SS

DEPARTMENTS

U.S. DEPARTMENT OF STATE

Defense

Trade
Advisory
Group

SHIVaSdV AMVLOIN-TVOLLNOd JO NVAYNG

DTAG Developments

The Defense Trade Advisory Group (DTAG)
convened its semi-annual plenary session on
October 6, 1993 at the Department of State.
Highlights from the session:

Reorganization at State

Assistant Secretary for Political-Military
Affairs Robert L. Gallucci discussed how the
Department of State has redirected its export
control priorities to reflect President Clinton’s
emphasis on non-proliferation and U.S.
economic security.

State export control functions have been
centralized within the Bureau of Political-
Military Affairs. The restructuring advances
one of the Bureau’s key goals—to prevent
arms diversions and exports which fue!

proliferation, while promoting transfers
consistent with U.S. national security and
foreign policy concerns. Assistant Secretary
Gallucci concluded by reaffirming the
Administration’s commitment to facilitating
legitimate U.S. defense exports.

New Priorities

In her keynote address, Under Secretary for
International Security Affairs Lynn E. Davis
commented on the Administrations pro-
posed international affairs budget reforms.
Evolving relations between countries and
new U.S. priorities require the Administration
to re-examine the way it allocates scarce
Tesources.

Although it is proposed that the Economic
Support Funds (ESF), Foreign Military
Financing (FMF), and International Military
Education and Training (IMET) programs will
no longer exist, the activities they have sus-
tained will continue. The administration will
instead redraft the Foreign Assistance Act
according to five policy objectives, and will
link funding levels to the attainment of these
goals:

- promoting economic prosperity and
development;

- building democracy;

- promoting peace;

- providing emergency humanitarian
assistance; and

- refining the bilateral and multilateral
negotiating skills of U.S. diplomats.

Arms Transfer Policy

Dr. Davis remarked that the Administration is
reviewing its conventional arms transfer
policy. She confirmed the U.S. Government’s
commitment to actively support U.S. manu-
facturers’ efforts to increase their exports,

Page 20

Defense Trade News, Volume 5, Number 1, January 1994



How DOD reviews applications. To save
time, DTC provides copies of applications to
pertinent DOD offices. (Refer to chart on
following page.) DTSA/LD reviews opinions
received from these DOD entities and formu-
lates a single DOD position. A DOD office
that disagrees with a DOD position proposed
by DTSA/LD can request DOD’s Interna-
tional Technology Transfer Coordinating
Committee, chaired by an Assistant Secretary
of Defense, to consider the issue.

National Disclosure Policy. The National
Disclosure Policy (NDP) is a classified
document that governs the release of U.S.
classified military information to foreign

governments and international organizations.
A request for exception to NDP may be
sponsored by State, Defense, Army, Navy,
Air Force, or the Joint Chiefs of Staff.

How DOD views Commodity Jurisdiction
determinations. Determination of whether
an item or service is under the jurisdiction of
the Department of State’s U.S. Munitions List
(USML) is provided by the Office of Defense
Trade Controls, Department of State upon
receipt of written request. The determina-
tions are based on interagency consultations,
including technical evaluations from the De-
partments of Commerce and Defense and
other cognizant agencies.

Position

Acting Director
Policy Analyst
Secretary
Secretary
Admin Support

Chief, Munitions Branch
Senior Analyst
Analyst
Export Controt Specialist
Analyst
Export Control Specialist
Analyst
Export Control Specialist
Senior Analyst
Analyst
Export Control Specialist
Analyst
Export Control Specialist
Analyst
Export Control Specialist
Admin NCO

Defense Technology Security Administration (DTSA)
Suite 302, 400 Army Navy Drive, Arlington, VA 22202

License Directorate

Name Phone

Jim Woody (703) 695-3554
Nancy L. Hindman 614-7761
JoAnne L. Brown 695-3554
Chery] Barnett : 614-7398
SMSGT Ricky B. Cookse 697-5336
Janet L. Michel 697-3429
Leonard H. Altman 693-1127
Julia Kortum 614-7756
Mary Gressette 614-7399
Howard Gardiner 693-1126
Paula Harris 614-7399
MAJ Brien McNamara 693-1125
(vacant) 693-1129
Jim Stofferahn 614-7754
Linda Randall 614-7753
Paula Harris 614-7399
Natalie Pechanski-McRoy 697-5335
Janet Smith 693-1129
Susan Webster 614-7392
Mary Gressette 614-7399
TSGT Joseph Brooks 614-7398

Page 14

Defense Trade News, Volume 5, Number 1, January 1994



Suspensions &
Debarments

Eliyahu Cohen, a.k.a. Eli Cohen

On September 26, 1993, Assistant Secretary
Robert L. Gallucci, Bureau of Political-
Military Affairs, suspended all existing
licenses and other approvals (including all
activities under manufacturing license and
technical assistance agreements), granted
pursuant to §38 of the Arms Export Control
Act (AECA), that authorized the export or
transfer of defense articles or services by, for
or to Eliyahu Cohen a.k.a. Eli Cohen,
Netanya, Israel; A.V.S. Armoured Vehicles
Systems Inc. a.k.a. A.V.S. Inc., New York;

A.V.S. Armoured Vehicles Spares Ltd. a.k.a.
A.V.S. Ltd., Netanya, and any of their
subsidiaries, associated companies or
successor entities.

In addition, it shall be the policy of the
Department of State to deny all export license
applications and other requests for approval
involving, directly or indirectly, Eliyahu
Cohen a.k.a. Eli Cohen; A.V.S. Armoured
Vehicles Systems, Inc. a.k.a. A.V.S., Inc.;
A.V.S. Armoured Vehicles Spares Ltd. a.k.a.
AVS. Ltd., and any of their subsidiaries,
associated companies or successor entities.
Also, these persons are precluded from using
any exemptions from license or other
approval included in the International Traffic
in Arms Regulations (ITAR).

Notice of this suspension was published in
the Federal Register (October 13, 1993, Vol.
58, Page 53015, Public Notice 1887).

Industrias Cardoen Limitada, a.k.a. INCAR
Carlos Cardoen

Jorge Burr

Franco Saffa

Swissco Management Group, Inc.
Teledyne Wah Chang Albany

Ronald W. Griffin

Edward A. Johnson

On July 26, 1993, Assistant Secretary Robert L.
Gallucci, Bureau of Political-Military

Affairs, suspended all existing licenses and
other approvals (including all activities under
manufacturing license and technical
assistance agreements), granted pursuant to
§38 of the AECA that authorized the export or
transfer of defense articles or services by, for
or to Industrias Cardoen Limitada a.k.a.
INCAR, Iquigue, Chile; Carlos Cardoen
(owner of Industrias Cardoen Limitada and
Swissco Management Group, Inc.); Jorge
Burr (employee of Industrias Cardoen
Limitada); Franco Saffa (employee of
Industrias Cardoen Limitada); Swissco
Management Group, Inc., Florida; Teledyne
Wah Chang Albany (TWCA), Oregon (a
division of Teledyne Industries, Inc.); Ronald
W. Griffin (employee of TWCA); Edward A.
Johnson (employee of TWCA); and any of
their subsidiaries or associated companies.

In addition, it shall be the policy of the
Department of State to deny all export license
applications and other requests for approval
involving, directly or indirectly, Industrias
Cardoen Limitada a.k.a. INCAR; Carlos
Cardoen; Jorge Burr; Franco Saffa; Swissco
Management Group, Inc.,; TWCA; Ronald W.
Griffin; Edward A. Johnson; and any of their
subsidiaries or associated companies. Also,
these persons are precluded from using any
exemptions from license or other approval
included in the ITAR.

Notice of this suspension was published in
the Federal Register (September 23, 1993, Vol.
58, Page 49540, Public Notice 1871). @

Page 24

Defense Trade News, Volume 5, Number 1, January 1994



eS

taking into account technical, non-prolifera-
tion, environmental, budgetary, and eco-
nomic considerations. Russia and other
nations with relevant interests and experience
will be invited to participate in this study.

The United States does not encourage the civil
use of plutonium and, accordingly, does not
itself engage in plutonium reprocessing for
either nuclear power or nuclear explosive
purposes. The United States, however, will
maintain its existing commitments regarding
the use of plutonium in civil nuclear
programs in Western Europe and Japan.

Export Controls

To be truly effective, export controls should
be applied uniformly by all suppliers. The
United States will harmonize domestic and
multilateral controls to the greatest extent
possible. At the same time, the need to lead
the international community or overriding
national security or foreign policy interests
may justify unilateral export controls in
specific cases. We will review our unilateral
dual-use export controls and policies and
eliminate them unless such controls are
essential to national security and foreign
policy interests.

We will streamline the implementation of
US. non-proliferation export controls. Our
system must be more responsive and efficient
and not inhibit legitimate exports that play a
key role in American economic strength,
while preventing exports that would make a
material contribution to the proliferation of
weapons of mass destruction and the missiles
that deliver them.

Nuclear Proliferation

The U.S. will make every effort to secure the
indefinite extension of the Non-Proliferation
Treaty in 1995. We will seek to ensure that
the International Atomic Energy Agency has
the resources needed to implement its vital

safeguards responsibilities and will work to
strengthen the [AEA’s ability to detect clan-
destine nuclear activities.

Missile Proliferation

We will maintain our strong support for the
Missile Technology Control Regime. We will
promote the principles of the MTCR Guide-
lines as a global missile non-proliferation
norm and seek to use the MTCR as a mecha-
nism for taking joint action to combat missile
proliferation. We will support prudent
expansion of the MTCR’s membership to
include additional countries that subscribe to
international non-proliferation standards,
enforce effective export controls, and aban-
don offensive ballistic missile programs.

The United States will also promote regional
efforts to reduce the demand for missile
capabilities.

The United States will continue to oppose
missile programs of proliferation concern and
will exercise particular restraint in missile-
related cooperation. We will continue to
retain a strong presumption of denial against
exports to any country of complete space
launch vehicles or major components.

The United States will not support the devel-
opment or acquisition of space launch
vehicles in countries outside the MTCR.

For MTCR member countries, we will not
encourage new space launch vehicle
programs which raise questions on both
non-proliferation and economic viability
grounds. The United States will, however,
consider exports of MTCR-controlled items to
MTCR member countries for peaceful space
launch programs on a case-by-case basis. We
will review whether additional constraints or
safeguards could reduce the risk of misuse of
space launch technology. We will seek adop-
tion by all MTCR partners of policies as vigi-
lant as our own.

Defense Trade News, Volume 5, Number 1, January 1994

Page 5





eS

saying that State will take into account a
proposed export’s economic consequences
and effect on the U.S. industrial base. Dr.
Davis cautioned, however, that support for
U.S. business must be balanced against other
policy concerns, such as non-proliferation.

Whither COCOM?

Under Secretary Davis concluded by com-
menting on the future of COCOM. An insti-
tution which formulates export controls based
on the former East-West divide is not consis-
tent with post-Cold War conditions. The
Administration favors a new institution
through which responsible supplier nations
would address dual-use technologies on a
world-wide basis, and restrain countries
engaged in proliferation. The United States is
Participating in sensitive negotiations with its
COCOM partners on how to reorient export
controls.

Working Group Reports

Policy Working Group suggestions for future
projects include: initiating a joint DTAG/
DOD study on how increased U.S. arms
exports can strengthen our industrial base;
developing a foreign availability database on
specific defense articles and technologies to
assist the arms export licensing process;
revising DTAG Chairman William
Schneider's paper on arms transfer policy;
and requesting State to organize a briefing on
USML exports to and imports from the
former Soviet Union. After further discus-
sion, some of these suggestions may be
incorporated into formal DTAG recommen-
dations to the Department.

The Department has completed action on
several Regulatory Working Group recom-
mendations, including: upgrading DTC’s
Remote On-Line Bulletin Board; improving
licensing forms; establishing a pilot project on
the electronic submission of license applica-
tions; agreeing to establish a State Appeal
Review Process; and identifying MTCR
equipment in the ITAR.

The Technical Working Group made no
formal recommendations to the Department,
but continues to examine jet engine hot
sections, commercial aircraft prior to certifica-
tion, software source code, and encryption.

It is working to develop criteria to determine
whether specific technologies belong on the
U.S. Munitions List or the Commodity
Control List.

Taiwan Briefing

Officers from State’s Taiwan Coordination
staff and Office of Export Control Policy and
the Department of Defense spoke in closed
session on U.S. arms transfer policy toward
Taiwan. They noted that our policy has
resulted in Taiwan being more secure, pros-
perous, and democratic than at any time
during its history. U.S. arms sales policy
since the 1980s has fully met Taiwan’s legiti-
mate defensive needs while remaining consis-
tent with our commitments under the August
1982 communique. U.S. defense firms are in a
good position vis-a-vis foreign competitors,
as U.S. manufacturers have the highest-
quality, most interoperable, and lowest-
priced equipment to offer.

DTAG-related questions can be directed to
Linda Lum of the DTAG Secretariat at
(202) 647-4231.

Defense Trade News, Volume 5, Number 1, January 1994

_Page 21



Feedback

Please circle or fill in your responses, add any
comments, and fax it to (703) 875-6647.

1. Your organization is a...

1. Manufacturer

2. Exporter

3. Consulting or law firm

4. Freight Forwarder

5. U.S. Embassy or Consulate

6. U.S. Customs element

7. U.S. DOD/Military element

8. Other U.S. Government element

9. Foreign government element

10. Other (please explain in Comments)

2. How many people will read this issue?

1. 1 person

2. 2-5 people
3. 6-10 people
4. 11+ people

3-14. Please rate the usefulness of each article
ona scale of 1 (worst) to 5 (best). Rate as "0"
any articles you did not read.

3. White House Statement ___

4. The Export Control Agenda__
5. Fine-Tuning the ITAR___

6. Don't Just Carp; Turn to SARP__
7. DTSA’s Role ___

8. ELLIE Comes on Line__

Tiger Team__

10. DTAG Developments__

11. Commodity Jurisdiction __
12. Suspensions & Debarments__
13. Personnel Updates__

14. Tips & Tidbits___

wes

15-26. Please rate each article’s readability

(style and physical presentation) on a scale of
1 (worst) to 5 (best); rate as “0” articles you
did not read.

15. White House Statement__

16. The Export Control Agenda___
17. Fine-Tuning the ITAR__

18. Don't Just Carp; Turn to SARP___
19. DTSA’s Role__

20. ELLIE Comes on Line___

21. Tiger Team__

22. DTAG Developments__

23. Commodity Jurisdiction__

24. Suspensions & Debarments__
25. Personnel Updates__

26. Tips & Tidbits__

27-29. Please circle the numbers of the three
topics you would most like to see covered in
the magazine.

. Defense trade policy

Non-defense trade policy

. Country-specific trade issues

. Trade legislation

. Licensing procedures

. Regulatory and legal issues

. Licensing case studies

. Compliance case studies

. Other (please explain in Comments)

CONAN FONE

30. This magazine is provided to DTC regis-
trants and others free of charge. If we were to
change to a paid subscription basis (at c. $20/
year), how would your organization react?

1. We would pay for one subscription.

2. We would pay for more than one
subscription.

3. We would not pay to subscribe.

4. Don’t know.

Comments:

We welcome lengthier comments,
suggestions, and criticism.

Defense Trade News, Volume 5, Number 1, January 1994

Page 27



COMMODITY JURISDICTION
Nuclear Thermat Rocket Engine USML IV(a)
Oil Filtration Kit, Not Specifically Designed

for Military Engines CCL 9A94F
PBAN Polymer CCL 1C31B
Printer, Continuous: CCL 6A%G
Processor, Single Board Signal USML XI
Radar, Site Security Surveillance CCL 6A96G
Radiation-Hardened Components

Designed for Military Systems USML XI(a)
Radioactivel y-Contaminated Scrap Metals

(Depleted Uranium, Beryllium, etc.),

Non-Military Recycling, Manufacturing

Technology for cel

Radio Controller and Data Modem Not

Specifically Designed for Military Application = CCLTM
Radio Frequency Target Generator CCL 6A96G
Receiver, GPS ccL*
Receiver HF, Designed for Military Use USML XI(b)
Receiver System, Wide-band, Not Designed,

Modified, or Configured for Military Application CCL **

Reflector Assembly for Communications Antenna CCL 5A96G.
Schottky Rectifier Semiconductors Not Specifically

Designed for Military Application CCL 3A96G
Signature Reduction Material USML XIII(e)
Silicon Carbon-Aluminum Alloy Metal Matrix Composites

Production Process ccL
Silicon Nitride Rolling Contact Bearing Materials,

Generic ccL**
Software, Electronic Catalog CCL SDI3A

Software, Employing DES for Data Encryption USML XIII(b)
Software, Employing DES for Password Encryption

Object Code CCLS5DI3A
Source Code USML XIII(b)
Software, Military Communications USML XI(e)
Software, Simulation and Analytical Modeling CCL 4D96G

COMMODITY
Steel Plate, Not Designed, Modified, or Configured

JURISDICTION

for Use as Armor for Defense Articles ccL*
Suppressors, Data Line Transient, Not
Designed for Military Use CCL 3A96G
Surge Protection Modules, High-Power
Specifically Designed, Modified, or
Configured for Military Application USML Xi(d)
Not Specifically Designed, Modified, or
Configured for Military Application cc”
Switch, Automatic Bus Transfer CCL 8A94F
Tachometer, DC CCL 2A96G
Tape Recorders, Remote Sensing Satellite USML XV(d)
Technical Data Related to AZT cc”
Technical Data Related to Equipment Specifically
Designed to Detect, Analyze, and Jam
Communications Signals USML XI(e)
Technical Data Related to a Mortar USML Ia)
Technical Data Related to Military Multilevel
Database Systems USML XIU(k)
Telecommunications Switching System
Limited Access Feature CCLSDIBA
Television Receiver /Decoder System With No
Digital Encryption Capability and With the
Digital Decryption Limited to Video and
Audio Functions CCL 5A95F
Test Set for Military Aviation Oxygen Mask USML X(d)
Vehicle, Remotely Operated, Specifically
Designed for Inspecting Nuclear and
Hydroelectric Power Plants CCL 2A50B
Voice Transmitter CCL 5A80D
Zirconium
Zirconium 93, 95, and 97 NRC, App F
Zirconium Alloy Powder of
Particle Size 60 Micrometers or Less
Manufactured from Material With a
Zirconium Content of 99% or More USML V(a)
Zirconium Sponge Compacts USML*
Zirconium, Other Forms ccL

* USML category is the same as the item for which this part or component was designed.

** A specific Export Commodity Classification Number (ECCN) was not provided by the Department of Commerce. For the ECCN
number, please file a commodity classification request with the Bureau of Export Administration (BXA), Department of Commerce,

P.O. Box 273, Washington, DC 20044

Defense Trade News, Volume 5, Number 1, January 1994

Page 23



DEFENSE TRADE NEWS
United States Department of State postage a Hes PAID

Washington, D.C. 20522-0602 US Department of State
ee Permit No. G-130

OFFICIAL BUSINESS
PENALTY FOR PRIVATE USE $300

Address Correction Re . tis. Cora cumpe
Federation of American Scientists

307 Massachusetts Ave., N.E.
WASHINGTON, BC 20002-

SMON Opes esugjag 9181S JO JUaWJeEdeg SN

vy66. Asenuer

LON ‘S “10A


State Tiger Team Unleashed

Reorganizing for Efficiency at the Office of Defense Trade Controls

If you have submitted a license application to
the Office of Defense Trade Controls since
December, 1993, you may have gotten it back
stamped with the phrase “TIGER TEAM.”
Those licenses are part of an organizational
experiment underway at DTC—one aspect of
a multi-pronged effort to improve productiv-
ity, increase job satisfaction within the office,
and increase customer satisfaction with case
processing.

Enhanced computerization. A major thrust
of the change is an emphasis on greater
computerization at DTC. Two examples are
the implementation of license application
through “electronic data interface,”or EDI (in
which the applicant submits a license applica-
tion electronically via the ELLIE system), and
the expansion of electronic staffing of cases to
other agencies and other State Department
offices.

DTC is already using electronic means to
staff cases to the Department of Defense, and
will expand electronic staffing to State
Department offices early in 1994. This will
enable DTC to get cases staffed instanta-
neously and ona daily basis, and will combat
the problem of paper files going astray as
they travel between DTC and other offices
and agencies.

Organizational change. Perhaps the most
intriguing element of the change at DTC
involves use of a “Tiger Team” experiment to
test the utility of “Total Quality Manage-
ment” (TQM) theory in organizing the office
as a whole and in approaching license pro-
cessing.

Tigers in the vanguard. The thrust of the
TQM approach as applied to DTC is to com-

bine licensing, compliance, and administra-
tive specialists into largely self-managed
work teams, improving inter-functional
coordination and cutting down on the
transfer of cases among DTC divisions.

Licensing officer Ken Peoples has been
appointed to head this team for a three-month
trial period. Dan Cook and Major Bob Kovac
join the Team as licensing analysts (Bob also
as the Team’s “quality control” officer), Jim
DePalma as computer and electronics expert,
Danielle Mack as administrative assistant,

and Eva Tyler as compliance analyst.

Since December 6, license applications
assigned to Peoples, Cook, or Kovac have
been processed using this teaming approach,
with a processing system which the team has
designed itself. Licenses which they process
in this fashion are being marked “TIGER
TEAM” when issued.

Fewer hands, quicker handling. The Tiger
Team expects to reduce case processing time
by minimizing the number of people
handling each case, maximizing the amount
done to a case each time someone handles it
(e.g., having licensing officers type in license
provisos instead of passing cases off to secre-
taries for typing), and emphasizing use of
electronics (ELLIE, electronic staffing).

Towards paperless licensing. The Team is
also looking at several proposals to improve
processing speed and reduce opportunities
for human error—e.g., eliminating manual
processing of applications, computer-gener-
ating licenses at the end of the process. If
possible, the Team wants to use such an
approach as part of the experiment. Note that
this will be possible only with cases submit-
ted electronically (another reason for compa-
nies to sign onto the ELLIE pilot project).

Page 18

Defense Trade News, Volume 5, Number 1, January 1994



OPERATIONS

Fine-Tuning the ITAR

Questions and Answers on the Revised International Traffic in Arms Regulations

A revised version of the International Traffic
in Arms Regulation (ITAR) entered into force
on July 22, 1993. This article provides infor-
mal guidance and clarification of some of the
changes in the new ITAR. Only changes
printed in the Federal Register constitute
official modifications to the ITAR.

Exemptions and Registration. While the new
ITAR allows for many new exemptions and
reduced paperwork, companies in the
business of defense trade must still fulfill the
requirements of registration. All U.S. manu-
facturers of defense articles, as well as export-
ers of defense articles and persons furnishing
defense services, are required to register with
the Office of Defense Trade Controls. This is
true even if they will be exporting articles or
services that, in the specific circumstances,
are exempt from licensing requirements.

Public Domain Exemptions (§120.11 (5). The
public domain exemption for technical data
does not apply to patents protected by
secrecy orders.

Hierarchy (§120.1 (b). The revised ITAR
provides that all authorities conferred upon
the Director of the Office of Defense Trade
Controls may be exercised at any time by the
Under Secretary of State for International
Security Affairs, the Assistant Secretary of
State for Political-Military Affairs, and the
Deputy Assistant Secretary of State for Export
Controls.

Transfer or Disclosure to Embassies
(§120.13). The new ITAR expressly provides
that disclosure or transfer of any defense

article to a foreign embassy in the U.S. is to be
considered an export for the purposes of
these regulations.

Satellites (§120.17 (6). Transfer of a U.S.-
origin satellite between foreign countries, or
from the U.S. to a foreign country, requires a
license. However, the launch of a satellite
from the U.S. or from a foreign country (once
the license for transfer has been approved)
does not require a license. Once in space, a
satellite is still covered by the ITAR; the
transfer of ownership, control, or use of a
satellite in orbit from one country to another
requires a license.

Free Trade Zones (§120.18). Any transfer of
an item covered by the USML to a foreign
country through a free trade zone requires a
license or other written approval, whether or
not the item originates in the U.S.

“NATO Plus” Exemption (§123.9). The
ITAR, under certain circumstances, grants an
exemption from the general requirement for
State Department retransfer authorization to
transfers to the governments of NATO mem-
bers, Japan and Australia of U.S.-origin
components incorporated into a foreign
defense article. This exemption does not
apply to parties ineligible under §126.7(a)(2)-
(7), §127.7(c), or §128. These parties must
apply to DTC for specific exemption to legally
retransfer defense items to any recipient,
including the governments of NATO coun-
tries, Japan and Australia.

Empowered Official Defined (§120.25). The
ITAR defines the criteria a company officer

signing a license application or other written
request for approval must meet to qualify as

Page 10

Defense Trade News, Volume 5, Number 1, January 1994



Contacting the Office of Defense Trade Controls

Postal Address

Office of Defense Trade Controls
Bureau of Political-Military Affairs
PM/DTC, SA-6, Room 200

U.S. Department of State
Washington, D.C. 20522-0602

Express Mail/Courier Delivery Address

Office of Defense Trade Controls

Bureau of Political-Military Affairs
PM/DTC, Room 200

U.S. Department of State

1701 N. Fort Myer Drive (Nash St. Entrance)
Arlington, VA 22209-3113

Fax Numbers

Director; Licensing Division;

Defense Trade News: (703) 875-6647
Compliance Division;

info on ROBB or ELLIE: (703) 875-5663

General Telephone Numbers

General Information: (703) 875-6644
Office Director & Deputies: (703) 875-7050
Defense Trade News: (703) 875-5671
Licensing Division: (703) 875-6644

Registration/Compliance: (703) 875-6650
Commodity Jurisdiction: (703) 875-5655

Status Inquiry Telephone Numbers

General Status Inquiries: (703) 875-6652
Congressional Case Status: (703) 875-6641
Automated License Status System:

(703) 875-7374
Remote On-Line Bulletin Board:

(703) 875-6650

Contacting the Deputy Assistant Secretary
for Export Controls

Deputy Assistant Secretary for Export Controls
Bureau of Political-Military Affairs

PM, Room 7325A

U.S. Department of State

Washington, D.C. 20520-7325

Contacting the Office of Export
Control Policy

Office ofExport Control Policy
Bureau of Political-Military Affairs
PM/EXP, Room 2242

U.S. Department of State
Washington, D.C. 20520-2242

Telephone (202) 647-4231
Fax (202) 647-4232

Department of State Publication 9783
Bureau of Political-Military Affairs
Revised Dec. 1993

*U.S. G.P.0.21994-301-462 : 80083


Page 30 Defense Trade News, Volume 5, Number 1, January 1994



LS

The Export Control Agenda

Under Secretary of State Davis Testifies

Under Secretary of State for International
Security Affairs Lynn E. Davis testified before
the House Committee on Foreign Affairs
Subcommittee on Europe and the Middle East
on November 10, 1993, addressing non-
proliferation and export control issues. An
excerpt from Under Secretary Davis's opening
statement follows.

Thank you very much. . . for the opportunity
to appear before your committee to discuss an
issue of great importance to the Clinton
Administration. As you and your committee
appreciate, non-proliferation is the arms
control priority of the post-Cold War world.
The proliferation of dangerous weapons
represents the most critical security threat we
face. As a result, the Clinton Administration
is placing a very high priority on non-prolif-
eration.

Let me briefly describe the Clinton
Administration’s non-proliferation agenda,
which spans the whole range of proliferation
dangers and which we are pursuing with a
global diplomatic effort.

Secretary Christopher recently returned from
a visit, a trip to Russia, Kazakhstan, Ukraine,
and Belarus. In addition to pledging U.S. sup-
port for democratic reform, Secretary Christo-
pher focused on the nuclear danger and our
goal to prevent the threats posed from the
proliferation of weapons of mass destruction.

U.SJN.LS. Partnership

The United States and Russia, now as part-
ners, are consulting very closely on the goals
of negotiating as quickly as possible a Com-
prehensive Test Ban Treaty, achieving the

indefinite extension of the Non-Proliferation
Treaty, a global ban on the production of
fissile material for the production of nuclear
weapons, and the elimination of chemical
weapons. In Moscow, we worked together to
ensure a smooth entry into force of the
Bilateral Missile Technology Control Regime
Agreement.

Kazakhstan committed to accede to the NPT
as a non-nuclear weapons state by the end of
this year. In Ukraine, President Kravchuk
reaffirmed the goal of a non-nuclear Ukraine
and his personal commitment to ratify the
START Treaty and to proceed to the NPT as a
non-nuclear weapons state. He made clear
that the Lisbon protocol covers all nuclear
weapons in the Ukraine, including the SS-24
missiles.

But much remains to be done. . . particularly
on the 3,000 former Soviet nuclear warheads
that need to be eliminated from Ukraine,
Kazakhstan, and Belarus. The U.S. is working
actively to facilitate agreements to transfer all
these nuclear warheads to Russia for disman-
tling and to provide compensation for the
highly enriched uranium in them.

Through the Nunn-Lugar program, we will
assist in the elimination of strategic offensive
arms in all four states. Such assistance is
already flowing to Russia and Belarus and we
aim to put the necessary agreements in place
with Ukraine and Kazakhstan in the coming
weeks. To prevent these nations from becom-
ing a source of dangerous arms and technolo-
gies, we are working with them to establish
effective export control systems.

Our activities in the Newly Independent
States demonstrate the many diverse
elements which constitute the Clinton
Administration's overall non-proliferation
policy. Let me describe our overall goals with
respect to our non-proliferation policy.

Defense Trade News, Volume 5, Number 1, January 1994

Page 7



Dl

Chemical and Biological Weapons

To help deter violations of the Biological
Weapons Convention, we will promote new
measures to provide increased transparency
of activities and facilities that could have bio-
logical weapons applications. We call on all
nations—including our own—to ratify the
Chemical Weapons Convention quickly so
that it may enter into force by January 13,
1995. We will work with others to support
the international Organization for the Prohibi-
tion of Chemical Weapons created by the
Convention.

Regional Non-Proliferation Initiatives

Non-proliferation will receive greater priority
in our diplomacy and will be taken into
account in our relations with countries
around the world. We will make special
efforts to address the proliferation threat in
regions of tension such as the Korean Penin-
sula, the Middle East, and South Asia, includ-
ing efforts to address the underlying motiva-
tions for weapons acquistion and to promote
regional confidence-building steps.

In Korea, our goal remains a non-nuclear
peninsula. We will make every effort to
secure North Korea’s full compliance with its
non-proliferation commitments and effective
implementation of the North-South denucle-
arization agreement.

In parallel with our efforts to obtain a secure,
just, and lasting peace in the Middle East, we
will promote dialogue and confidence-build-
ing steps to create the basis for a Middle East
free of weapons of mass destruction. In the

Persian Gulf, we will work with other suppli-

ers to contain Iran’s nuclear, missile, and
CBW ambitions, while preventing reconstruc-
tion of Iraq's activities in these areas. In South
Asia, we will encourage India and Pakistan to
proceed with multilateral discussions of non-
proliferation and security issues, with the
goal of capping and eventually rolling back
their nuclear and missile capabilities.

In developing our overall approach to Latin
America and South Africa, we will take
account of the significant non-proliferation
progress made in these regions in recent
years. We will intensify efforts to ensure that
the former Soviet Union, Eastern Europe, and
China do not contribute to the spread of
weapons of mass destruction and missiles.

Military Planning and Doctrine

We will give proliferation a higher profile in
our intelligence collection and analysis and
defense planning and ensure that our own
force structure and military planning address
the potential threat from weapons of mass
destruction and missiles around the world.

Conventional Arms Transfers

We will actively seek greater transparency in
the area of conventional arms transfers and
promote regional confidence-building mea-
sures to encourage restraint on such transfers
to regions of instability. The U.S. will under-
take a comprehensive review of conventional
arms transfer policy, taking into account
national security, arms control, trade, budget- -
ary, and economic competitiveness consider-
ations. #

Page 6

__ Defense Trade News, Volume 5, Number 1, January 1994



You be the judge. Eventually, the Tiger
Team will seek industry reaction and com-
ments from those customers affected by the
process. At the end of the 3-month trial
period, a neutral observer will be called in to
evaluate the Team’s performance; customer
satisfaction will be one of the criteria used in
that evaluation. In the meantime, applicants
should not be surprised if they receive a call
from Bob Kovac seeking feedback on a case
the Tiger Team has handled.

Investment in training. Finally, training will
be an important aspect not only of the Tiger
Team project, but of the customer service and
processing enhancements DTC seeks to
implement in the near future.

All DTC employees are scheduled to take a
2-day course in “customer service” at the
State Department's National Foreign Affairs
Training Center in January. In addition, all
DTC employees will receive basic training in
TOM theory, and selected employees will
receive advanced TOM training.

This training is being scheduled so everyone
will be given adequate “back-up” while out of
the office on training, but callers seeking a
specific person in the office might be delayed.
Any delays or inconveniences will be short-
lived and, we expect, minor—and worth it. @

Questions on the Tiger Team project can be
addressed to Ken Peoples at (703) 875-6619,
Dan Cook at 875-5674, Bob Kovac at
875-5199, or Jim DePalma at 875-7391.

sion of previously-issued licenses.

Landmine Moratorium Extended Through 1996

On November 10, 1993, Congress extended for an additional three years the
moratorium on exports of anti-personnel landmines established in the 1993
Defense Authorization Act. The original one-year moratorium took effect on
November 23, 1992, prohibiting the sale, transfer, or export under the Arms Export
Control Act of any anti-personnel land mine. In November 1992 the State Depart-
ment announced via the Federal Register (57 FR 55614) the revocation or suspen-

Defense Trade News, Volume 5, Number 1, January 1994

Page 19



LS

We have also demonstrated that we are
prepared to pursue our non-proliferation
goals vigorously even when such efforts
involve sanctions and may risk frictions in
critical bilateral relationships.

Again. . . to point out the breadth and range
of the Clinton Administration's overall non-
proliferation policies, we are in the process
of reorienting export controls in the post-
Cold War world to meet the new dangers
and security concerns that we see in the
world that we now live in.

Reorienting Export Controls

There is general agreement that the
COCOM controls on trade with Russia and
the other states of the former Warsaw Pact
should be phased out, and a partnership
offered to Russia and other Newly Indepen-
dent States in a new regime. The partner-
ship will be based on clearly defined criteria
concerning adherence to export controls
and non-proliferation norms. We and our
allies are discussing now how best to struc-
ture a new regime in partnership with
Russia and the other Newly Independent
States to enhance transparency and coordi-
nation of controls on exports of arms and
sensitive dual-use and military technolo-
gies. Our approach is multilateral, focused
on new dangers, and particularly focused
onthe dangers we see in Iran, Iraq, Libya,
and North Korea. .. .

Let me conclude by a few observations with
respect to how to think about our non-pro-
liferation goals in the new world.

We very much appreciate the complex nature of
the task of promoting non-proliferation. It is not
simply stopping the flow of technologies,
weapons, or hardware. Rather, it deals with the
tough and interrelated issues of security,
economics, jobs, and trade. It also cuts to the
fundamental prerogative of states and that is
their sovereignty.

Non-proliferation requires global engagement.
Success will also require regional strategies
tailored to the specific security concerns of
individual countries. Diplomacy, backed up by
American power, represents our primary tool
in attaining our non-proliferation goals. At the
same time, we will ensure that U.S. and allied
forces are prepared to cope with possible
threats if our non-proliferation efforts were

to fail.

American Leadership

Success will require American leadership. The
Clinton Administration is poised to undertake
that leadership around the world. We also
recognize that we cannot shoulder all
non-proliferation responsibilities alone. We
will require the help of others to succeed, first
in controlling trade in dangerous arms and
technologies which are available now around
the world.

But let me conclude. . . that as important, if not
more important, will be that the Administration
and the Congress will work as a team. We share
the same non-proliferation goals, and working
together, in my view, we will be able to achieve
these so the world knows that the United States
stands firmly for these goals and that we are
prepared to take the steps necessary to achieve
those goals. @

Defense Trade News, Volume 5, Number 1, January 1994

Page 9



Personnel Updates

Out...

Marsha Finley (Major, USA), completed her
3-year tenure as Managing Editor of Defense
Trade News and retired from the Army in
November 1993.

Foreign Service Officer Charles A. Ray,
formerly Special Assistant to the Director of
DTC and Executive Editor of Defense Trade
News, is now Deputy Chief of Mission at U.S.
Embassy Freetown, Sierra Leone.

Martin “Tex” Maier (Major, USAF) after
completing a 2-year tour as a DTC licensing

officer, moving to a similar position at USAF.

DTC licensing officer Sue Plant departed in
November to join her husband who will be
employed in the US Embassy in Bonn.

In...

Philip S. Kosnett joined DTC in July, 1993
as Special Assistant to the Director and
Executive Editor of Defense Trade News. A
Foreign Service Officer, he has served in
Ankara, Turkey; Nagoya, Japan; and State’s
Bureau of Intelligence and Research.

Christopher R. Elder joined DTC’s new
Research and Analysis Branch in March, 1993
as a Compliance Specialist. He previously
handled Commodity Jurisdictions in the
Arms Licensing Division.

Robert Huffman also joined DTC ‘s Research
and Analysis Branch in March 1993 as a
Compliance Specialist. He has worked for
DTC since October 1991, when he started as a
clerk in the Compliance Analysis Division.

The Office of Export Control Policy (for-
merly the Office of Defense Trade Policy)
welcomed a new director and four officers:

William P. Pope assumed direction of EXP
in August, after a tour as Deputy Political
Counselor at U.S, Embassy Pretoria, South
Africa. A member of the Senior Foreign
Service, he has served in Paris; Belgrade;
Zagreb; and Gaborone, Botswana. In Wash-
ington, he has served in the Legislative
Affairs, Near Eastern Affairs, African Affairs,
and Intelligence and Research bureaus.

Paul S. Aronsohn handles industry outreach
and intergovernmental issues. Before coming
to State, he worked in the White House
Communications Office. During the Clinton
Administration transition he served as a
liaison to the Commerce Department's Bu-
reau of Export Administration.

John C. Clarkson is responsible for the
Western Europe, NATO and United Nations
Arms Register portfolios. A Foreign Service
Officer, he has completed tours in Helsinki,
Finland; Damascus, Syria; and Kingston,
Jamaica. He has also served in State’s Bureau
of Economic and Business Affairs.

Foreign Service Officer Julie L. Kavanagh
covers East Asia and represents the Bureau of
Political-Military Affairs on the Committee on
Foreign Investment in the U.S. She has served
in Rio de Janeiro, Brazil and Montevideo,
Uruguay.

Jeffry R. Olesen, also a Foreign Service
Officer, is responsible for the Middle East and
South Asia. He has served in Guadalajara,
Mexico; Abu Dhabi, United Arab Emirates;
and Lahore, Pakistan.

Defense Trade News, Volume 5, Number 1, January 1994

Page 25



ASM 2S

United States Department of State ° Bureau of Political-Military Affairs

Defense Trade News

and Export Policy Bulletin

Volume 5, Number 1 e Washington, D.C. ° January 1994
Policy
Non-Proliferation and Export Control Policy 4

White House Unveils New Framework

The Export Control Agenda 7
Under Secretary of State Davis Testifies

Operations

Fine-Tuning the ITAR 10
Questions and Answers on the Revised International Traffic in Arms Regulations

Don't Just Carp; Turn to SARP 12
A New Licensing Appeal Mechanism at State

DTSA's Role in the Export Review Process 13
An Introduction to the Defense Technology Security Agency

ELLIE Comes on Line 17
DTC Introduces Electronic License Submission

State Tiger Team Unleashed 18
Reorganizing for Efficiency at the Office of Defense Trade Controls

a é

Departments
Defense Trade Advisory Group Developments 20
Commodity Jurisdiction Determinations 22
Suspensions & Debarments 24
Personnel Updates 25
Tips and Tidbits 26
Feedback Questionnaire 27
ELLIE User Application 29

Training Form 31


Don’t Just Carp; Turn to SARP

A New Licensing Appeal Mechanism at State

The Office of Defense Trade Controls, on the
recommendation of the Department of State’s
Defense Trade Advisory Group (DTAG), has
implemented an informal appeal process for
license applications for which it has made a
preliminary determination of denial. The
process is known as the State Appeal Review
Process, or SARP.

An additional appeal mechanism. The SARP
will not replace the formal appeals process
provided for in ITAR §126.7(d). The goal is
for the Director of DTC to augment the regu-
latory system by ensuring industry has the
opportunity to understand the U.S. Govern-
ment position on any case which DTC intends
to deny.

Eligibility. Cases eligible for review in the
SARP include applications which DTC licens-
ing officers recommend for denial either in
the initial review process or following inter-
agency referral. Not all cases are eligible for
the SARP.

For example, any ineligible case include those
for which there clearly exists published for-
eign policy or national security guidelines.
This would include publication of denial cri-
teria in the regulations, Federal Register, DTN
or any MTEC case where the USG has re-
quested MTEC assurances and the foreign
government has either not responded or re-
fuses to provide the required assurances.

Grounds for denial. In accordance with
ITAR §126.7 (a) (1), applications for export
licenses will not be approved when such
exports are deemed not to be in furtherance of
world peace, national security, or the foreign
policy of the United States. Factors that may
Jead to a denial include human rights con-
cerns, regulatory interpretation, technological
sophistication, bona fides of the end use and
end user, and concerns related to the Missile
Technology Control Regime.

Step one—notification. The SARP process
will begin with DTC notifying the applicant
by phone and fax of the intent to deny,
explaining the rationale for the denial. DTC
will request a written response as to whether
the applicant wishes to implement a SARP
review. If the applicant does not reply within
3 working days of transmission of the notifi-
cation, DTC will proceed with a formal writ-
ten denial. To reply, the applicant need only
complete the bottom of DTC’s fax notification
form.

Step two—the ASID test. If the applicant
requests a SARP, the applicant has 7 working
days, dating from DTC’s notification, to sub-
mit a paper known as the “Applicant SARP
Information Document (ASID).” The ASID
should address and counter DTC’s denial
rationale; thus it must contain new informa-
tion not included in the original

application.

The ASID paper, at this time, has no format
requirements. However, if the Department of
Defense has held a “Day in Court” review of
the application, the applicant should attach a
copy of the “White Paper” which was pre-
pared for the Day in Court.

Step three—the meeting. Within 2 working
days of receiving the ASID, DTC will review
it and decide whether the additional informa-
tion presented warrants a follow-up meeting.
If so, DTC will coordinate with the applicant
to establish a meeting date, time, and place.
DTC may invite other interested agencies to
participate, in which case DTC will request
that the applicant provide copies of the ASID
directly to all U.S.G. personnel who will par-
ticipate in the SARP.

Step four—decision. DTC will not rule on
the spot, but will notify the applicant in writ-
ing of its decision within 5 working days. #

Page 12

Defense Trade News, Volume 5, Number 1, January 1994



a

request for approval must meet to qualify as
an “empowered official” for the purposes of
registration. All these criteria must be met. In
submitting a license application, other request
for approval or registration form, an empow-
ered official does not need to demonstrate
evidence of fulfillment of the criteria unless
specifically requested.

Questions have been raised as to whether an
“empowered official” needs to have a
“power of attorney.” An employee need not
hold a power of attorney for a company to be
designated an empowered official for the
purposes of the ITAR.

Records Maintenance (§122.5). Companies
must hold records of defense trade for

5 years from the expiration of the license or
other approval, down from 6.

Intermediate Consignees (§123.9 (c) (d).
DTC must be informed of all intermediate
consignees, or any other consignees, involved
in any export of defense articles. Even when
an exemption is claimed for a U.S.-origin
defense article shipment, all companies at
each stage of the shipment must be informed
that the article is of U.S. origin and may not
be retransferred except with the prior written
approval of the Department of State.

Proscriptions (§126.1). In addition to those
countries listed in §126 as proscribed, other
countries may from time to time be subject to
the denial, suspension, or revocation of
licenses to export to them. These decisions
will be announced in the Federal Register.

DTC invites questions and comments
on the new ITAR and its implementa-
tion. Please fax your thoughts, queries,
and ideas to (703) 875-6647.

ITAR Qs & As

Q: Will licenses approved before July 22,
1993 now be valid for 4 years (new ITAR),
instead of 3 years (old ITAR)?

A: No.The provision concerning validity of
export licenses is not retroactive to previously
issued licenses.

Q: Does the new ITAR extend the validity of
DSP-94 licenses (for authority to export under
the Foreign Military Sales program) from

2 years to 4 years?

A: No. However, it is the intent of DTC to
amend the ITAR to do so.

Q: §122.4 (c) (1) - (3) requires certain informa-
tion to be provided to DTC when a new
entity is formed in a merger or acquisition. Is
there a specific time period within which DTC
must be notified?

A: DTC must be notified of any material
changes in the registration statement, includ-
ing any material changes in the information
required by §122.4 (c) (1) (3), within 5 days of
the event, as specified in §122.4 (a) (2).

Q: Isa registrant required to notify DTC in
advance of any intended sale or transfer toa
foreign person of ownership or control of the
registrant or entity thereof?

A: Yes, in accordance with §122.4 (b). A
registrant must notify DTC in writing at least
60 days in advance of any such intended sale
or transfer. @

To order a copy of the revised ITAR,
call the Government Printing Office at
(202) 783-3238 from 8:00 -4:00 EST. Cite
stock number 069-001-000-58-1.

Defense Trade News, Volume §, Number 1, January 1994

Page 11



Tape Edge Before Mailing

January 1994
Defense Trade News

Training Seminars
PM/DTC, SA-6, Room 200

Office of Defense Trade Controls
Bureau of Political Military Affairs
US. Department of State

Washington, D.C. 20522-0602


Export Licensing Training From DTC

The Office of Defense Trade Controls can design a seminar on export licensing policies and proce-
dures with your specific needs in mind. We hold our seminars at our office at 1701 N. Fort Myer
Drive, Arlington, VA, minutes from the District of Columbia.

We normally hold four half-day seminars per year, with attendance limited to 30. We combine
participants from different companies each month to make up a session, and encourage small
companies to apply.

To sign up, please mail this application to DTC or fax it to (703) 875-6647. We will contact you.

1. Types of training desired:

Completion of Applications ___ Registration Requirements
____ Country Licensing Policies ____ Congressional Requirements
____COCOM Requirements ____ Agreement Requirements
___..US Customs EXODUS Program ____ Commodity Jurisdiction Requests
_..._.Processing of Requests ____Licensing Foreign Nationals

2. Other subject areas you wish covered.

3. Number wishing to attend:

4. Primary U.S. Munitions List categories of defense articles, services, and/or technical data with
which your firm deals. 1. 2. 3. 4.

5. Would your company be interested in briefing DTC about your products or services? Yes/No.

6. Company Name
DTC Registration Code -

Address

City , State, ZIP _

Point of Contact

Phone ( ) = Fax ( ) -.


The spread of nuclear weapons is clearly the
greatest proliferation danger we face. Our
foremost goal is universal NPT membership.
Weare actively urging all NPT parties to join
us in extending the Non-Proliferation Treaty
indefinitely and unconditionally in 1995. And
I can report. . . that support is growing for
these goals.

Critical Initiatives

The Clinton Administration has announced
two critical initiatives in support of our
overall nuclear nonproliferation strategy:

to achieve a Comprehensive Nuclear Test Ban
Treaty by 1996, and to put in place a global.
convention cutting off production of fissile
material for nuclear weapons purposes.

I can report again momentum towards a
CTBT is growing. Last summer, the Confer-
ence on Disarmament reached consensus on
beginning formal negotiations in Geneva in
January of 1994.

Since then, we have made good progress on
drafting a specific CD negotiating mandate
for the Conference on Disarmament. And in
addition, in New York at the General Assem-
bly, for the first time. .. we will achieve a
consensus resolution supporting test ban ne-
gotiations. So we see movement and momen-
tum towards a Comprehensive Test Ban
Treaty.

But we also need measures to strengthen the
global nuclear non-proliferation regime with
a regional focus. And here let me describe to
you briefly one particular area of concern and
one particular set of policies that are very
important to our Administration. And this
has to do with North Korea.

North Korea Concerns

President Clinton made clear that North
Korea cannot be allowed to develop a nuclear

bomb. We are thus working very closely with
the IAEA, with Japan, South Korea, and other
interested parties to bring North Korea into
compliance with all of its international obliga-
tions. This is not an easy process but we
remain committed to our goal of having
North Korea comply with its safeguards obli-
gations under the Non-Proliferation Treaty
and implement the North-South Denuclear-
ization Declaration.

Recent North Korean behavior has been
disappointing. The U.S. has made clear its
readiness to address legitimate North Korea
concerns. But unless the North Koreans take
the necessary steps to persuade the world
community that it is not pursuing a nuclear
weapons option, we will have no choice but
to end our bilateral dialogue with North
Korea and pursue further steps in the United
Nations Security Council.

Let me turn, then, briefly to. . . the progress
we have made with respect to tightening,
export controls to prevent the spread of the
materials necessary to produce chemical and
biological weapons.

MTCR Successes

With respect to missile proliferation, the
multilateral missile technology control regime
will continue to be the primary tool of United
States missile nonproliferation policy. It
works and has enjoyed several recent
successes which this committee has learned
about through our past consultations.

In South Africa, Argentina, Hungary and in
Russia we are achieving successes with
respect to the flow of missiles and missile
technology. We now intend to move the
regime into the future, beyond a group of
responsible suppliers that seeks to ensure that
its own industries do not inadvertently
contribute to missile proliferation, to a group
that works actively together to deal with the
missile proliferation problem worldwide.

Page 8

Defense Trade News, Volume 5, Number 1, January 1994



Commodity Jurisdiction
Determinations

The following chart lists selected recent Commodity
Jurisdiction (CJ) determinations. We have described the
commodities in general terms to ensure the confidentiality
of proprietary information related to individual cases.

Determinations apply only to the specific commodities

reviewed. If you believe one of your products is similar to one listed here as having been placed
on the Commerce Department's Commerce Control List (CCL) and wish to have your product
reviewed, please submit a CJ request letter following the guidelines set forth in ITAR §120.4. Refer
to Defense Trade News articles “Guidelines for Preparing C] Requests” and “C]s for Mass Market
Software” (Vol. 3, No. 4, Oct 1992) and “Class and Multiple C] Requests” (Vol. 3, No. 1, Jan 1992),

or call (703) 875-5655 for guidance. #

COMMODITY JURISDICTION
Accelerometers
Specifically Designed or Modified
for military use USML XII(4)
Not Specifically Designed or
Modified for military use ech

Acoustic Charge Transport Devices, Processors,

Modules and Development Stations USML Xi(a)
Actuators, Electric Motor Operated Valve,
Specifically Designed for Military Use USML V(b)
Armor, Level 1V
‘Aluminum Oxide Ceramic Inserts USML X(a)
Aerial Targets Specifically
Designed for Military Gunnery Training USML IX(a)
Aerial Targets Associated Equipment USML IX(b)
Aerial Targets Technical Assistance USML IX(c)
Ammunition Demilitarization System USML XXI
Antennas Specifically
Designed for Military Use USML XI(d)
Artillery Fuze Part USML III)
Artillery Fuze Part Manufacturing Equipment — USML III(d)
Batteries, Lithium USML XI(d)
Braided Textiles
Specifically Designed, Modified,
or Configured for Military Use USML XIII(a)
Not Specifically Designed, Modified, or
Configured for Military Use ccL*
Bullet Casting Machines
Automated USML IiI(d)
Non-automated CCL 1B96G
Bulet Lubricant CCL 1€96G
Bullet Molds
Designed, Modified, or Configured for
‘Automated Bullet Casting Machines USML III(4)

Not Designed, Modified, or Configured for Automated
Bullet Casting Machines. ccL*

COMMODITY JURISDICTION
Camera, Military Thermal Imaging USML Xil(c}
Camera System, Infrared USML XII(c)
Collators
Specifically Designed, Modified, or
Configured for Bullet Manufacturing USML ITI(a)
Not Specifically Designed, Modified, or
Configured for Bullet Manufacturing CCL 1B96G

Compasses, Navigation, Specifically Designed

for Military Use USML XII)
Computers , Microcomputers, Monitors, and Keyboards
That Are Ruggedized
TEMPEST Models USML XI(b)
Non-TEMPEST Models: ccL**

‘Cones, Copper and Molybdenum,
Used in Research of Shaped Charge Liners USML III(b)

Dies, Lubricating and Sizing USML II(d)
Document Analyzer, Fraud Investigations CCL 3A96G
Fire Detection Kit cel
Flight Loads Recording Systems,

Designed for Military Aircraft USML VIHG)
GPS Mission Planning Station CCL 7A94E
GPS Receiver, Miniaturized Airborne CCL 7A25B
Gyro, Vertical, Specifically Designed for

Commercial Use CCL 7A94F
Headsets, Specifically Modified for

Use with Armored Vehicles USML X(a)
Intelligence Surveillance System USML XI(b)
Image Intensifier Tube, Military,

Second Generation USML XI()
Imaging Equipment, Thermal USML XII(c)
Metal Matrix Composites Production Process cc
Micro-peripheral Devices, Specifically Designed

for Commercial Spacecraft USML Xv(d)

Page 22

Defense Trade News, Volume 5, Number 1, January 1994



Page 28 Defense Trade News, Volume 5, Number 1, January 1994



POLICY

Non-Proliferation and Export Control Policy

White House Unveils New Framework

The following statement was released by the
White House, Office of the Press Secretary,
Washington, DC, September 27, 1993. Reprinted
from the U.S. Department of State Dispatch.

The President today established a framework
for U.S. efforts to prevent the proliferation of
weapons of mass destruction and the missiles
that deliver them. He outlined three major
principles to guide our non-proliferation and
export control policy.

¢ Our national security requires us to
accord higher priority to non-proliferation
and to make it an integral element of our
relations with other countries.

* To strengthen U.S. economic growth,
democratization abroad, and international
stability, we actively seek expanded trade and
technology exchange with nations, including
former adversaries, that abide by global non-
proliferation norms.

¢ We need to build a new consensus—
embracing the executive and legislative
branches, industry and the public, and friends
abroad—to promote effective non-prolifera-
tion efforts and integrate our non-prolifera-
tion and economic goals.

The President reaffirmed U.S. support for a
strong, effective non-proliferation regime that
enjoys broad multilateral support and
employs all of the means at our disposal to
advance our objectives. Key elements of the
policy follow.

Fissile Material

The U.S. will undertake a comprehensive
approach to the growing accumulation of
fissile material from dismantled nuclear
weapons and within civil nuclear programs.
Under this approach, the U.S. will:

* Seek to eliminate where possible the
accumulation of stockpiles of highly enriched
uranium or plutonium and to ensure that,
where these materials already exist, they are
subject to the highest standards of safety,
security, and international accountability;

© Propose a multilateral convention
prohibiting the production of highly enriched
uranium or plutonium for nuclear explosives
purposes or outside of international safe-
guards;

¢ Encourage more restrictive regional
arrangements to constrain fissile material
production in regions of instability and high
proliferation risk;

¢ Submit U.S. fissile material no longer
needed for our deterrent to inspection by the
International Atomic Energy Agency;

¢ Pursue the purchase of highly
enriched uranium from the former Soviet
Union and other countries and its conversion
to peaceful use as reactor fuel;

¢ Explore means to limit the stockpiling
of plutonium from civil nuclear programs and
seek to minimize the civil use of highly
enriched uranium; and

* Initiate a comprehensive review of
long-term options for plutonium disposition,

Page 4

Defense Trade News, Volume 5, Number 1, January 1994



DOD Review of License Applications

Application l Applicant Response
El —__

Department of State
Office of Defense Trade Controls (PM/DTC)

Defense Technology Security Administration
License Directorate (OTSA/LD)

Defense Security Assistance Agency (DSAA)

Joint Chiefs of Staff (JCS, J-5)

Ballistic Missile Defense Organization (BMDO)

Office of the Assistant Secretary of Defense
International Security Policy | OASD (ISP)

Defense Technology Security Administration
Technology Directorate (DTSA/TD)

Office of the Assistant Secretary of Defense for Command,
Contro!, Communications & Intelligence © OASD (C*l)

Office of the Deputy Under Secretary of Defense for Acquisition
International Programs © ODUSD (IA)/P

Defense Advanced Research Projects Agency (DARPA)

Defense Communications Agency (DCA)

Defense Nuclear Agency (DNA)

Defense Mapping Agency (DMA)

Department of the Army (AMSAC-Ml)

Department of the Navy (IPO-20)

Department of the Air Force (SAF-IADM)

National Security Agency (NSA - N512)

Defense Trade News, Volume 5, Number 1, January 1994

Page 15



ELLIE Comes On Line

Office of Defense Trade Controls Introduces Electronic License Submission

Following up the success of ROBB (DTC’s
Remote On-Line Bulletin Board), the Office of
Defense Trade Controls has inaugurated a
pilot program to test the feasibility of elec-
tronic license submission.

The centerpiece of the system is the
ELectronic License Entry system, ELLIE,
designed and implemented by DTC’s
in-house Computer Support Staff under
Jim DePalma. With ELLIE, applicants can
fill out applications on the personal comput-
ers in their offices, dial up DTC’s computer
via modem, and submit the applications
electronically.

Easy application. ELLIE users fill in the face
of the application (DSP-5s only, at this stage)
on the computer screen. The system features
continuation sheets, to continue an item on
the form or to add an attachment (e.g,, a list of
freight forwarders). A template feature
allows users to store repetitive data such as
company name and address. Companies
with divisions at multiple locations could
create a template for each, selecting the
appropriate one for each application.

Error-resistant processing. All information
submitted via ELLIE is automatically entered
into DTC’s licensing data base eliminating
data entry errors, further speeding the licens-
ing process.

Easy tracking. Licenses entered electroni-
cally show up in ROBB the following morn-
ing, referenced by license number and by a
transaction number generated to facilitate
cross-referencing with paper attachments.

Quick turnaround. Building the efficiencies
inherent in electronic licensing, our aim is
that companies using ELLIE will receive
approved licenses back much more quickly
than with traditional methods. During our
test phase, a number of the most straightfor-
ward applications were processed 2 - 3 days
quicker.

Outstanding issues. Operational questions
remain to be solved for ELLIE to achieve her
full potential. For example, backup material
for complex applications cannot be entered
electronically on ELLIE’s continuation sheets;
it still must be submitted—by mail, courier,
or fax—and a paper file married up to the
information provided via ELLIE.

Now recruiting. From an initial test group of
five selected companies, the ELLIE project has
grown to include more than forty. User
reaction has been overwhelmingly positive,
and DTC is eager to expand the number of
users as well as the system’s features.

For more information, or to sign up for
ELLIE, please call DTC’s Computer Support °
Staff at (703) 875-6650 or use the rear applica-
tion form on page 28.

Defense Trade News, Volume 5, Number 1, January 1994

Page 17



Editor’s Note

Beginning this issue, we plan to broaden our coverage of policy issues handled by the
Bureau of Political-Military Affairs—issues such as non-proliferation, government-to-
government defense relations, and technology transfer—which we believe to be of
interest to the defense trade community. Accordingly, Defense Trade News now
sports the subtitle Export Policy Bulletin.

Our goal is to help you to keep abreast of the broader framework of U.S. non-prolif-
eration and export control policy, while continuing to provide detailed information to
facilitate the defense trade process.

Finally, this issue introduces an expanded Feedback questionnaire, designed to
provide more detailed analysis of your reaction to the magazine. We rely upon your
input to make the publication better suited to your needs. Please take a few minutes
to let us know how we can do better. @

Defense Trade News On-Line

If you have a PC and a modem, you can have 24-hour
electronic access to U.S. Government publications via
the Federal Bulletin Board. Download Defense Trade
News before your hardcopy reaches you. Keep abreast
of US. foreign policy with the Department of State
Dispatch. Track modifications to the International
Traffic in Arms Regulations with the Federal Register.

Toaccess the Bulletin Board, dial up (202) 512-1387 via
an 8-bit/no parity/I-bit stop modem, at 300 to 9600
baud. For more information, call (202) 512-1526.

Defense Trade News, Volume 5, Number 1, January 1994 Page 3



‘NATO’ Not Enough

The use of the word ‘NATO*‘ as the ultimate
destination is not adequate identification for
multiple countries on a license application.
When completing Block 3 on the DSP-5,
block 4 on the DSP-73, or block 4 on the
DSP-85, please list each country separately.

Are Your Suppliers Registered?

Exporters should request manufacturers
from which they purchase defense articles to
confirm that they are registered with the
Office of Defense Trade Controls. Checking
this before submitting an application can
help to avoid processing delays.

Recognizing Carbonless Forms

Remember that the newly revised DSP
application forms are printed on carbonless
paper. Please do not insert carbon paper
between the pages when completing the
forms. How to recognize the new forms:

¢ There is no short carbon interleaf at
the top;

¢ The numbers 11-92 appear under the
word “Form” at the bottom left;

An expiration date of 12-31-95 or
3-31- 96 appears at the bottom right
corner; and

* The ITAR §126.13 certification and
§130 statement are on the back of
copy 1 of the form.

New Forms - No More §126.13 and §130
Letters

It is not necessary to submit a separate
§126.13 or §130 letter with the new forms.
Simply have an empowered official sign the
front of the form, and check the appropriate
boxes on the back of copy 1.

Rounding Off Doliar Values

License applicants are encouraged to include
only whole dollar values when completing
applications. Please round off cents to the
nearest dollar. For example, enter $100.45 as
$100. Round $100.50 up to $101. This will
simplify processing and reduce the potential
for processing errors.

Did | Miss Defense Trade News
Volume 4, Number 4?

We didn’t publish one. In 1993 we published
two issues: “Volume 4, Numbers 1 & 2” dated
January / April, and “Volume 4, Number 3”
dated July. We plan four quarterly issues for
1994. @

Page 26

Defense Trade News, Volume 5, Number 1, January 1994



Secretary of State
Warren Christopher

Assistant Secretary
of State for
Political-Military
Affairs
Robert L. Gallucci

Deputy Assistant
Secretary for
Export Controls
Martha Caldwell Harris

Executive Editor
Philip S. Kosnett

Managing and
Production Editor
Nadia L. Brown

Contributing Editors
Commodity Jurisdiction:
Major Gary Oncale

Defense Trade Advisory
Group: Linda Lum

Layout Design
Paula M. Lorfano

Graphics Design
Richard E. Florence

Defense Trade News (ISSN 1051-2845) is a quarterly publication (Janu-
ary, April, July, October) of the Bureau of Political-Military Affairs, U.S.
Department of State. Its purpose is to provide American industry, the
public, and Congress with information on defense trade policy, licensing
practices, and compliance issues. Contents include official policy state-
ments and other official documents. Special features, articles, and other
materials (such as maps, charts, graphs, tables, and photographs) pro-
vide additional information on current issues but should not necessarily
be interpreted as official U.S. policy statements. The Secretary of State
has determined that the publication of this periodical is necessary in the
transaction of public business required by law.

Subscription and Address Changes: DTC Registrants - Every firm
registered with the Office of Defense Trade Controls as a manufacturer
or exporter should automatically receive this publication at its registered
address in the name of the registrant in Block 14 of Form DSP-9. To
change mailing addresses, a registrant must notify the Office of Defense
Trade Controls in writing, citing its applicant code, and must amend
Form DSP-9 (see ITAR §122.4).

Non-Registrants - Defense Trade News is also available to U.S. govern-
ment agencies, foreign governments, non-registrant firms, and other
interested parties. To subscribe or to submit an address change, write to
Editors, Defense Trade News, PM/DTC, SA-6, Room 200, Department of
State, Washington D.C. 20522-0602, or fax (703) 875-5663.

Copyright: Unless otherwise marked, this publication’s contents are in
the public domain and are not copyrighted. Such items may be
reprinted; we would appreciate citation of Defense Trade News as the
source. You must obtain permission to reproduce any copyrighted
material (including photographs) from its original source.

Limited Reprint Authorization: DTC registrant companies may
reproduce this entire edition (excluding postal mailing label) for internal
distribution. This permission is given to ensure proper distribution
throughout companies with multiple locations, and to reduce mailing
costs.

Corrections, Contributions, and Correspondence: Address to Editors, «
Defense Trade News, PM/DTC, SA-6, Room 200, Department of State,
Washington, D.C. 20522-0602.

Postmaster: Send address changes to Defense Trade News, PM/DTC,
SA-6, Room 200, Department of State, Washington, D.C. 20522-0602.

Postage: Third-class postage paid in Washington, D.C. 20522-0602.





DEPARTMENT OF STATE ANNOUNCES

ELLIE

DEFENSE TRADE CONTROLS PROGRAM
FOR ELECTRONIC SUBMISSION OF LICENSE APPLICATIONS

Several months ago Defense Trade Controls (DTC) began a pilot program for the
submission of applications electronically. The Electronic License Entry System
(ELLIE) has been a success processing over 500 applications submitted by more than
38 companies. To participate in the program, you must have access to DTC's Remote
On-line Bulletin Board (ROBB). ROBB and ELLIE are free services. Access to ROBB
requires Communications software, which if not currently available in your firm will
cost approximately $195. If you would like to join, and we encourage you to do so,
complete the lower part of this document and return itto DTC. Jim DePaima will
contact you as we increase the number of companies. Thanks in advance for your

participation.

COMPLETE THE FOLLOWING AND FAX THIS DOCUMENT TO DTC

TO: DTC, Mr. Jim DePalma FAX: 703 875-5663

FROM:

(Company Name)
I am interested in submission of my applications electronically.

My DTC Applicant Code Is:

Iam currently a ROBB user: YES NO

My firm submits approximately ______________ applications annually.
(Number)

The individual in my firm to be contacted is:

Name:

Phone: FAX:



Role in the Export Application Review '

An Introduction to the Defense Technology Security Administration

Approximately 25% of the arms export
license applications submitted to the Office
of Defense Trade Controls involve issues of
national security that require Department of
Defense (DOD) review. The Defense Tech-
nology Security Administration (DTSA),
established in May 1985 by DOD Directive
5105.51, is responsible for developing the
DOD position on munitions license applica-
tions and Commodity Jurisdictions. Within
DTSA, this function is delegated to the
License Directorate (DTSA/LD).

Why DOD reviews applications. DOD
reviews arms export license applications to
assess their impact on U.S. national security.
Among the factors in that evaluation:
* Commodity sophistication
- potential operational risk to U.S. troops
- valid needs of the end user
* End use
- stated end use
- possible alternate end uses
* End user
- ability to use the commodity
- status; not debarred or suspended
* Security classification of commodity
- accordance with National Disclosure
Policy
¢ International agreements
- disclosure guidance
° Foreign availability
- capability to manufacture production
quantities
- exportability
* EMS-only provisos
- must be fully justified in accor-
dance with existing DOD policy
¢ False impression
- if export of the end item cannot be
approved, DTSA normally cannot
approve technical marketing data or a
hardware demonstration.

Details, details, details. Twice each week,
DTSA picks up applications from DTC and
records the pertinent details of each license
application in a computer system. There is a
direct relationship between the accuracy and
completeness of an application and the
quality and timeliness of the DOD response.
The following items are critical to DOD in
reviewing a case:

Commodity description. A technical
description of hardware and/or data must be
attached to enable technical personnel to
understand the item’s functional capabilities.

End-use description. A thorough description
of the end-use must be provided to give
reviewers a complete understanding of the
transaction.

Precedent cases. A history of previous cases,
including denials, involving the identical
commodity is important in obtaining a fair
and accurate review. Applicants should
attach copies of any precedent applications
and related State Department letters.

Foreign availability. For an item with no
precedent release history, applicants should
attach any available documentation indi-
cating an equivalent foreign item is in pro-
duction, plus any available documentation
indicating that the government of the foreign
producer would permit export. It may be
advisable to consult with DTSA on this issue
prior to submitting an application to State.

When DOD receives an application without
supporting technical data, DTC is advised
that the application will be Returned Without
Action if DOD does not receive the data in

3 working days. If technical data accompany-
ing an application is insufficient, the applicant
has 10 working days to provide the data. If
the applicant does not do so, the application
is Returned Without Action to DTC.

Defense Trade News, Volume 5, Number 1, January 1994

Page 13



A Commodity Jurisdiction request should
contain a complete technical description of
the item, the reason it was developed,
whether U.S. Government funds were used in
its development, a description of any military
and/or commercial usage, and any other facts
the applicant deems appropriate.

Commodity Jurisdiction determination is
based primarily on whether the item was
specifically designed or modified for a mili-
tary application. A narrow exception to this
policy exists for items which have commercial
applications but also have significant military
or intelligence applicability; see ITAR §120.3.
Use of an item by the U.S. military and the
intended end use of an item proposed for
export are not factors.

Responsiveness. To respond to State Depart-
ment referrals within 20 calendar days, DTSA
has recently begun transmitting its positions
to DTC via computer, saving up to 3 days of
processing time.

Case status. Exporters can download case
status information from DTSA’s computer by
calling the Export License Status Advisor
(ELISA) at (703) 697-6109. Case information
remains in ELISA for three weeks after DOD
closes a case. ELISA maintenance assistance is

available by calling (703) 697-7840. Case status
information is also available by calling (703)
697-5336, Mondays and Wednesdays from
2:00 to 4:00 pm and Fridays from 9:00 to 10:30
am.

Objections. When DOD intends to object to a
transaction, DTSA contacts the designated ap-
plicant contact. Objections based on estab-
lished release policies or a determination by
the cognizant service that it does not wish to
sponsor the required exception to National
Disclosure Policy are not usually subject to
further discussion with DOD. Other types of
DOD objection rationales may be questioned
through “Day in Court” procedures.

For information on the Day in Court, contact
DTSA’s License Directorate at (703) 697-5336. @

Questions concerning this article should be
referred to Nancy Hindman, DTSA/LD, at
(703) 614-7761.

Page 16

Defense Trade News, Volume 5, Number 1, January 1994