4 October 2001
Source:
US Department of State
International Information Programs
Washington File
_________________________________
04 October 2001
(U.S. seeks better cooperation against proliferation) (1640) Under Secretary of Commerce Kenneth Juster says the Bush administration is pressing other countries to make multilateral export-control regimes more effective. In an October 4 address to the Commerce Department's Update 2001 annual conference on export controls, Juster said the administration is seeking agreement in all such regimes for what is called formal denial notification procedures. Under such procedures, one member country must give notice before approving a license for an export that another country has denied, allowing time for consultations. "Simply put, we do not want to let would-be proliferators or terrorists 'shop around' until they can find a regime member that is willing to allow the export of items that other regime members will not," Juster said. The four multilateral export-control regimes -- which are informal groups, not treaty organizations -- are the Nuclear Suppliers Group, the Australia Group for biological and chemical weapons, the Missile Technology Control Regime and the Wassenaar Arrangement for advanced technology and conventional arms. The Wassenaar Arrangement, widely viewed as the weakest of the four regimes, is the only one that lacks formal denial notification. Juster said the administration is pressing the multilateral regimes also to develop what are called "catch-all" lists, or lists of entities suspected in proliferation of weapons of mass destruction. Regime members would deny any exports to such entities that could contribute to proliferation, whether the exports were on some control list or not. "Indeed, we see the trend in export controls shifting from being primarily 'list based' to being a mixture of 'list based' and 'end-use based' controls," Juster said. "And the recent terrorist attacks will only accelerate this trend." Juster also reiterated administration support for the Export Administration Act (EAA) bill passed 85-14 by the Senate September 6. He urged the House of Representatives to pass a similar bill. The previous EAA, a Cold War-era law, lapsed in August; since then President Bush has maintained the export-control system for advanced technology under emergency law. Following are excerpts of Juster's address as prepared for delivery: (begin excerpts) Keynote Address By Kenneth I. Juster Under Secretary of Commerce For Export Administration At Update 2001 October 4, 2001 Washington, D.C. We think that the Export Administration Act that was passed by the Senate -- known as Senate bill 149 -- provides a balanced framework for protecting national security and promoting free trade; for imposing effective export controls and facilitating responsible exports. S. 149 provides transparency, predictability, and time limits in the export licensing process. S. 149 also sets forth procedures for U.S. companies to seek to decontrol mass market items and items that are readily available from foreign sources. It thus enhances the ability of U.S. companies to compete for legitimate international sales on a fair and equal footing with their foreign competitors. This will enable us to maintain the vibrant industrial base that is so critical to our continued security. I want to emphasize, however, that S. 149 -- contrary to some misperceptions -- also significantly strengthens our authority to safeguard national security and combat terrorism. For example: -- S. 149 requires all export license applications to be referred to the Secretaries of Defense and State, and gives the Secretary of Defense explicit concurrence authority in establishing the list of items controlled for national security reasons, including those controlled for anti-terrorism reasons. -- S. 149 requires a license for any export if the Secretary of State determines that the destination country supports international terrorism and the export would make a significant contribution to the country's military potential or enhance its ability to support acts of international terrorism. -- Significantly, S. 149 provides the President with the authority to continue indefinitely controls on the export of any items for national security reasons. -- And S. 149 substantially enhances our export enforcement capabilities, including increases in penalties for export control violations and new undercover authority for export enforcement agents. We therefore believe that S. 149 provides the framework for an effective export control system that is in line with today's global realities. S. 149 also provides the flexibility to adjust that system to meet tomorrow's challenges. The Senate recently passed this bill by an overwhelming vote of 85-14. We strongly urge the House to pass a similar bill .... The Need for Greater Multilateral Cooperation You will hear shortly from three of my colleagues -- Jim Jochum, the Assistant Secretary for Export Administration; Mike Garcia, the Assistant Secretary for Export Enforcement; and Karan Bhatia, the Chief Counsel for Export Administration -- on several of the specific policy and enforcement issues on which we are currently focusing, including improvements in the interagency licensing process, the "deemed export" issue, and increased resources for pre-license checks and post-shipment verifications. But I want to mention one other important initiative that is of heightened concern since the events of September 11 -- our effort to enhance multilateral export control cooperation. As a result of the increasing globalization of the world economy, sensitive dual-use items and technologies simply cannot be controlled effectively unless there is broad cooperation among exporting and transit countries. Without such cooperation, foreign purchasers denied a critical item by one country often are able to obtain the same item from another country that does not control its exports as stringently. In order to put in place effective export controls that accomplish their intended purpose of denying sensitive items to known or suspected proliferators or terrorists, all countries possessing such items must work together. In recent months, the U.S. government has been criticized -- unfairly in my view -- for allegedly engaging in a unilateral and isolationist foreign policy. This simply is not the ease. The United States strongly supports effective multilateral cooperation on export controls that establishes rules which are enforceable and which will be enforced equally. The Bureau is working hard, in conjunction with the State Department, to take steps to increase the effectiveness of the various multilateral export control regimes. For example, we are working to expand to all multilateral regimes the use of formal denial notification procedures. A denial notification procedure allows for bilateral consultations prior to a proposed export in situations where one regime member already has denied a license for essentially an identical export. Simply put, we do not want to let would-be proliferators or terrorists "shop around" until they can find a regime member that is willing to allow the export of items that other regime members will not. If we agree to control an item multilaterally, then those who have agreed to maintain these controls should be vigilant to ensure that such an item is exported only for legitimate purposes. Anything less than a united front with respect to multilaterally based export controls undermines their effectiveness. We also are pushing for widespread adoption of end-use oriented controls -- so called "catch-all" or "catch-more" controls -- in the multilateral regimes. These types of controls generally impose an export licensing requirement based on the known or suspected end-use or end-user of an item, rather than its identification on a control list. Controls can therefore be targeted directly at end-users involved in proliferation or other activities of concern. As you are no doubt aware, the United States currently employs broad "catch-all" controls -- also known as EPCI (Enhanced Proliferation Control Initiative) controls -- focused on exports destined for use in proliferation activities. We believe that carefully crafted end-use controls strengthen the effectiveness of an export control regime by requiring countries to license the export of items that may fall just outside of control list parameters, but that still would make a material contribution to proliferation activities or other activities of concern. Indeed, we see the trend in export controls shifting from being primarily "list based" to being a mixture of "list based" and "end-use based" controls. And the recent terrorist attacks will only accelerate this trend. Finally, no export control system will be effective without the knowing and willing compliance of the private sector. Especially in light of the events of September 11, we all must work together to ensure that export trade is conducted responsibly and in a way that supports, rather than undermines, our national security. Now, more than ever, companies should strive to know their customers and the end-uses of their exports. Internal compliance programs should include more extensive due diligence on potential export transactions. A properly designed export control system, in which government and industry work together, is in everyone's best interest .... Conclusion In sum, as a result of globalization, economic interaction and national security are more intertwined than ever. Indeed, the entire concept of "national security" takes on new meaning in the current global economy and in light of the recent terrorist attacks. No longer is national security narrowly limited to national defense and military preparedness. Our conception of national security must also be concerned with securing the international conditions necessary for preserving and enhancing free trade and U.S. economic prosperity. As the events of September 11 made crystal clear, with globalization we all now find ourselves on the front lines of both international trade and U.S. national security. Complying with export controls, securing computer networks, and protecting critical infrastructure assets are issues that are relevant not only to individual anti corporate responsibility, but also to the maintenance of our national security. Our challenge is to manage these risks in a way that allows the United States to reap the maximum economic benefits of globalization while still protecting U.S. national security. I look forward to working closely with all of you in the business community in addressing this important new challenge. Thank you. (end excerpts) (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)