matic Security. O’Mara utilizes his extensive
knowledge of State Department organization
and structure in his current duties as a licens-
ing officer in the Electronics and Combat
Systems Branch of the Arms Licensing Divi-
sion. O’Mara is currently assigned two
categories: Category IX—Military Training
Equipment (Simulator Training Devices for
all categories); and Category XI—Com-
mand, Control, Communication (C3) Equip-
ment; Direction Finding Equipment; Micro-
wave Equipment.

Celeste T. Lewis joined DTC’s Compliance
Analysis Division as a Paralegal Specialist on
July 16. She came to DTC from the State
Department’s Bureau of Consular Affairs,
Passport Services, after 21 years, where she
most recently served 7 years as the Chief of
the Diplomatic and Congressional Travel
Branch. Lewis joined the State Department
immediately after attending George Wash-
ington University. She is currently complet-
ing rotational training in the Compliance
Analysis Division before final assignment of
duties.

Nancy Meyer came to the Center July 30 as
another Paralegal Specialist in the Compli-
ance Analysis Division. She began her
government service career as a Passport
Examiner in the Chicago Passport Agency,

transferring to a paralegal position in the
Washington, D.C. Passport Fraud Office in
1974. Most recently, Meyer served as a
Consular Fraud Officer in the Bureau of
Consular Affairs Office of Fraud Prevention
Program. Her extensive background in case
analysis and law enforcement agency coordi-
nation will transfer directly to her new duties.
Meyer be given a final duty assignment after
completing rotational training in the Compli-
ance Analysis Division.

Stacy J. Bernard came to the Center Septem-
ber 10, and began her rotation as a Presiden-
tial Management Intern (PMI) in DTC. After
completing her undergraduate work at
Cornell in 1983, she held several positions in
financial public relations and international
private banking in New York's financial
district. Bernard participated in the State
Department’s Summer Intern Program in
1989, serving as a political officer at the
American Consulate General in Jerusalem.
She completed her Master’s Degree in Inter-
national Relations (specializing in trade,
Southwest Asia, and U.S. Diplomatic History
and Foreign Policies) at The Fletcher School
of Law and Diplomacy in May 1990. Bernard
began her internship in the Arms Licensing
Division, and will rotate throughout the
Center for Defense Trade.@

TIPS AND TIDBITS

New Government of Greece Guidelines

The new Greek Alternate Minister of
Defense, who is in charge of all Greek gov-
ernmental military procurement, has issued
the following guidelines to all foreign coun-
tries wishing to sell military equipment to
Greece.

1) Any US. firm interested in meeting with
the Alternate Minister must submit a request
for such a meeting to U.S. Embassy Athens.

2) U.S. Embassy Athens must then submit a
request to the military office of the Alternate
Minister. The embassy’s request will contain
the original request of the firm to the em-
bassy asking for a meeting with the Minister,
as well as the reasons for the meeting and the
names of the representatives who will attend
the meeting.

3) If the request is approved by the Alter-
nate Minister's office and the date and time of
the meeting decided, then the representatives
of the U.S. firm must be accompanied on all

Page 20

Detense Trade News, Volume 1, Number 3, September 1990

|

paren


al

have on the industrial base. There is a strong
inclination to expand the target available to
US. defense exporters as much as possible.

Now for the bad news. The prospect that de-
fense exports can fill the gap for a declining
defense budget are not bright, no matter how
committed we may be to promoting sales
abroad. First, export sales are a very small
part of the U.S. defense business. These sales
have never been more than a small fraction of
the business compared to the overall Defense
Department procurement account.

Moreover, the reduction in defense expendi-
tures the United States is experiencing is
going on in virtually all other major industri-
alized countries. Foreign defense industries
also will be casting an eye to exports to fill
their gap, increasing the prospects for trade
barriers and competition. Joint ventures and
cooperative projects may be able to give US.
industry the toehold it needs.

Defense industries in the United States have
other attendant problems that exports will
not address. Perhaps one of the largest is the
cost of capital. Lower stock prices make it
costly to raise capital in the bond market.
Some companies are now selling off parts of
themselves to raise capital and, hopefully,
keep what remains healthy. The buyers,
when there are buyers, are frequently foreign.
This is not what is normally considered de-
fense trade, although it may be an appropri-
ate way of downsizing the defense industrial
base to match reduced demand without
losing core capabilities.

Against this backdrop, exports can be seen as
a useful but not overwhelming possibility.
Greater cooperation between government
and industry is needed and such steps are
being taken within the executive branch.

However, some inhibitions on promoting de-
fense trade remain. For example, Section 515
(A of the Arms Export Control Act states that
the “President shall. . instruct United States
diplomatic and military personnel in the

United States missions abroad that they
should not encourage, promote or influence
the purchase by any foreign country of
United States-made military equipment
unless they are specifically instructed to do so
by an appropriate official of the executive
branch.”

Nevertheless, there is a markedly new atti-
tude in all government agencies concerning
defense trade. Innovative proposals will be
given favorable hearings. For our part at
State Department, we will make licensing
easier and use our offices overseas to assist in

competitive and cooperative ventures.
Published July 2, 1990
Reprinted Courtesy of Defense News
Copyright by Times Journal Publishing Company,
Springfield, Virginia

Postscript

Since I wrote the above, one notable event
has occurred—the Iraqi invasion of Kuwait.
This underlines why munitions export con-
trols are necessary, and necessarily global in
nature. Munitions list controls are the reason
US. troops do not confront U.S.-manufac-
tured weapons in Iraq today.

The Iraqi invasion also highlights why a
strong defense industrial base is essential for
US. national security interests. The recent
decision by President Bush to support Saudi
self-defense through the sale of additional
US. arms is evidence of this. These sales will
be an important boost in an otherwise grim
market and are beneficial to the U.S. produc-
tion base. However, it is worth bearing in
mind that they would not have been possible
if the production lines were not already
active.

While the sales provide obvious benefits to
the defense industrial base, our objective in
selling arms to Saudi Arabia is not the sale as
an end in itself, but rather the net increase in
Saudi self-defense capabilities that comes
from the additional arms. We will support
and promote such sales as best we can consis-
tent with foreign policy and national security
objectives.

Page 14

Defense Trade News, Volume 1, Number 3, September 1990



a A

be precise, including all DSP-5, DSP-61, DSP-
73, and DSP-85 license applications and all
Commodity Jurisdiction, General Correspon-
dence, and Agreement requests).

Of the cases received in April and May, 99%
were issued (i.e., mailed back to the applicant
with a decision) as of mid-September. The
1% (113 cases) that had not been issued as of
mid-September are not included in the
following figures.

Tracking old cases. Statistically, the 1% of
April-May cases that are still “open” repre-
sent a small number of earlier data points. By
and large, these cases represent applications
that either a) are particularly sensitive for
policy or technical reasons and are thus still
under review, usually outside of DTC, or

b) are on hold in DTC pending the furnishing
of more information regarding the case by the
applicant.

Old cases of this sort are tracked by both a
Special Projects Licensing Officer, Rob
Groesbeck, and by the individual licensing
officers responsible for the cases. The Con-
trols Office works closely with the staffing
offices in State and throughout the govern-
ment to ensure that such difficult, old cases
are not lost in the shuffle, but receive the
ongoing attention that they need to be com-
pleted.

Average for non-staffed cases: 4 days. Of
the April-May cases, 71% (6,797 cases) were
handled exclusively within DTC, never re-
quiring staffing within State or interagency
for a more extensive technical or policy re-
view. The average licensing time for these

nearly 7,000 non-staffed applications—from
day one when they were received to the day
that they were mailed back—was 4 business
days.

Average for staffed cases: 36 days. The
remaining 28% (2,654 cases) of the cases
received in April and May required staffing.
The average licensing time for these staffed
cases—again from day of receipt through
staffing to day of issuance—was 36 business
days.

The vast majority of staffed cases go to the
Defense Technology Security Administration
(DTSA) at Department of Defense (DOD).
Like DTC, DTSA also operates with strict
internal guidelines and tracking mechanisms
which ensure a timely response. In April and
May, for example, DTSA averaged 15 busi-
ness days on staffed cases.

The 1990 weighted average: 13 days. Taking
the non-staffed (71% in 4 days) and the
staffed (28% in 36 days) cases together, the
weighted average licensing time for April
and May cases was 13 business days.

50-70% improvement over 1989 averages.
These 1990 average licensing times show
substantial reductions compared to last year’s
averages. In 1989, for example, the average
non-staffed case took 13 business days. Thus,
the 1990 average of 4 days represents.a 69%
reduction in licensing time. °

Likewise, the 1989 average for staffed cases
exceeded 70 business days compared to the
current 36 days. The handling of staffed
cases has thus been expedited a full 50%. Of

AVERAGE LICENSING TIMES
(business days)

Non-staffed Staffed
Cases (28%)

Cases (71%)

4 days 36 days

Weighted
Average

13 days

(Sample: 9,564 cases from April-May 1990)

Page §



ee

occasions by the Commercial Attache or by
another authorized official of U.S. Embassy
Athens during the visit.

4) Any requests for a meeting with the
Alternate Minister by representatives of any
foreign firm not following the above men-
tioned procedure will not be considered by
the Alternate Minister's office.

Customs Modifies Filing Procedures

Effective July 11, 1990, a Department of
State DSP-61 or DSP-73 license no longer
must be presented at the port of arrival for
unclassified defense articles entered for
transportation under bond to another United
States port. The proper Department of State
license must be presented, prior to release, at
the destination port.

Previously, presentation of State Department
licenses at the first port of arrival for ship-
ments traveling in bond were required. The
Office of Defense Trade Controls and U.S.
Customs have agreed to the new procedural
change.

The importer or their agent is now required
to present the DSP-61 or DSP-73 license with
the entry documents at the destination port
or at the final U.S. port in the case of in-
transit shipments for purposes of export.

Any questions regarding this new procedure
should be directed to U.S. Customs, either
Chuck Davies, (202) 566-21 41, or John
Rupchis, (202) 566-9464,

New Indian Requirement for Missile
Cases

Before licensing the export of materiel,
which could help a foreign government
develop missiles of a certain size and range,
the U.S. Government, under the Missile
Technology Control Regime (MTCR), must
obtain formal end use assurances. These

assurances must come through diplomatic
channels from the government of the end-
user and verify that the items will be used for
stated purposes and not for prohibited
purposes. This process involves an exchange
of telegrams with the U.S. Embassy in that

country.

According to the U.S. Embassy in New Delhi,
there will be long delays in the Processing of
DTC cases that require the Government of
India to provide MTCR assurances unless the
requests cite the case number of the Indian
Import Certificate (IC/DV). In some in-
stances, that will require the U.S. applicant to
have its customer in India obtain an IC/DV
and send it to him so that he can forward a
copy to the DTC licensing officer.

For the future, if you are planning to apply
for a DSP-5 license for India for equipment
covered by the MTCR Equipment Annex, you
should require your Indian customer to
obtain an Indian IC/DV and fax you a copy
of it, which you can attach to your applica-
tion. If you have such an application already
pending with DTC, you should obtain a copy
of the Indian IC/DV and send a copy to the
attention of the DTC licensing officer han-
dling the case, citing the DTC case number.
Taking these steps will help all State Depart-
ment officials involved expedite the review of
your license application.

New ITAR Available from GPO

On September 1, 1990, the Office of the
Federal Register, National Archives and
Records Administration, published Code of
Federal Regulations, Volume 22, Parts 1 to 299,
Foreign Relations. The International Traffic in
Arms Regulations (ITAR) , updated to in-
clude changes up to April 1, 1990, is con-
tained in this 5" x 8" paperbound volume,
Subchapter M, Parts 120 through 130.17,
pages 340 through 397. This volume is
printed and offered for sale by the Superin-
tendent of Documents, U.S. Government
Printing Office (GPO), Washington, D.C.,

Defense Trade News, Volume 1, Number 3, September 1990

Page 21



COMMODITY JURISDICTION DETERMINATIONS

The following chart provides selected 1990 Commodity Jurisdiction (CJ) determinations. ‘The
commodity descriptions are intentionally general to ensure the confidentiality of all } proprietary —

anformation related to these cases:

These determinations may be applied only to the oe commodity reviewed in the CJ process.
If you think one of your products is similar to one of those listed as having been placed under
Commerce control, please submit a CJ request letter (TAR 120.5). See the article “A Checklist for
Preparing CJ Requests” for assistance in submitting your request.

COMMODITY JURISDICTION

Application of Joule-Thomson
Refrigeration Technology State
Civil Air Traffic Control System Commerce

Eye-visible Laser sights (under 20 milliwats) Commerce
Flight Line Tester State
Frequency Oscillation Scrambler State
Gearbox Housing for Military Turbine Engine State
Hand-held Computer

(TEMPEST, encrypting and decrypting) State
Handheld Control Display Terminal,

designed and configured for military use State

Hyperbaric Chamber, Hypobaric Chamber, Training
Centrifuge, Environmental Stress Chamber
(military training equipment

related to defense article) State
Integrated Circuits, radiation hardened State
non-radiation hardened Commerce
Linear Diode Laser Arrays Commerce

Microwave Components conforming

to MIL Spec State
Non-Linear Junction Detector Commerce
Oxidation-Resistant Titanium-Base Alloy Commerce
Plasmascope and Graphic Display System,

TEMPEST State

non-TEMPEST Commerce
Radiation-hardened Microelectronic Devices for
commercial space application State
Radio (wireless) Local Area Network (LAN)

with DES encryption chip State

without DES encryption chip Commerce

COMMODITY JURISDICTION
Rangefinders, not designed

ta military specifications or:

for military use Commerce

Ruggidized Computers designed

and configured for military

environments and application State
Satellite receiver with built-in

descrambler incorporating digital

cryptographic techniques State
Semiconductors for Cable TV

Satellite Descrambling Commerce
Software using proprietary algorithms

to encrypt files Commerce
Software designed for

MIL-STD-1750A Computers State
Software for design, development,

and analysis of spacecraft State
Software using Data Encryption a

Standard (DES) to encrypt files State
STEIN Code Software Package Commerce
Telephone Set

and Manual Switchboard

(military adverse environment operation) State

Two-Dimensional (2-D) Diode Laser Arrays Commerce
Utilities Software program
with DES encryption State

without DES encryption Commerce
Visual Image Generator

(with database, image generator,

and display subsystem) Commerce

Page 18

Defense Trade News, Volume 1, Number 3, September 1990

i
{


a

IRAQ/KUWAIT POLICY NOTICE

Special Handling of Persian Gulf Cases

Federal Register Notice. The morning of
the Iraqi invasion of Kuwait on August 2, the
Office of Defense Trade Controls (DTC)
revoked all export licenses and other approv-
als to transfer defense articles and services to
Iraq, and suspended such licenses and ap-
provals to Kuwait. Formal notification of
this action appeared in the following day's
Federal Register (Vol. 55, No.150, Friday,
August 3, 1990, page 31,808). The Notice
read as follows:

Revocation of Munitions Export Licenses
to Iraq; Suspension of Munitions Exports
to Kuwait

Summary: Notice is hereby given that
all licenses and approvals to export or
otherwise transfer defense articles and
defense services to Iraq pursuant to
section 38 of the Arms Export Control Act
are revoked. All such licenses and ap-
provals with respect to Kuwait are sus-
pended.

Effective date: August 2, 1990.

For further information contact: Rose
Biancaniello, Chief, Licensing Division,
Office of Defense Trade Controls, Bureau
of Politico-Military Affairs, Department of
State (703-875-6644).

Supplementary information: Effective
immediately, it is the policy of the US.
Government to deny all applications for
licenses and other approvals to export or
otherwise transfer defense articles to Iraq
and Kuwait. In addition, U.S. manufac-
turers and exporters and any other af-
fected parties are hereby notified that the
‘Department of State has revoked all
licenses and approvals authorizing the
export or other transfers of defense
articles or defense services to Iraq. The

Department of State has also suspended
all such licenses and approvals with
respect to Kuwait in order to ensure that
no defense articles or defense services
reach Iraqi authorities.

The licenses and approvals that have been
revoked or suspended include manufac-
turing license and technical assistance
agreements involving those countries.
These actions also preclude the use in
connection with Iraq and Kuwait of any
exemptions from license or other ap-
proval requirements included in the
International Traffic in Arms Regulations
(ITAR) (22 CFR parts 120-130).

These actions have been taken pursuant
to sections 38 and 42 of the Arms Export
Control Act (22 U.S.C. 2778, 2791) and
section 126.7 of the ITAR (22 CFR 126.7)
in furtherance of the foreign policy of the
United States.

Dated: August 2, 1990.
Richard A. Clarke,
Assistant Secretary of State
for Politico-Military Affairs.

Appropriate industry action. To ensure
compliance with the Notice, registered
companies should transmit to all employees
involved in export matters information
regarding revocation and suspension of
licenses and agreements (manufacturing,
technical assistance, and distribution) where
the end-user or sales territory is Iraq or
Kuwait.

Special handling of Persian Gulf cases. In
response to the situation in the Persian Gulf
region and the undertaking of Operation
Desert Shield, DTC began an immediate
review, in coordination with the Defense
Technology Security Administration (DTSA)
at Department of Defense (DOD), of all prior
applications for countries involved in Opera-

Page 10

Defense Trade News, Volume 1, Number 3, September 1990



eS ENS

Gains for industry. DETAS will also provide
new, service-oriented features designed
specifically for U.S. industry. The first such
feature to come on-line is the Automated (i.e.,
telephonic) License Status System, or ALISS.
ALISS can be accessed from a touch tone
phone, and provides the current status of
applications in DTC. See the following
article, “Go Ask ALISS...,” for more details on
this system.

DETAS still evolving. The system brought
on-line at the end of August represents only
the core of a larger ADP system, portions of
which are still being developed. Additional
features will be brought on-line as they are
finalized. Those that affect industry will be
detailed in upcoming editions.TM

GO ASK ALISS...

Telephonic License Status System On-Line

DTC overwhelmed with phone calls. The
Office of Defense Trade Controls (DTC)
receives hundreds of thousands of phone
calls annually. Many of these are routine
calls from applicants inquiring about the
status of their pending cases. The new
computer system, DETAS, was designed to
address these regular, general inquiries
through an automated, telephonic voice
system, thereby reducing DTC’s phone calls
while providing a reliable and accessible
response mechanism for U.S. industry.

ALISS to the rescue. Specifically, when
DETAS was brought on line August 27, DTC
also brought on-line ALISS—the Automated
License Status System. ALISS is designed to
be a user-friendly service to industry.

All that is needed to access ALISS is a touch
tone phone. Moreover, ALISS is accessible 22
hours daily, every day of the year, and the
status information ALISS provides is updated
daily. Thus, no longer will industry have to
encounter any delays in obtaining the current
status of applications in DTC.

Call ALISS at (703) 875-7374. When you call
ALIS, the following text will greet you:

ALISS Text: Welcome to DTC’s around-the-
clock Automated License Status System,
ALISS. ALISS is updated daily from 7 to
9 am; it is accessible to touch tone users atall

other times 365 days a year. You may enter a
case type and number followed by the pound
key at any time during this message; if you
do not respond within 15 seconds to a voice
prompt, you will be automatically
disconnected. Up to 10 entrees are permitted
per call. If you need additional help informa-
tion, please press the star key; if you do not
have your case number, please call 875-6652
from 9 to 12 am or 2 to5 pm. Please enter
your two-digit case-type number followed by
the six-digit case number and ending with
the pound key now.

Help Information: You may terminate this
help message at any time by pressing the

pound key.

Amendments: Amendments are not acces-
sible through ALISS. Please call 875-6652 for

status on amendments.

Case Type Numbers: There are seven 2-digit
case type numbers: 05 for DSP-5, 61 for DSP-

61, 73 for DSP-73, 85 for DSP-85, AG for
Agreement, GC for General Correspondence,
and CJ for Commodity Jurisdiction. For AGs,
GCs, and CJs, the two-digit case type number
is represented by the appropriate alphanu-
meric keys on your phonepad: 24 for AG, 42
for GC, and 25 for CJ.

Case Numbers: Most case numbers include
six digits. For those case numbers that are
less than six digits, you should add the

Defense Trade News, Volume 1, Number 3, September 1990

Page 7



the 1990 cases received in April and May,
only 2% (229 cases) were even open longer
than 70 business days (including the 1%, or
113 cases, discussed above that are still open
as we go to press).

Aiming higher. The Controls Office is very
proud of the progress made over the past 9
months in licensing times. For non-staffed
cases, we believe that we have now attained

an average that will be very hard to improve
upon. On the other hand, we are aiming to
continue driving down the average licensing
time for staffed cases, and are concentrating
on means for doing so.

Overall, despite our pleasure with the results
to date, we aim—with the help of industry—
to continue improving the licensing
process.

NEW COMPUTER SYSTEM ON-LINE

Advanced Technologies Aiding Licensing

On August 27, the Office of Defense Trade
Controls (DTC) brought on-line an entirely
new computer system. The new ADP sys-
tem—named Defense Trade Applications
System (DETAS)—brings state-of-the-art
technologies to bear on DTC’s licensing
process. DETAS consists of all new hardware
and software, and utilizes the latest in data,
voice, and image processing technologies.

Hardware and software. DETAS runs ona
WANG VS8000 minicomputer and is ac-
cessed through imaging work stations. Other
hardware includes image scanning equip-
ment and an Optical Jukebox, which stores
images on optical disks.

The system software was designed in-house
by DTC's Systems Manager James DePalma
starting in April 1990. As one of its many
features, the new software was designed to
be fully compatible with the old computer
system. This permitted the numerous years
of licensing files in the old system to be rolled
over into the new system when it came on-
line.

DTC scanning all new applications. A key
feature of the new system is scanning. With
the optical scanning and viewing capability,
DTC will now be able to store images of all
applications, including licenses, registrations,
commodity jurisdictions, etc.

These images, or “pictures,” will be stored in
perpetuity on optical discs, allowing employ-
ees to view the actual documents of cases in
the DETAS database on the terminals at their
desks. This will eventually eliminate the
time-consuming, manual file searches officers
undertake daily to review precedent cases.

The DETAS advantage. Scanning, however,
is but one of DETAS’ numerous new features.
The bottom line, without detailing the vari-
ous features, is that DETAS provides the
Center for Defense Trade with computing
capacity and capabilities far superior to the
old computer system.

Froma licensing perspective, DETAS pro-
vides quicker access to more extensive license
case information, and will thus save time-
while also facilitating the substantive work of
the licensing staff. From a compliance per-
spective, DETAS provides DTC with much
greater registration and enforcement
capabilities.

From a management perspective, the new
system provides an unlimited variety of
computer runs for tracking and reporting
purposes. Finally, from an analytical per-
spective, DETAS permits a wide variety of
analytical examinations of DTC’s database,
including word-in-text search capability.

Page 6

Defense Trade News, Volume 1, Number 3, September 1990

heme

er


SSS

PERSONNEL UPDATES

More People and More Space

A busy summer of training. As training
came to a close for the half-dozen new Office
of Defense Trade Controls (DTC) employees
who started work prior to the June newslet-
ter, another 16 new, full-time employees
joined the Center for Defense Trade. Most of
this group are still in training as this edition
goes to press.

Sixteen new employees. The new staff
added this summer to the Controls Office
includes three paralegals (Celeste Lewis,
Nancy Meyer, and Eva Tyler), one compli-
ance operations specialist (Wendy Payne),
one administrative support specialist (Juanita
Holsendorff), and eight licensing officers
(Stacy Bernard, Dan Buzby, Calvin Chin, Sue
Clark, Sue Norsworthy, Martin O’Mara, Sue
Plant, and Sandi Snyder). The Policy Office
also added three new officers (Linda Lum,
Jackie Shire, and Marlene Urbina).

More space as well. Along with the addi-
tional employees, DTC is also adding 12 new
offices to its space on the second floor of State
Annex 6. The new space will provide DTC
with enough room to house its new employ-
ees and will provide industry with a large
Teception room and ample space for meeting
with DTC employees.

For late September and early October, how-
ever, the growth in floor space also brings
with it much construction, changing of phone
lines, moving of people, etc. We ask that you
please forgive us any inconveniences you
may encounter as a result.

Personnel profiles. As a regular feature in
each newsletter, the Center profiles several
employees. For this edition, we have selected
four licensing officers and two paralegals.

Robert B, Groesbeck joined DTC June 14.
Groesbeck spent the past year working in the
Office of the Assistant Secretary in the De-
partment’s European Bureau, and in the
Executive Office of the Bureau of Politico-
Military Affairs (PM). The experience he ac-
cumulated while providing executive sup-
port for the PM Bureau formed the founda-
tion for his DTC position, Special Projects
Licensing Officer. In this capacity, Groesbeck
tracks those items of special interest to DTC
management. Currently, he tracks all license
applications that require Congressional
notification, and initiates any required action
to maintain both visibility and timeliness of
these specialized licenses. Groesbeck also
follows up on all “special” cases assigned by
the DTC licensing management team, espe-
cially cases over 30 days old and “emergency
cases.”

Daniel J. Buzby arrived in DTC on July 2
from private industry, where he had just
completed a year as marketing and promo-
tional manager for a products business. Fol-
lowing completion of his Political Science
undergraduate studies in 1984, he spent the
following 2 years in staff assistant positions
for both a private university and a presiden-
tial campaign. Buzby successfully managed a
state house seat campaign in Pennsylvania in
1988, and entered private industry in 1989.
Assigned as a licensing officer in the Elec-
tronic and Combat Systems Branch of the
Arms Licensing Division, he currently
handles amendments, DSP-5's for spare parts
up to $500,000, DSP-61s, and DSP-73s for
companies beginning in ‘N’ through ‘Z.’

Martin J. O’Mara also arrived July 2, return-
ing to the State Department after 4 years in
sales management and executive training in
the private sector. His previous 11 years in
the State Department included positions in
the Bureau of Administration, Bureau of
European and Canadian Affairs, Office of
Counter-Terrorism, and Bureau of Diplo-

Defense Trade News, Volume 1, Number 3, September 1990

Page 19



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Page 9

Detense Trade News, Volume 1, Number 3, September 1990


United States Department of State bd Bureau of Politico-Military Affairs

Defense Trade News

The Bulletin of the Center for Defense Trade
Washington, D.C. September 1990

Volume 1, Number 3°"

Features

New State Directive on Defense Trade
Embassies Advised to Support U.S. Companies

Average License Issued in 13 Days

3
The Bottom Line: Fast Licensing 4
6

New Computer System On-Line
Advanced Technologies Aiding Licensing

Go Ask ALISS... 7
Telephonic License Status System On-Line

fraq/Kuwait Policy Notice 1 0
Special Handling of Persian Gulf Cases

A Checklist for Preparing CJ Requests 1 1

Eastern Europe Defense Imports Policy 1 2

U.S. Eases Military Export Path mo 1 3
(Courtesy of Defense News, 7/2/90)

Overview of the Policy Office 1 5 .
SS
Departments

U.S. Customs at DTC
The Positions and the Peopte 16

Commodity Jurisdiction Determinations 18

Personnel Updates
More Growth and More Space 1 9

Tips and Tidbits 20

Written and Edited by the Center for Defense Trade


SNE eel

product then becomes a spare part of the
larger end-item. As a part of this, specify
end-items by model number (e.g. spare part
for the C-130 and/or L-100 aircraft).

5. A description of the current market
(civilian/ military) for the product, including
the specific end-uses and end-users.

Additional Information. The applicant
should also submit any additional informa-
tion that they deem appropriate for the CJ
determination. The following list suggests
additional types of information that might be
included in a CJ request.

1. If the commodity is similar to other
products, explain both the similarities and
dissimilarities. If possible, include technical
marketing data for similar products.

2. If possible, identify and briefly explain
which U.S. Government agency you believe
should have jurisdiction for the product and
why. In addition, provide the USML Cate-

gory Number or the ECCN Number you
believe covers the product.

3. If the commodity is designed to Military
Standards or Specifications, indicate if it is
designed to meet all of the specifications or
just some. If it is not designed to meet all of
the specifications, indicate which specifica-
tions the commodity does not meet.

4, If requesting a Commodity Jurisdiction
for a “class” of products, include the specific
wording that delineates the class.

The final CJ packet. Since all CJ determina-
tions are reviewed by multiple agencies, a
complete CJ package should include nine
complete sets of information, including nine
copies of all supporting technical /marketing
information. This will ensure the speediest
processing of CJ requests.

The CJ team encourages everyone submitting
a CJ request to contact them as necessary.
Mike Van Atta and Gary Oncale are available
at (703) 875-6644.8

EASTERN EUROPE DEFENSE IMPORTS POLICY

PM request for change in policy. Since the
June edition, Assistant Secretary of State for
Politico-Military Affairs (PM) Richard A.
Clarke requested Mr. Stephen E. Higgins,
Director of the Bureau of Alcohol, Tobacco,
and Firearms (BATF) at the Department of
the Treasury, to amend BATF policy and
regulations to permit the importation into the
United States of Warsaw Pact defense mate-
riel, subject to case-by-case review by PM.
Handguns, rifles, machine guns, and spare
parts and ammunition for these weapons, as
well as all defense imports from the Soviet
Union, were excluded from this request.

The request for this change was made in an
effort to balance the legitimate concerns of
collectors and entrepreneurs in the United
States and U.S. foreign policy interésts, in
light of the dramatic changes in Eastern
Europe, with US. national security concerns.
Case-by-case review will ensure proper
monitoring of those instances which could be
contrary to USS. national security and foreign
policy interests.

BATF’s decision. BATF responded favorably
to the request this summer and agreed to
amend its policy to permit the importation of
defense materiel from East European coun-
tries. Any questions regarding BATF proce-
dures should be directed to Virginia Alford at
(202) 789-3104.

Page 12

Defense Trade News, Volume 1, Number 3, September 1990



rr SE

tion Desert Shield. This review ensured ex-
peditious handling, as appropriate, of such
cases.

Additionally, all new, incoming license
applications for countries in the Middle East
or for countries involved in operations in the
region are being segregated upon arrival in
DTC to receive immediate attention by the
licensing management team. Cases related to

USS. operations, the self-defense of friendly
countries in the region, or NATO-country
forces deploying to the region are then
ordinarily handled within 48 hours.

This special handling will continue for as
long as appropriate. To assist us in this
effort, please label appropriate applications to
highlight their relevance to the Persian Gulf
situation. m

A CHECKLIST FOR PREPARING CJ REQUESTS

More CJs than ever before. The Office of
Defense Trade Controls’ (DTC) encourage-
ment of Commodity Jurisdiction submissions
has apparently been well received by indus-
try. Only 9 months into 1990, DTC has
received nearly 200 CJ requests, whereas
industry submitted about 220 annually in the
past few years.

A framework for CJ submissions. DTC’s cj
Team, Mike Van Atta and Gary Oncale,
conferred telephonically with virtually all
individuals submitting CJ requests during the
past 6 months. Through these discussions,
the CJ team developed the following outline
to help industry prepare CJ transmittal
letters.

Following this outline when preparing a CJ
letter will ensure that all necessary informa-
tion is included in each CJ submission, and in
the most accessible order. We ask that you
please use this outline to facilitate DIC’s
handling of CJ submissions.

The CJ preparation checklist. The following
list indicates the information that should be
included in a CJ transmittal letter.

Subject Line: Identify that the request is for a
Commodity Jurisdiction and provide a clear
identification of the commodity for which the
CJ determination is being requested.

Transmittal Letter: The letter should provide
the following information, as appropriate.

1. A complete description of the commod-
ity (e.g. chemical compound, level or genera-
tion of technology, etc.), including product
name or model number (both company and
US. Government), company stock number,
and National Stock Number (if applicable).

2. A discussion of the commodity’s origin
and characteristics, including: a) for whom
and to what specifications/standards the
product was designed and produced; f
b) any special design or testing characteristics :
of the item, such as radiation-hardening,
special configuration(s) or special compo-
sitions(s) for military or space applications; c)
whether the product was designed for ballis-
tic protection; military search, rescue, surveil- i
lance, or intelligence gathering operations; [
weapons (hard points); or thermal or infra- r
red signature reduction; and d) any informa-
tion on coding capabilities, including an
explanation of the process by which the
product encrypts or decrypts (i.e., the method
employed and purpose of the process).

3. A description of the relative ease or
difficulty of modifying the product for either
civilian or military use.

4. Information on whether the commodity
loses its identity when incorporated into i
another component. If so, note whether the Hi

Detense Trade News, Volume 1, Number 3, September 1990

Page 11



a

appropriate number of zeros before the case ALISS’ database. In order to keep the re- :
number to make it six digits, deleting any sponse time short, ALISS’ database does not i
hyphens. . contain cases that were issued more than :
1 month earlier—cases that should have al-
Examples: For ALISS, DSP-5 case number ready been received by the applicant. In
123456 should be entered 05123456#. Agree- other words, the cases for which ALISS can
ment case number 123-90 should be entered provide a response include all pending (i.e.,
24012390#. open) cases and all cases issued in the past
month.
ALISS’ responses. Once you have provided
ALISS with the case number about which you A.user’s guide. To simplify the steps for
are inquiring, ALISS will immediately tell using ALISS, the following chart is provided
you its status. Specifically, ALISS will re- as a user’s guide. We hope you find it useful,
spond to your inquiry by reading back the and that ALISS meets your general status
case number that you entered, telling you inquiry needs in the future. If you encounter
what the most recent action taken on the case any problems with ALISS, please call James
was, and when this action was taken. The DePalma at (703) 875-6650 or telefax a copy of
chart, on page 9, details ALISS’ various re- your concerns.f

sponses by the type of inquiry.

STEPS FOR USING ALISS

DETERMINE CASE TYPE
OBTAIN CASE NUMBER ALISS NUMBERIC CODE
Type Code
+ Call (703) 875-6652 9-12 AM, 2-5 PMEST DSP-5 0s
+ Provide 1) Case Type, 2) DTC Reg. No. pers s ,
3) Date Prepared, 4) Country, 5) Dollar DSP-85 85 ie
Value Agreement (AG) 24
Commodity (C)) 25
+ Record Case No. Jurisdiction
General (GQ) a2
; Correspondence
| ACCESS T
an
| CALL ALISS (703) 875-7374 ~ \ a
| 365 DAYS/YR, 9 AM to 7 AM DAILY :
LISTEN TO INTRO MESSAGE |
{ ENTRIES | .
| ENTER 2 DIGIT CASE TYPE £_— _l
— > ENTER 6 DIGIT CASE NUMBER
ENTER#
TO BEGIN SEARCH
REPEAT FOR 10 CASES TOTAL
—||_
TE YOU ENTER THREE INCORRECT CASE NUMBERS,
ALISS WILL DISCONNECT FOR SECURITY REASONS.

2 tetennernnenenseneneneeneneness peeperrererrrerertrrtrrro Coolio. fal. li ls iio 9

q FOR HELP, ENTER * AT ANY TIME TO HEAR ADDITIONAL INFORMATION 7?

Ce cenece Gnd penn bes seeedhgn ES GOES EE EEEREOEHEESSHI ERI ERSHAERSEREEIETS SNES EEN SELES

Page 8 Defense Trade News, Volume 1, Number 3, September 1990



20402. To order, call (202) 783-3238 and.ask
for “CFR 22, stock number 869-011-00075-4.”
The cost is $24.00, and both Master Card and
Visa are accepted for telephonic orders. You
may also write and include a check or money
order for the purchase price.

Asa service to registrants, DTC plans to
reprint the applicable sections of this volume
in a separate publication entitled “Interna-
tional Traffic in Arms Regulations.” The
estimated cost of the reprint will be from $10
to $15 each. When the individual edition is
available, DTC will notify all registrants of
ordering information.

Classified Information

When submitting classified information to
the Office for Defense Trade Controls (DTC),
we ask that you adhere to the following
guidelines:

¢ Ensure that the level of classification is
clearly marked on the cover sheet of all
copies of the classified information submitted
with a request.

* Do not use permanent metal fastening
devices on classified documents. After
staffing, all copies in excess of the required

file copy are destroyed by shredding and
burning. Metal fasteners will damage equip- yy
ment.

* Copies not needed for file after the
staffing process may be mailed to the appli-
cant, if requested. Mark the cover of each
copy clearly for return, and include address
and special mailing instructions in the mark-
ing.

Congressional Defense Trade Estimate

The Javits Report, required annually for
Congressional presentation in February,
contains the administration's estimate of both
commercial defense and foreign military sales
to foreign countries in the upcoming year.
The Bureau of Politico-Military Affairs is now
collecting projected sales data in preparation
for the 1991 Javits Report.

Defense Trade News on ELAIN 9
Defense Trade News is now available elec-

tronically to subscribers of the Department of

Commerce ELAIN (Electronic License Appli-

cation and Information Network) system.

The ELAIN vendors are:
OCR: (301) 881-0532
Tbek: (512) 339-7700

Department of State Publication 9783 "
Bureau of Politico-Military Affairs ©

Released September 1990

Page 22

Defense Trade News, Volume 1, Number 3, September 1990



a &

cial position of the country, any International
Monetary Fund controls or restrictions on
credit, and the relationship between the
Ministry of Defense and other branches of
the government. This might mean drawing
on the expertise of commercial, economic,
and political officers in the embassy.

Other embassy support functions. Embassy
personnel are permitted to assist U.S. indus-

try representatives with appointments with
host country officials. Personnel may provide
names and office telephone numbers of key
defense procurement officials. If requested by
both industry and host country representa-
tives, embassy officers may sit in on meetings
between the two. However, post officials
must avoid any action that forecloses options
or prejudices the outcome of the arms transfer
decision-making process.

THE BOTTOM LINE: FAST LICENSING

Average License Issued in 13 Days

The implementation side of the Center's
mission. In addition to providing improved
defense trade policy guidelines, the other
half of the Center’s mission is to provide
improved export licensing services.

The overall objective on the implementation
side is to create and institutionalize a fast,
predictable export licensing process that
ensures adherence to and enforcement of the
Arms Export Control Act (AECA), the Inter-
national Traffic in Arms Regulations (ITAR),
and State Department policies in a time
frame that does not unnecessarily impede
trade through delays in the issuance of
licensing decisions. Achieving this objective
permits U.S. defense industry to be a reliable
supplier to overseas purchasers while ad-
vancing U.S. foreign policy and national se-
curity.

A phased approach. In the Office of Defense
Trade Controls (DTC), which regulates all
US. commercial defense trade through the
export licensing process, improvements in
the implementation of US. defense trade
have been intentionally phased.

In the first phase, from the creation of DTC
on January 8 through March 5, the primary
objective in the Controls Office was eliminat-

ing the thousands of backlogged 1989 license
applications while also handling new, incom-
ing cases so as to ultimately reach a point
where the staff could begin handling cases as
they arrived. Having reached this plateau in
March, the Controls Office set as its next
objective to begin instituting control mecha-
nisms—on both quality and speed—at each
stage of the licensing process to ensure appro-
priate handling of all cases.

The current, third phase involves refining the
numerous internal control mechanisms
recently put in place through a continuous
assessment of performance. Throughout all of ‘
these phases, DTC has also hired, trained, and {
brought into the licensing process many new
employees. -

The bottom line: fast licensing. From an
industry perspective, the best measure of
DTC's performance is undoubtedly the
responsiveness of the licensing process.
Average licensing times would thus seem to
provide a good gauge of the performance of
the Controls Office to date. :

Sample set of April and May cases. The t

following statistics are derived from the

sample set of all cases received from April 1 |

through May 31, 1990. This represents a total t

of nearly 10,000 applications to DTC (9,564 to €
i

Page 4

Defense Trade News, Volume 1, Number 3, September 1990



ee near

OVERVIEW OF THE POLICY OFFICE

The Office of Defense Trade Policy (DTP) is
the sister office of the Office of Defense Trade
Controls (DTC) within the Center for Defense
Trade. Although the work of the two offices
overlaps a fair amount, DTP focuses on
providing commercial defense trade policy
guidance within the U.S. Government. More-
over, DTP works to support the efforts of
US. defense industry to sell its goods and
services overseas.

Various responsibilities. Responsibilities of
the Policy Office include:

* Setting policy guidelines for commercial
defense trade, especially in the areas of
strategic trade and technology transfer.

* Seeking to help improve the competitive-
ness of U.S. firms in the global defense
market through such actions as providing
guidance to U.S. embassies in support of
commercial defense exports and responding
to regional developments, such as in the Eu-
ropean Community.

* Representing the U.S. in CoCom discus-
sions on the International Munitions List
(IML).

*¢ Representing the Bureau of Politico-
Military Affairs (PM) on the Department of
the Treasury-chaired Committee on Foreign
Investment in the U.S. (CFIUS).

* Analyzing trends in U.S. defense trade
and studying foreign markets to assess
opportunities for U.S. defense firms.

* Working with relevant offices in Depart-
ment of Defense (DOD) on U.S. defense in-
dustrial base issues.

¢ Working jointly with the Controls Office
to rationalize, as appropriate, the U.S. Muni-
tions List (USML) with CoCom’s export
control lists.

* Assisting the Controls Office in revising
licensing procedures to reduce the licensing
workload for U.S. industry while maintaining
the necessary export controls.

Workload reduction test cases needed. As
pointed out in the June edition of Defense
Trade News, the Center for Defense Trade is
looking for industry to supply test cases for
the workload reduction initiatives. The
Center will use the test cases to develop
appropriate interagency procedures for the
initiatives. If you would like to submit a test
case, Jackie Shire is the current point of
contact at (202) 647-4231.

Defense Trade News, Volume 1, Number 3, September 1990

Page 15



ee

Annette McKisson represents the Operation
Exodus Program of U.S. Customs, serving as
the Liaison Officer to the Office of Defense
Trade Controls. She assumed this duty in
1986, following a year assignment in the
Exodus Command Center. McKisson has

16 years’ Customs enforcement experience,
including assignments to the Office of Inter-
nal Affairs, as Special Assistant to the Assis-
tant Commissioner for Enforcement, and in
the Customs Attache Office in US. Embassy
Paris. In her current capacity, she provides
direct communication and coordination
between Customs and DTC. She assists in
licensing determinations, detentions and
seizures, and in compliance issues relating to
import/export laws that interface with the
Exodus Program. McKisson deals primarily
with Customs Field Offices, DTC officers, and
other governmental agencies, but also works
with industry, providing guidance and
referral to the appropriate district office
regarding detentions and seizures.

Michele T. Becker came to the DTC March 7,
from the Strategic Investigation Division,
Office of Enforcement, U.S. Customs, where
she completed a 2-year assignment as a
Munitions Desk Officer. In that capacity, she
oversaw Customs investigations of both
International Traffic in Arms Regulations
QTAR) and Arms Export Control Act (AECA)
violations. She has 10 years’ experience in
the Customs enforcement arena, including

4 years in the Special Agent in Charge, Balti-
more Office, and 3 years in the Office of
Internal Affairs. Because of the expertise
Becker developed in previous positions, she
was selected as the U.S. Customs Enforce-
ment Liaison for DTC. In this capacity,
Special Agent Becker assists licensing officers
in handling enforcement concerns. She acts
as the investigative arm of Customs in DTC,
identifying information to be sent to other
Customs agents for potential investigation.
Becker also deals directly with industry
representing the U.S. Customs industry
outreach program, Operation Gemini, an-
swering questions and referrals regarding
possible violations or questionable
activities.

Detense Trade News, Volume 1, Number 3, September 1990

Page 17



42

Mi

NEW STATE DIRECTIVE ON DEFENSE TRADE

Embassies Advised to Support U.S. Companies

The Center’s strategic objective. As stated
in previous editions of Defense Trade News,
the Department of State created the Center
for Defense Trade, earlier this year, to im-
prove the US. Government's regulatory
handling of U.S. defense trade. Improve-
ments were to be focused both on the actual
implementation of the Arms Export Control
Act (AECA) and the resultant International
Traffic in Arms Regulations (ITAR), as well
as on related policy guidelines.

Previous guidance to U.S. posts. A key
aspect of providing improved defense trade
policy guidelines, both to U.S. defense indus-
try and within the Federal Government,
involves providing guidance to U.S. embas-
sies. In 1977, the Carter Administration—in
what became known as the “leprosy cable”—
actively discouraged U.S. officials from
getting involved in the sales efforts of US.
defense firms abroad. In 1981, the Reagan
Administration rescinded this policy. In its
place, it issued new, general guidance
indicating that U.S. officials should operate in
a more cooperative manner with overseas
representatives of U.S. defense industry.

The new State directive. In light of this
history, a recent State Department cable was
sent to all diplomatic posts expanding upon
the 1981 guidance and advising them to sup-
port the marketing efforts of U.S. defense
firms abroad. The new cable detailed for US.
embassy personnel some specific types of
assistance that should be provided to U.S.
defense industry representatives overseas. In
essence, the goal is to treat defense exports on
the same basis as other exports—consistent
with U.S. foreign policy objectives.

Specifically, the July 10, 1990 cable from
Acting Secretary of State Lawrence Eagle-
burger to all U.S. Ambassadors worldwide
outlined the appropriate embassy role in

support of U.S. defense trade. Secretary
Eagleburger wrote: “It is the policy of the
United States that our diplomatic posts
abroad should support the marketing efforts
of U.S. companies in the defense trade arena
as in all other spheres of commercial activ-
ity.”

Special nature of defense trade. At the same
time, Secretary Eagleburger cautioned am-
bassadors that defense exports involve
special considerations and responsibilities.
US. missions must adhere to relevant laws,
regulations, and statutory restraints govern-
ing defense trade. It is not U.S. policy for
embassy personnel to create markets that do
not currently exist. Whenever two or more
US. firms are in competition for a sale, it is
US. policy that embassy personnel support
all American contenders equally.

Country-specific info for U.S. firms. The
cable advised embassies to be well informed
about, and responsive to, U.S. defense indus-
try sales interests in host countries. Posts
may provide many kinds of pertinent country
information to industry representatives. This
information might include the defense
budget cycle in the host country; decisions
concerning memoranda of understanding,
coproduction and codevelopment; the na-
tional procurement process; and estimates of
equipment the country currently needs to fill
defense requirements or likely future pro-
curement plans. Of course, release of such
data depends upon available embassy re-
sources and country sensitivity to specific
data.

Unique embassy role. American embassies,
Secretary Eagleburger pointed out, are ina
unique position to help U.S. defense industry.
When providing information, posts draw on
expertise within the embassy staff. For
example, it might be useful for industry rep-
resentatives to be aware of the overall finan-

Defense Trade News, Volume 1, Number 3, September 1990

Page 3



Secretary of State
James A. Baker Ill

Assistant Secretary
of State for
Politico-Military
Affairs
Richard A. Clarke

Director of the Center
for Defense Trade
Charles A. Duelfer

Executive Editor
Richard A. Levy

Managing Editor
Marsha F. Filtrante

» jlewsletter conterits include official policy statements and other official documents. Special

Defense Trade News (ISSN 1051-2845) is a quarterly publication of the Center for Defense
Trade, Bureau of Politico-Military Affairs, U.S. Department of State. Its purpose is to provide
‘American industry, the general public, Congress, and government agencies with information on
developments about defense trade policy, licensing practices, and compliance issues. The

features, articles, and cther supportive materials (such as maps, charts, graphs, tables, and photo-
graphs) provide 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 of the Department.

Subscription, Address Changes: Firms registered with the Office of Defense Trade Controls
automatically receive this publication addressed to the applicant signing DSP-9 Block 14 .at the
registered address. Registrants must notify the Office of Defense Trade Controls by registered
mail, citing the applicant code, whenever the mailing address changes (ITAR 122.4). The editorial
staff maintains a separate list for other interested persons and organizations. Contact the Managing
Editor, via mail or datafax, for addition to or address change for the editorial mailing list

Copyright: Most of this publication's contents are in the public domain and not copyrighted.
Those items may be reprinted; citing the source as Defense Trade News would be appreciated.
Permission to reproduce all copyrighted material (including photographs) must be obtained from
the original source.

Limited Reprint Authorization: All addressees that are registered with the Office of Defense
Trade Controls may reproduce this entire publication (excluding postal mailing label) for distribu- .
tion within their organizations. This permission is given to ensure proper distribution throughout

companies with multiple locations or offices and to reduce mailing costs. i

Corrections, Contributions, and Correspondence to the Editor: Address to Editor, Defense
Trade News, PM/DTC, SA-6 Room 228, U.S. Department of State, Washington, D.C. 20522-
0602. Sending a letter to the Editor constitutes consent for publication unless otherwise requested,

Postmaster: Send address changes to Defense Trade News, PM/DTC SA-6 Room 228, U.S. De-
partment of State, Washington, D.C. 20522-0602 .

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

Office of Defense Trade Controls

PMIDTC SA-6 Room 228
Office of Defense Trade Controls

Bureau of Politico-Military Affairs

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

PM/DTC Room 228

Office of Defense Trade Controls
Bureau of Politico-Militery Affairs

US. Department of State
1701 N. Fort Myer Drive
Adlington, VA 22209-3113

Contacting the Center for Defense Trade
Office of Defense Trade Policy

Postal Mailing Address
PM/DTP Room 7815
Office of Defense Trade Policy
Bureau of Politico-Military Affairs
U.S. Department of State .
Washington, D.C. 20520-7815

Express Mail and Courier Delivery Address

PMIDTP Room 7815
Office of Defense Trade Policy
Bureau of Politico-Military Affairs
US. Department of State
‘Washington, D.C. 20520-7815

Telephone Numbers
General Information: (202) 647-4231

General Information: (703) 875-6644

Commodity Jurisdiction Licensing Team: (703) 875-6644
License Status Inquiry: (703) 875-6652

Automated License Status: (703) 875-7374

Registration and Compliance Information: (703) 875-6650
Defense Trade News Editor: (703) 875-5660

Facsimile Numbers

‘Anms Licensing Division: (703) 875-6647
‘Compliance Analysis Division: (703) 875-5663

PM/DTP: (202) 647-1346


a
U.S. EASES MILITARY EXPORT PATH

Foreign Markets Sought to Boost Sagging Domestic Sales

By Charles Duelfer

The world of the 1990s is an unpredictable
place. Even the wisest of political analysts
were forced to go back to the drawing board
after the dramatic events of the last year in
Eastern Europe and the Soviet Union.

Democracy is breaking out in Eastern Europe.
The Soviet Union is in political turmoil, but
appears headed in a more democratic direc-
tion. Conversely, the unprecedented student
uprising and subsequent downfall in
Tienanmen Square, though now 1 year
behind us, left the world stunned.

At home, the administration faces a serious
budget deficit. Our perception of the threat is
clearly changing. The defense budget is de-
clining, reflecting that changed view of the
threat and other domestic pressures on a tight
budget. The bottom line: This confluence of
events has resulted in what appears to be
certain decline for some defense industries.

Individual companies and government
agencies are looking at exports with new
vigor, if not desperation, to sustain defense
production capabilities. Industry wants to be
profitable, and government needs a reliable
industrial base. The real question is, can
exports fill the gap? While there are many
steps industry and government can take,
expectations must remain limited.

The loosening of restrictions by the Coordina-
tion Committee on Multilateral Export Con-
trols with respect to dual-use exports at the
group’s meeting in Paris, June 6-7, was an
important step, in the process of redefining
US. export controls for the 1990s. This will
assist some companies with products not
strictly military in nature. In addition, the
State Department is working to reduce the
number of items under the more stringent
munitions category. The objective is to level
the playing field for U.S. industry in dual-use

and munitions exports within the limits of
national security.

A significant change in arms export controls
is taking place. Since control of munitions
exports was initiated with the passage of the
Neutrality Acts in the 1930s, there has been a
continuous growth in the number and type of
things controlled. The trend in now revers-
ing, and industry is obviously anxious to
remove as many of the shackles as possible,
and fast. But 60 years of controls over muni-
tions cannot be dismissed without some
careful consideration.

Munitions controls were established before
the East-West confrontation began. The
principle underlying munitions controls is
worldwide concern about the effect that these
exports could have on regional conflict and
the balance of power. Obviously, the radical
changes in Eastern Europe and the Soviet
Union will diminish the requirements for
some controls, but there will remain many
areas of concern. The recent attempted
diversion of nuclear capacitors to Iraq under-
scores this point. The suspension of muni-
tions exports to China following Tienanmen
Square is another.

First the good news. There is an unusual
consensus among ranking officials in De-
fense, Commerce, and State that the govern-
ment should do more to assist the U.S. de-
fense industry overseas. Stories of foreign
government intervention on behalf of their
defense industries at key moments are leg-
end.

The prevailing view is that it is time for the
USS. Government to begin to actively help our
industry overseas within the limits of our
foreign policy and national security concerns.
Those charged with assessing the national
security equation are giving more weight to
the positive value of a defense export may

Defense Trade News, Volume 1, Number 3, September 1990

Page 13



a

DEPARTMENTS

U.S. CUSTOMS AT DTC

The Positions and the People

Note: Starting with this edition, “U.S. CUS-
TOMS AT DTC” will be a regular department in
Defense Trade News. For this issue, we have
provided profiles of U.S. Customs personnel
working at the Office of Defense Trade Controls
(DTC).

Customs and the Center for Defense Trade.
Section 127.4 of the International Traffic in
Arms Regulation (ITAR) recognizes the U.S.
Customs Service as the primary governmen-
tal agency responsible for enforcing the ITAR
and preventing any attempts at illegal ex-
ports. The Compliance Analysis Division of
the Office of Defense Trade Controls (DTC)
interacts daily with members of the U.S.
Customs Service. To ensure direct coordina-
tion between the licensing office (DTC) and
the enforcement agency, three U.S. Customs
employees work at DTC providing special-
ized Customs knowledge, especially regard-
ing export procedures at the Customs Ports
of Entry.

The positions. The three Customs personnel
(Thomas Smith, Annette McKisson, and
Michele Becker) represent the three aspects of
USS. Customs operations that interact with
the export process. One position, the Special
Coordinator for Law Enforcement, provides
senior-level interaction on policy and proce-
dural matters. The second position, the
Operation Exodus Liaison, acts as the inter-
mediary between DTC and Customs ports
regarding detentions and seizures. The third
position, a U.S. Customs Special Agent,
conducts actions supporting Operation
Gemini—the industry outreach program in
Customs—and actions required for pending
enforcement cases.

The people. To parallel our “Personnel
Updates” department, we provide the follow-
ing profiles of U.S. Customs personnel work-
ing in DTC.

Thomas R. Smith will report to DTC in
October 1990 to fill the position of Special
Coordinator for Law Enforcement. Smith,
possessing a Bachelor's Degree in Criminal
Justice Administration, brings with him 22
years of law enforcement experience. He
began his law enforcement career in 1968
with the New York City Police Department,
spending 3 years as a police officer assigned
to the city-wide Anti-Crime Task Force. In
1971, Smith left local law enforcement to filla
Sky Marshall position as a U.S. Customs
official in the U.S. Government Anti-Skyjack-
ing Program. He returned to New York City
in 1973 as a Special Agent investigating drug
smuggling, arms export violations, money
laundering, criminal fraud, and general
smuggling cases. Transferring to the Cus-
toms office in Miami in 1978, Smith became
Group Supervisor of the Ft. Lauderdale
Office in 1981. He spent 11 years in South
Florida, holding supervisory positions in-
cluding Assistant Special Agent in Charge of
Miami and Deputy Director of the Vice
President’s South Florida Task Force. Smith
transferred to the U.S. Customs Strategic
Division, Washington, DC, in September
1989, assigned as the Senior Agent in the
Munitions Branch. He served as the U.S.
Customs representative to two State Depart-
ment committees, the Nuclear Export Viola-
tions Working Group and the Missile Tech-
nology Advisory Group, prior to promotion
to Chief, Munitions Branch. Smith’s broad
background in investigations and specialized
knowledge of smuggling and munitions
issues should greatly enhance the already ex-
cellent cooperation between DTC and USS.
Customs.

Page 16

Defense Trade News, Volume 1, Number 3, September 1990

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