Customs and the Revised ITAR

Most of the revisions to the International
Traffic in Arms Regulations (ITAR) which
took effect July 22, 1993, had minimal effect
on the import and export procedures of the
U.S. Customs Service. The new ITAR exemp-
tions from licensing requirements do change
some of the documentation required by
Customs for exports and temporary imports.

Certify Exemptions

Exporters are cautioned that they must claim
an exemption from licensing requirements for
defense articles by certifying on the Shippers
Export Declaration (SED) the ITAR citation
under which the exemption is allowed. The
certification is a declaration that all the condi-
tions of the exemption are met.

Customs regulations allow for filing most
SEDs with the complete manifest up to four
days after outbound clearance of a vessel.
Most general cargo carriers take advantage of
this procedure. SEDs for all defense articles
listed in the ITAR must be filed with Customs
before the shipment is exported. This includes
SEDs for exports fitting within the new ITAR
exemption provisions.

File Documents On Time

The exporter must assure timely delivery of
SEDs to Customs. Delivery of documentation
by the exporter to an agent or forwarder is
not sufficient. The exporter is still in violation
if a SED is not received by Customs prior

to export.

A certification for exemption from the
Tequirement for a temporary import license
for defense articles must be listed on Customs
entry documents at the time of import. The
entry number on which the exemption was
claimed and the regulatory citation for the
exemption are required on the SED when the
merchandise is exported. The annotated SED
must be provided to Customs prior to the
actual export.

Maintain Records

The exporter needs to maintain a complete
record of the Customs import entry numbers
and documentation to assure the export
requirements can be met. Many Customs
brokers do not routinely include the entry
number in documentation returned to the
importer. The importer/exporter may need to
take extra steps to assure the information is
available at the time of export.

The best advice Customs can offer to avoid a
delay in shipments of defense articles is to get
documentation to Customs early to provide
adequate time for review and verification.
The exporter/importer is the party respon-
sible for providing accurate and complete
information. A deficiency caused by an agent
or freight forwarder acting for the company
does not alleviate the liability of the exporter
or importer.

Any Questions?

U.S. Customs has a policy of promoting
informed compliance with all laws and
regulations within Customs jurisdiction. If
you have questions about import and export
procedures and requirements, please call
your local Customs office.

Page20_

Defense Trade News, Volume 5, Number 2, April 1994



Nonproliferation

The U.S. Representative to the International
Atomic Energy Agency serves as Ambassa-
dor to this multilateral organization, tasked
with strengthening the international nuclear
nonproliferation regime and advancing
peaceful nuclear cooperation.

The Office of the Senior Coordinator directs
the development of U.S. policies and activities
in two areas — establishing centers in the
former Soviet Union to engage scientists and
engineers in peaceful science and technology
activities, and coordinating U.S. Government
technical assistance to former Soviet, Eastern
European, and Central European countries to
improve the safety of nuclear power reactors.

The dual mission of the Office of Nuclear
Energy Affairs is to strengthen the interna-
tional nuclear nonproliferation regime, while
advancing peaceful nuclear cooperation with
those states which have accepted binding
international commitments to nuclear
nonproliferation.

The Office of Regional Nonproliferation
works to prevent and reverse the proliferation
of weapons of mass destruction and their
means of delivery. Among its activities, the
office provides operational and intelligence
support to the U.N. Special Commission on
Iraq and the International Atomic Energy
Agency.

The mission of the Office of Chemical,
Biological, and Missile Nonproliferation is
to fight the proliferation of weapons of mass
destruction and the systems capable of deliv-
ering them. It leads U.S. efforts in such
multilateral fora as the Missile Technology
Control] Regime, and works with the Office of
Defense Trade Controls to regulate trade in
missile technology.

Regional Security

The Ambassador-at-Large for Burdensharing
works to ensure a more balanced sharing of
defense costs by U.S. allies.

The Office of Defense Relations and Secu-
rity Assistance manages bilateral political-
military relations and negotiates agreements
on access, prepositioning, and basing of U.S.
forces overseas. The office also manages
State's statutory responsibilities for security
assistance programs and Foreign Military
Sales (FMS) arms transfers.

The Office of International Security and
Peacekeeping Operations serves as State’s
primary operational point of liaison with the
Defense Department, the National Security
Council, and U.S. embassies during crises,
military exercises, and operations abroad.
The office provides coordination and support
for a growing number of humanitarian assis-
tance programs, such as airdrops to Bosnia.

The Office of Policy and Plans conducts
long-range policy planning with an emphasis
on the scope of our future security commit-
ments, prepares crisis response options, and
supports development of the policy frame-
work for peacekeeping, regional arms contro},
and confidence-building initiatives.

Administration, Liaison, Detachments

The Bureau includes an administrative unit
known as the Office of the Executive Direc-
tor and a small Congressional/Public Affairs
staff. Also carried on the Bureau’s rolls are
State officers serving rotational tours outside
the Department — as State-Defense
Exchange Officers at the Pentagon, and
Political Advisors on the staffs of senior U.S.
military commanders. @

Page 14

Defense Trade News, Volume 5, Number 2, April 1994



Ronald J. Hoffman

22 U.S.C. § 2778

April 20, 1992, Central District of California
(Public Notice #1895, 58 Federal Register
58586, November 2, 1993)

Herbert J. Hoffmann

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

December 11, 1990, District of Maryland
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Tsotomu Ida

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

December 17, 1992, District of Columbia
(Public Notice #1895, 58 Federal Register
58586, November 2, 1993)

Instrubel N.V., Belgium

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

John Jarema

22 U.S.C. § 2778

August 30, 1990, Eastern District of Michigan
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Franciso Ernesto Jerez,

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

January 29, 1992, Central District of California
(Public Notice #1758, 58 Federal Register

6835, February 2, 1993)

Jetborne, Inc.

22 U.S.C. § 2778

December 3, 1992, Southern District of Florida
(Public Notice #1928, 59 Federal Register

1053, January 7, 1994)

Hilton Langley

18 U.S.C. § 371 (conspiracy to violate

22 US.C. § 2778)

June 26, 1992, Western District of Louisiana
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

Joseph McColgan

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

June 7, 1991, Southern District of Florida
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Charles Farrell Malone

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

June 20, 1990, Middle District of Alabama
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

Miles Andrew Maynard

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
June 3, 1991, Eastern District of Michigan
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

George R. Mitchell

22 U.S.C. § 2778

January 17, 1992, District of Maryland
(Public Notice #1674, 57 Federal Register
37184, August 18,1992; Public Notice #1699,
57 Federal Register 43768, September 22, 1992,
Department of State Correction Notice)

Seamus Moley

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

June 7, 1991, Southern District of Florida
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Toshiyuki Murakoshi

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

December 17, 1992, District of Columbia
(Public Notice #1895, 58 Federal Register
58586, November 2,1993)

Novacom, Inc.

22 U.S.C. § 2778

December 13, 1991, Eastern Dist. of Virginia
(Public Notice #1674, 57 Federal Register
37184, August 18,1992; Public Notice #1699,
57 Federal Register 43768, September 22, 1992,
Department of State Correction Notice)

Page 24

Defense Trade News, Volume 5, Number 2, April 1994



A

In its stead, the COCOM members agreed to
work together toward a new, more broadly-
based arrangement designed to enhance
transparency and restraint in transfers of
conventional weapons and sophisticated
technologies to countries whose behavior is
cause for serious concern and to regions of
potential instability. The new arrangement
will thus have a completely different purpose
than COCOM. It will seek to put in place
multilateral approaches to controls aimed at
the threats we face today. We hope that
Russia will become a founding member of the
new regime. We are working to achieve this.

While the specific procedures of the new
regime are still being developed, COCOM
member governments have agreed to main-

tain the capability after April 1 to control ona
national basis, to any destination, items previ-
ously contained on the COCOM lists (indus-
trial, military, and atomic energy) while new
control lists and arrangements are being
finalized.

As we look ahead, there is much work to be
done with other governments. We must con-
tinue to work to establish a regime to control
sensitive exports to countries of concern and
to regions of potential instability. Here at
home, we will work with the Congress to pass
an Export Administration Act that brings the
export control system in line with the new
challenges we face to our national security
and economic competitiveness. #

A Brief History of COCOM

45 Years of Multilateral Cooperation

The Coordinating Committee for Multilateral
Export Controls (COCOM) was established in
1949 to facilitate multilateral cooperation to
control strategic goods and technology. Its 17
members were Australia, Belgium, Canada,
Denmark, France, Germany, Greece, Italy,
Japan, Luxembourg, Netherlands, Norway,
Portugal, Spain, Turkey, the U.K. and the U.S.

COCOM was not based on a treaty or execu-
tive agreement; it operated instead by infor-
mal agreement and according to the rule of
unanimity. A COCOM secretariat was located
in Paris, with member countries represented
by permanent delegates.

Members cooperated in publishing national
control lists of embargoed equipment (dual-
use, atomic energy use, and direct military
use) and enacting effective export control
systems; considering proposed exports of
specific embargoed items from member
countries to proscribed countries; and.

harmonizing national licensing practices for
strategic exports and coordinating export
control enforcement activities.

In June 1992, COCOM members decided to
establish a COCOM Cooperation Forum on
Export Controls and to invite the former
Soviet republics to participate. The Forum’s
first meeting was held in Paris in November
1992, with representatives from all Eastern
European democracies, the Baltic states, and
all but three of the former Soviet republics
attending. It was concluded that trade in
sensitive goods and technologies could be
significantly liberalized, as the reforming
countries introduced and developed
adequate export controls. COCOM members
undertook to provide technical assistance to
help establish control systems through both
bilateral contacts and multilateral meetings.

Today, Russia and other formerly proscribed
countries are viewed not as potential adver-
saries but as potential allies in combatting the
proliferation of sensitive technology. #

Detense Trade News,

e 5, Number 2, April 1994

Page 5



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

1700 Lynn Street

Arlington, VA 22209-3113

Fax Numbers

Director; Licensing Division;
Defense Trade News:

Compliance Division;
Computer Support Staff:

(703) 875-6647

(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

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

Status System (ALISS): (703) 875-7374
Remote On-Line

Bulletin Board (ROBB): (703) 875-6650

Contacting the Deputy Assistant
~acretary for Export Controls

»puty Assistant Secretary for Export Controls
areau of Political-Military Affairs
M, Room 7325A
JS. Department of State
Vashington, D.C. 20520-7325

Contacting the Office of
Export Control Policy

Office of Export 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

Ordering Forms and Regulations

To order license application forms, write the Office of Defense Trade Controls or fax (703) 875-6647.
Please mark your message “Attn: Forms.” Specify the type and quantity of forms needed, and
provide a phone number and point of contact along with your address. To order a copy of the
International Traffic in Arms Regulations, call the Government Printing Office at (202) 783-3238 from
8:00 - 4:00 EST; cite stock number 069-001-000-58-1. Please note that DTC does not distribute the ITAR

and GPO does not carry application forms.

Department of State Publication 10138
Bureau of Political-Military Affairs
Revised March 1994


Suspensions,

Debarments,
Reinstatements

Japan Aviation Electronics industry,
Ltd., Japan (JAE)

Effective March 25, 1994, Japan Aviation
Electronics Industry, Ltd., Japan (JAE) had
export/retransfer privileges reinstated pursu-
ant to Section 38(g)(4) of the Arms Export
Control Act (AECA) and Section 127.11 of the
International Traffic in Arms Regulations
(ITAR). JAE may once again participate in
the export or retransfer of defense articles or
defense services subject to Section 38 of the
AECA and the ITAR.

Notice of this reinstatement was published in
the Federal Register (April 7, 1994, No. 67, Page
16681-2, Public Notice 1980).

Rexon Technology Corporation

Gary D. Kauf

Jerome S. Shafir

James A. Bittel

Ronald L. Laib

Ordnance Technologies Ltd. (ORDTEC)
John Paul Grecian

Bryan Mason

On February 24, 1994, Assistant Secretary
Robert L. Gallucci, Bureau of Political-Mili-
tary Affairs, suspended all existing licenses
and other approvals (including all activities
under manufacturing license and technical
assistance agreements) granted pursuant to

Section 38 of the AECA that authorized the
export or transfer of defense articles or
services by, for, or to Rexon Technology
Corporation, New Jersey; Gary D. Kauf
(president of Rexon); Jerome S. Shafir
(employee of Rexon); James A. Bittel
(employee of Rexon); Ronald L. Laib
(former employee of Rexon); Ordnance
Technologies Ltd., a.k.a. ORDTEC, United
Kingdom; John Paul Grecian and Bryan
Mason, United Kingdom; and any of their
subsidiaries, associated companies or succes-
sor 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, Rexon
Technology Corporation; Gary D. Kauf;
Jerome S. Shafir; James A. Bittel; Ronald L.
Laib; Ordnance Technologies Ltd., a.k.a.
ORDTEC; John Paul Grecian; Bryan Mason,
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 ITAR.

Notice of this suspension was published in
the Federal Register (April 7, 1994, Vol. 59,
No. 67, Page 16682-3, Public Notice 1981).

Armour of America

On December 31, 1992, pursuant to Section 38
of the AECA, the Department of State in Pub-
lic Notice 1753 suspended all existing licenses *
and other approvals that authorized export or
transfer of defense articles or services by, for,
or to Armour of America, Inc. (Armour) and
any of its subsidiaries or associated compa-
nies, and Arthur G. Schreiber, President of
Armour. (See 58 Federal Register 4450, January
14, 1993.)

On September 20, 1993, Ms. Glenda Joyce
Tucker, a former employee of Armour, pled
guilty to the illegal export of defense articles
in violation of Section 38 of the AECA and the

Defense Trade News, Volume 5, Number 2, April 1994

Page 21



COMMODITY RULING

Microprocessor, Radiation-Hardened
16-Bit CMOS & Radiation- Hardened

MOS RAM Module CCL3A01A
Module, Radiation-Hardened CMOS RAM CCL3A01A
Missile Trainer Equipment Component USML 1X(b)
Navigation System, Airborne GPS/LORAN:
Not P-Code Capable ccL”
P-Code Capable USML XV(b)
Night Vision Device CCL 6A96G
Nozzle Guide Vanes, Specifically Designed
to be Installed on a Military Marine Gas
Turbine Engine USML VI(b)
Personal Decoder CCL 5A895F

Portable Cooling Packs, Engine Driven & Electric CCL A96G

Satellite Programs, Technical Data for
Commercial Commmunications ccLl"*

Seats, Military Helicopter, Pilot and Co-Pilot USML VIII)

Servovalves, Electrohydrautlic:
Specifically Designed, Modified or
Configured for Commercial Applications cc”
Specifically Designed, Modified or

‘Configured for Military Applications USML VIII)

Silicon Carbide Ceramic Fiber CCL 1C10A
Simulator, Generic Radar Target USML XI(d)
Software, Computational Fluid
Dynamics Computer Code USML VIII(k)
Software, Computer-Aided Design (CAD) Type CCL 4D96G
Software, Copy-Protected Encryption Software cc”
Software, Electric Punds Transfer:
Object Code CCLS5ALIA
Source Code USML XIII(b)

Software, Encryption
International (Export) Version without DES = CCL 5D13A
Domestic Version with DES

for Data Encryption USML XIII(6)
Software, Encryption Providing Access Control ccLTM
Software, Intelligence USML XI
Software, Microcomputer-Based Accounting
Application CCLAD96G
Software Program, Integrated Multiplex
System Design ccLTM
Software Security Modules USML XIN(b)
Software, Simulation and Study of
Military Engagements and Conflicts USML IX(a)
Software, Transaction Security System
using DES for Data Encryption USML XIII(b)
Tank Searchlight Assembly USML VII(h)
Telemetry Receiver and Diversity Combiner
Specifically Designed for Both Military and USML XI
Commercial Applications and XV
Temperature Regulating Valves Specifically
Designed for Military Applications USML XI)
Tensile Testing Machines CCL 1B96G
Vehicle Decoys, Two-Dimensional Pictoral USML XIII(e)
Wheel, Brake, and Anti-Skid System
Specifically Modified for a Military Aircraft USML VIII()

DTAG Developments
(Continued from page 19)

Andrew Church of the Office of Export
Control Policy outlined U.S. efforts to help
Eastern Europe and the former Soviet states
establish effective export controls. State is in
the process of amending the ITAR list of
proscribed destinations to reflect progress
by various states.

In the case of the former Soviet states, the U.S.
is most likely to approve sales of non-lethal
civilian end-use items. Albania, Bulgaria,
Estonia, Latvia, Lithuania, and Romania have
made progress toward becoming free-market
democracies; while they remain proscribed,
State is approving some transfers in support
of legitimate defense needs. The Czech
Republic, Hungary, Poland, and Slovakia
were removed from the proscribed list in
1991. They have the region’s most effective
export control systems, and are likely to be
the most active Partnership for Peace partici-
pants. These countries are eligible for FMS
transfers, and State is likely to approve
commercial sales which fulfill these countries’
legitimate defense needs.

Dean Rogers of the Office of Export Control
Policy and Daniel Cook of the Office of
Defense Trade Controls discussed develop-
ments on reconnaissance satellite and
encryption policy.

Under Secretary’s Overview

Finally, Under Secretary of State for Interna-
tional Security Affairs Lynn E. Davis took
questions on prospects for U.S. participation
in the upgrade of Soviet systems, human
rights as a factor in licensing decisions for
countries such as China, the Conventional
Arms Transfer policy review, defense export
financing, and the COCOM successor regime.

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

Defense Trade News, Volume 5, Number 2, April 1994

Page 27

*U.S. G.P.0.:1994-301-462:15


Maryanne E. Callaghan

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 20, 1990, District of Columbia
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Fu Chin Chung, a.k.a. Alfred Chung

22 U.S.C. § 2778

May 20, 1990, Northern District of Georgia
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

B.V. Delft Electronische Producten (DEP),
Netherlands [DEP defense-related activities]
18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778

July 17, 1992, District of Columbia

(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Delft Instruments, N.V., Netherlands
18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Delft Instruments Defense B.V., Netherlands
18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778

July 17, 1992, District of Columbia

(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Delft Instruments Electro-Optics B.V.
(DIEO), Netherlands

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Colin J. Devellerez

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
September 14, 1993, District of Columbia
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

Dilligas Trading Co., Inc.

22 U.S.C. § 2778

December 13, 1991, Eastern Dist. of Virginia
(Public Notice #1674, 57 Federal Register 37184,
August 18, 1992; Public Notice #1699, 57
Federal Register 43768, September 22, 1992,
Department of State Correction Notice)

Brian Joseph Fleming, a.k.a. Brian Joseph
McSulla

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

July 3, 1990, Middle District of Alabama
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

Franke Systemtechnik GmbH, Germany
18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Louis Haneef

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
December 30, 1991, Southern Dist. of Florida
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

Edouard Michel Heldewier

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
June 3, 1991, Eastern District of Michigan
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

Hierax Co. Ltd.

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
May 12, 1993, District of Columbia
(Public Notice #1868, 58 Federal Register
50382, September 27, 1993)

Hierax Co. Ltd. — 2nd Statutory Debarment
18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778

July 5, 1993, District of Columbia

(Public Notice #1944, 59 Federal Register
5664, February 7, 1994)

Defense Trade News, Volume 5, Number 2, April 1994

Page 23



DEFENSE TRADE NEWS
United States Department of State POSTAGE & eEES PAID

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

OFFICIAL BUSINESS
PENALTY FOR PRIVATE USE $300

A * Ms, Lora Lute” ~
Address Correction Requested Federation of American Scientists
307 Massachusetts Ave., NE.

WASHINGTON, OC 20002-

SMAN 9pesL SSudjJ9q 9383S Jo JUaWUedEN SN

Z ‘ON ‘S *10A


NEE el

U.S. DEPARTMENT OF STATE

SUIW44V AUV_LIIN-TWOLLNOd 40 NvaHNE

DTAG Developments

The Defense Trade Advisory Group (DTAG)
convened its semi-annual plenary session on
March 17, 1994 at the Department of State.
Highlights from the session:

The Policy Framework

In his opening address, Assistant Secretary
for Political-Military Affairs Robert L. Gal-
lucci outlined the broad foreign policy context
for U.S. export controls:

* Supporting reform in Russia is a top U.S.
priority.

The success of the Middle East peace process
will determine whether the region will be
stable and whether certain nations will be a
threat to their neighbors and to the U.S.

* North Korea’s attempts to acquire nuclear
capability threaten the entire Pacific region.

* While China is potentially a lucrative
market, it is also a major arms supplier and
presents human rights concerns.

The Partnership for Peace provides flexibil-
ity to meet Europe’s long-term security needs,
preserving the traditional U.S..NATO mili-
tary alliances while allowing us to broaden
security ties with other European countries.

Presidential Directives

Mr. Gallucci described four Presidential
Decision Directives (PDDs) shaping policy on
arms transfers and export controls. PDD-8
calls for strengthening nonproliferation
regimes. PDD-23 announces a liberalized
remote sensing satellite policy. PDD-27
maintains State’s role in controlling encryp-
tion exports to safeguard national security,
while streamlining encryption licensing.
Finally, the Administration is preparing
PDD-41 on U.S. conventional arms transfer
policy. Goals include enhancing transparency,
encouraging restraint in conventional arms
sales, and supporting defense conversion.

Balancing Exports & Nonproliferation

Deputy Assistant Secretary for Export
Controls Martha Harris opened her keynote
address by saying the President has placed
the nonproliferation of weapons of mass
destruction and advanced conventional
weapons on the international security agenda.
The Administration is striving to reduce the
supply of these arms to countries of concern
such as North Korea, Iran, Iraq, and Libya.

Dr. Harris reiterated State’s commitment to
support U.S. firms facing hardship in the
shrinking global defense market, stating that
State will take economic considerations into
account in licensing decisions. She described
PM initiatives to better assist industry, includ-
ing the centralization of dual-use and defense

Page 18

Defense Trade News, Volume 5, Number 2, April 1994



Te

a professional and cooperative relationship
has developed, which | attribute in large part
to the professionalism of the people at DTC.”

Does that mean State is improving? “It’s dif-
ficult to know how good a sample you're get-
ting. There’s a lot of positive feedback from
big companies, but I haven’t had as much
opportunity to hear from smaller companies,
and we need to be sensitive to their needs.”
Dr. Harris emphasized the need for compa-
nies to provide feedback on such matters as
regulatory modifications. “It has to be a
two-way street.”

What of criticism that State has been slow

to adjust the export control regime to the
realities of technological development? Is
State building roadblocks on the information
superhighway? “In fact, we've liberalized
quite a lot lately, particularly on dual use
[equipment],” she said, referring to the
Administration’s liberalization of telecommu-
nications and computer export standards.

“We hear broad complaints, but we need to
hear specifics so we can examine our deci-
sions. For example, | hear criticism about the
Commodity Jurisdiction procedure [being too
restrictive], but few concrete complaints
about CJ rulings.” Moreover, “we have an
active [interagency] process underway to
eliminate some of these restrictions.”

Dr. Harris acknowledged the existence of
“irritants” in licensing operations and the
policy development process. “Companies are
concerned not only with processing time, but
also with the clarity of policy guidelines” they
need to judge whether to devote resources to
potential export markets.

Dr. Harris rejected any notion that State is less
sensitive to the needs of American industry
than agencies focused on commercial matters.
While the Arms Export Control Act directs
that licensing decisions are to be made on
national security and foreign policy grounds,
it does not prohibit taking into account eco-
nomic or commercial interests in a reasonable
manner. “Prosperity is a factor in national

security, and while we cannot allow commer-
cial concerns to overpower the other interests
we need to balance, neither should we
ignore” the well-being of US. firms. One
sign of State’s concern, she added, is the
growing emphasis on commercial work at
our embassies.

And how does Dr. Harris rate the Defense
Trade Advisory Group, the Department's
official link to the defense industry? “DTAG
is very active. I've worked with advisory
groups at several other agencies, and DTAG
is a good example of how the relationship
should work. I would like to see more
frequent interaction [than the semiannual
plenary] — more frequent meetings, to
break down big questions into manageable
problems and come up with solutions.

“DTAG is also helpful in clarifying to the
public that State’s not just limiting defense
exports; we’re also working to facilitate
legitimate sales. We recognize the impor-
tance of arms exports for legitimate goals,
such as improving interoperability with allied
forces and supporting regional stability.”

Internal Management

In keeping with the National Performance
Review, State is working to make the export
control process “more customer-friendly and
efficient,” Dr. Harris noted. One result has
been the reinvention of the former Office of —_
Defense Trade Policy as the Office of Export
Control Policy, which absorbed COCOM staff
formerly assigned to the Bureau of Economic
and Business Affairs.

'
1

“Before, the COCOM staff, working ina
dual-use context, had little to do with PM.
That might have made sense in the old world;
after all, we weren’t selling arms to COCOM-
proscribed countries. Now we have brought
together the expertise to work military and
dual use issues in a more integrated way.” #

Page 10

Defense Trade News, Volume 5, Number 2, April 1994



Sign Up for
State Department Export Licensing Training

The State Department's Office of Defense Trade Controls (DTC) can design a seminar on export
licensing policies and procedures with your specific needs in mind. We hold our seminars at our
office in Arlington, Virginia, minutes from the District of Columbia.

We normally hold four half-day seminars per year, combining participants from different firms,
with attendance limited to 30. We encourage small companies to apply. To sign up, please mail
this application to DTC (Attn: Training Seminars Coordinator) or fax it to (703) 875-6647.

TO: Training Seminars Coordinator, Office of Defense Trade Controls
FAX: (703) 875-6647

FROM:
(Company Name)

We would like to send attendees to a seminar including training on these topics:

____ Completion of Applications ___ Registration Requirements
____Country Licensing Policies ____ Congressional Requirements
____Proscribed Country Requirements ___ Agreement Requirements
____U.S. Customs EXODUS Program ____ Commodity Jurisdiction Requests
____ Processing of Requests ____Licensing Foreign Nationals

Other subject areas we would like covered.

Number wishing to attend:

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

Our attendees would/would not be interested in briefing DTC about our products and services.

DTC Registration Code
Address
City , State, ZIP
Point of Contact for Training
Phone ( ) Fax ( )





a

* Personal use exemption. We will no
longer require that U. S . citizens obtain an
export license prior to taking encryption
products out of the U.S. temporarily for
their own personal use. In the past, this
requirement caused delays and inconve-
nience for business travellers.

¢ Allowing exports of key-escrow encryp-
tion: After initial review, key-escrow
encryption products may now be exported
to most end users. Additionally, key-escrow
products will qualify for special licensing
arrangements.

Cooperation with Industry

These reforms should have the effect of mini-
mizing the impact of export controls on U.S.
industry. The Department of State will take
all appropriate actions to ensure that these
reforms are implemented as quickly as
possible. The Secretary of State asks that
encryption product manufacturers evaluate
the impact of these reforms over the next year
and provide feedback both on how the
reforms have worked out and on recommen-
dations for additional procedural reforms.

ROBB Users — Remember to Log Off

Users of DTC’s Remote On-Line Bulletin Board (ROBB)
should be sure to go through the full log-off procedure
when done, not just “quit” the system. Users who fail
to go through the log-off sequence may be exposing
some of their licensing data (specifically, case num-
bers) to other ROBB users who log on subsequently.
Questions on log-off procedures should be directed to
DTC’s Computer Support Staff a (703) 875-6650.

Defense Trade News, Volume 5, Number 2, April 1994

Page 7



Licensing Cyberspace
Evolving Policies on Encryption Technology

On February 4 Dr. Martha Caldwell Harris,
Deputy Assistant Secretary of State for Export
Controls, made the following statement regarding
new Administration policies on the export licens-
ing of encryption technologies:

The Secretary of State is announcing today
measures arising from the Administration’s
decision to reform export control procedures
applicable to products incorporating encryp-
tion technology. These reforms are part of the
Administration’s effort to eliminate unneces-
sary controls and ensure efficient implemen-
tation.

The reforms will simplify encryption product
export licensing and speed the review of
encryption product exports, thus helping U.S.
manufacturers to compete more effectively in
the global market. While there will be no
changes in the types of equipment controlled
by the Munitions List, we are announcing
measures to expedite licensing.

Presidential Initiative

Last year the President announced an initia-
tive to encourage U.S. manufacturers and
users of encryption to take advantage of a
government technology (the key-escrow chip)
that provides excellent security while ensur-
ing that the Government has a means to
decode the encryption when lawfully autho-
rized, such as when executing a court-autho-
rized warrant in connection with a criminal
investigation.

At the time he announced this initiative, the
President directed a comprehensive review of
USS. policy regarding domestic use and
export of encryption technology. The reforms
we are announcing today result from that
review.

The President has determined that vital U.S.
national security and law enforcement inter-
ests compel maintaining appropriate control
of encryption. Still, there is much that can be
done to reform existing controls to ensure
that they are efficiently implemented and to
maintain U.S. leadership in the world market
for encryption technology.

Immediate Action

Accordingly, the President has asked the
Secretary of State to take immediate action to
implement a number of procedural reforms.
The reforms are:

¢ License reform. Under new licensing
arrangements, encryption manufacturers will
be able to ship their products from the United
States directly to customers within approved
regions without obtaining individual licenses
for each end user. This will improve the
ability of our manufacturers to provide
expedited delivery of products, and to reduce
shipping and tracking costs. It should also
reduce the number of individual license
requests, especially for small businesses that
cannot afford international distributors.

* Rapid review of export license applica-
tions. A significant number of encryption
export license applications can be reviewed
more quickly. For such exports, we have set a
license turnaround goal of two working days.

Page 6

Defense Trade News, Volume 5, Number 2, April 1994



export control policy management in the
Office of Export Control Policy; the imple-
mentation by the Office of Defense Trade
Controls of expedited license review, elec-
tronic license application, and the State
Appeals Review Process; and the continuing
revision of the International Traffic in Arms
Regulations.

Country Policies

Dr. Harris noted continuing concern over
China’s commitment to human rights and
non-proliferation. Taking questions, she said
that proposed recipients’ human rights
records are factored into licensing decisions;
that the U.S. is working to limit the spread of
weapons of mass destruction in South Asia;
and that the U.S. hoped that free and fair
elections in South Africa would allow the
U.N. embargo to be lifted.

Working Group Reports

DTAG officers outlined their accomplish-
ments since the October 1993 plenary and
their projects for 1994. In 1993 the Policy
Working Group submitted recommendations
on USS. conventional arms transfer policy and
US. arms transfer policy towards Taiwan,
and proposed State/DOD collaboration on
preparation of a comprehensive foreign
availability database and identification of
technological means to mitigate the
consequences of unauthorized transfers.

New issues for the Policy Working Group
include U.S. arms transfer policy towards
Latin America and South Africa; consider-
ation of cooperative theater missile defense
development, production, and deployment as
a policy instrument; amendment of unfair tax
treatment of defense exports; participation by
US. firms in Soviet bloc equipment upgrades;
and clarification of U.S. policies on arms
transfers to multilateral entities.

The Regulatory Working Group has submit-
ted recommendations on the State Appeals
Review Process, Commodity Jurisdiction
issues, and third country transfers. It has
task forces devoted to the Missile Technol-
ogy Control Regime, licensing automation,
review of the International Traffic in Arms
Regulations, and compliance issues. The
Technical Working Group continues to focus
on jet engine hot sections, satellites, and
encryption policy.

Background Briefings

Clifford Bond, Deputy Director for Regional
Economic Assistance, Office of Independent
States and Commonwealth Affairs,
discussed the Russian economy. State
planning and centralization have been
abolished, trade liberalized, and foreign
investment encouraged. The defense sector
no longer controls resource allocation. To
bring about a full market economy, the
government must diffuse economic power
to the provinces, create a social safety net,
and become more involved in building up
selected industrial sectors. Elsewhere,
Ukraine is suffering economically. Kazakh-
stan, Kyrgyzstan, and Moldova also face
financial hardships, but are proceeding with
economic reforms.

Ed Malloy, Director of State’s Office of
Science, Technology, and Health, described
the rapid development of U.S./Russian
space cooperation. Although some in the
Russian government feel Russia is sacrificing *
too much Soviet technology, many more
favor increased cooperation. The U.S. and
Russia are cooperating on missile nonprolif-
eration, a technical safeguard agreement for
INMARSAT, and the space station partner-
ship. Meanwhile, Kazakhstan and the
Ukraine want to broaden space collaboration
with the United States.

(Continued on page 27)

Defense Trade News, Volume 5, Number 2, April 1994

Page 19



a
A New Chief for Defense Trade

An Interview with Deputy Assistant Secretary Martha Caldwell Harris

Within the Bureau of Political-Military Affairs,
the senior official responsible for export control is
Deputy Assistant Secretary Martha Caldwell
Harris. Since taking her Ph.D. in Political
Science at the University of Wisconsin, Dr. Harris
has held a number of academic and government
positions “at the intersection of national security
and international competitiveness.” She
conducted a number of studies on strategic trade
issues during more than seven years at the
Congressional Office of Technology Assessment.
More recently, at the National Research Council,
her work focused on issues in U.S./Japan trade
and technology transfer. Dr. Harris spoke with
Defense Trade News and Export Policy
Bulletin about current trends in the export
control environment.

Multi-Front Engagement

Dr. Harris listed four broad areas in which
she is engaged: policy development on dual
use and defense export controls; licensing and
compliance issues; industry and public rela-
tions; and internal management.

Policy Development

Dr. Harris assumed her new duties at a time
of rapid shifting in the export control environ-
ment due to the end of the Cold War and the
imminent dissolution of the COCOM regime.
“Just in the last few months, the focus has
changed. Some ask why, with no unified
threat, we even need export controls. But
we've gone from an East/West confrontation
toa world with many proliferation threats
and many sources of instability.

“There has been dramatic change in the past
year,” she added. “The world is a more com-
plicated place. Information flows rapidly.

Even developing countries are increasingly
able to afford high technologies which could
improve their military capabilities.”

In developing U.S. aims for the post-Cold
War export control environment, Dr. Harris
emphasized the need to “develop an interna-
tional security policy framework, then deter-
mine where our export control goals fit into
the framework.”

Licensing and Compliance

“You'd expect this to be fairly routine, right?”
Actually, noted Dr. Harris, while licensing
procedures are generally straightforward,

a small percentage of the 50,000+ cases which
State processes each year do reach her desk.
“The ones I see either present tough choices,
or somehow push the envelope.”

Does that mean individual cases drive export
policy? “No. Cases will not be emblematic of
a whole new approach. They don’t create a
policy framework. Cases will, however,
highlight the gaps in the policy framework”
that need to be adjusted to the realities of
actual commerce.

Dr. Harris added that PM is putting increas-
ing effort into compliance issues, including
investigation of tech transfer violations, but
“we need better interaction with industry and
other governments” to tighten enforcement.

industry Relations

“We need to hear what industry has to say”
about both policy and operational licensing
issues, she emphasized. Dr. Harris noted
that she frequently hears laudatory comments
from “companies on the front line” about
State’s Office of Defense Trade Controls and
Office of Export Control Policy. “Over time,

Defense Trade News, Volume 5, Number 2, April 1994

Page 9



OIP N.V., Belgium

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Oldelft Electronic Instruments Srl, Italy
18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 17, 1992, District of Columbia
(Public Notice #1798, 58 Federal Register
26028, April 29, 1993)

Francisco Salvador Martin Panameno

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

January 29, 1992, Central District of California
(Public Notice #1758, 58 Federal Register

6835, February 2, 1993)

Pan Aviation, Inc.

18 U.S.C. § 371 (conspiracy to violate

22 US.C. § 2778) and 22 U.S.C. § 2778
January 23, 1992, Southern District of Florida
(Public Notice #1674, 57 Federal Register
37184, August 18, 1992; Public Notice #1699,
57 Federal Register 43768, September 22, 1992,
Department of State Correction Notice)

Ricardo Benitez Perez

22 US.C. § 2778

January 21, 1992, Southern District of Texas
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

Alfredo Antonio Ramos-Tinoco

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
April 4, 1991, Middle District of Florida
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

Frank J. Randazzo

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778)

May 10, 1990, District of Columbia
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

David R. Rosen

18 U.S.C. § 371 (conspiracy to violate

22 US.C. § 2778) and 22 U.S.C. § 2778

June 26, 1990, Eastern Dist. of Pennsylvania
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

Sarkis G. Soghanalian

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778

January 29, 1992, Southern District of Florida
(Public Notice #1674, 57 Federal Register 37184,
August 18, 1992, Public Notice #1699; 57
Federal Register 43768, September 22, 1992,
Department of State Correction Notice)

Hironobu Takahashi

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

December 17, 1992, District of Columbia
(Public Notice #1895, 58 Federal Register 58586,
November 2, 1993)

Rudy Yujen Tsai

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778

March 4, 1991, Eastern Dist. of Pennsylvania
(Public Notice #1771, 58 Federal Register 12440,
March 4, 1993)

Glenda Joyce Tucker

22 U.S.C. § 2778

September 20, 1993, Central Dist. of California
(Public Notice #1928, 59 Federal Register 1053,
January 7, 1994)

Phyllis Ware

22 U.S.C. § 2778

June 3, 1991, Eastern District of Michigan
(Public Notice #1928, 59 Federal Register 1053,
January 7, 1994)

Anyone needing additional information
to determine whether a person has been
debarred or reinstated should contact the
Compliance Division of the Office of
Defense Trade Controls. @

Defense Trade News, Volume 5, Number 2, April 1994

___ Page 25



Am 2t- al
WG 8 o RED
United States Department of State . Bureau of Political-Military Affairs

Defense Trade News

and Export Policy Bulletin

Volume 5, Number 2 * Washington, D.C. . April 1994

Policy

COCOM: An End and a Beginning 4
End of the Cold War Brings Changes to Multilateral Export Controls

Licensing Cyberspace 6
Evolving Policies on Encryption Technologies

Lean Times Ahead for FMF 8
U.S. Government Budget for Foreign Military Financing Shrinks

A New Chief for Defense Trade 9
An Interview with Deputy Assistant Secretary Martha Caldwell Harris

LL SS

Operations
National Disclosure Policy 11
A Primer on the Process
Perestroika at PM 13

A Guide to the Restructured Bureau of Political-Military Affairs

ELSA Speeds Staffing 16
State's Export License Staffing Analysis Network Cuts License Processing Time

SARP Update 16
State Appeals Review Process Gets Underway

a

Departments
Country Policy Briefs 17
Defense Trade Advisory Group Developments 18
U.S. Customs Report 20
Suspensions, Debarments, Reinstatements 21
Commodity Jurisdiction Determinations 26

Feedback and Application Forms 28


Exception Criteria

NDPC members determining whether to
sponsor or approve an exception judge
requests according to the following criteria:

¢ The proposed disclosure must support
U.S. foreign policy objectives toward both
the recipient country and the region.

© The proposed disclosure must have no
unacceptable military security implications.
The key consideration is the impact a compro-
mise or diversion of the system or technology
would have on the operational capability of
US. and allied forces. This determination
takes into account system capability and
vulnerability, foreign availability of the same
or similar systems and technology, and the
susceptibility of the system to exploitation.

© The recipient must have the capability and
intent to protect the system. The U.S.
Government determines capability through
on-site security visits, intelligence risk assess-
ments, and other means. Intent is established
by the negotiation of detailed security agree-
ments with recipient governments. If there is
no security agreement, a program-specific
security arrangement may be negotiated.

¢ The proposed disclosure must result in
clearly-defined political, military or other
national security benefit to the U. S.
Economic/commercial benefits to the U.S.
are not currently exception criteria.

* The disclosure must be limited to the
minimum information necessary to satisfy
the U.S. Government goals outlined above.

Information must not be divulged that would
assist the recipient in the design and develop-
ment of an indigenous system — unless, of
course, that is the U.S. Government's inten-
tion in permitting the disclosure, e.g., to
enhance an ally’s defense industrial base.

Determination and Appeal

If NDPC members split on whether to permit
a disclosure, the Committee chairman renders
a “Chairman’s Decision.” Dissenting NDPC
members can appeal this ruling to the Secre-
tary of Defense.

If the NDPC achieves unanimity — or if
there is a disagreement, but the members in
the minority choose not to appeal — the
Chairman releases a formal “Record of
Action” on the determination. Decisions ren-
dered by the Secretary of Defense or his
deputy are recorded in the same manner.

Efforts to Improve the System

The NDP process is important to the protec-
tion of U.S. classified material. State and DoD
recognize, however, that industry has experi-
enced difficulties with this process. All agen-
cies involved are working to improve the
NDP process.

Suggestions or questions on National
Disclosure Policy should be directed to the
Office of Export Control Policy. @

DTC Registrants — New Address? New Boss? Let Us Know

Ofcourse, all subscribers need to notify us of achange ofaddress to continue to receive the magazine.
But for those recipients of Defense Trade News registered with the Department of State as
manufacturers or exporters, there is another important reason to keep in touch — registrants are
required by law to notify State’s Office of Defense Trade Controls of any change of address or
change in the name of the registrant entered in Block 14 of Registration Form DSP-9. For details,
consult ITAR §122.4 or contact the Registration Staff at FAX: (703) 875-5663.

Page 12

Defense Trade News, Volume 5, Number 2, April 1994



eS
OPERATIONS

National Disclosure Policy

A Primer on the Process

Many people have observed that the process sur-
rounding the National Disclosure Policy (NDP)
and the actions of the National Disclosure Policy
Committee (NDPC) appear opaque and rather
mysterious. This article is meant to make both the
policy and the process more understandable.

What is the NDP?

The NDP establishes a framework for
approval or denial of proposed disclosures of
classified information to foreign governments
and some international organizations. Infor-
mation controlled under NDP includes eight
categories of information on subjects as
diverse as military intelligence, military orga-
nization, and training, as well as information
required for operation and maintenance of
military materials and munitions sold to
foreign countries.

The NDP establishes specific criteria and con-
ditions which must be satisfied before a deci-
sion is made to release classified military
information to foreign governments. These
criteria and conditions satisfy, in part, the
security requirements of the Arms Export
Control Act and Executive Order 12356.
Approval or denial is based on a determina-
tion of whether these specific criteria and
conditions are satisfied.

The Secretaries of the military departments
have generally been delegated authority to
tender decisions, with respect to disclosure of
information controlled by their departments,
to the governments of countries with which

the United States has mutual defense arrange-
ments. In cases where authority has not been
delegated, an exception to NDP is needed.
Requests for exception are considered by the
National Disclosure Policy Committee.

What is the NDP Committee?

The NDPC is chaired by a Defense Depart-
ment representative and includes representa-
tives of each military service, the State
Department, and other agencies. A small
secretariat is based at the Pentagon.

The Exception Process

Often U.S. firms encounter the NDP when an
export license application dealing with the
release of a classified defense article is denied
on NDP grounds.

A request for exception to NDP must be
sponsored by an NDPC member, normally
the cognizant military service — that is, the
service which operates or “owns” the system.
For example, the Air Force would normally
sponsor the F-16, the Navy the F/A-18, and
the Army the Apache helicopter. State or
other NDPC members may sponsor a request
for exception, but this is generally impractical
as only the cognizant service will have the
technical expertise to make a credible case.
Once a member agrees to sponsor a request
for exception, the sponsor submits the request
to the secretariat, which staffs the proposal to
the NDPC members. Members normally must
vote within 10 working days, or justify the
delay.

Defense Trade News, Volume 5, Number 2, April 1994

Page 11





Log onto ELLIE
State’s Electronic License Entry System

The State Department's Office of Defense Trade Controls (DTC) now offers on-line
electronic license submission via ELLIE, the Electronic License Entry System. Since its
inception in late 1993, ELLIE has processed over 2000 applications. Having successfully
completed the pilot stage of the project, DTC has gradually increased the number of
companies participating in the ELLIE program to over 300.

ELLIE is a free service. To use ELLIE, you must have access to DIC’s Remote On-line
Bulletin Board (ROBB). Access to ROBB and ELLIE requires a PC, a modem, and
communications software,which your firm may already possess.

To sign up for ELLIE, please mail this application to DTC (Attn: Computer Support
Staff) or fax it to (703) 875-5663.

TO: Director, Computer Support Staff, Office of Defense Trade Controls
FAX: (703) 875-5663

FROM:
(Company Name)

We would like to sign up to submit license applications electronically via ELLIE.
We.do/do not already use ROBB.
Our firm submits approximately. license applications to DTC per year.

DTC Registration Code
Address
City , State, ZIP
Point of Contact for ELLIE
Phone ( ) Fax ( )



el

Lean Times Ahead for FMF

US Government Budget for Foreign Military Financing Shrinks

Broad Mandate

The U.S. has long used foreign assistance to
promote political stability, democratization,
and market economy throughout the world.
The post-Cold War world system continues
to provide numerous challenges in which
foreign assistance can be a vital tool.

The President has defined six fundamental
foreign policy goals against which decisions
on the allocation of foreign assistance
resources are to be measured:

¢ Promoting U.S. Prosperity through Trade,
Investment, and Employment

Building Democracy

Promoting Sustainable Development
Promoting Peace

Providing Humanitarian Assistance
Advancing Diplomacy

eooeee

Shrinking Budgets...

Budgets for key foreign assistance programs
— Foreign Military Financing (FMF), Eco-
nomic Support Fund (ESF), and International
Military Education & Training (IMET) —
continue to decrease. The combined budget
for FMF, ESF, and IMET has shrunk since
Fiscal Year ’91 by about one third, or

$2.5 billion.

FMF in FY 94 sustained a 10% reduction

from the previous budget, for a cut of nearly
$1 billion since FY 91. There is no indication
this trend will reverse in FY 95. Adding to the
crunch is the rescission of nearly $550 million
of previous years’ uncommitted aid, includ-
ing $91 million from FMF.

Plus Reduced Flexibility...

The decrease in the overall foreign assistance
budget has not been matched by a decrease in
Congressionally-mandated earmarks, with
the result that earmarks accounted for 98%

of grant FMF in FY 94.

Increased U.S. commitments to peacekeeping,
operations have also consumed a growing
share of assistance funds, with correspond-
ingly less available for discretionary spend-
ing. After earmarks, commitments, and treaty
obligations are subtracted, $25 million
remains in the budget to fund discretionary
FMF programs worldwide.

..Equals Fewer Programs

Asa result of funding cuts in FY 92-94,

45 country programs spanning every
geographic region have been dropped.

FMF spending cuts have extended to
counternarcotics programs, requiring reduc-
tion in assistance to South American and
Caribbean nations cooperating with the U.S.

The assistance budget cuts are also felt in
the U.S. With the exception of some funds
earmarked by Congress for expenditure in
Israel, almost all FMF aid is spent in the
US., to the benefit of American industry.

fon Challenges, New Alternatives

Hi Budgetary constraints have forced the U.S.

to seek alternative and innovative ways to
continue to assist friendly nations, notably the
Excess Defense Article (EDA) program, under
which U.S. forces’ excess hardware is pro-
vided to allies and friends. Inevitably, how-
ever, some former recipients of U.S. foreign
assistance will reach out to other suppliers,
government or commercial, to fill the gap. #

Page 8

Defense Trade News, Volume 5, Number 2, April 1994



SS

ITAR, and aiding and abetting in violation
18 U.S.C. § 2(b); making false statements
within the jurisdiction of the United States in
violation of 18 U.S.C. §1001; and bank fraud
in violation of 18 U.S.C. §1344. Ms. Tucker is
currently statutorily debarred pursuant to 22
C.F.R. §127.7(c) of the ITAR. (See 59 Federal
Register 1053, January 7, 1994.)

Asa result of a Deferred Prosecution Agree-
ment between Armour and the Departments
of Justice and State, and an Order by the
Assistant Secretary of State for Political-Mili-
tary Affairs, the Department of State's suspen-
sion notice of December 31, 1992 was
rescinded for Armour and its subsidiaries
and associated companies and Arthur G.
Schreiber, effective December 29, 1993. There-
fore, those persons holding existing licenses
or other approvals that were affected by the
Armour and Arthur G. Schreiber suspension
may resume exporting defense articles or
defense services.

Notice of this recision action was published in
the Federal Register (Vol 59, January 26, 1994,
p. 3746, Public Notice No. 1934).

Public Notices of Debarred Persons

The following persons have previously been
debarred for a period of three years following
their conviction for violating or conspiring to
violate the AECA. Key —— name; offense; convic-
tion date & court; Federal Register citation.

Aero Systems, Inc.

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
May 12, 1993, District of Columbia
(Public Notice #1868, 58 Federal Register
50382, September 27, 1993)

Aero Systems, Inc. — 2nd Statutory
Debarment

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 5, 1993, District of Columbia
(Public Notice #1944, 59 Federal Register
5664, February 7, 1994)

Aero Systems Aviation Corp.

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
May 12, 1993, District of Columbia
(Public Notice #1868, 58 Federal Register
50382, September 27, 1993)

Aero Systems Aviation Corp. — 2nd
Statutory Debarment

18 U.S.C. § 371 (conspiracy to violate
22 US.C. § 2778) and 22 U.S.C. § 2778
July 5, 1993, District of Columbia
(Public Notice #1944, 59 Federal Register
5664, February 7, 1994)

Aero Systems Pte. Ltd.

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
May 12, 1993, District of Columbia
(Public Notice #1868, 58 Federal Register
50382, September 27, 1993)

Aero Systems Pte. Ltd. — 2nd Statutory
Debarment

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
July 5, 1993, District of Columbia
(Public Notice #1944, 59 Federal Register
5664, February 7, 1994)

Luis Fernando Arcila-Giraldo

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778) and 22 U.S.C. § 2778
April 30, 1991, Middle District of Florida
(Public Notice #1758, 58 Federal Register
6835, February 2, 1993)

Symone Morris Behrmann

18 U.S.C. § 371 (conspiracy to violate
22 U.S.C. § 2778) and 22 U.S.C. § 2778
May 10, 1990, District of Columbia
(Public Notice #1771, 58 Federal Register
12440, March 4, 1993)

John L. Broussard

18 U.S.C. § 371 (conspiracy to violate

22 U.S.C. § 2778)

June 26, 1992, Western District of Louisiana
(Public Notice #1928, 59 Federal Register
1053, January 7, 1994)

Page 22

Defense Trade News, Volume 5, Number 2, April 1994





Le

POLICY

COCOM: An End and a Beginning

End of the Cold War Brings Changes to Multilateral Export Controls

On March 30, 1994, the White House released the
following statement on export control reform.

Today the President announced another step
in U.S. efforts to reform the export control
system. From the outset, this Administration
has been committed to combatting the prolif-
eration of dangerous weapons and sensitive
technologies, while at the same time ensuring
that American workers and firms remain the
most competitive in the world.

Our policies seek to balance these goals. As
global technology advances, export controls
must be updated, in order to remain focused
on those items that still make a difference to
programs of proliferation concern. To pro-
mote 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 nonprolifera-
tion norms.

Export Liberalization

As of April 1, 1994, we will liberalize licens-
ing requirements on the export of nearly all
civilian telecommunications equipment and
computers that operate up to 1000 MTOPS
(million theoretical operations per second)
to civil end-users in all current COCOM-
controlled countries except North Korea.

This action is consistent with our national
security requirements, because we are
retaining individual licensing requirements
for high-end computers and for transfers to

military end-users. We are not changing our
nonproliferation controls, which require a
license for any export that would contribute
toa program of proliferation concern.

Last year, the Commerce Department
received approximately 25,000 export license
applications. With these and other changes
announced by this Administration, it is
expected that the number will be cut by
nearly half. When this Administration came
into office, certain basic personal computers,
such as IBM PCs and Apple Macintoshes,
were still being controlled. Last September,
we took the first step to liberalize licensing
requirements for over $30 billion worth of
computer exports.

National Security and Nonproliferation

Today’s decision is compatible with our
national security and nonproliferation objec-
tives. By liberalizing licensing requirements
on items that routinely are granted licenses,
we will concentrate our export control efforts
on denying technologies that still make a
difference to the development of dangerous
arms. Most of the items currently controlled
by the United States will remain subject to
licensing requirements, including dual use
goods and technologies controlled due to
their use in chemical, biological, nuclear,
advanced conventional weapons and missile
delivery systems.

The members of COCOM have agreed to end
the Cold War regime effective tomorrow. The
end of the Cold War and the disintegration of
the Soviet Union and the Warsaw Pact led us
and our allies to the view that COCOM’s
strategic rationale was no longer tenable.

Page 4

Defense Trade News, Volume §, Number 2, April 1994



__| Assistant Secretary &

a

Bureau of Political-Military Affairs
Department of State

Assistant Secretary

Robert-b; Gallucci

VE

Ambassador for
Safe and Secure
Dismantlement

U.S. Representative to
the IAEA

| senior Coorainato |

Ambassador for

Burdensharing

Principal Deputy

DAS, Arms Control
Thomas E. McNamara

Deputy
Assistant Secretary,
Export Controls
Martha C. Harris

Deputy
Assistant Secretary,
Non-Proliferation
Robert J. Einhorn

Deputy

_| Assistant Secretary,

Regional Security
Frances D. Cook

VS Noda as
Office of Strategic Office of Defense Office of Nuclear Office of Defense
Policy and ty Trade Controls LY Energy Affairs LI Relations and
Negotiations PM/DTC PM/NE Security Assistance
PM/SPN PM/DRSA
Office of Office of Export Office of Regional Office of International
Arms Control LI Contro} Policy Nonproliferation H Security and Peace-
Implementation PM/EXP PM/RNP keeping Operations
PM/ACI PM/ISP

Nuclear Risk
Reduction Center
PM/NRRC

Office of the
Executive Director
PM/EX

Congressional &
Public Affairs

Office of Chemical,

Biological, and Mis-
“| sile Nonproliferation
PM/CBM

Office of Policy and
HH Plans
PM/P

State-Defense
Exchange Officers

4 Political Advisors |

Defense Trade News, Volume 5, Number 2, Apuil 1994

Page 15



DEPARTMENTS

Country Policy Briefs

Central and Eastern Europe

On January 5, 1994, President Clinton
announced his finding that the furnishing of
defense articles and services to the govern-
ments of the Czech Republic and the Slovak
Republic will strengthen the security of the
U.S. and promote world peace. On March 22,
the President announced the same finding
regarding the governments of Albania,
Bulgaria, Estonia, Latvia, Lithuania, and
Romania. The State Department will hence-
forth consider applications for the export of
U.S. Munitions List articles and services to
these governments on a case-by-case basis.

Vietnam

On February 4, 1994, President Clinton
announced that the trade embargo imposed
with respect to Vietnam in 1975 is being
removed. This action, however, did not
extend to trade in U.S. Munitions List articles.
The State Department continues to return
without action all applications for licences to
export USML hardware, technical data, or
services to Vietnam.

Former Yugoslavia

On July 11, 1991, the United States declared
an embargo on exports of U.S. Munitions List
articles and services to the former Yugoslavia,
suspending all existing licenses. This
embargo remains in force, applying to
Bosnia-Herzegovina, Croatia, the Former
Yugoslav Republic of Macedonia, Serbia-
Montenegro, and Slovenia. @

Subsidiaries —
Don't Forget Your Parents

Subsidiaries sometimes submit appli-
cations to the Office of Defense Trade
Controls (DTC) using a parent
company’s registration code but not
the parent company’s name. This de-
lays processing while DTC verifies the
subsidiary’s status. To avoid this prob-
lem, subsidiaries should identify the
parent company in the Applicant box
of applications, e.g.:

ABC Company

A Subsidiary of XYZ, Inc.
1234 Elm Street
Anytown, CA 99999

Defense Trade News, Volume 5, Number 2, April 1994

Page 17



Editor’s Note

Welcome to the second issue of the revamped Defense Trade
News and Export Policy Bulletin. This issue’s feature articles
highlight U.S. Government initiatives in response to two key
trends in the export control environment — the post-Cold War shift in focus
from the Soviet threat to the dangers of regional arms proliferation, and the rapid
technological and marketplace evolution in encryption, telecommunications, and
computing. The back of the book contains practical information for exporters.

Please send in your Feedback form to let us know how Defense Trade News and
Export Policy Bulletin can better serve your needs. #

DTC Has Not Moved...

.-but it does have a new address. Due to secu-
rity upgrades at the State Department Annex
housing the Office of Defense Trade Controls,
the public access and courier delivery address
has changed from 1701 N. Fort Myer Drive to
1700 Lynn Street. The mailing address is un-
changed. See the inside rear cover of this issue
for a list of addresses and phone/fax numbers.

Defense Trade News, Volume §, Number 2, April 1994 . Page 3



Commodity Jurisdiction
Determinations

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

proprietary information.

Determinations apply only to the specific commodities

reviewed. If you believe one of your firm’s products is similar to one listed here as having been
placed on the Commerce Department’s Commerce Control List (CCL) and wish to have the 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 “CJs for Mass Market
Software” (Vol. 3, No. 4, Oct 1992) and “Class and Multiple CJ Requests” (Vol. 3, No. 1, Jan 1992),

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

COMMODITY RULING
‘Accelerometer, Quartz Flexure cect”
Accelerometers, Linear Servo and Quartz Flexure:
Specifically Designed for
‘Commercial Applications cc”
Specifically Designed for
Military Applications USML XII(d)

Airships, Non-Rigid:
Not Specifically Designed, Modified
or Configured for Military Applications cel
Specifically Designed, Modified
or Configured for Military Applications USML VIII(a)

Ammonium Dinitramide (Dinitramide Salts) USML V(a)
Amuunition Loading System USML III(b)
Angular Rate Sensor:
Specifically Designed for
Military Applications USML XIK(d)
Cable Television Decoders CCL 5ATIA and SA9SF
‘Camouflage Coatings with Infrared and
Chemical Resistant Primers and Topcoats USML XIII(e)
Capacitor Discharge Unit (CDU) ccLTM
Castings:
Not Specifically Designed, Modified, or Configured
for a Defense Article ccLTM
Specifically Designed, Modified, or Configured
for a Defense Article USML
Central Transceiving Earth Station and
Transportable Transceiving Station CCL 5SA94F
Command Instrument Processor ccLTM
Computer, Handheld CCL 4A96G
Connecting Track Fixture cc”
Data Encryption Device USML XIII(b)
Data Television Network Containing
Data Encryption USML XIII(b)
DEF-6 (S,S,S-Tributylphosphorotrithioate)
Defoliant ccLTM

COMMODITY RULING

Digital Conferencing System CCL 5A03A,

Digital Signal Processor, Low Power,

16-Bit General Purpose ccLTM

Digital Voice Logger cc”

Facsimile Transceiver, Commercially Compatible:
Non-TEMPEST CCL 5A96G

TEMPEST USML XI(b)
Fiber Optic Cable Specifically Designed

for Military Applications USML IV(h)
Fiber Optic Modem Specifically Designed
for Military Applications USML XI(d)

Fireworks (Hazard Class 1.3G) cc

Helicopters Specifically Designed for
Military Applications

Horizontal Situation Indicator

USML VIII(@)

and Radio Magnetic Indicator ccL
Imaging System, Airborne Video ccs
Infrared Focal Plane Array Camera USML XIKe)
Integrated Circuit with Encryption CCL SANA
Intensifier System, Lens-Coupled USML XiIl(e)

Knife, Hook and Snap Blade ccLl*

Laser Aiming Devices for Small Arms CCL OAS4C
Lighter-than-Air Vehicle, Remotely Piloted:
Not Modified or Configured for Military
‘Applications cc”
Modified or Configured for Military
Applications USML XUl(a)
Magnesium Rods, Extruded ccLTM
Magnesium Sheet cc”
Mercury Cadmium Telluride:
In Unpolished Sticed Form ccLTM
Specifically Designed, Polished, Cut,
Configured for Military Applications USML XII(¢)

Page 26

Defense Trade News, Volume 5, Number 2, April 1994



La

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:
Thomas A. Denner

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
(January, 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 statements and other official documents. Special features, articles,
and other 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.

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 address, a registrant must notify the Office of Defense
Trade Controls in writing, citing its applicant code and amending 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 firms 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.



Tape Edge Before Mailing

April 1994
Defense Trade News

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

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

Washington, D.C. 20522-0602

rae


Defense Trade News, Vol. 5, No.2

a €) Feedback

Please circle or fill in your responses, add any
comments, and mail to DTC (Attn: DTN
Feedback) or fax 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

3-15. 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. COCOM ___

4. Cyberspace__

5. FMF Outlook__

6. Harris Interview__

7. National Disclosure Policy__
8. PM Restructuring __

9, ELSA__

10. SARP Update__

11. Country Policy Briefs__

12. DTAG Developments

13. Customs Report____

14. Debarments & Recisions__
15, Commodity Jurisdiction__

16-28. Please rate each article’s readability
(style and physical presentation) ona scale of
1 (worst) to 5 (best); rate as “0” articles you
did not read.

16. COCOM __

17. Cyberspace__

18. FMF Outlook__

19, Harris Interview__

20. National Disclosure Policy__
21. PM Restructuring __

22. ELSA__

23. SARP Update__

24. Country Policy Briefs__

25. DTAG Developments

26. Customs Report____

27. Debarments & Recisions___
28. Commodity Jurisdiction__

29-31. 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)

WCRONANTRONE

32. 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.


cS

Perestroika at PM

A Guide to the Restructured Bureau of Political-Military Affairs

This snapshot guide to the Bureau of Political-
Military Affairs (PM, in State Departmentese) is
aimed at business people and others who work
with PM offices but may not be familiar with the
Bureau's overall structure and responsibilities.

The Bureau of Political-Military Affairs
recently underwent a reorganization aimed at
improving policy and operational efficiency,
absorbing some elements previously attached
to other State bureaus.

Some PM offices were given modified respon-
sibilities, and most were given new names
reflective of these evolving missions. For
example, the former Office of Defense Trade
Policy became the Office of Export Control
Policy, following augmentation with officers
transferred from the Bureau of Economic &
Business Affairs.

Mission

The Bureau furthers U.S. national security
objectives by stabilizing regional military
balances through negotiation and security
assistance; negotiating reductions in global
inventories of weapons of mass destruction
and curbing their proliferation; maintaining
global access for U.S. military forces; inhibit-
ing adversaries’ access to militarily significant
technologies; and promoting responsible U.S.
defense trade.

Organization

PM's 270 Foreign Service, Civil Service, and
military personnel are supervised by four
Deputy Assistant Secretaries, who — together
with several Ambassadors-at-Large — report
to Assistant Secretary of State for Political-
Military Affairs Robert L. Gallucci. The
Bureau's work is divided into four functions:

Arms Control

The Ambassador for Safe and Secure
Dismantlement leads the State Department
effort in negotiating and implementing
agreements for assistance to Russia, Ukraine,
Belarus, and Kazakhstan for the safe and
secure dismantlement of nuclear weapons.

The Office of Strategic Policy and Negotia-
tions supports the development of U.S. policy
on Comprehensive Test Ban Treaty negotia-
tions; safe and secure dismantlement; strate-
gic arms negotiations; ballistic missile defense
policy; arms control and security negotiations
in Europe; and multilateral arms control.

The Office of Arms Control Implementation
provides political-military technical expertise
related to compliance with and implementa-
tion of arms control agreements.

The Nuclear Risk Reduction Center (NRRC)
operates 24-hour government-to-government
communications links (“hotlines”) in support
of arms control and security agreements with
former Soviet republics and member states of
the Conference on Security and Cooperation
in Europe.

Export Controls

The Office of Defense Trade Controls, the
Bureau's largest element, issues export

licenses to U.S. firms and enforces compliance *
with the Arms Export Control Act and the
International Traffic in Arms Regulations.

The Office of Export Control Policy sets
policy guidelines for commercial defense
trade and high technology exports, and
provides guidance to embassies on assistance
to U.S. defense industry marketing efforts
overseas.

Defense Trade News, Volume 5, Number 2, April 1994

Page 13



ELSA Speeds Staffing

State’s Export License Staffing Analysis Network Cuts License Processing Time

In recent years the Office of Defense Trade
Controls (DTC) has developed several auto-
mated systems to speed license processing
and provide more timely information to the
public. These include the in-house informa-
tion management system known as DETAS,
the automated telephone inquiry system
ALISS, the electronic bulletin board ROBB,
and the new electronic licensing application
system ELLIE.

March 1994 saw the introduction of State’s
latest export licensing support system —
ELSA, the Export License Staffing Analysis
network. ELSA is a PC-based net which

links DTC to the State Department regional
bureaus and functional bureaus which review
many license applications on foreign policy
grounds.

Before ELSA, DTC staffed applications to
other State offices by forwarding hard copies
of applications via inter-office mail. With
quick electronic communication via ELSA,
the Department hopes to achieve quicker
turnaround on staffed cases while reducing
instances of strayed documents and human
processing error.

Unlike ALISS, ROBB, and ELLIE, ELSA won’t
communicate directly with U.S. industry. But
she will be serving it. @

SARP Update

State Appeals Review Process Gets Underway

The Office of Defense Trade Controls has
begun the State Appeals Review Process
(SARP) described in the January 1994 issue of
Defense Trade News. Procedures and guide-
lines are being fine-tuned as we proceed.

No Detour Around the Day-in-Court
Applications for which the Department of
Defense has recommended denial based on
national security concerns will not be eligible

for the SARP if an applicant has been offered,
and has declined, a DoD Day-in-Court hear-
ing. An applicant who has made his case at a
Day-in-Court without obtaining a reversal of
the DoD position may request a SARP hear-
ing, but only if the applicant has substantial
new information to introduce. In such cases,
DTC will invite DoD to participate.

Questions and suggestions on the State
Appeals Review Process should be directed
to the Licensing Division of the Office of
Defense Trade Controls. @

Page 16

Defense Trade News, Volume 5, Number 2, Apnil 1994