoà0  àLoading€pumps€of€large€capacity€(great‚er€than€4000€m3/h)€and€small€head€(10€bars);Ðä4(#(# Ðoà0  à€Boosting€pumps€within€the€same€range€of€flow€rates;ÐÐ (#(# Ðoà0  àIn€line€pipeline€inspection€tools€and€cleaning€devices€(i.e.€pigging€tools)€(16€inches€andÐ ¼  Ðabove);Ð (#(# Ðoà0  àMetering€equipment€of€large€capacity€(1000€m3/h€and€above).€Ð”ä(#(# ÐÌ4.à  àRefinery€equipment,€as€follows:Ð l¼ ÐÌoà0  àBoilers€meeting€American€Society€of€Mechanical€Engineers€1€standards;ÐD!”(#(# Ðoà0  àFurnaces€meeting€American€Society€of€Mechanical€Engineers€8€standards;Ð0"€ (#(# Ðoà0  àFractation€columns€meeting€American€Society€of€Mechanical€Engineers€8€standards;Ð#l!(#(# Ðoà0  àPumps€meeting€American€Petroleum€Institute€610€standards;Ð$X"(#(# Ðoà0  àCatalytic€reactors€meeting€American€Society€of€Mechanical€Engineers€8€standards;€andÐô$D #(#(# Ðoà0  àPrepared€catalysts€including€catalysts€containing€platinum€and€catalysts€con‚tainingÐ à%0!$ Ðmolybdenum.Ð (#(# ÐÌ5.à  àSpare€parts€for€any€item€above.€Ð ¤(ô#' ÐòòÌB.€€Items€Used€to€Service€or€Maintain€Aircraft€and€AirfieldsóóÐ |*Ì%) ÐÌ1.à  àAny€aircraft€or€aircraft€components.Ð T,¤'+ Ї2.à  àEngineering€or€maintenance€servicing€of€any€aircraft€or€aircraft€components.Ð ° ÐÌ3.à  àAny€materials€destined€for€the€con‚struc‚tion,€improvement€or€mainte‚nance€of€LibyanÐ ˆØ Ðcivilian€or€military€airfields€and€associated€facilities€and€equipment.€€ò òNote:€€ó óEmergency€equipƒÐ tÄ Ðment€and€equipment€and€services€directly€related€to€civilian€air€traffic€control€are€exempt€fromÏthis€control€and€reexport€applica‚tions€for€such€will€continue€to€be€re‚viewed€on€a€case„by„caseÏbasis.€€ÌÌ4.à  àAny€engineering€or€other€services€or€components€destined€for€the€mainte‚nance€of€anyÐ  d ÐLibyan€civil€or€military€airfields€and€associated€facilities€and€equipment.€€òòNoteóó:€€EmergencyÐ  P  Ðequip‚ment€and€equipment€and€services€direct‚ly€related€to€civilian€air€traffic€control€are€exemptÏfrom€this€control€and€reex‚port€applications€for€such€will€continue€to€be€reviewed€on€a€case„by„¼case€basis.€€ÌÌ5.à  àAny€advice,€assistance€or€training€to€Libyan€pilots,€flight€engineers,€or€air‚craft€and€groundÐ œì  Ðmaintenance€personnel€associated€with€the€opera‚tion€of€aircraft€and€airfields€within€Libya.€€€€ÌœÌÔ‡Q¼R{»XQXkDÔò ò7.›€Chemical€Precursors€and€Associated€Equipment€and€Technical€Data€[SecƒÐ `° Ðtions€742.2,€744.4€and€744.6(778A.8€and€778A.9)]Ìó óÔ#†QXkDX»Q¼R{1¸#ÔÌœÓ  Óò òExport›€Control€Program€Description€And€Licensing€Policyó óÐ tÄ ÐÓ ¹ÓÌà  àThe€United€States€has€continued€efforts€to€curb€proliferation€of€chemical€weapons€byÏmaintaining€national€controls€and€by€promoting€multi‚lateral€harmonization€of€export€con‚trolsÏthrough€the€Australia€Group€(AG).€€The€AG€is€an€informal€forum€of€30€na‚tions€(South€KoreaÏjoined€in€1996),€cooperat‚ing€to€prevent€and€impede€chemical€and€biological€weaponsÏproliferation€through€information€exchange,€harmonized€export€controls,€and€other€diplomaticÏmeans.€€The€European€Union€also€is€represented€at€the€AG's€annual€plenary€meeting.€€(See€tableÏin€Appendix€II€for€complete€list€of€members.)ÌÌà  àOn€October€19,€1995,€Commerce€issued€the€final€rule€to€implement€the€AG's€three„tieredÏapproach€to€controlling€exports€of€chemical€mixtures€containing€an€AG„controlled€chemicalÏweapon€(CW)€precursor.€€This€regulation:€€1)€provided€relief€to€the€chemical€industry€from€theÏprevious€requirement€to€apply€for€licenses€for€the€de€minimum€threshold€concentration€on€aÏsolvent„free€basis,€and€2)€streamlined€controls€and€reporting€requirements€on€sample€chemicalÏshipments.ÌÌà  àAt€the€October€1996€AG€plenary€session,€the€members€discussed€the€chemical€mixturesÏrule€which€uses€a€solvent€free€basis€to€compute€the€percentage€of€CW€precursor€and€agreed€toÏmeet€œintersessionally›€to€review€member€country€proposals€to€modify€the€solvents€rule.€€TheÏsession€also€covered€many€other€topics,€including€œ1)€the›€AG's€role€once€the€Chemical€WeaponsÏœConvention€(see›€next€œparagraph)›€enters€into€force,€œ2)€the›€"no€undercut"€policy€and€"catch„all"Ïcontrols,€œ3)€AG›€membership,€and€4)biological€controls€and€the€Biological€Weapons€ConventionÏReview€œConference€(see›€Part€8€of€this€œreport).›Ð ¨,ø'+ Їà  àThe€Convention€on€the€Prohibition€of€the€Development,€Production,€Stockpil‚ing€and€UseÏof€Chemical€Weapons€and€on€their€œDestruction,€known€as€the€Chemical€Weapons€Convention,›Ï(CWC)€was€signed€by€the€United€States€on€January€13,€1993.€€Since€the€required€65€countriesÏhave€ratified€the€CWC€by€the€end€of€October€1996,€it€will€enter€into€force€on€April€29,€1997.€€ÌÌ€€€€€The€Convention€was€scheduled€for€a€œSenate›€vote€œon€providing€its€advice€and€consent€toÏratification›€on€September€14,€1996,€but€was€withdrawn€from€consideration€on€September€12,Ï1996.€€The€President€considers€ratification€of€the€CWC€as€a€high€priority€objective€and€wants€theÏUnited€States€to€be€a€State€Party€when€it€enters€into€œforce.›€€Accordingly,€the€AdministrationÏencourages€the€Senate€to€schedule€a€ratification€vote€as€early€as€possible€in€1997€in€order€toÏcontinue€U.S.€leadership€in€the€CW€non„proliferation€arena.€€ÌÌ€€€€€The€CWC€will€ban€the€development,€production,€stockpiling,€and€retention€of€chemicalÏweapons€(CW)€and€will€support€the€economic€viability€of€the€U.S.€chemical€industry.€€The€CWCÏwill€also€prohibit€the€direct€or€indirect€transfer€of€CW.€€The€CWC€œtrade€restriction›€provisions€areÏcompatible€with€existing€AG„related€export€licensing€regulations.€The€CWC€will€provide€anotherÏtool€for€stemming€the€proliferation€of€chemical€weapons.€€ÌÌ€€€€€In€1995€and€1996,€the€Department€has€made€significant€progress€in€planning€for€theÏimplementation€of€the€CWC.€€In€April,€1995,€the€Department€field„tested€draft€CWC€dataÏdeclarations€with€nine€chemical€companies.€€This€exercise€provided€an€opportunity€for€theÏchemical€industry€to€critique€the€draft€instructions,€the€format,€and€the€forms,€and€to€develop€aÏtime€estimate€for€completing€the€declarations.€€In€general,€the€companies€commented€favorablyÏon€the€clarity€and€user„friendliness€of€the€forms€and€suggested€minor€modifications€to€furtherÏenhance€their€utility.€€During€this€period,€the€Department€has€worked€closely€with€chemicalÏindustry€associations,€including€the€Chemical€Manufacturers€Association€and€the€SyntheticÏOrganic€Chemical€Manufacturers€Association,€on€CWC€industry„related€issues.ÌÌà  àThe€licensing€requirements€for€chemical€precursors€and€associated€equipment€andÏtechnical€data€are€as€follows:ÌÌA.à  àA€license€is€required€for€the€export€to€most€destinationsœ× ƒ¾ ×Ý ƒR$ÓÝòòÚ  Ú29Ú  ÚóóÝ  Ý×  ×›€of€54€dual„use€chemicals€andÐ D!” Ðrelated€techni‚cal€data€identified€as€chemical€weap‚ons€precursors€by€the€AG.€(Chemical€war‚fareÏagents€deemed€to€have€direct€mili‚tary€application€are€controlled€by€the€State€Department€underÏthe€Interna‚tional€Traffic€in€Arms€Regulations.)€ÌÌà  àA€license€is€required€for€the€export€to€specified€€destinations€of€certain€equipment€andÏrelated€technical€data€that€can€be€used€in€the€production€of€chemical€weapon€precur‚sors€orÏchemical€war‚fare€agents.€€These€destinations€are:€€Bulgaria,€People's€Re‚public€€of€China,€Cuba,ÏMiddle€East,œ× ƒ¿ ×Ý ƒR$ÓÝòòÚ  Ú30Ú  ÚóóÝ  Ý×  ×›€Mongolia,€Myanmar€(Burma),€North€Korea,€Southwest€Asia,œ× ƒÀ ×Ý ƒR$ÓÝòòÚ  Ú31Ú  ÚóóÝ  Ý×  ×›€the€geographicalÐ ¤(ô#' Ðarea€former‚ly€known€as€the€Soviet€Unionœ× ƒÁ ×Ý ƒR$ÓÝòòÚ  Ú32Ú  ÚóóÝ  Ý×  ×›,€Tai‚wan€and€Vietnam.€Ð )à$( ÐÌà  àA€license€is€also€required€for€the€export€of€any€commodity,€soft‚ware,€or€technical€data,Ïwhen€the€exporter€knows€that€it€will€be€used€in€the€design,€development,€production,€stockpiling,Ð T,¤'+ Ðor€use€of€chemical€weap‚ons€in€or€by€one€of€the€above„€listed€countries.€€In€addition,€theÏDepartment€may€inform€the€exporter€that€a€validated€license€is€required€because€there€is€anÏunaccept‚able€risk€of€use€in,€or€diversion€to,€a€CBW€project€any‚where€in€the€œworld.Ì›Ìà  àA€license€is€required€for€the€export€to€most€destinations€(see€endnote€1)€of€technical€dataÏfor€facili‚ties€designed€or€intended€to€produce€any€of€the€controlled€chemi‚cals.ÌÌà  àLicensing€restrictions€apply€to€certain€forms€of€"knowing"€participation€and€support€byÏUnited€States€persons,€including€foreign€branches€of€United€States€companies,€in€chemicalÏweapons€activ‚ities€in€the€countries€of€concern€speci‚fied€in€the€regulations.€The€restric‚tions€applyÏto€the€export,€reexport€or€transfer€of€òòanyóó€item,€including€foreign€origin€items,€by€a€United€StatesÐ è 8  Ðperson€where€the€person€knows€the€item€will€be€used€in€the€design,€development,€production,Ïstockpiling,€or€use€of€chemical€weapons€in€such€countries.€€Support€activities€requiring€a€licenseÏinclude€financing,€freight€forwarding,€transpor‚tation,€and€other€comparable€assis‚tance€by€which€aÏper‚son€facilitates€an€export,€reexport€or€transfer.€€In€addi‚tion,€no€United€States€person€mayÏperform€any€contract,€service,€or€em‚ployment€knowing€it€will€assist€in€chemical€weaponsÏactivities€in€a€coun‚try€of€concern.€€There€also€are€limits€on€a€United€States€person's€participationÏin€the€design,€construction,€or€export€of€whole€chemical€plants.€€€ÌÌB.à  àApplications€for€export€licenses€will€be€considered€on€a€case„by„case€basis€to€determineÐ 4„ Ðwhether€the€export€would€make€a€material€contribution€to€the€design,€development,€production,Ïstock‚piling,€or€use€of€chemical€weap‚ons.€€When€an€export€is€deemed€to€make€such€aÏcontribution,€the€applica‚tion€will€be€denied.œ× ƒ ×Ý ƒR$ÓÝòòÚ  Ú33Ú  ÚóóÝ  Ý×  ×›€€Ð øH ÐÌœò òà@7 7 ìàAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€The€ActˆÐ Ð  Ðó óÌA.€€The€Purpose€of€the€ControlÌÌà  àThe€purpose€of€these€controls€is€to€prevent€U.S.€contribution€to,€and€to€supportÏmultilaterally€coordinated€efforts€to€control€the€proliferation€and€use€of€chemical€weapons.€ÏExports€from€the€United€States€are€denied€when€there€is€a€signifi‚cant€risk€that€they€will€be€usedÏfor€chemical€weapon€purposes.ÌÌà  àThese€controls€implement€some€of€the€measures€specified€in€Executive€Order€12735€ofÏNo‚vember€16,€1990,€and€its€successor,€Execu‚tive€Order€12938€of€November€14,€1994,€and€theÏEnhanced€Proliferation€Control€Initiative€(EPCI)€announced€by€then€President€Bush€onÏDecember€13,€l990.€€The€Administration€fully€supports€all€of€these€EPCI€measures.ÌÌà  àThese€controls€advance€U.S.€implementation€of€multilateral€export€control€commitmentsÏmade€by€members€of€the€AG€to€further€nonproliferation€objectives.€€They€also€advance€the€goalsÏof€the€1925€Geneva€Protocol€for€the€Prohibition€of€the€Use€in€War€of€Asphyxiating,€Poisonous€orÏother€Gases,€and€of€Bacteriological€Methods€of€Warfare,€under€which€Parties€are€prohibited€fromÏâ âusing€chemical€and€biological€weapons€in€warfare,€and€are€fully€compatible€with€the€object€andÐ h+¸&* Ðpurpose€of€the€CWC.€€These€multilateral€export€controls€on€items€particularly€useful€in€theÏproductions€of€chemical€weapons€help€limit€the€destabilizing€spread€of€chemical€weapons.Ìâ âÌB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€CommerceÌÌ€1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€€The€54€chemicals€and€theÐ L œ Ðequipment€and€technical€data€cov‚ered€by€these€controls€have€many€commer‚cial€uses€and€areÏwidely€available€from€foreign€sources.€€Many€of€the€major€sources€of€these€items€are€inÏindustrialized€countries€that€are€members€of€the€AG.€€While€it€is€not€expected€that€exportÏcontrols€œalone›€can€prevent€the€proliferation€of€chemical€weap‚ons,€these€controls€strength‚enÏUnited€States€efforts€to€stem€the€spread€of€such€weapons.€€Accordingly,€the€Secretary€hasÏdetermined€that€these€con‚trols€are€likely€to€achieve€the€intended€foreign€policy€purpose.Ìà0  àÐ (#(# Ð2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€In€extending€these€controls,€the€SecretaryÐ ¬ü  Ðhas€determined€that€the€controls€are€compatible€with€the€foreign€policy€objec‚tives€of€the€UnitedÏStates.€€The€United€States€has€a€strong€interest€in€remaining€in€the€forefront€of€internationalÏefforts€to€stem€the€prolifera‚tion€of€chemical€weapons€and€has€made€multilateral€commitments€toÏdo€so.€€These€controls€are€compatible€with€United€States'€goals€of€preventing€AmericanÏcontribution€to€the€spread€of€chemical€weapons€and€reducing€the€ability€of€countries€of€concernÏto€ob‚tain€the€means€for€coercive€destabilization.€€They€are€also€compatible€with€U.S.€multilateralÏand€bilateral€non„prolif‚eration€cooperation€and€obligations€that€the€United€States€expects€toÏundertake€under‚€the€CW‚C,€upon€ratification€by€the€U.S.€Senate.ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€The€Secre‚tary€has€determined€that€the€reaction€of€otherÐ ä4 Ðcountries€to€these€controls€by€the€United€States€is€not€likely€to€render€the€controls€ineffective€inÏachieving€the€in‚tended€foreign€policy€purpose€or€to€be€counterproductive€to€United€States€for‚eignÏpolicy€interests.€€In€1996,€the€United€States€contin‚ued€to€consult€with€the€AG€and€other€nationsÏon€the€growing€problem€of€chemical€weap‚ons€proliferation€and€terrorism.€€The€AG€continues€toÏurge€all€countries€to€take€necessary€steps€to€en‚sure€that€they€are€not€contributing€to€the€spread€ofÏchemical€weapons.ÌÌà  àIn€October€1996,€South€Korea's€application€for€membership€to€the€AG€was€accepted.€€TheÏAG€will€continue€to€consider€potential€new€mem‚bers,€as€well€as€continue€its€outreach€effort€to€Ïnonmembers.€€We€encourage€all€countries€to€implement€an€effective€export€control€system€whichÏincludes€covering€the€items€on€the€AG€control€lists,€as€well€as€forgoing€any€CW€activities€orÏprograms.€€Because€the€AGððs€membership€consists€of€the€major€chemical€producers€and€tradersÏin€the€world€and€because€it€has€a€"no€undercut€policy,"€which€commits€the€other€AG€members€toÏhonor€another€member's€denial,€other€member€countries'€actions€will€not€undermine€U.S.€foreignÏpolicy€or€commercial€interests.€€ÌÌ4.à  àòòEconomic€Impact€on€United€States€In‚dustry.óó€€The€Secretary€has€determined€that€theÐ )à$( Ðpotential€impact€of€these€export€controls€on€the€United€States'€economic€position€is€minimal€asÏborne€out€by€our€export€licensing€statistics.€€In€FY€1996,€616€license€appli‚cations€were€approvedÏfor€export€and€reexport€of€controlled€chemi‚cal€precursors€with€a€value€of€$265€mil‚lion.€€Only€oneÐ T,¤'+ Ðof€these€applications€was€denied€for€$222.€€For€chemical€pro‚duction€equipment,€85€export€licenseÏappli‚cations€were€approved€valued€at€$13.3€million,€while€only€two€export€license€applica‚tionsÏwere€denied€with€a€value€of€$5,300.€€ÌÌ€€€€€These€statistics€also€demonstrate€that€AG€export€controls€do€not€undermine€the€legitimateÏeconomic€or€technological€development€of€any€country.€Rather€they€are€consistent€with€Article€IÏof€the€CWC€which€prohibits€assistance€of€any€type€to€any€country's€CW€program.ÌÌ5.à  àòòEnforcement€of€Control.óó€€Chemical€controls€pose€problems€for€Commerce€enforcementÐ  ` Ðpersonnel€because€of€the€vast€size,€dispersion,€diversity,€and€specialized€nature€of€the€dual„useÏchemical€industry.€€In€addition,€enforcement€officers€can€be€exposed€to€personal€safety€risksÏwhen€seizing€and€inspecting€chemical€materials.ÌÌà  àTo€meet€the€challenge€of€effective€enforcement€of€these€controls,€Commerce€hasÏredirected€resources€toward€preventive€enforcement,€with€particular€attention€to€Shipper's€ExportÏDeclarations€to€ensure€that€the€products€labeled€ð ðNo€License€Requiredðð€(NLR)€are€in€fact€eligibleÏfor€unlicensed€shipment.€€Also,€Commerce€conducts€an€extensive€on„going€outreach€program€toÏeducate€companies€about€export€controls,€and€to€heighten€their€awareness€of€"red€flags"€that€mayÏindicate€potentially€risky€transactions.€€This€program€is€an€important€component€of€Commerce'sÏefforts€to€prevent€companies€from€illegally€exporting€dual„use€products€which€can€be€used€toÏmake€chemical€weapons.ÌÌC.€€Consultation€with€IndustryÌÌà  àThe€Department€has€sought€the€views€of€a€broad€cross„section€of€industry€by€consult‚ingÏwith€various€advisory€commit‚tees,€trade€associations€and€individual€firms.€€(For€industryÏconsultations€regarding€the€CWC€see€Section€E,€"Alternative€Means".)ÌÌD.€€Consultation€with€Other€CountriesÌÌà  àThese€U.S.€controls€are€consistent€with€the€multilateral€export€control€criteria€of€the€30Ïmember„nation€AG,€which€includes€many€of€the€world's€major€chemical€producers€and€traders.€ÏA€number€of€non„AG€countries€„„€including€Bulgaria,€Russia,€and€Ukraine€„„€have€taken€steps€toÏadopt€AG„type€controls.€€The€U.S.€has€actively€encouraged€non„AG€participants€to€adopt€AGÏcontrols.€€The€United€States€continues€to€encourage€harmonization€of€export€control€provisionsÏamong€AG€participants€to€ensure€a€level€playing€field€for€U.S.€exporters.ÌÌE.€€Alternative€MeansÌÌà  àAlternative€means€to€curtail€chemical€weapons€proliferation,€such€as€diplomaticÏapproaches,€do€not€obviate€the€need€for€these€controls.€€Diplomatic€means€alone€are€not€likely€toÏprevent€attempts€by€countries€intent€on€acquiring€chemical€weapons€or€to€obtain€materials€for€theÏproduction€of€chemi‚cal€weapons.€€Some€of€the€addi‚tional€means€that€have€been€and€will€continueÏto€be€used€in€an€attempt€to€curb€the€illegal€use€and€spread€of€chemical€weapons€are:Ð T,¤'+ Їà0  àbilateral€diplomatic€approach‚es€to€countries€that€are€seeking€to€acquire€chemical€weaponsÏor€are€furnishing€materials€and€assistance€for€chemical€weapons€production;Ð (#(# ÐÌà0  àmultilateral€cooperation€with€coun‚tries€concerned€about€the€use€and€prolifera‚tion€ofÏchemical€weapons;Ð (#(# ÐÌà0  àU.S.€legislation€„€The€Chemical€and€Biological€Weapons€Control€and€WarfareÏElimination€Act€of€1991€(Title€III,€Pub.€L.€102„182)€provides€for€the€imposition€ofÏsanctions€on€foreign€entities€and€countries€for€certain€kinds€of€chemical€and€biologicalÏweapons€related€activity.€€Sanctions€have€been€imposed€on€certain€entities€for€chemicalÏweapons„related€activities;€andÐ (#(# ÐÌà0  àpublic€statements€by€United€States€officials€condemning€the€use€of€chem‚ical€weapons€andÏdrawing€attention€to€the€dangers€of€increased€chemical€war‚fare€capabilities.Ð (#(# ÐÌœà  àF.›€€Foreign€AvailabilityÌÌà  àPast€reviews€conducted€by€Commerce€revealed€that€there€was€availability€from€non„AGÏcoun‚tries€for€a€wide€range€of€AG€chemical€precursors€and€production€equipment.€€SomeÏproducing€countries€have€export€controls€on€certain€AG„controlled€items.€€Non„AG€suppliers€ofÏprecursors€and/or€related€production€equipment€include€Brazil,€Chile,€Colombia,€India,€Mexico,ÏPRC,€South€Africa,€‚former€Soviet€Union,€Taiwan,€Thai‚land,€and€Turkey.€€However,€most€ofÏthese€countries€have€signed€the€CWC€and€will€take€steps€to€prevent€CW€proliferation€under€thisÏtreaty.€€ÌœÌÌÔ‡Q¼R{»XQXkDÔò ò8.›€€Biological€Agents€and€Associated€Equipment€and€Technical€Data€[SectionsÐ ¨ø Ð742.2,€744.4€and€744.6(778A.8€and€778A.9)]ó óÔ#†QXkDX»Q¼R{Hû#ÔÐ ¼  Ðò òÌœà@  ìàExport›€Control€Program€Description€And€Li‚censing€Policyó óˆÐ ¼  ÐÌà  àThe€Convention€on€the€Prohibition€on€the€Development€Production€and€Stockpiling€ofÏBacteriological€(Biological)€and€Toxin€Weapons€and€on€Their€Destruction€(BWC),€whichÏentered€into€force€in€1975,€is€an€international€arms€control€agreement€among€139€nations€thatÏbans€the€development,€production,€stockpiling,€acquisition,€or€retention€of€biological€agents€orÏtoxins€that€have€no€justification€for€prophylactic,€protective€or€other€peaceful€purposes.€ÏHowever,€unlike€other€arms€control€agreements,€the€BWC€did€not€include€a€regime€to€monitorÏthe€compliance€of€participating€state€parties.€€It€was€not€until€the€threatened€use€of€BiologicalÏWeapons€(BW)€by€Iraq€on€U.S.€and€Allied€troops€during€the€Gulf€War€that€a€number€of€countriesÏbegin€to€consider€the€need€for€additional€BWC€measures€to€help€detect€and€discourage€the€use€ofÏBW.ÌÌà  àIn€September€1994€a€BWC€Special€Conference€established€an€international€Ad€HocÏGroup€with€the€mandate€to€develop€a€legally€binding€instrument€to€strengthen€the€effectiveness€ofÐ ¤,ô'+ Ðthe€BWC.€€Over€the€past€two€years€this€group€has€held€six€meetings€to€define€elements€that€couldÏbe€used€to€strengthen€the€BWC.€€Elements€under€consideration€included,€but€were€not€limited€to,Ïmandatory€data€declarations,€on„site€inspections,€enhanced€information€exchange,€and€aÏpermanent€BWC€international€oversight€organization.ÌÌà  àThroughout€the€year€Commerce€worked€closely€with€various€industry€associations,Ïincluding€the€Pharmaceutical€Manufactures€Association€(PhRMA),€the€Biotechnology€IndustryÏOrganization,€and€the€Animal€Health€Institute€on€issues€being€discussed€at€the€BWC€Ad€HocÏGroup.€€Commerce€organized€and€participated€in€numerous€meetings€with€industry€and€in€mockÏinspection€exercises.ÌÌà  àOn€March€25,€1996,€based€on€the€decisions€of€the€Australia€Group,€Commerce€updatedÏthe€Biological€Control€List€for€the€first€time€in€three€years.€€These€changes€included:€ÌÌà0  àœimplementing›€new€nomenclatures€for€several€pathogens,Ð (#(# Ðà0  àœmodifying›€the€wording€and€clarification€of€terms€for€biological€œitems,Ð (#(# Лà0  àœliberalizing›€BW€export€controls€on€immunotoxins,Ð (#(# Ðà0  àœrevising›€technical€parameters€for€fermenters,€cross„flow€filtration€equipment,€and€œ€€€€Ïchambers.›€Ð (#(# ÐÌà  àCommerce€also€participated€in€the€interagency€Culture€Collection€Committee.€TheÏAntiterrorism€and€Effective€Death€Penalty€Act€of€1996€required€the€Administration€to€takeÏcertain€steps€to€better€address€the€potential€threats€of€biological€terrorism.€€The€Center€forÏDisease€Control€within€the€U.S.€Department€of€Health€and€Human€Services€led€the€interagencyÏgroup€to€develop€plans€that€would€ensure€that€public€safety€is€protected€without€encumberingÏlegitimate€scientific€and€medical€research€in€the€United€States.€€On€June€10,€1996,€the€CommitteeÏpublished€in€the€òòFederalóó€òòRegisteróó€a€proposed€rule€which€places€additional€shipping€and€handlingÐ ¨ø Ðrequirements€on€facilities€involved€in€interstate€commerce€that€transfer€or€receive€selected€agentsÏcapable€of€causing€substantial€harm€to€human€health.€€It€designed€the€rule€to:€1)€collect€andÏprovide€information€on€biological€facilities€where€agents€are€transferred,€2)€track€the€domesticÏtransfer€of€these€specific€agents,€and€3)€establish€a€process€for€alerting€appropriate€authorities€ifÏan€unauthorized€attempt€is€made€to€acquire€these€agents.à p àÐ D!” ÐÌà  à€€Finally,€Commerce€restructured€the€Materials€Technical€Advisory€Committee€to€includeÏa€biotechnology€subgroup€to€provide€the€technical€input€needed€to€understand€the€potentialÏimpact€of€proposed€measures€on€industry.€€ÌÌà  àThe€licensing€requirements€for€biological€agents€and€associated€equipment€and€technicalÏdata€are€derived€from€the€AG€and€are€as€follows:ÌÌA.à  àA€license€is€required€for€the€export€to€all€destinations,€except€Can‚ada,€of€biological€agentsÐ )à$( Ðand€related€technical€data€consisting€of€viruses,€viroids,€bacteria,€toxins,€fungi,€protozoa,€andÏgenetically€modified€forms€that€could€be€used€in€the€production€of€biological€weapons.œ× ƒÉ ×Ý ƒR$ÓÝòòÚ  Ú34Ú  ÚóóÝ  Ý×  כРh+¸&* ÐÐ T,¤'+ Ðà  àA€license€is€required€for€the€export€to€specified€countries€of€cer‚tain€dual€use€equipmentÏand€related€technical€data€that€can€be€used€in€the€production€of€biological€weapons.€€TheÏcountries€to€which€this€requirement€applies€are:€Bulgaria,€People's€Republic€of€China,€Cuba,ÏMiddle€East,œ× ƒÊ ×Ý ƒR$ÓÝòòÚ  Ú35Ú  ÚóóÝ  Ý×  ×›€Myanmar€(Burma),€North€Korea,€Southwest€Asia,œ× ƒË ×Ý ƒR$ÓÝòòÚ  Ú36Ú  ÚóóÝ  Ý×  ×›€the€geographical€area€knownÐ tÄ Ðformerly€as€the€Soviet€Union,œ× ƒÌ ×Ý ƒR$ÓÝòòÚ  Ú37Ú  ÚóóÝ  Ý×  ×›€Taiwan,€Mongolia,€and€Vietnam.Ð `° Ѐ€Ìà  àA€license€is€also€required€for€the€export€of€any€commodity,€software,€or€technical€data,Ïwhen€the€exporter€knows€that€it€will€be€used€in€the€design,€development,€production,€stock‚piling,Ïor€use€of€biological€weapons€in€or€by€one€of€the€above„listed€coun‚tries.€€In€addition,€the€Comƒ¼merce€Department€may€inform€the€exporter€that€a‚€validated€license€is€required€because€there€is€anÏunacceptable€risk€of€use€in,€or€diversion€to€a€CBW€project‚,€anywhere€in€the€world.€€ÌÌà  àLicensing€restrictions€apply€to€certain€forms€of€"know‚ingðð€participation€and€support€byÏU.S.€persons,€including€for‚eign€bran‚ches€of€U.S.€com‚panies,€in€biological€weapons€activities€inÏthe€countries€of€concern€specified€in€the€regulations.€€The€restrictions€apply€to€the€export,Ïreexport€or€trans‚fer€of€òòanyóó€item,€including€foreign€origin€items,€by€a€U.S.€person€where€theÐ „Ô  Ðperson€knows€the€item€will€be€used€in€the€design,€development,€production,€stockpiling,€or€use€ofÏbiological€weapons€in€such€countries.€€Support€activities€requiring€a€license€include€financing,Ïfreight€forwarding,€transpor‚tation€and€other€comparable€assis‚tance€by€which€a€per‚son€facilitatesÏan€export,€reexport€or€transfer.€€In€addi‚tion,€no€U.S.€person€may€perform€any€contract,€service€orÏem‚ployment€knowing€it€will€assist€in€biological€weapons€activities€in€these€countries.€ÌÌB.à  àApplications€for€licenses€will€be€considered€on€a€case„by„case€basis€to€determine€whetherÐ øH Ðthe€export€would€make€a€material€contribution€to€the€design,€development,€production,€stockƒ¼piling,€or€use€of€biological€weap‚ons.€€When€an€export€is€deemed€to€make€such€a€contribution,€theÏapplica‚tion€will€be€denied.œ× ƒÍ ×Ý ƒR$ÓÝòòÚ  Ú38Ú  ÚóóÝ  Ý×  כР¼  Ѐ̜à@7 7 ìàò òAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€The€ActˆÐ ”ä Ðó óÌA.€€The€Purpose€of€the€ControlÌÌà  àThe€purpose€of€these€controls€is€to€sup‚port€multilaterally€coor‚dinated€efforts€to€controlÏthe€proliferation€and€illegal€use€of€biological€weapons.€€They€also€pro‚vide€regulatory€authority€toÏcontrol€exports€from€the€United€States€when€there€is€a€significant€risk€that€they€will€be€used€forÏthat€purpose.€€The€con‚trols€implement€some€of€the€measures€directed€in€Executive€Order€12735Ïof€November€16,€1990€and€its€succes‚sor,€Executive€Order€12938€of€November€14,€1994€and€theÏEnhanced€Proliferation€Control€Initiative€of€December€13,€1990.€€ÌÌà  àThirty€nations€cooperate€in€the€Australia€Group€(AG)€to€further€BW€non„proliferationÏobjectives.€€(See€table€in€Appendix€for€complete€list€of€members.)€€While€initially€organized€toÏaddress€the€threat€of€chemical€weapons,€the€AG€later€expanded€its€cooperation€into€the€biologi‚calÏarea.€€Therefore,€these€controls€are€consis‚tent€with€the€international€standards€adopted€by€the€AG.€ÏThese€controls€help€implement€the€United€States€obligation€under€the€BWC€not€to€assist€in€anyÏway€the€acquisition€of€biological€agents€or€toxins€covered€by€the€BWC.€€They€also€advance€theÐ T,¤'+ Ðgoals€of€the€1925€Geneva€Protocol€for€the€Prohibition€of€the€Use€in€War€of€Asphyxiating,ÏPoisonous,€or€other€Gases,€and€of€Bacteriological€Methods€of€Warfare€under€which€States€PartiesÏare€prohibited€from€using€chemical€and€biological€weapons€in€warfare.€€U.S.€export€controls,Ïalong€with€those€of€other€suppliers,€help€limit€the€destabilizing€spread€of€biological€weapons.ÌÌB.€€Considerations€and/or€Determinations€of€the€Secretary€of€CommerceÌÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purposeóó.€€The€Secretary€hasÐ $ t Ðdetermined€that€the€control€is€likely€to€achieve€the€intended€foreign€policy€pur‚pose€in€light€ofÏother€factors€including€availability€from€other€sources€of€these€biological€mate‚rials€and€relatedÏequipment€and€technical€data.€€The€United€States€continues€to€address€the€problem€of€biologicalÏweapons€proliferation€through€a€variety€of€international€fora,€and€urges€other€AG€members€toÏpursue€export€control€cooperation€with€non„members€on€a€bilateral€or€regional€basis.ÌÌà  àWhile€the€controlled€materials€are€widely€available€from€other€countries,€the€continuationÏof€these€controls€reaffirms€U.S.€opposition€to€the€development,€prolif‚eration€and€use€of€biologicalÏweapons€and€serves€to€distance€the€United€States€from€such€activities.ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€In€extending€these€controls,€the€SecretaryÐ H˜ Ðhas€determined€that€the€controls€are€compatible€with€the€foreign€policy€objec‚tives€of€the€UnitedÏStates.€€The€United€States€has€a€strong€interest€in€remaining€in€the€forefront€of€internationalÏefforts€to€stem€the€prolifera‚tion€of€biological€weapons.€€The€United€States€has€bindingÏobligations€not€to€assist€in€any€way€the€acquisition€of€biological€weapons€under€the€BWC,€andÏhas€made€multilateral€commitments€to€control€exports€in€connection€with€the€AG.€€TheseÏcontrols€are€compatible€with€the€multilateral€export€controls€for€biological€materials€agreed€to€inÏthe€AG.€€They€are€also€compatible€with€multilateral€efforts€to€strengthen€the€BWC€to€deter€non„¼compliance€and€to€reinforce€the€global€commitment€against€the€proliferation€of€biologicalÏweapons.ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€The€Unit‚ed€States€regularly€engages€in€consultation€withÐ l¼ Ðother€countries€regarding€use€of€export€controls€to€halt€the€proliferation€of€biological€weapons.€€ÌIn€addition€the€AG€urges€all€countries€to€adopt€export€controls€on€microor‚ganisms,€equipmentÏand€technical€data€related€to€the€production€of€bio‚logical€weapons.€€ÌÌ4.à  àòòEconomic€Impact€on€U.S.€Industry.óó€€The€Secretary€has€determined€that€the€potentialÐ $X" Ðimpact€of€these€export€controls€on€the€U.S.€economic€position€is€minimal€as€borne€out€by€ourÏexport€licensing€statistics.€€ÌÌà  àIn€FY€1996,€the€Department€approved€242€export€license€applications€for€biologi‚calÏagents€valued€at€$24.7€million.€€Two€export€applications€valued€over€$740€were€denied.€€‚For€theÏcategories€of€equipment€and€materials€relat‚ed€to€production€of€con‚trolled€biological€agents,€1Ïexport€application€was€ap‚proved€totaling€$680€thousand€dollars.€€No€license€application€wasÏdenied.ÌÐ T,¤'+ МññÑ€ΟÑññññ›ññññà  àññññ›€›€›€›€›€ññThese›€statistics€also€demonstrate€that€AG€export€controls€do€not€undermine€the€legitimateÏeconomic€or€technological€development€of€any€country.€€Rather€they€are€consistent€with€the€spiritÏof€Article€III€of€the€BWC€which€prohibits€assistance€to€any€country's€BW€program.ÌÌ5.à  àòòEnforcement€of€Controlóó.€€Enforcing€controls€on€biological€weapons€materials€posesÐ `° Ðproblems€similar€to€the€enforcement€of€chemical€controls,€but€with€additional€difficulties.€ÏBiological€materials€are€microscopic€organisms€that€require€technical€expertise€and€specializedÏfacilities€to€identify€and€to€handle.€€Because€of€their€size,€they€can€be€concealed€and€transportedÏwith€ease.€€Enforcing€controls€on€biological€agents€and€associated€equipment,€brings€enforcementÏpersonnel€in€contact€with€industries,€manufacturers€and€exporters€with€whom€they€have€had€littleÏprior€contact,€until€recently.ÌÌà  àTo€meet€the€challenge€of€effective€enforcement€of€these€proliferation€controls,€CommerceÏhas€redirected€resources€toward€preventive€enforcement,€and€conducts€an€extensive€on„goingÏoutreach€program€to€educate€appropriate€industries€about€export€controls.€€The€program€is€alsoÏdesigned€to€increase€the€industry's€awareness€of€suspicious€orders€for€products€or€equipment€thatÏcould€be€used€for€biological€weapons€proliferation.€€A€significant€number€of€investigations€haveÏbeen€opened€into€allegations€of€illegal€activity€related€to€these€concerns.€€In€cases€whenÏunlicensed€shipments€of€biological€materials€have€already€taken€place,€Commerce€has€found€thatÏinvestigations€and€prosecutions€can€be€successfully€conducted€on€the€basis€of€routineÏdocumentation,€as€in€other€export€control€enforcement€œcases.ÌÌC.›€€Consultation€with€IndustryÌÌà  àCommerce€consulted€the€government/industry€members€of€its€Regulations€andÏProcedures€Technical€Advisory€Committee€in€the€development€of€the€March€25,€1996€interimÏrule€amending€the€regulations€to€implement€the€biological€changes€agreed€to€by€the€AG.€€DuringÏFY€1996,€BXA€reestablished€the€charter€of€the€Biological€Technical€Advisory€CommitteeÏ(BIOTAC)€and€incorporated€it€into€the€Materials€Advisory€Technical€Committee€(MATAC).€€ÏBXA€took€this€action€because€of€the€need€to€address€issues€relating€to€the€Biological€WeaponsÏConvention€(BWC)€and€BW€agents.€€This€re„formatted€industry€advisory€group€is€playing€anÏimportant€role€in€the€development€and€implementation€of€BXA's€BW€export€controlÏresponsibilities€as€well€as€in€its€efforts€to€develop€a€legally€binding€protocol€to€strengthen€theÏBWC.ÌÌD.€€Consultation€with€Other€Coun‚tries€ÌÌà  àThe€United€States€coordinates€its€controls€on€biological€items€with€29€other€countries€inÏthe€AG.€€On€October€14„17,€1996,€experts€at€the€AG€Implementation/Enforcement€MeetingÏdiscussed€implementation€of€last€yearððs€agreed€biological€changes€and€any€other€controlÏtechniques€which€could€be€adopted€to€the€AGððs€BW€list.€€A€BXA€representative€presented€anÏoverview€of€the€measures€that€the€U.S.€has€recently€used€to€help€address€the€threats€of€BWÏterrorism,€i.e.,€the€recently€proposed€regulation€on€the€domestic€transfer€of€select€biologicalÏagents.Ð T,¤'+ Їà  àThe€U.S.€continues€to€urge€key€non„AG€countries€to€adopt€AG€biological€controls.€€WeÏhave€been€working€closely€with€Bulgaria,€€Russia€and€Ukraine€to€set€up€an€export€control€system,Ïincluding€an€enforcement€mechanism,€that€will€include€AG„listed€biological€items.ÌÌE.€€Alternative€MeansÌÌà  àThe€United€States€continues€to€address€the€problem€of€the€proliferation€of€biologicalÏweapons€on€a€number€of€fronts.€€Direct€negotiations€with€countries€intent€on€acquiring€biologicalÏweapons€are€not€likely€to€prevent€the€use€of€U.S.„origin€materials€in€such€activities.€€Neither€areÏsuch€negotiations€likely€to€affect€the€be‚havior€of€these€countries.ÌÌà  àAlternative€means€to€curtail€the€acqui‚sition€and€development€of€biological€war‚fareÏcapabilities,€such€as€diplomatic€nego‚tiations,€do€not€obviate€the€need€for€controls.€€Some€of€theÏfollowing€are€examples€of€additional€means€that€have€been€and€will€con‚tinue€to€be€used€in€anÏattempt€to€curb€the€use€and€spread€of€biological€weapons:ÌÌà0  àU.S.€Legislation€„€The€Chemical€and€Bio‚logical€Weapons€Control€and€WarfareÏElimination€Act€of€1991€(Title€III,€Pub.€L.102„182)€provides€for€the€imposition€ofÏsanctions€on€foreign€persons€and€countries€for€certain€kinds€of€chemical€and€biologicalÏweapons€related€activity.€€To€date,€no€sanctions€have€been€imposed€for€biologicalÏweapons€related€activi‚ties.€Ð (#(# ÐÌà0  àTrilateral€US/UK/Russian€Statement€„€In€September€1992,€the€US,€UK€and€RussiaÏconfirmed€their€commitment€to€full€compliance€with€the€Biological€Weapons€ConventionÏand€agreed€to€a€number€of€steps€including€data€exchanges€and€visits€to€biological€sites,Ïand€further€consultations€to€enhance€cooperation€and€confidence.Ð (#(# ÐÌà0  àBiological€Weapons€Convention€„€The€BWC€Special€Conference€held€September€19„30,Ï1994,€produced€a€mandate€to€develop€a€legal‚ly€binding€instrument€to€strengthen€theÏeffectiveness€and€improve€the€implementa‚tion€of€the€BWC.€€The€BWC€Ad€Hoc€GroupÏcontinues€to€work€on€developing€these€instruments.€Ð (#(# ÐÌF.€€Foreign€AvailabilityÌÌà  à‚‚‚Past€reviews€conducted€by€BXA€identified€the€availability€of€AG„controlled€viruses€andÏbacteria€in€the€non„AG€countries€of€Brazil,€Bulgaria,€India,€Indonesia,€Iran,€Jordan,€Mexico,ÏPRC,€Senegal,€Singapore,€Taiwan,€and€Thailand€and€related€AG„controlled€equipment€itemsÏavailable€in€‚Brazil,€Bul‚garia,€Hong€Kong,€India,€Israel,€Malaysia,€Pakistan,€PRC,€Russia,€SaudiÏArabia,€Singa‚pore,€South€Africa,€Taiwan€and€Ukraine.€(Most€of€this€equipment€has€application€inÏthe€food€processing€and€phar‚maceutical€industries.)€€Many€of€the€countries€listed€above€areÏparties€to€the€BWC€and€Commerce€is€working€with€other€U.S.€agencies€as€part€of€ongoingÏinternational€efforts€to€strengthen€the€effectiveness€of€this€œconvention.Ô‡pXtXXQXkDÔÐ |*Ì%) ÐÌÔ#†QXkDXXpXtkA#ÔÔ‡Q¼R{»XQXkDÔò ò9.›€€Missile€Technology€[Sections€742.5€and€744(778A.7€and€778A.9)]ó óÔ#†QXkDX»Q¼R{ÃA#ÔÐ 0,€'+ Їœò òÓ  ÓExport›€Control€Program€Description€And€Li‚censing€Policyó óÐ ° ÐÓhBÓÌà  àOn€April€16,€1987,€the€United€States,€Canada,€France,€Germany,€Italy,€Japan,€and€theÏUnited€Kingdom€formed€the€Missile€Technology€Control€Regime€(MTCR)€to€coordinate€theirÏnational€export€controls€on€certain€goods€and€technologies€in€order€to€limit€the€proliferation€ofÏmissiles€and€related€technology.€€Spain€joined€the€MTCR€in€1989,€with€Belgium,€the€Netherƒ¼lands,€Luxembourg,€Denmark,€Australia€and€New€Zealand€becoming€members€in€1990.€€In€1991,ÏAustria,€Fin‚land,€Norway€and€Sweden€were€admitted€and€Greece,€Ireland,€Portugal,€and€Switƒ¼zerland€joined€in€1992.€€In€March€1993,€Iceland€joined€the€MTCR,€and€in€Novem‚ber€the€MTCRÏexpanded€into€Latin€Amer‚ica€and€Eastern€Europe€for€the€first€time,€as€Argentina€and€HungaryÏwere€admitted€as€new€members.ÌÌà  àIn€1995€the€MTCR€added€Brazil,€Russia€and€South€Africa€as€new€members,€which€furtherÏexpands€the€regime€into€Eurasia€and€Africa,€and€strengthens€the€global€efforts€to€prevent€missileÏproliferation.€€There€were€no€new€members€added€in€1996.€€However,€several€other€countries,Ïincluding€Romania,€Israel,€the€Czech€Republic,€and€Ukraine€have€made€public€pronouncementsÏregarding€their€unilateral€adherence€to€the€current€MTCR€Guidelines.€€In€addition,€China€hasÏcommitted€to€abide€by€the€original€1987€MTCR€Guidelines.ÌÌà  àThe€MTCR€is€not€treaty„based,€but€rather€an€understanding€among€Partners€to€implementÏa€common€set€of€export€guidelines€on€a€commonly€agreed€list€of€goods€and€technologies€inÏaccordance€with€each€Partner's€national€laws€and€regulations.€€The€MTCR€Guidelines€form€theÏbasis€for€controlling€transfers€of€items€that€could€contribute€to€unmanned€delivery€systems€forÏweapons€of€mass€destruction€(WMD).€€The€Guidelines€describe€general€export€licensingÏcommitments,€review€criteria,€standard€assurances,€and€an€appeal€for€all€countries€to€unilaterallyÏadhere€to€them.€€The€original€1987€Guidelines€restricted€transfers€of€nuclear„capable€missiles€andÏrelated€technology.€€However,€in€January€1993,€the€MTCR€Partners€extended€the€Guidelines€toÏcover€delivery€systems€for€all€types€of€WMD.ÌÌà  àThe€MTCR€Annex€is€a€multilaterally€agreed€list€of€controlled€equipment€and€technologyÏneeded€for€the€development,€production,€and€operation€of€missiles.€€The€MTCR€Annex€is€dividedÏinto€two€categories,€with€technology€for€the€items€controlled€in€the€same€manner€as€the€hardwareÏor€materials:ÌÌ(1)à0  àCategory€I€covers€complete€missile€systems,€as€well€as€major€subsystems;€andÐ$X"(#(# ÐÌ(2)à0  àCategory€II€covers€munitions€and€dual€use€hardware,€parts,€components,€production€andÐ à%0!$ Ðtest€equipment,€and€mate‚rials,€as€well€as€Items€19€and€20€(described€below).Ð (#(# ÐÌThe€Annex€defines€a€Category€I€missile€system€as€one€capable€of€delivering€at€least€a€500Ïkilogram€payload€to€a€distance€of€at€least€300€kilometers.€€Category€I€items€carry€a€strongÏpresumption€of€denial€and€are€rarely€licensed€for€export.€€Transfers€of€production€facilities€forÏCategory€I€items€are€prohibited.€€Category€II€items€are€licensed€only€after€a€case„by„case€reviewÏto€insure€that€they€are€not€intended€for€use€in€an€MTCR€class€missile€or€a€WMD€delivery€system.€Ð T,¤'+ ÐIn€1993,€Item€19€was€added€to€Category€II€in€the€MTCR€Annex€to€cover€complete€rocket€systemsÏand€unmanned€air€vehicles€not€covered€under€Category€I€and€capable€of€a€range€of€300Ïkilometers.€€Item€20€was€added€to€Category€II€of€the€Annex€to€cover€major€subsystems€for€ItemÏ19€missiles.ÌÌà  àIn€1991,€the€Enhanced€Proliferation€Control€Initiative€(EPCI)€was€instituted€to€controlÏgoods€and€technology€(not€on€the€MTCR€Annex),€as€well€as€services,€when€the€exporter€"knows"Ïthe€export€will€be€used€in€the€design,€development,€production,€or€stockpiling€of€missiles€orÏChemical/Biological€Weapons€(CBW),€€or€"is€informed"€by€the€Commerce€Department€that€thereÏis€an€unacceptable€risk€of€diversion€to€a€missile€or€CBW€project.€€A€majority€of€the€MTCRÏPartners€have€followed€the€U.S.€lead€and€adopted€EPCI„like€controls€to€further€combat€missileÏproliferation.€€This€was€most€evident€in€July€1995€when€the€15€countries€in€the€European€UnionÏincluded€so€called€"catch„all"€controls€in€their€dual€use€export€control€regulations,€and€JapanÏfollowed€with€new€regulations€that€went€into€effect€on€October€1,€1996.ÌÌà  àThe€licensing€requirements€and€policy€for€missile€technology€controls€are€described€inÏParts€742.5€and€744€of€the€Export€Administration€Regulations€(EAR),€and€summarized€asÏfollows:ÌÌA.à  àA€license€is€required€for€the€export€to€all€destinations€(except€Canada)€of€those€dual„useÐ 4„ Ðitems€specifically€identified€on€the€Commerce€Control€List€as€controlled€for€missile€technologyÏreasons.€€These€items€are€controlled€on€a€multilateral€basis€by€the€MTCR.€€Munitions„relatedÏitems€are€controlled€and€licensed€through€the€Department€of€State.ÌÌB.à  àA€license€is€required€for€any€destination,€including€Canada,€for€any€dual€use€export€orÐ Ð  Ðreexport€subject€to€the€EAR,€when€the€exporter€knows€that€the€item€is€either€(1)€destined€for€aÏmissile€project€listed€in€the€footnote€to€Country€Group€D:4€in€the€EAR,€or€(2)€will€be€used€in€theÏdesign,€development,€production,€or€use€of€missiles€in€or€by€a€country€listed€in€Country€GroupÏD:4.ÌÌC.à  àThe€Department€may€inform€the€export‚er€that€a€license€is€required€for€any€item€becauseÐ X ¨ Ðthere€is€an€unac‚ceptable€risk€of€use€in,€or€diversion€to€such€activities,€anywhere€in€the€world.ÌÌD.à  àEPCI€licensing€restrictions€also€apply€to€certain€forms€of€"knowing"€participation€andÐ #l! Ðsupport€by€U.S.€persons,€including€foreign€branches€of€U.S.€companies,€in€missile€activities€inÏcountries€of€concern€specified€in€the€regulations.€€The€restrictions€apply€to€the€export,€reexport€orÏtransfer€of€òòanyóó€item,€including€foreign€origin€items,€by€a€U.S.€person€where€the€person€knows€theÐ à%0!$ Ðitem€will€be€used€in€the€design,€development,€production,€or€use€of€missiles€in€or€by€suchÏcountries.€€Support€activities€requiring€a€license€include€financing,€freight€forwarding,Ïtransportation€and€other€comparable€assistance€by€which€a€person€facili‚tates€an€export,€reexportÏor€transfer.€€In€addition,€no€U.S.€person€may€per‚form€any€contract,€service€or€employ‚mentÏknowing€it€will€assist€in€missile€activi‚ties€in€a€country€of€concern.€€Ìâ âÐ h+¸&* ÐE.à  àApplications€for€export€licens‚es€will€be€considered€on€a€case„by„case€basis€to€determineÐ ° Ðâ âwhether€the€export€would€make€a€material€contribution€to€the€proliferation€of€missiles.€€ÌÌœò òAnalysis›€of€Control€as€Required€by€Section€6(f)€of€The€ActÐ tÄ Ðó óÌA.€€The€Purpose€of€the€ControlÌÌà  àThe€purpose€of€this€control€is€to€curtail€the€availability€of€goods€and€technology€thatÏcould€contribute€to€missile€proliferation.€€Regulating€exports€of€specific€types€of€mis‚sile€relatedÏequipment€and€technology,€in€coordination€with€other€suppliers€of€these€materials,€helps€limit€theÏdestabilizing€spread€of€missile€systems€and€related€technology€around€the€world.€€This€controlÏcomple‚ments€U.S.€and€international€nuclear,€chemical,€and€biologi‚cal€non„proliferation€efforts€byÏblocking€development€of€unmanned€delivery€systems€for€weapons€of€mass€de‚struction.ÌÌà  àThis€control€lends€clear€U.S.€support€to€a€collective€effort€with€the€other€27€memberÏcountries€of€the€MTCR€and€underscores€our€resolve€to€address€mounting€international€concernÏregarding€missile€proliferation.€€A€multilat‚eral€arrangement€to€honor€other€mem‚bers'€denials€ofÏlicenses€and€to€support€such€denials€through€a€"no€undercut"€commitment€enhances€global€effortsÏto€prevent€missile€proliferation€and€pre‚vents€unfair€commercial€advantage€or€disad‚vantage€toÏmembers.ÌÌB.€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Commerce:ÌÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€€Despite€the€foreignÐ ä4 Ðavailability€of€some€controlled€items,€cooperation€be‚tween€the€United€States,€its€MTCR€Partners,Ïand€other€like„minded€countries,€many€of€which€are€major€producers€of€the€items€under€control,Ïhas€hindered€the€efforts€of€œproliferators›€to€successfully€develop€or€acquire€highly€accurateÏmissiles€that€are€militarily€effective.€€The€Secretary€has€determined€that€the€extended€controls€areÏlikely€to€achieve€the€purpose€of€limiting€the€spread€of€missile€delivery€systems.ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Objectives.óó€€Halting€the€spread€of€missiles€and€relatedÐ X ¨ Ðequipment€and€technology€worldwide€is€a€key€U.S.€national€security€goal.€€This€control€isÏconsistent€with,€and€contributes€to,€this€important€U.S.€policy€objective.€€Moreover,€U.S.Ïmembership€in€the€MTCR€and€rigorous€application€of€the€MTCR€Guidelines€and€AnnexÏcomplement€the€existing€nuclear,€chemical€and€biological€non„proliferation€control€policies€byÏworking€actively€to€curb€the€spread€of€missile€technology€and€equipment€for€use€of€suchÏweapons.ÌÌ3.à  àòòReaction€of€Other€Countriesóó.€€The€Secretary€has€determined€that€the€reac‚tion€of€otherÐ ¸'#& Ðcountries€to€these€controls€will€not€render€the€controls€ineffective€or€be€counterproductive€to€U.S.Ïpolicy.€€The€United€States€is€confident€that€other€members€of€and€adherents€to€the€MTCR,€manyÏof€whom€are€also€the€leading€West‚ern€suppliers€of€mis‚sile€technology,€will€continue€to€sup‚portÏand€strengthen€this€control€regime.€€The€MTCR€Partners€share€information€regarding€denials€ofÏMTCR€Annex€items€and€are€committed€to€consult€before€approving€an€essentially€identicalÐ T,¤'+ Ðexport€denied€to€a€specific€end€user€by€another€Partner€("no€undercut€policy").€€The€MTCRÏPartners€also€share€information€about€activities€of€potential€proliferation€concern€and€haveÏcooperated€to€interdict€certain€transactions.€€€In€addition,€both€the€number€of€MTCR€membersÏand€other€countries€willing€to€cooperate€with€the€Regime€have€increased€over€the€past€few€years.€ÏAt€the€1996€Edinburgh€MTCR€Plenary,€the€Partners€also€reaffirmed€their€commitment€toÏcombating€the€missile€proliferation€threat€from€non„member€countries.€€Finally,€the€U.S.€and€itsÏMTCR€Partners€have€actively€engaged€in€an€outreach€program€to€encourage€additional€countriesÏto€adhere€to€the€Guidelines€and€implement€effective€export€controls€on€MTCR€items.ÌÌ4.à  àòòEconomic€Impact€on€U.S.€Industryóó.€€In€extending€these€controls€the€Secre‚tary€hasÐ ü L  Ðdetermined€that€the€econom‚ic€im‚pact€does€not€outweigh€the€for‚eign€policy€benefit€of€the€control.€ÏThere€were€no€major€changes€or€revisions€to€the€MTCR€Annex€or€U.S.€missile€technologyÏcontrols€on€dual€use€items€in€1995€or€1996.€€The€focus€of€the€control€is€limited€to€those€goodsÏand€technologies€that€would€contribute€to€missile€develop‚ment.€€Therefore,€the€MTCR€affectsÏonly€a€confined€list€of€commodities€and€has€limited€economic€impact€on€the€export€of€theÏmajority€of€dual€use€commodities.€€In€September€1994,€Commerce€published€revisions€to€theÏCommerce€Control€List€to€reflect€changes€in€the€MTCR€Annex.ÌÌà  àMultilateral€support€for€the€MTCR€Annex€by€other€major€suppliers€of€controlledÏtechnologies€and€products€helps€restrain€the€flow€of€missile„related€goods€and€technologies€toÏactivities€and€projects€of€proliferation€concern.€€Multilateral€cooperation€from€other€MTCRÏmembers€to€honor€œmembersðð›€export€denials€through€a€ð ðno€undercut€policyðð€helps€ensure€that€noÏmember€country€obtains€an€unfair€commercial€advantage€in€the€pursuit€for€foreign€sales.€œÌÌà  àIn€FY€1996€a€total€of€1,466€licenses€were€approved€to€all€destinations€controlled€forÏmissile€technology,€at€a€dollar€value€of€$354,855,430.€€A€total€of€63€licenses€were€denied,€at€aÏdollar€value€of€$8,011,893.€€A€total€of€154€applications€were€returned€without€action,€with€aÏdollar€value€of€$231,901,610.›ÌÌ5.à  àòòEnforcement€of€Control.óó€€€To€meet€the€challenge€of€effective€enforcement€of€theseÐ l¼ Ðcontrols,€Commerce€has€redirect‚ed€resources€toward€preven‚tive€enforce‚ment,€and€conducts€anÏextensive€on„going€outreach€program€to€educate€appropriate€companies€about€export€controls€andÏto€increase€their€awareness€of€"red€flags"€that€may€indicate€potentially€risky€transactions.€€ThisÏprogram€is€an€important€component€of€Commerce's€efforts€to€prevent€companies€from€illegallyÏexporting€dual„use€products€or€equip‚ment€that€could€be€used€to€make€missiles.€€A€significantÏnumber€of€investigations€have€been€opened€into€allegations€of€illegal€activity€in‚volving€MTCRÏcontrols.̜Р Ì&"% ÐC.›€€Consultation€with€IndustryÌÌà  àCommerce€received€no€comments€on€missile€technology€controls€from€the€request€forÏpublic€comments.€€However,€changes€or€issues€involving€the€MTCR€Annex€are€discussedÏprimarily€in€the€Transportation€Technical€Advisory€Committee€(TransTAC).€€The€materialÏcontribution€of€items,€such€as€oscilloscopes,€controlled€for€other€reasons€were€reviewed€toÏdetermine€if€they€were€critical€for€the€use€or€development€of€missiles.€€The€results€of€theseÏdiscussions€are€now€under€review.€€There€are€also€regular€consultations€with€other€relevant€TACsÏon€missile„related€issues,€such€as€the€EPCI€clarification€project€and€other€current€MTCRÏtechnical€issues.€€The€MTCR€Annex€can€be€amended€by€a€consensus€decision€of€all€MTCRÏPartners.€€Commerce€participates€in€interagency€working€groups€that€review€proposed€changes€toÏthe€Annex.ÌÌD.€€Consultation€with€Other€Coun‚triesÌÌà  àOngoing€consultations€with€the€other€members€of€the€MTCR€are€a€fundamental€elementÏof€U.S.€missile€technology€controls.€€The€membership€of€the€MTCR€continues€prudently€toÏexpand,€as€other€significant€potential€suppliers€recognize€the€im‚portance€of€this€cooperativeÏmechanism€to€restrict€the€proliferation€of€missile€systems.€€Consultations€with€non„MTCRÏcountries€are€also€an€essential€element€of€U.S.€missile€nonproliferation€policy.€€As€noted€above,Ïthe€USG€shares€information€about€activities€of€concern€with€other€countries€and€seeks€to€preventÏor€stop€certain€transactions.€€The€United€States€also€shares€denial€information€with€the€MTCRÏPartners.€€Although€the€export€controls€are€coordinated€multilaterally,€national€discretion€remainsÏthe€ultimate€œdecision„making›€authority.€ÌÌE.€€Alternative€MeansÌÌà  àTo€participate€fully€in€the€MTCR,€the€United€States€must€be€able€to€prevent€ex‚ports€ofÏequipment€and€technologies€relevant€to€the€development€of€missiles.€€€The€missile€technologyÏcontrol€provisions€of€the€Nation‚al€Defense€Authorization€Act€of€FY€1991€provides€for€theÏimposition€of€export,€import,€and€procurement€sanctions€on€foreign€entities€engaged€in€certainÏkinds€of€activities€relating€to€the€trans‚fer€of€MTCR€Annex€items€to€non„MTCR€adherentÏcountries.€€In€the€past,€sanctions€have€been€imposed€on€entities€in€China,€India,€North€Korea,ÏPakistan,€and€Russia.€€A€goal€of€the€missile€sanctions€is€to€encourage€the€governments€of€theÏsanctioned€entities€to€adopt€responsible€nonproliferation€behavior.ÌÌà  àDiplomatic€efforts€by€the€United€States€and€the€MTCR€Partners€to€encourage€additionalÏcountries,€including€other€potential€suppliers€of€missile€technology,€to€abide€by€the€MTCRÏGuidelines€are€on„going.€€These€efforts€are€aimed€at€encouraging€non„MTCR€members€to€adhereÏunilaterally€to€the€MTCR€Guidelines€and€implement€effective€export€controls€on€missile€items.€ÌÌF.€€Foreign€AvailabilityÌâ âÐ h+¸&* Ðà  àForeign€availability€of€missile€systems€and€launch€vehicles€prior€to€the€imposition€ofÏâ âMTCR„based€controls€was€examined.€€Foreign€capabilities€outside€the€MTCR€included,€but€wereÏnot€limited€to€China€(PRC),€Egypt,€India,€Israel,€Taiwan,€and€Ukraine.€€Some€of€these€countries,Ïsuch€as€Israel€and€Ukraine,€abide€by€the€MTCR€Guidelines€and€apply€MTCR„type€controls.€€PriorÏto€the€1991€stream‚lining€of€the€COCOM€national€security€list,€most€of€the€MTCR€Annex€itemsÏwere€also€included€on€the€COCOM€lists€and€de‚tailed€foreign€availabili‚ty€analyses€wereÏperformed.€€Even€though€COCOM€ceased€to€exist€in€April€1994,€the€COCOM€con‚trols€remain€inÏplace€until€a€new€strategic€trade€regime€can€be€estab‚lished.€€A€for‚eign€availability€study€wasÏconducted€on€batch€mixers€and€a€solid€fuel€additive€in€1989.€€In€1992,€foreign€availabil‚ityÏreviews€were€conducted€on€vibration€test€equip‚ment€and€accelerometers.€€The€United€States€hasÏapproached€and€will€continue€to€approach€other€nations€that€produce€the€MTCR€Annex„¼controlled€items€to€urge€vigilance€in€reviewing€requests€to€export€these€items€and€to€rigorouslyÏapply€the€MTCR€Guidelines€to€help€prevent€missile€proliferation€œworldwide.ÌÌÔ‡Q¼R{»XQXkDÔò ò10.›€€High€Performance€Computers€[Section€742.12(776A.10)]ó óÔ#†QXkDX»Q¼R{©„#ÔÐ ˜è  ÐÌœÓ  Óò òExport›€Control€Program€Description€And€Li‚censing€Policyó óÐ ˜è ÐÓB…ÓÌà  àThe€revision€of€export€controls€on€computers€is€a€high€priority€for€the€Administration.€ÏMajor€revisions€occurred€in€1993,€but€the€Administration€recognized€that€computer€technologyÏwould€continue€to€change€rapidly€and€computer€controls€would€need€to€be€reviewed€every€18€toÏ24€months.€€Accordingly,€the€Administration€continues€to€review€export€controls€on€computersÏtaking€into€account€1)€the€rapid€advance€of€computing€technology€since€1993,€2)€U.S.€securityÏand€nonproliferation€interests,€and€3)€the€need€for€a€policy€that€will€remain€effective€over€an€18€toÏ24€month€period.ÌÌà  àOn€October€6,€1995,€the€President€again€announced€substantial€changes€in€export€controlsÏon€computers,€including€controls€on€computers€formerly€referred€to€as€"supercomputers."€€TheseÏproposed€changes€were€to€increase€the€performance€levels€of€computers€which€could€be€exportedÏwithout€prior€government€approval.€€However,€recognizing€the€strategic€and€proliferationÏapplications€for€"High€Performance€Computers,"€foreign€policy€controls€were€extended€forÏmachines,€including€software€and€technology,€at€varying€levels,€based€on€country€of€destination,Ïend€use€and€end€user,€as€described€below.€€These€foreign€policy€controls€supplement€nationalÏsecurity€and€anti„terrorism€controls€that€apply€to€computers.€€ÌÌà  àThe€extension€of€foreign€policy€controls€on€"high€performance€computers"€does€not€meanÏthat€prior€government€review€for€foreign€policy€reasons€is€required€for€all€destinations.€€For€manyÏdestinations,€no€prior€government€approval€to€export€is€necessary.€€Four€Computer€CountryÏGroups€have€been€established€for€the€purpose€of€these€controls.€€The€specific€performance€levelÏat€which€prior€government€review€is€required€varies€based€on€country€of€destination€and€the€endÏuser€and€end€use€of€the€computers.€€ÌÌà  àThe€President's€decision€called€for€a€sliding€scale€of€controls,€whereby€the€scope€ofÏcontrol€is€commensurate€to€the€performance€of€the€computer€and€the€level€of€risk€associated€withÐ |,Ì'+ Ðdestination€and€end„use.€€The€revised€level€of€controls,€which€eliminates€the€use€of€the€termÏ"supercomputer,"€using€the€term€"high€performance€computers"€instead,€is€as€follows:ÌÌà  àòòComputer€Country€Tier€1€ó󀄄€The€first€level€of€the€sliding€scale€allows€exports€to€mostÐ tÄ Ðindustrialized€countries€to€proceed€without€prior€government€review€(license€exception).€ÏExporters€are€required€to€maintain€records€of€shipments€and€must€forward€certain€information€toÏthe€government€as€requested€for€shipments€of€computers€at€2000€CTPS€(Composite€TheoreticalÏPerformance)€and€above.€€Reexport€and€retransfer€restrictions€also€apply.Ì(See€Addendum€to€this€chapter€for€listing€of€specific€countries€by€Country€Tiers.)ÌÌà  àòòComputer€Country€Tier€2€ó󀄄€The€second€level€applies€to€countries€with€mixed€(butÐ è 8  Ðgenerally€low€risk)€proliferation€and€export€control€records.€€There€is€no€prior€government€reviewÏup€to€10,000€CTPS,€but€exporters€are€required€to€maintain€records€for€computers€at€2,000€CTPSÏand€above€and€report€this€information€to€the€United€States€Government,€as€requested.€€ReexportÏand€retransfer€restriction€apply.€€Exports€above€10,000€œññmillion€ññCTPS›€to€these€countries€would€requireÏprior€government€review€(an€export€license).€€Above€20,000€CTPS,€additional€safeguardsÏprocedures€are€required.ÌÌà  àòòComputer€Country€Tier€3€ó󀄄€The€third€level€applies€to€countries€posing€proliferation,Ð H˜ Ðdiversion€or€other€security€risks.€€Licenses€would€begin€at€2,000€CTPS€for€military€andÏproliferation€end„users/uses,€and€7,000€CTPS€for€all€other€end„users/uses,€with€a€requirement€forÏfull€safeguards€for€machines€of€10,000€CTPS€and€above,€depending€on€the€end„user.€€No€priorÏgovernment€review€would€be€required€for€exports€to€civil€end„users/uses€between€2,000€„€7,000ÏCTPS,€but€exporters€would€be€required€to€maintain€records€and€report€this€information€to€theÏUSG,€as€requested.€€Reexport€and€retransfer€restrictions€apply.ÌÌà  àòòComputer€Country€Tier€4€ó󀄄€The€fourth€level€applies€to€terrorist€countries€(Cuba,€Iran,Ð ¨ø ÐIraq,€Libya,€North€Korea,€Sudan€€€and€Syria).€€The€Presidentððs€decision€was€to€continue€to€denyÏcomputer€technology€to€terrorist€countries.€€A€license€is€required€to€export€or€reexport€to€any€end„¼user€in€Sudan€or€Syria€computers€with€a€CTP€=>€6€MTOPS.€€Licenses€are€required€for€export€orÏreexport€of€any€computer,€regardless€of€CTP€to€Iran,€Iraq,€Libya,€North€Korea€or€Cuba.€€(OFACÏhas€responsibility€for€transactions€with€Iran€and€Iraq,€and€exports€to€Libya.)€€Applications€toÏexport€or€reexport€computers€to€terrorist€countries€will€generally€be€denied.€ÌÌà  àA€regulation€implementing€the€above„described,€revised€level€of€controls€was€publishedÏin€the€òòFederal€Registeróó€on€January€25,€1996.Ð ô$D # Ѐ€€€€€€€€€€€€€€.ÌPart€Two:€€Analysis€of€Con‚trol€as€Required€by€Section€6(f)€of€The€ActÌÌA.à  àThe€Purpose€of€the€ControlÐ ¤(ô#' ÐÌà  àThe€purpose€of€the€computer€controls€is€to€prevent€the€transfer€or€diver‚sion€of€computersÏâ âto€unauthorized€end„uses€or€end„users.€€The€controls€also€demon‚strate€the€degree€of€U.S.€concernÐ h+¸&* Ðover€illegitimate€access€to€such€machines€and€assist€the€United€States€in€its€efforts€to€obtainÏmultilateral€cooperation€in€the€re‚gime.Ìâ âÌB.à  àConsiderations€and/or€Determinations€of€the€Secretary€of€Commerce:Ð tÄ ЀÌ1.à  àòòProbability€of€Achieving€the€Intended€Foreign€Policy€Purpose.óó€€Because€the€United€StatesÐ L œ Ðis€one€of€the€few€producers€of€high€performance€computers€in€the€world,€there€is€high€probabilityÏthat€the€controls€will€be€effective.€€The€United€States€is€also€making€every€effort€to€convinceÏother€producers€to€adopt€similar€controls.€ÌÌ2.à  àòòCompatibility€with€Foreign€Policy€Ob‚jectives.óó€€It€is€the€foreign€policy€of€the€United€StatesÐ è 8  Ðto€restrict€the€flow€of€goods€and€technology€that€would€compromise€U.S.€security€and€foreignÏpolicy€interests.€€Exten‚sive€U.S.€leadership€and€participa‚tion€in€various€multilateral€controlÏgroups€demon‚strate€the€U.S.€commitment€in€this€regard.€€Since€high€performance€computerÏexport€controls€focus€on€security€and€for‚eign€policy€concerns,€these€controls€substan‚tially€supportÏU.S.€foreign€policy€objec‚tives.ÌÌ3.à  àòòReaction€of€Other€Countries.óó€€The€Secre‚tary€has€determined€that€the€reaction€of€otherÐ \¬ Ðcountries€to€the€extension€of€controls€is€not€likely€to€render€the€controls€ineffective€in€achievingÏthe€intended€foreign€policy€objectives,€or€to€be€counter‚productive€to€U.S.€foreign€policy€interests.€ÏCountries€that€want€high€performance€computers€for€legitimate€civilian€purposes€should€have€noÏobjection€to€the€control€because€export€licenses€are€re‚viewed€on€a€case„by„case€basis€and€areÏdenied€only€if€the€export€would€adversely€affect€U.S.€security€or€foreign€policy€objec‚tives.ÌÌ4.à  àòòEconomic€Impact€on€U.S.€Industry.óó€€In€FY€1996€there€were€169€licenses€approved€forÐ Ð  Ðhigh€performance€computers,€valued€at€$188.3€million.€Of€these,€165€licenses,€valued€at€$179.9Ïmillion,€were€approved€through€January€25,€1996;€while€the€remaining€four€licenses,€valued€atÏ$9.4€million,€were€approved€between€the€date€the€new€computer€deregulation€was€published,€andÏthe€end€of€the€fiscal€year.€No€export€license€applications€for€the€transfer€of€high€performanceÏcomputers€were€denied€in€FY€1996.€€The€effect€of€the€deregulation€on€high€performanceÏcomputers€can€be€seen€when€compared€to€FY€1995€when€306€licenses,€valued€at€$525.8€million,Ïwere€approved.ÌÌà  àThe€administrative€costs€incurred€by€computer€producers€to€comply€with€U.S.€exportÏregulations€had€been€a€major€burden€in€the€export€licensing€process.€€The€October€6,€1995Ïdecision,€and€subsequent€publication€in€January€1996,€resulted€in€a€substantially€reducedÏcompliance€burden€for€U.S.€industry.ÌÌ5.à  àòòEnforcement€of€Control.óó€€€The€Secre‚tary€has€determined€that€the€United€States€has€theÐ ¸'#& Ðability€to€enforce€the€control€effectively.€€Significant€problems€of€prod‚uct€identifica‚tion€are€notÏexpected.€Be‚cause€this€control€covers€only€one€class€of€items,€training€of€enforcement€personnelÏto€familiarize€them€with€the€equipment€can€be€done€without€undue€difficulty.€€In€addition,€theÏactual€computer€hard‚ware€is€only€one€compo‚nent€of€the€total€system.€Specialized€applica‚tionÏsoftware,€maintenance,€and€spare€parts€often€re‚quire€continued€contact€with€the€exporter.€Ð T,¤'+ ÐTherefore,€with€appro‚priate€safeguards,€computers€could€not€be€completely,€readily,€and€reliablyÏdiverted€to€unautho‚rized€uses,€moved,€or€adequately€main‚tained€for€extended€periods€of€timeÏwith‚out€the€knowledge€and€support€of€the€exporter€or€manufacturer.€€ÌœÌC.›€€Consultation€with€IndustryÌÌà  àOne€commentor€claimed€that€liberalization€of€computer€export€controls€have€failed€toÏkeep€up€with€the€speed€of€computer€technology€development€and€its€rapid€disseminationÏthroughout€the€world.€€Industry€has€proposed€to€index€controls€to€the€pace€of€technology;€in€otherÏwords,€once€a€level€of€computer€or€computer€products€become€foreignly€available,€the€decontrolÏwould€ð ðkick€inðð€automatically.ÌÌà  àAnother€computer€manufacturer€said€that€it€is€necessary€for€the€Administration€to€againÏreview€the€thresholds€of€export€controls€on€computers€because€the€next€generation€workstationÏservers€and€workstations€will€far€exceed€the€current€control€œlevels.›ÌÌD.€€Consultation€with€Other€CountriesÌÌà  àThe€United€States€has€actively€consulted€our€allies€and€friends€to€ensure€that€theyÏunderstand€the€basis€for€the€new€controls.€€The€United€States€is€working€particularly€closely€withÏJapan€and€others€in€the€Wassenaar€Arrangement€(the€successor€to€COCOM),€believing€that€ourÏcontrols€are€consistent€with€the€basic€foundations€and€principles€already€agreed€in€theseÏnegotiations.€€Exporters€will€be€required€to€report€certain€information€to€the€governmentÏconsistent€with€our€multilateral€commitments€on€information€sharing€in€the€new€regime.ÌÌE.€€Alternative€MeansÌÌà  àAlternatives€to€controls€would€not€be€the€most€effective€means€of€achieving€the€intendedÏstrategic€and€non„proliferation€objectives.€€The€United€States€will€contin‚ue€to€use€diplomaticÏefforts€to€discourage€other€countries€from€engaging€in€activities€which€the€controls€address,€andÏto€consult€with€other€supplier€coun‚tries€about€adhering€to€multilateral€export€controls.€However,Ïthese€efforts€can€only€supplement,€not€replace,€the€effective‚ness€of€actual€export€controls.ÌÌF.€€Foreign€Availability€ÌÌà  àThe€new€computer€export€controls€take€a€realistic€account€of€the€likely€effectiveness€ofÏcontrols€in€the€face€of€the€rapid€advance€and€diffusion€of€computer€technology€worldwide.€€TheÏkey€to€effective€export€controls€is€setting€control€levels€above€foreign€availability€„„€that€is,€theÏlevel€of€computer€capability€that€end€users€of€security€and€proliferation€risk€can€obtain€because€ofÏwidespread€availability€or€by€diversion€from€normal€commerce.€€When€the€United€States€had€lastÏadjusted€the€controls€in€1993,€it€was€evident€that€computer€technology€would€continue€to€changeÏrapidly€„„€about€every€18€to€24€months.€€Thus,€the€Administration€announced€then€that€it€wouldÏbe€reviewing€computer€controls€again€in€that€time€frame.ÌÐ T,¤'+ Ðà  àThe€government€review€determined€that€widespread€worldwide€availability€of€computersÏup€to€7,000€CTPS€would€likely€become€uncontrollable€over€the€next€two€œyears.ÌÌ›à@¦¦&ìàADDENDUMˆÌÌÒ\°ÒÒt°ÒÔ*µƒÏÕ ddL”d Btd Ftd –td –td ;td =t” ­¶\d&\d&µÔÔ,FdT"ÔÔ,: dd ÔÔ+  ÔÐ -€`` L œ € €ƒ,ƒ„„-ÐCOMPUTERÐ °  ÐTIERÐ =€```*œ ì"`` „„=ÐCOUNTRIESÐ M€``>*° " d,  ``` €@€ƒ,ƒ„„MÐ1Ð 4€```! h `` „„4ÐAustralia,€Austria,€Belgium,€Canada,€Denmark,€Finland,€France,€Germany,€Greece,€Holy€See,ÏIceland,€Ireland,€Italy,€Japan,€Liechtenstein,€Luxembourg,€Mexico,€Monaco,€Netherlands,€NewÏZealand,€Norway,€Portugal,€San€Marino,€Spain,€Sweden,€Switzerland,€Turkey,€and€the€UnitedÏKingdom,€and€all€territories€thereof€(except€Hong€Kong,€which€is€in€Tier€2).€Ð D€``5!Ü,  d, @ ``` €Ø €ƒ,ƒ„„DÐ2Ð 4€```!X¨ `` „„4ÐCountry€Group€T€(except€Mexico)€in€the€Export€Administration€Regulations,€Antigua€&€Barbuda,ÏBangladesh,€Benin,€Bhutan,€Botswana,€Brunei,€Burkina€Faso,€Burma€(Myanmar),€Burundi,€ÏCameroon,€Cape€Verde,€Central€Africa,€Chad,€Congo,€Cote€dððIvoire,€Cyprus,€Czech€Republic,ÏDominica,€Equatorial€Guinea,€Eritrea,€Ethiopia,€Fiji,€Gabon,€Gambia€(The),€Ghana,€Grenada,ÏGuinea,€Guinea„Bissau,€Hong€Kong,€Hungary,€Indonesia,€Kenya,€Kiribati,€Korea€(Republic€of),ÏLesotho,€Liberia,€Madagascar,€Malawi,€Malaysia,€Maldives,€Mali,€Malta,€Marshall€Islands,ÏMauritius,€Micronesia€(Federated€States€of),€Mozambique,€Namibia,€Nauru,€Nepal,€Niger,€Nigeria,ÏPalau,€Papua€New€Guinea,€Philippines,€Poland,€Rwanda,€St.€Kitts€&€Nevis,€St.€Lucia,€St.€VincentÏand€Grenadines,€Sao€Tome€&€Principe,€Senegal,€Seychelles,€Sierra€Leone,€Singapore,€SlovakÏRepublic,€Slovenia,€Solomon€Islands,€Somalia,€South€Africa,€Sri€Lanka,€Swaziland,€Taiwan,ÏTanzania,€Togo,€Tonga,€Thailand,€Tuvalu,€Uganda,€Western€Sahara,€Western€Samoa,€Zaire,€Zambia,Ïand€œZimbabwe.›Ð D€``5!|Ì d, Ø ``` €˜€ƒ,ƒ„„DÐ3Ð 4€```!øH`` „„4МAfghanistan,›€Albania,€Algeria,€Andorra,€Angola,€Armenia,€Azerbaijan,€Bahrain,€Belarus,€Bosnia€&ÏHerzegovina,€Bulgaria,€Cambodia,€China€(Peopleððs€Republic€of),€Comoros,€Croatia,€Djibouti,ÏEgypt,€Estonia,€Georgia,€India,€Israel,€Jordan,€Kazakhstan,€Kuwait,€Kyrgyzstan,€Laos,€Latvia,ÏLebanon,€Lithuania,€Macedonia€(The€Former€Yugoslavia€Republic€of),€Mauritania,€Moldova,ÏMongolia,€Morocco,€Oman,€Pakistan,€Qatar,€Romania,€Russia,€Saudi€Arabia,€Serbia€andÏMontenegro,€Tajikistan,€Tunisia,€Turkmenistan,€Ukraine,€United€Arab€Emirates,€Uzbekistan,ÏVanuatu,€Vietnam,€and€Yemen.Ð F€```5!€!Ð" d, ˜ ``` €h€ƒ<ƒ„„FÐ4Ð 4€````!ü"L#``` „„4ЀCuba,€Iran,€Iraq,€Libya,€North€Korea,€Sudan,€and€Syria.€Ð1'%ü"L$ d< h  ```` 1ÐÌÒ°\ÒÒ°tÒœÌÔ‡Q¼R{»XQXkDÔò ò11.›€€Encryption€(Sec‚tion€742.15)€ó óÔ#†QXkDX»Q¼R{ ¿#ÔÐ ü%L!& ÐÌœÓ  Óò òExport›€Control€Program€Description€and€Licensing€Policyó óÐ ü'L#( ÐÓ"ÀÓÌà  àOn€October€1,€1996,€the€Vice€President€announced€a€plan€to€make€it€easier€for€AmericansÏto€use€stronger€encryption€products€to€protect€their€privacy,€intellectual€property€and€otherÏvaluable€information.€€The€plan€relies€on€market€forces€to€develop€a€worldwwide€keyÏmanagement€infrastructure€with€the€use€of€key€recovery€and€key€escrow€encryption€items€toÐ ˜,è'- Ðpromote€electronic€commerce€and€secure€communications€while€protecting€national€security€andÏpublic€safety.ÌÌà  àOn€November€15,€1996,€the€President€issued€a€Memorandum€and€Executive€Order€13026Ï(15€November€1996,€61€FR€58767)€directing€that€all€encryption€items€controlled€on€the€U.S.ÏMunitions€List€(USML),€except€those€specifically€designed,€developed,€configured,€adapted,€orÏmodified€for€military€applications,€be€transferred€to€the€Commerce€Control€List€(CCL).€€TheÏMemorandum€also€set€forth€certain€additional€provisions€with€respect€to€controls€on€suchÏencryption€items€to€be€imposed€by€the€Department€of€Commerce.€€The€Executive€Order€providesÏfor€appropriate€controls€on€the€export€and€foreign€dissemination€of€encryption€items€controlledÏon€the€USML€that€are€placed€on€the€CCL.€€€ÌÌà  àNon„recoverable€encryption€items€up€to€56„bit€key€length€œData›€Encryption€œStandard›Ï(DES)€or€equivalent€strength€will€be€permitted€for€export€and€reexport€after€a€one„time€review,€ifÏan€exporter€makes€satisfactory€commitments€to€build€and€market€products€that€supportÏrecoverable€encryption€items€and€to€support€an€international€key€management€infrastructure.€ÏThis€policy€will€apply€to€hardware€and€software.€€The€relaxation€of€export€and€reexport€controlsÏon€non„recoverable€encryption€items€up€to€56„bit€key€length€DES€or€equivalent€strength€will€lastÏuntil€January€1,€1999.ÌÌà  àOn€December€13,€1996€Commerce€published€a€rule€in€the€òòFederal€Registeróó€acceptingÐ  p Ðjurisdiction€for€key€recoverable€encryption€items.€€Full€implementation€of€the€Vice€PresidentððsÏOctober€1€announcement€on€encryption€export€controls€came€on€December€30,€1996€withÏpublication€of€the€full€regulation.€€This€€rule€imposed€national€security€and€foreign€policyÏcontrols€on€certain€encryption€items.€€These€items€do€not€include€those€that€are€specificallyÏdesigned,€developed,€configured,€adapted€or€modified€for€military€applications€€(includingÏcommand,€control€and€intelligence€applications).€€Such€items€remain€on€the€USML,€and€continueÏto€be€controlled€by€the€Department€of€State,€Office€of€Defense€Trade€Controls.€€The€controlsÏimposed€by€the€rule€apply€to€encryption€software,€including€recoverable€encryption€ð ðsoftwareððÏtransferred€from€the€USML€to€the€CCL€pursuant€to€E.O.€13026.€€With€this€rule€the€Secretary€ofÏCommerce€imposed€foreign€policy€controls€on€encryption€products€to€supplement€the€nationalÏsecurity€controls€already€in€place.€€In€the€CCL€the€acronym€ð ðEIðð€(Encryption€Items)€designatesÏforeign€policy€controls€on€these€items.Ìà0  àà0` (#(#àÐ ` (#` (# Ðà  àThe€Presidentððs€executive€order€directs€the€Secretary€of€Commerce€to€take€actions€toÏcontrol€the€export€of€assistance€to€foreign€persons€in€the€same€manner€and€to€the€same€extent€asÏthe€export€of€such€assistance€is€controlled€under€the€Arms€Export€Control€Act.€€Therefore,€theÏrule€prohibits€U.S.€persons,€without€a€license€from€Commerce,€from€knowingly€providingÏassistance€to€foreign€persons,€including€providing€training,€to€manufacture€or€to€exportÏencryption€items€transferred€from€the€USML€to€the€CCL.€€This€provision€will€not€apply€to€anyÏactivity€involving€such€encryption€items€that€have€been€licensed€or€otherwise€authorized€byÏCommerce.Ìâ âÐ h+¸&* МA.›€€In€general,€the€United€States€requires€a€license€for€all€destinations,€except€Canada,€for€exportsÏâ âand€reexports€of€commercial€encryption€items.€€However,€certain€exceptions€to€the€licensingÏrequirements€may€apply.€ÌÌB.€€Export€license€applications€for€commercial€encryption€items€are€reviewed€on€a€case„by„caseÏbasis,€to€determine€whether€the€export€or€reexport€is€consistent€with€U.S.€national€security€andÏforeign€policy€interests.ÌÌC.€€Exporters€of€56„bit€DES€or€equivalent€encryption€products€are€required€to€makeÏcommitments€to€develop€and€market€products€that€support€key€recovery.€€The€AdministrationÏbelieves€that€the€worldwide€use€of€key€recovery€encryption€products€will€promote€electronicÏcommerce€and€secure€communications,€while€protecting€national€security€and€public€safety.̜̀Ó  Óò òAnalysis›€of€Con‚trol€as€Required€by€Section€6(f)€of€the€Actó óÐ ¬ü  ÐÓGÒÓÌA.€€The€Purpose€of€the€ControlÌÌà  àThe€purpose€of€the€control€is€to€protect€U.S.€national€security€and€foreign€policy€interests,Ïincluding€the€safety€of€U.S.€citizens.€€Policies€concerning€the€export€control€of€cryptographicÏproducts€are€based€on€the€fact€that€the€proliferation€of€such€products€will€make€it€more€difficultÏfor€the€United€States€Government€to€obtain€access€to€information€vital€to€national€securityÏinterests.€€Cryptographic€products€and€software€have€military€and€intelligence€applications.€€AsÏdemonstrated€throughout€history,€encryption€has€been€used€to€conceal€foreign€militaryÏcommunications,€on€the€battlefield,€aboard€ships€and€submarines,€or€in€other€military€settings.€ÏEncryption€is€also€used€to€conceal€other€foreign€communications€that€have€foreign€policy€andÏnational€security€significance€for€the€United€States.€€For€example,€encryption€can€be€used€toÏconceal€communications€or€data€of€terrorists,€drug€smugglers,€or€others€intent€on€taking€hostileÏaction€against€U.S.€facilities,€personnel,€or€security€interests.ÌÌœB.›€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Commerce:ÌÌœ1.›€òòProbability€of€Achieving€the€Intended€Foreign€Policy€Purposeóó.€€The€Secretary€of€CommerceÐ D!” Ðhas€determined€that€the€control€is€likely€to€achieve€the€intended€purpose€of€denying€the€export€ofÏcommercial€encryption€items,€including€products€with€key€recovery€features,€if€its€export€wouldÏbe€contrary€to€U.S.€national€security€or€foreign€policy€interests.€ÌÌ2.€òòCompatibility€with€Foreign€Policy€Objectivesóó.€€The€Secretary€has€also€determined€that€theÐ à%0!$ Ðcontrols€are€compatible€with€the€foreign€policy€objectives€of€the€United€States.€€The€control€isÏconsistent€with€U.S.€foreign€policy€goals€to€promote€peace€and€stability€and€to€prevent€U.S.Ïexports€that€might€contribute€to€destabilizing€military€capabilities€and€assisting€internationalÏterrorist€or€criminal€activities€against€the€United€States.€€The€controls€will€also€contribute€toÏpublic€safety€by€promoting€the€protection€of€U.S.€citizens€overseas.Ìâ âÐ h+¸&* Ð3.€òòReaction€of€Other€Countriesóó.€€The€Secretary€has€determined€that€the€reaction€of€other€countriesÐ ° Ðâ âto€this€control€is€not€likely€to€render€the€control€ineffective€in€achieving€its€intended€foreignÏpolicy€purpose€or€to€be€counterproductive€to€U.S.€foreign€policy€interests.€€Other€allied€countriesÏrecognize€the€need€to€control€exports€of€encryption€products€for€national€security€and€lawÏenforcement€reasons.€€These€countries€also€recognize€the€desirability€of€restricting€goods€thatÏcould€compromise€shared€security€and€foreign€policy€interests.ÌÌ4.€òòEconomic€Impact€on€U.S.€Industryóó.€€The€Secretary€has€determined€that€the€transfer€ofÐ $ t Ðcommercial€encryption€items,€including€products€with€key€recovery€features,€from€the€USML€toÏthe€CCL€will€benefit€industry€positively€and€make€U.S.€manufacturers€more€competitive€in€theÏworld€market.€€Removal€of€these€products€from€the€USML€may€actually€improve€theirÏmarketability€to€foreign,€civil€end„users€who€prefer€not€to€trade€in€items€the€United€StatesÏconsiders€to€be€munitions.€€Moreover,€since€key€recoverable€encryption€products€pose€lessÏsecurity€and€law€enforcement€risks,€their€export€will€be€treated€more€liberally€than€export€ofÏencryption€products€with€non„recoverable€keys.€€This€will€allow€U.S.€manufacturers€andÏexporters€to€capture€a€larger€share€of€growing€world€demand€for€key€recovery„based€products.€€ÌÌ5.€òòEnforcement€of€Controlóó.€€The€Secretary€has€determined€that€the€United€States€has€the€ability€toÐ \¬ Ðenforce€these€controls€effectively.€€The€United€States€expects€no€unusual€problems€in€enforcingÏthe€controls.€€Under€the€State€Department's€authority,€the€items€covered€by€this€action€have€beenÏunder€strict€control.€€Manufacturers€and€dealers€are€familiar€with€U.S.€controls€on€this€productÏand€technology.€€The€strategic€importance€of€these€items€is€clear.€€Finally,€since€these€items€areÏalso€under€multilateral€control,€we€can€expect€cooperation€from€foreign€enforcement€agencies€inÏpreventing€violations€and€punishing€violators.€Ôä4ä4ÔÌÌC.€òòConsultation€with€Industryóó€Ð ¼  ÐÌà  àThe€U.S.€Government€consulted€with€various€elements€within€industry€on€the€proposedÏchange€in€controls€and€on€the€desirability€of€development€of€key€recoverable€encryption€productsÏfor€both€Government€and€industry.€€In€preparation€for€the€USML€rationalization€exercise,€theÏState€Department€also€published€a€number€of€òòFederal€Registeróó€notices€dealing€with€this€and€otherÐ X ¨ Ðchanges€to€the€USML.€€Industry€comments€overwhelmingly€favored€inclusion€of€commercialÏencryption€items,€including€products€with€key€recovery€features,€on€the€CCL€versus€the€USML.€ÌÌD.€òòConsultation€with€Other€CountriesóóÐ $X" ÐÌà  àThe€United€States€has€taken€the€lead€in€international€efforts€to€stem€the€proliferation€ofÏsensitive€items,€urging€other€supplier€nations€to€adopt€and€apply€export€controls€comparable€toÏthose€of€the€United€States.€€The€major€industrial€partners€of€the€United€States€maintain€exportÏcontrols€on€this€equipment€and€technology.€€Pursuant€to€their€agreement€to€establish€a€newÏregime€for€the€control€of€conventional€arms€and€sensitive€dual„use€technologies,€the€33Ïparticipants€in€the€Wassenaar€Arrangement€have€agreed€to€control€these€items€on€a€global€basisÏand€to€coordinate€export€policies€for€such€items.€€ÌÐ T,¤'+ Мà  àIn›€addition,€the€President€appointed€Ambassador€David€L.€Aaron€as€Special€Envoy€forÏCryptography,€with€the€responsibility€to€promote€the€growth€of€international€electronicÏcommerce€and€robust,€secure€global€communications€in€a€manner€that€protects€the€public€safetyÏand€national€security€Ambassador€Aaron€will€carry€out€his€responsibilities€as€Special€EnvoyÏwhile€retaining€his€position€as€the€United€States€Permanent€Representative€to€the€OrganizationÏfor€Economic€Cooperation€and€œDevelopment›€(OECD).€€As€Special€Envoy,€Ambassador€AaronÏwill€promote€international€cooperation,€coordinate€U.S.€contacts€with€foreign€governments€onÏencryption€matters€and€provide€a€focal€point€for€identifying€and€resolving€bilateral€andÏmultilateral€encryption€œissues.›ÌÌœà  àThe›€United€States€and€other€members€of€the€OECD€have€discussed€the€desirability€of€anÏinternational€standard€using€encryption€with€key€recovery€features€and€have€completed€a€draftÏstandard.ÌÌE.€òòAlternative€MeansóóÐ ˜è  ÐÌà  àAlternatives€to€export€controls€at€this€time€would€not€be€the€most€effective€means€ofÏachieving€the€intended€national€security€and€foreign€policy€objectives.€€The€United€States€hasÏundertaken€a€wide€range€of€diplomatic€means,€both€bilateral€and€multilateral,€to€encourage€theÏproper€restrictions€over€these€items.€€However,€these€efforts€can€only€supplement,€not€replace,€theÏeffectiveness€of€actual€export€controls.ÌÌF.€òòForeign€AvailabilityóóÐ øH ÐÌà  àAlthough€other€countries€produce€software€and€hardware€encryption€products,€the€UnitedÏStates€is€the€world's€leader.€€The€U.S.€is€also€leading€the€world€in€development€of€the€emergingÏtechnology€of€encryption€with€key€recovery€features.€€This€fact€alone€would€make€a€unilateralÏcontrol€effective;€however,€this€is€not€a€unilateral€control€because€most€producers€of€encryptionÏare€members€of€the€Wassenaar€Arrangement€and€also€control€exports€of€encryption.ÌÌœà  àIt›€should€be€noted€that€the€Department€of€Commerce€and€the€National€Security€AgencyÏ(NSA)€prepared€a€joint€study€of€the€international€market€for€computer€software€with€encryption.€ÏThe€study€found€that€the€U.S.€software€industry€still€dominates€world€markets€for€encryption.€€InÏthose€markets€not€offering€strong€encryption€locally,€U.S.€software€encryption€remains€theÏdominant€choice.€€However,€the€existence€of€foreign€products€with€labels€indicating€DES€or€otherÏstrong€algorithms,€even€if€they€are€less€secure€than€claimed,€can€nonetheless€have€a€negativeÏeffect€on€U.S.€competitiveness.€€The€study€also€notes€that€the€existence€of€strong€U.S.€exportÏcontrols€on€encryption€may€have€discouraged€U.S.€software€producers€from€enhancing€theÏsecurity€features€of€general€purpose€software€products€to€meet€the€anticipated€growth€in€demandÏby€foreign€markets.ÌÌœà  àThe›€study€found€that€all€countries€that€are€major€producers€of€commercial€encryptionÏproducts€control€exports€of€these€products€to€some€extent.€€A€few€countries€control€imports€andÏdomestic€use€of€encryption,€as€œwell.ññÔ€Þаx¼ÔññÐ  T,¤'+ Ðà  àIn›€regard€to€foreign€availability€as€it€relates€to€encryption€items€transferred€from€theÏUSML€to€the€CCL,€the€Presidentððs€Executive€Order€of€November€15,€1996€stated€the€following:€ÌÌà0  àI€have€determined€that€the€export€of€encryption€products€[transferred€to€the€CommerceÏControl€List]€could€harm€national€security€and€foreign€policy€interests€even€whereÏcomparable€products€are€or€appear€to€be€available€from€sources€outside€the€United€States,Ïand€that€facts€and€questions€concerning€the€foreign€availability€of€such€encryptionÏproducts€cannot€be€made€subject€to€public€disclosure€or€judicial€review€without€revealingÏor€implicating€classified€information€that€could€harm€United€States€national€security€andÏforeign€policy€interests.€Accordingly,€sections€4(c)€and€6(h)(2)„(4)€of€the€ExportÏAdministration€Act€of€1979,€50€U.S.C.€App.€2403(c)€and€2405(h)(2)„(4),€as€amended€andÏas€continued€in€effect€by€Executive€Order€12924€of€August€19,€1994,€and€by€notices€ofÏAugust€15,€1995,€and€August€14,€1996,€all€other€analogous€provisions€of€the€EAAÏrelating€to€foreign€availability,€and€the€regulations€in€the€EAR€relating€to€such€EAAÏprovisions,€shall€not€be€applicable€with€respect€to€export€controls€on€such€encryptionÏproducts.€€Notwithstanding€this,€the€Secretary€of€Commerce€may,€in€his€discretion,Ïconsider€the€foreign€availability€of€comparable€encryption€products€in€determiningÏwhether€to€issue€a€license€in€a€particular€case€or€to€remove€controls€on€particularÏproducts,€but€is€not€required€to€issue€licenses€in€particular€cases€or€to€remove€controls€onÏparticular€products€based€on€such€consideration.œÐ (#(# ÐÌÔ‡Q¼R{»XQXkDÔò ò12.›€€Commercial€Communications€Satellites€and€Hot€Section€Technology€[SecƒÐ  \ Ðtion€742.14(776A.2€&€776A.20)]€ó óÔ#†QXkDX»Q¼R{Gû#ÔÐ  p ÐÌœà@1 1 ìàò òExport›€Control€Program€Description€and€Licensing€Policyó óˆÐ  p ÐÌà  àOn€October€21,€1996€Commerce€published€a€rule€in€the€òòFederal€Registeróó€acceptingÐ øH Ðjurisdiction€on€certain€commercial€communications€satellites€and€certain€hot€section€technologyÏfor€the€development€and€production€of€commercial€aircraft€engines€transferred€from€the€U.S.ÏMunitions€List€to€the€Commerce€Control€List€(CCL).€€The€Secretary€of€Commerce€imposed€newÏforeign€policy€controls€on€these€items€with€the€concurrence€of€the€Secretary€of€State,€in€the€beliefÏthat€these€controls€are€necessary€to€further€significantly€the€foreign€policy€of€the€United€œStates.›Ïœ[In€the€CCL€the€acronym€ð ðSIðð€(Significant€Items)€designates€foreign€policy€controls€on€theseÏitems.]€€These›€commodities€are€also€controlled€by€the€Wassenaar€Arrangement€whose€membersÏinclude€most€of€the€other€producers€of€these€commodities.€€Commerce€controls€these€on€the€CCLÏunder€Export€Control€Classification€Numbers€(ECCNs)€9A004(9A04)and€œ9E003(9E03.a.1›Ïthrough€œa.12).›ÌÌA.€€The€United€States€requires€a€license€for€all€destinations,€except€Canada,€for€exports€andÏreexports€of€the€above€listed€items.€€These€items€will€be€controlled€for€national€security€andÏforeign€policy€reasons.Ìâ âÐ Ì*&) ÐB.€€The€United€States€reviews€all€license€applications€for€the€above€items,€on€a€case„by„caseÏbasis,€to€determine€whether€the€export€or€reexport€is€consistent€with€U.S.€national€security€andÏforeign€policy€interests.Ìâ ✀Ìà@Y Y ìàò òAnalysis€of€Con‚trol€as€Required€by€Section€6(f)€of€the€ActˆÐ `° Ðó óÌA.€€The€Purpose€of€the€ControlÌÌññÔ€G` °xL Ôññà  àThe€purpose€of€the€control€is€to€protect€U.S.€national€security€and€foreign€policy€interestsÏand€to€demonstrate€U.S.€resolve€to€promote€peace€and€stability.€€The€United€States€is€maintainingÏsuch€controls€because€of€potential€applications€for€the€equipment€in€a€manner€contrary€to€U.S.Ïsecurity€or€foreign€policy€interests.ÌÔ‡FXtXXQXkDԛ̜Ô#†QXkDXXFXt?#ÔB.›€€Considerations€and/or€Deter‚mina‚tions€of€the€Secretary€of€Commerce:Ð ˆØ  ÐÌœ1.›€òòProbability€of€Achieving€the€Intended€Foreign€Policy€Purposeóó.€€œThe›€Secretary€of€CommerceÐ `°  Ðhas€determined€that€the€control€is€likely€to€achieve€the€intended€purpose€of€denying€the€export€ofÏcommercial€communication€satellites€and€hot€section€technology€if€its€export€would€be€contraryÏto€U.S.€national€security€or€foreign€policy€interests.€ÌÌœ2.›€òòCompatibility€with€Foreign€Policy€Objectivesóó.€€œThe›€Secretary€has€also€determined€that€theÐ üL Ðcontrols€are€compatible€with€the€foreign€policy€objectives€of€the€United€States.€€The€control€isÏconsistent€with€U.S.€foreign€policy€goals€to€promote€peace€and€stability€and€to€prevent€U.S.Ïexports€that€might€contribute€to€inappropriate€military€capabilities€abroad.ÌÌ3.€òòReaction€of€Other€Countriesóó.€œThe›€Secretary€has€determined€that€the€reaction€of€other€countriesÐ ˜è Ðto€this€control€is€not€likely€to€render€the€control€ineffective€in€achieving€its€intended€foreignÏpolicy€purpose€or€to€be€counterproductive€to€U.S.€foreign€policy€interests.€€Other€allied€countriesÏcurrently€control€commercial€communications€satellites€and€hot€section€technology€forÏcommercial€jet€engines.€€These€countries€also€recognize€the€desirability€of€restricting€goods€thatÏcould€compromise€shared€security€and€foreign€policy€interests.ÌÌœ4.›€òòEconomic€Impact€on€U.S.€Industryóó.€€œThe›€Secretary€has€determined€that€the€transfer€ofÐ  "\  Ðcommercial€communication€satellites€and€commercial€hot€section€technology€from€the€USML€toÏthe€CCL€will€benefit€industry€positively€and€make€U.S.€manufacturers€more€competitive€in€theÏworld€market.€€Removal€of€these€products€from€the€USML€may€improve€their€marketability€toÏforeign,€civil€end„users€who€prefer€not€to€trade€in€items€the€United€States€considers€to€beÏmunitions.€€Ì€œÌ5.›€òòEnforcement€of€Controlóó.Ô€(Ð#€(Ð#Ô€€œThe›€Secretary€has€determined€that€the€United€States€has€the€ability€toÐ €(Ð#' Ðenforce€these€controls€effectively.€€The€United€States€expects€no€unusual€problems€in€enforcingÏthe€controls.€€Under€the€State€Department's€authority,€the€items€covered€by€this€action€have€beenÏunder€strict€control.€€Manufacturers€and€dealers€are€familiar€with€U.S.€controls€on€this€productÏâ âand€technology.€€The€strategic€importance€of€these€items€is€clear.€€Finally,€since€these€items€areÐ 0,€'+ Ðalso€under€multilateral€control,€we€can€expect€cooperation€from€foreign€enforcement€agencies€inÏpreventing€violations€and€punishing€violators.€ÔœìœìÔÌâ âÌC.€òòConsultation€with€Industryóó€Ð tÄ ÐÌà  àCommerce€consulted€with€various€elements€within€industry€on€the€proposed€change€inÏcontrols.€Industry€comments€in€large€measure€favored€transfer€of€the€items€to€œCommerce.›ÌÌD.€òòConsultation€with€Other€CountriesóóÐ  ` ÐÌà  àThe€United€States€has€taken€the€lead€in€international€efforts€to€stem€the€proliferation€ofÏsensitive€items,€urging€other€supplier€nations€to€adopt€and€apply€export€controls€comparable€toÏthose€of€the€United€States.€€The€major€industrial€partners€of€the€United€States€maintain€exportÏcontrols€on€this€equipment€and€technology.€€Pursuant€to€their€agreement€to€establish€a€newÏregime€for€the€control€of€conventional€arms€and€sensitive€dual„use€technologies,€the€33Ïparticipants€in€the€Wassenaar€Arrangement€have€agreed€to€control€these€items€on€a€global€basisÏand€to€coordinate€export€policies€for€such€items.€€œÌÌE.›€òòAlternative€MeansóóÐ H˜ М̛à  àThe€United€States€has€undertaken€a€wide€range€of€diplomatic€means,€both€bilateral€andÏmultilateral,€to€encourage€the€proper€control€over€these€items.€€The€United€States€has€specificallyÏencouraged€efforts€to€limit€the€flow€of€satellites€and€hot€section€technology€to€areas€contrary€toÏU.S.€security€and€foreign€policy€concerns.ÌÌF.€òòForeign€AvailabilityóóÐ ¼  ÐÌà  àAlthough€other€countries€produce€commercial€communications€satellites€and€hot€sectionÏtechnology,€the€United€States€is€the€world's€leader.€€This€fact€alone€would€make€a€unilateralÏcontrol€effective;€however,€this€is€not€a€unilateral€control€because€most€producers€of€commercialÏcommunications€satellites€and€hot€section€technology€are€members€of€the€WassenaarÏArrangement€and€are€controlling€these€items.€€ÌÌà  àIn€addition,€it€is€important€to€note€that€while€the€Act€contains€provisions€on€foreignÏavailability,€items€controlled€for€foreign€policy€reasons€are€excluded€from€mandatory€foreignÏavailability€decontrol€or€export€licensing€provisions€of€the€Act.€€ÌœÌÔ‡Q¼R{»XQXkDÔò ò13.›€Nuclear€Non„Prolifer‚ation€[Section€744.2)(778A)]Ð Ì&"% Ðó óÔ#†QXkDX»Q¼R{#ÔÌœÓ  Óò òExport›€Control€Program€Description€and€Li‚censing€Policyó óÐ Ì($' ÐÓ—ÓÌà  àThe€United€States€maintains€export€controls€on€certain€items€for€the€purpose€of€furtheringÏits€nuclear€non„proliferation€policy.€€Although€under€different€legisla‚tive€authority€(the€NuclearÏNon„Proliferation€Act€of€1978)€and€thus€not€foreign€policy„based€controls€in€the€same€sense€asÐ |,Ì'+ Ðothers€noted€in€this€report,€nuclear€controls€maintained€by€the€Commerce€Department€areÏincluded€here€because€they€have€many€foreign€policy€characteristics€and€are€normally€groupedÏwith€the€other€non„proliferation€controls€contained€in€this€report.€€The€format€of€this€chapter€doesÏnot€follow€that€of€previous€chapters€but€instead€addresses€the€require‚ments€of€the€legal€authorityÏfor€these€con‚trols.ÌÌA.à  àA€validated€license€is€required€for€exports€of€the€following€commodities€and€relatedÐ 8 ˆ Ðtechnical€data:ÌÌ1.à  àCommodities€or€related€technical€data€that€could€be€of€significance€for€nuclear€explosiveÐ ü L  Ðpurposes€(i.e.,€the€Nuclear€Referral€List€included€in€the€CCL);€and€ÌÌ2.à  àAny€commodity€or€related€techni‚cal€data€that€the€exporter€knows,€or€has€reason€to€know,Ð À  Ðwill€be€used€directly€or€indirectly€in€any€of€the€following€activities:ÌÌà  àa.€nuclear€explosive€activities€includ‚ing€designing,€developing,€manu‚facturing,€or€testingÏnuclear€weapons€or€nuclear€explosive€devices;€orÌÌà  àb.€unsafeguarded€nuclear€activities€including€designing,€developing,€or€manufacturing€anyÏnuclear€reactor,€critical€facility,€facility€for€the€fabrication€of€nuclear€fuel,€facility€for€theÏconversion€of€nuclear€mate‚rial€from€one€chemi‚cal€form€to€another,€or€separate€storage€instalƒ¼lation,€where€there€is€no€obligation€to€accept€Interna‚tional€Atomic€Energy€Agency€Safeguards€atÏthe€facility€or€in‚stallation,€when€it€contains€any€source€of€special€fissionable€ma‚terial,€or€whereÏany€such€obliga‚tion€is€not€met;€orÌÌà  àc.€safeguarded€and€unsafeguarded€nuclear€activities€including:€de‚signing,€constructing,Ïfabricating,€or€operating€the€following€facili‚ties,€or€components€for€such€facili‚ties:€(i)€facilitiesÏfor€the€chemical€processing€of€irradiated€special€nuclear€or€source€materi‚als;€(ii)€facilities€for€theÏproduc‚tion€of€heavy€water;€(iii)€facilities€for€the€separation€of€isotopes€of€source€and€specialÏnuclear€mate‚rial;€or€(iv)€facilities€for€the€fabri‚cation€of€nuclear€reactor€fuel€containing€plutonium.ÌÌ3.à  àThe€Commerce€Department€may€inform€the€exporter€that€a‚€license€is€re‚quired€for€anyÐ D!” Ðitem€because€there€is€an€unac‚ceptable€risk€of€use€in€or€diver‚sion€to€such€activities,€anywhere€inÏthe€world.Ì€€€ÌB.à  àFactors€considered€in€reviewing€applications€for€licenses€include:Ð ô$D # ÐÌ€à0  àthe€stated€end-use€of€the€item;ÐÌ&"%(#(# Ðà0  àthe€significance€for€nuclear€pur‚poses€of€the€particular€component€and€its€availabilityÏelsewhere;Ð (#(# Ðà0  àthe€types€of€nuclear€non„prolifer‚ation€assurances€or€guarantees€given€in€a€particular€case;ÏandÐ (#(# Ðà0  àthe€non„proliferation€credentials€of€the€recipient€country.€Ð (#(# ÐÐ T,¤'+ Мò òÓ  ÓAnalysis›€of€Control€as€Required€by€Lawññ× ƒÝ ×ññññ× ƒ‘ ×ññÝ ƒR$ÓÝòòÚ  Ú39Ú  ÚóóÝ  Ý×  ×ó óÐ ° ÐÓµ$ÓÌà  àSection€17(d)€of€the€Act€and€Section€309(c)€of€the€Nuclear€Non„Proliferation€Act€of€1978Ïare€interpreted€to€provide€that:ÌœA.›à  àNuclear€non„proliferation€controls€do€not€expire€annually€and€determinations€to€extendÐ `° Ðthem€are€thus€not€required;€andÌÌB.à  àThe€criteria€and€other€factors€set€forth€in€Sections€6(b)€through€6(f)€of€the€Act€are€notÐ $ t Ðapplicable€to€these€controls.ÌÌà  àThe€Congress€is,€therefore,€notified€that€these€controls€continue€in€effect.€€These€controlsÏfurther€significantly€the€nuclear€non„proliferation€policy€of€the€United€States€and€its€internationalÏobliga‚tions.€€This€policy€of€the€United€States€has€made€it€more€diffi‚cult€for€nations€to€ac‚quireÏsensitive€nuclear€technology€or€equipment.ÌÌà  àThe€United€States€maintains€on„going€discussions€with€other€countries€to€coordi‚nateÏexport€controls€for€nuclear€non„prolif‚eration€purposes€and€has€received€signifi‚cant€assistanceÏfrom€other€countries€in€reducing€available€foreign€sources.€€The€multilateral€Nuclear€SuppliersÏGroup€(NSG),€composed€of€34€members€(Brazil€and€Ukraine€became€members€in€1996),€setÏforth€guidelines€on€the€export€control€of€a€list€of€nuclear„related€dual„use€items,€effective€onÏJanuary€1,€1993.ÌÌà  àThe€Departments€of€Commerce€and€Energy,€in€consultation€with€the€Depart‚ments€of€StateÏand€Defense,€the€Arms€Con‚trol€and€Disarmament€Agency€and€the€Nu‚clear€RegulatoryÏCommission,€have€revised€the€list€of€dual„use€items€con‚trolled€for€nuclear€non„proliferation€reaƒ¼sons€and€published€this€revision€in€March€1994.€€This€list,€commonly€called€the€Nuclear€Refer‚ralÏList,€conforms€with€our€international€obligations€under€the€NSG.€€The€list€was€further€revised€byÏthe€member€countries€of€the€NSG;€these€revisions€were€published€in€January€œ1996,€but€the€list€isÏtoo€lengthy€to€include€in€this€report.›€€ÌÔ€æXkDXXQXkDÔÌà@ÅÅ&ìàò òENDNOTESó óˆÐ X ¨ ÐÌÔ€õXkDXXæXkDÔ