His previous U.S. Government service was as
Supervisory Compliance Specialist, Office of
Antiboycott Compliance, Bureau of Export
Administration, U.S. Department of Com-
merce.

He has a B.A. (international affairs), the
George Washington University; an M.I.A.
(international affairs), Columbia University;
anda J.D., University of Kentucky School of
Law.

Mr. Rhoads is a member of the District of Co-
lumbia, Kentucky and Louisiana Bar Associa-
tions.

In addition to private practice attorney in
New Orleans, Louisiana, specializing in ex-
port contracting, and financing. Also criminal
and civil practice, he worked with the agency
for International Development, (law clerk-
ship), and served as an International Trade
Specialist, Kentucky Department of Com-
merce. ®

Page 20

Defense Trade News, Volume 6, Number 1, October 1995



American countries will probably not be
making substantial arms purchases in the
near-term. Many of the region’s economies
are weak, and although the region is
generally at peace, contentious border
disputes such as the Peru-Ecuador conflict
and simmering guerrilla movements exist.
Other policy considerations include human
rights concerns and civil-military relations.
The United States will continue efforts to
coordinate multilateral restrictions on sales of
potentially destabilizing advanced
equipment.

Regarding Central Europe, State participants
explained that there was previously a
presumption of denial for transferring
sophisticated, lethal military equipment to the
CE states. After a policy review, it was
decided that all proposed USML exports
would be reviewed on a case-by-case basis.
Only the former Yugoslav Republics cannot
receive military equipment: a UN arms
embargo prohibits them from receiving
weapons and other military equipment which
would exacerbate the military conflict.

Export controls towards specific CE nations
have liberalized as they have instituted
political and economic reforms.

The first afternoon briefing involved
regulatory changes connected with
acquisitions and mergers, audits, and
compliance requirements. In the next

briefing LXLAG members expressed interest

inthe Department's er policy in general
id Singapore’s desire for t i

Se ee eae Sete sdvived that

the United States would be cautious about
introducing advanced and possibly
destabilizing technologies into the East Asia/
Southeast Asia region. The final briefing
dealt with encryption articles arid’
technologies and supercomputers. Although
national security concerns dictate that
encryption controls would stand,
representatives of the Department noted that
efforts are being made to reform the export
requirements and reduce the burden to
industry. Specifics on the U.S./Japanese

supercomputer negotiations were discussed,
including countries to which case-by-case
review of proposed exports applied and the
terms of notification.

Assistant Secretary of State for Political-
Military Affairs Thomas McNamara gave
concluding remarks on the financial
hardships imposed by a shrinking global
defense market, the criteria for U.S, arms
transfers, and USG support for responsible
transfers. @

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

Page 14

Defense Trade News, Volume 6, Number 1, October 1995



Tape Edge Before Mailing

|
| Place |
! Return |

| Postage |

Here

L___]

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


Agreement Notes, Part Il: Estimating Values

No More “Worthless” Agreements, Please

Proposed Manufacturing License Agreements
and Technical Assistance Agreements submit-
ted to the Office of Defense Trade Controls
(DTC) for approval must contain a “statement
of the actual or estimated value of the agree-
ment,” derived from “the estimated value of
all defense articles to be exported in further-
ance of the agreements or amendments
thereto [22 CFR § 124.12(a)(6)].”

Nonetheless, many applications are received
which list the value as “none.” Applicants
justify this omission by citing such factors as a
lack of immediate remuneration (as on joint
development or teaming agreements) or
offsets. Yet proposed Agreements received
without an estimated value are often delayed
in processing until DTC can obtain this
information from the applicant.

Multiple Measures

The value of an Agreement can be estimated
by answering one of the following questions:

* Actual contract cost. How much will the
applicant actually receive for the service
provided?

* Objective contract value. How much
would the applicant charge for the service if it
were being offered independent of offset or
teaming arrangements?

* Estimated sales of the article. What is the
value of sales of the article over the Agree-
ment period?

¢ Impact of disapproval. How much will it
cost the applicant if the Agreement is not
approved?

If an applicant firm is able to calculate an
answer to more than one of these questions,

it should include all the answers in its letter of
transmittal for action.

In for the Duration

The information to be provided is the esti-
mated value over the duration of the Agree-
ment. Estimates which account for only the
sale of the license, but not the value of the
articles produced under the license, do not
accurately depict the value of the Agreement
as defined in the International Traffic in Arms
Regulations.

Ditto for Amendments

This process is also applicable to estimating
the value of amendments. There is more
flexibility here, however, as some amend-
ments are administrative in nature and have,
by definition, no value (e.g. novations).

However, amendments which add items,
expand the scope, expand the sales territory
or extend the duration of an Agreement
almost certainly will change the value of the
basic Agreement, and thus an estimated value
of the amendment must be submitted. Note,
however, that the value to be provided with
the application for amendment is the value
attributable to the amendment itself, not a
cumulative amount attributable to the Agree-
ment since its inception.

Questions on this process should be
addressed to the Licensing Division of
the Office of Defense Trade Controls. @

Defense Trade News, Volume 6, Number 1, October 1995

Page



Defense Trade News, Volume 6, No1

a e) 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...

. Manufacturer

. Exporter

. Consulting or law firm

. Freight Forwarder

U.S. Embassy or Consulate

U.S. Customs element

. U.S. DOD/Military element

. Other U.S. Government element

. Foreign government element

10. Other (please explain in Comments)

BSSAONDUDRONE

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.

16-28. Rate readability (style and physical
presentation) on a scale of 1 (worst) to 5
(best); rate as “0” articles you did not read.

29-31. Please circle the numbers of the three
topics you would most like to see covered.

1. Defense trade policy

2. Non-defense trade policy

3. Country-specific trade issues
4. Trade legislation

5. Licensing procedures

6. Regulatory and legal issues

7. Licensing case studies

8. Compliance case studies

9. Other (please explain in Comments)

Comments: *

We welcome lengthier comments,
suggestions, and criticism.


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
U.S. Customs EXODUS Program

Processing of Requests

Agreement Requirements

Commodity Jurisdiction 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 ( yi


Oe

COMMODITY RULING
Limiters, High Temperature Superconductor
Fault Current USML XI (a)
Mats, Rapid Runway Repair USML XIII (a)
Methyl Bromide 67% /Chloropicrin 33% cc”
Chloropicrin in Pure Form is Designated as a
Defense Article USML XIV (a)
Microwave, Downconverter USML XI (b)
Microwave Receiver ccL”
Missile, Parts and Components USML IV (h)
Modules, Racal Host Security cc”
Monitor, Communications Systems cc”
Encryption/ Decryption Capability and
Keying material USML XIII (b)(1)
Monitor, Remote Controlled Reconnaissance USML IV (c)
Operating System, Containing Implementation
of Enigma Encryption Algorithm cect”
Pocketscope, Night Vision
Specifically Designed, Modified, or
Configured for Military Use USML XII(c)
Not Specifically Designed, Modified, or
Configured for Military Use cL”

Propeller Systems, Fixed-Pitch and Controllable-Pitch
Specifically Designed, Modified, or

Configured for Military Applications USML V1)
Not Specifically Designed, Modified, or
Configured for Military Applications cc”
Radar, Absorbing Material USML XIII (e)
Radio Demultiplexer USML XI (b)
Radiotelephone, Digital Cellular ccLTM
Receiver, Compact cc”
Recorder, Ruggedized Communications USML XI (b)
Robot, Multi-Purpose cL”
Rotory Wing Head, Centering Socket Hub Assembly CCLTM
Satellite, Weather Receiver System cc”
Scrambler, Voice cc”
Semitrailer,
Specifically Designed for
Military Application USML VII (h)
Sensors, Temperature ccLTM
Services, Involving Sonar Platform Noise
Analysis for Commercial Sonars
on Foreign Vessels USML Vig)
Signal Analyzer ecu
Simulator, Chameleon, High Density Signal, ~
and Briefcase Threat, Beam Box Signal USML IX (a)

Smoke, Pepper Fog USML XIV
Software, Advanced Development

COMMODITY RULING

Environment USML XIH(b)

Software, Air Operations Center Workstation USML XI (e)
Software, Hand-Held Encoder-Decoder. _- USML XIII (b)(1)

Device
Software, Scrambling /Descrambling ccL*
Software, Secured PC Communications ccL"*

Software, Space Computer Development Unit USML XV (e)

Software, Test Procedures Designed for Testing
Circuit Card Assemblies in Guided Munition USML IV (i)

Standoff Electronic Incapacitation Device ccLl
Switch, Red/Black Voice Specifically Modified for

Military Applications USML XIII (b)
Technical Data Related to Specific Parts of

the CFM56 Engine Hot Section USML VII (k)
Teleoperation, Remote Control Kit ccLTM
Telephone Earth State (TES) cc”TM

When it Incorporates the Data Stream

Interface or Access Feature USML XIII (6)(5)

Telephone, Privacy Unit & Handheld cc”
Terminals, X-Band Remote Sensing Satellite Earth
Not Specifically Designed, Modified, or
Configured for Military use cc”
Track Roller, Stud Portion and Bearing Assembly cc”

Final Assembly of the Stud Portion & Bearing/Track
Roller USML VIII gj)

Training Systems, Air Traffic Control - Virtual Controller and
Airport Control Tower Simulator ccL”

Transponder, Civil Air Traffic Control
Not Specifically Designed, Modified, or
Configured for Military use cel

Tubes, Image Intensification
Not Specifically Designed, Modified, or
Configured for Military use USML XII (c)

Tubes, Image Intensifier ccLTM
Vehicle, Unmanned Air USML VIII (a)

Video, Compression Encoder ccLTM
Video, Reproducer ccLTM
Voice Channe] Demultiplexer USML XI (b)
Voice Compression Product ccLTM
Water Jet, Coating Removal System ccLTM
Welding System, Programmable Automated USML VI (e)

TM A specific Export Commodity Classification Number (ECCN) was not provided by the Department of Commerce. For the

ECCN number, please file a commodity classification request with the Bureau of Export Administration (BXA), Department of

Commerce, P.O. Box 273, Washington, DC 20044

Page 18

Defense Trade News, Volume 6, Number 1, October 1995



continued from page 8 A native of Kansas City, Missouri, “Gerry” is

a graduate of Washington & Lee University,
Hugh G. Hamilton, Jr. became Director, and has engaged in non-degree graduate
Office of Arms Transfer and Export Control studies at Georgetown and American

Policy in May 1995. Previous State Universities. #
Department positions he has held include

Head of Mission, CSCE Long-term Mission to

Latvia; Deputy Coordinator for East

European Assistance; Deputy Chief of

Mission, Cote d’Ivoire; and Deputy Chief of

Mission, Luxembourg. He also served in

Poland, the former USSR, and a number of

African posts.

Page 10 Defense Trade News, Volume 6, Number 1, October 1995



i 0

Arms Transfer Reorganization

Political-Military Review More Efficient

Assistant Secretary McNamara has approved
a reorganization plan that complies with
recommendations from the Vice President's
National Performance Review, the Secretary’s
Strategic Management Initiatives and the PM
Bureau Program Plan. All of these
management endeavors specifically direct
bureaus to streamline operations, consolidate
like functions and to eliminate unnecessary
layering. As approved, the plan among other
things:

—- Retitles the Office of Export Control
Policy (EXP) as the Office of Arms Transfer
and Export Control Policy (ATEC). This new
office will absorb arms transfer functions
from the Office of Defense Relations and
Security Assistance (DRSA). The office will
be headed by Mr. Gerry Hamilton.

OXY

—— Retitles the Office of Regional
Security Policy (RSP) as the Office of Security
Relations, Policy and Resources (SRP). This
office will inherit DRSA functions supporting
defense relatiofs and security assistance. Mr.
John Finney will serve as Director of the new
PM/SRP.

—-— Abolishes the Office of Defense Rela-
tions and Security Assistance and transfers its
functions and personnel to the Office of Arms
Transfer and Export Control Policy or the
Office of Security Relations, Policy and Re-
sources.

The arms transfer policy consolidation/reor-

ganization became effective on August 1,
1995. @

oe

T. Nauta lowell O07
Office of Arms reese, and expan apt co

ATEC

DIRECTOR
Gerry Hamilton

ARMS/TECHNOLOGY TRANSFERS

DEPUTY DIRECTOR
"Turk" Maggi

POLICY AND NEGOTIATIONS

DEPUTY DIRECTOR
Tom Maertens

Defense Trade News, Volume 6, Number 1, October 1995

Page 7


Zeroing in on Munitions List Categories

Accurate Applications Speed Processing

When completing license applications, appli-
cants must list the specific U.S. Munitions List
category and sub-category of the equipment
or technical data being exported — e.g.,
category VilI(e) or XI(a)(4)(iii), rather than the
general category VIII or XI. This will expedite
processing by ensuring the application is
forwarded to the appropriate licensing officer
for evaluation.

Moreover, the Munitions List category must
reflect the primary end-item equipment. The
key is to indicate the “lowest-level” whole
end-item to which the individual part relates.
This whole end-item should be referred to in
the Specific Purpose block of the application.

For example, an application listing parts for a
heads-up display should read Category XI(d)
[electronic system parts and components}, not
Category VIIIG) [aircraft parts and components],
even though the display will be installed on
an aircraft. Similarly, an application listing
parts for a shipborne chaff system should
read Category XI(a)(4)(i) [electronic combat
equipment, including countermeasures] rather
than Category VI(f) [parts and components of
ships], even though the equipment will be
installed on a ship.

If in doubt, applicants should contact the
Arms Licensing Division of the Office of
Defense Trade Controls for guidance before
submitting applications. @

DSP-119, Application for Amendment

What It Is and How to Use It

There is nothing so constant as change.
Therefore, if you find that you need to change
information on an existing license such as the
freight forwarder, an additional consignor,
etc., use the DSP-119, Application for Amend-
ment, to amend certain information on that
license.

Certain Restrictions Apply. You can only
amend one existing license per each
Application for Amendment. Furthermore,
the Application for Amendment does not
allow you to make wholesale changes to the
license; but it does allow you to amend the
following:

1. The addition of a US. freight
forwarder or consignor,

2. Acorrection of a typographical error
ona previous license, or

3. A change in a commodity source.

You cannot use the DSP-119 to make substan-
tial changes to the license such as additional
quantities, commodities, countries of ultimate
destination, foreign consignees, end-users, or
end-uses.

You may make more than one amendment to
a license using the DSP-119 as long as the
amendments are to only one license and are
of the type required by the DSP-119 (i.e. typo-
graphic corrections, commodity source
changes, or additions of freight forwarders or
consignors). The form itself will accommo-
date up to four amendments. If you are mak-
ing more than four, you may use a continua-
tion sheet as described in the instructions to
the form. @

Page 6

Defense Trade News, Volume 6, Number 1, October 1995



Personnel Updates

Out...

Carolyn Love, Licensing Officer, retired from
the Office of Defense Trade Controls in
November after completing 25 years of
service with the Department of State.

DTC Licensing Officer Suzanne Palmer
departed in November to assume new duties
with the Arms Control and Disarmament
Agency (ACDA).

Tom Denner, former DTC Commodity
Jurisdiction officer, resigned from the
Department of State in October 1994 to join
the Prince William, Va. Fire Department.

Ann Diemer, DTC staff aide, retired in
December 1994, after many years of service.

In...

Sharone Barnes came to DTC in November to
fill the position of secretary. She transferred
from the Office of Export Control Policy.

John C. Pisa-Relli is an attorney in DTC’s
Compliance and Enforcement Branch. Before
coming to State, he worked with the Office of
Antiboycott Compliance, Department of
Commerce.

Jim Sturdevant serves in DTC as a Research
Compliance Specialist in the Research and
Analysis Branch. Mr. Sturdevant recently
served as a Senior Analyst with the Air
Force Intelligence in the Pentagon
specializing in the Mideast/Africa/Asia/
Pacific regions.

Jefferey Cellars joined DTC as the Special
Assistant to the Director in August 1994. A
career Foreign Service Officer since 1989, Mr.
Cellars has served in Budapest, Hungary and
prior to DTC, in Manama, Bahrain.

Stephen M. Geis joined EXP in August 1994
as Director of the Technology Transfer
Division. A career Foreign Service Officer
since 1973, Mr. Geis has served in Europe,
Latin America, and the Department. His
most recent posting prior to joining EXP was
as Political Counselor at the U.S. Embassy in
Asuncion, Paraguay.

Richard Morey Sherman chairs the
Technology Transfer Working Group. In the
Department he had an assignment in the
office of Ocean Law and Policy, OES bureau.
He joined PM/EXP in October.

Joseph L. Novak is the action officer
responsible for Nunn-Lugar program
assistance to the nuclear successor states of
the former Soviet Union -- Russia, Ukraine,
Kazakhstan, and Belarus. Before joining EXP,
Mr. Novak was a Political/Consular officer at
the U.S. Embassy in Dhaka, Bangladesh.

Gilbert J. Sperling spent 15 of his 20 year
career in the Foreign Service doing consular
work. His last foreign posting was as chief of
the Consular Section in Madras. Most
recently he worked in the Department’s
Bureau of Consular Affairs. Mr. Sperling
joined EXP in September and is responsible
for issues and cases involving lasers, sensors,
materials, and machine tools.

Philip S. Rhoads had been Chief, Compliance
and Enforcement Branch, Office of Defense
Trade Controls, since April 1995.

Defense Trade News, Volume 6, Number 1, October 1995

__Page 19



United States Department of State

Assistant Secretary of State
for Political-Military Affairs

Washington, D.C. 20520

Thomas E. McNamara

A Message to Industry

Defense Trade is undeniably one of the most important and most challenging issues I deal with as
istant Secretary. The continuing decline of national defense budgets, coupled with an increased
| reliance on exports, has fueled an already competitive munitions market. To meet this challenge, we at

the State Department have undertaken -- and will continue to undertake -- changes in the way we do
business. Most notable among these changes has been Secretary Christopher's establishment of an
“America's” desk here at State. As part of this effort, we have been working to make our policy-making
and licensing processes more transparent and user-friendly. With your continued support, I know that
we'll be able to accomplish this and a great deal more.

as, a



Contacting the Office of Defense Trade Controls

Postal Address

Office of Defense Trade Controls
Bureau of Political-Military Affairs
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

SA-6, Room 200

U.S. Department of State

Washington, D.C. 20522-0602

(Deliver to Main Department of State Bldg.
2201 C Street, NW

Use 21st Street "Joggers' Entrance")

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
Secretary for Export Controls

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

PM, Room 7325A

U.S, Department of State

Washington, D.C. 20520-7325

Contacting the Office of
Export Control Policy

Office 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 doesnot distribute the ITAR

and GPO does not carry application forms.

Department of State Publication 10244
Bureau of Political-Military Affairs
Revised January 1995


‘1 Cafe, \A
pe
United States Department of State ° Bureau of Political-Military Affairs

Defense Trade News

baw and Export Policy Bulletin

Volume 6, Number 1 e Washington, D.C. ° October, 1995

Special Section 2

Leadership Changes in Defense Trade

Bureau of. Political- Military Affairs Gets New Leadership.
: pared

‘Thomas E. McNamara

"Assistant Secretary of State for Political- “Military Affairs, :
: OA ene to industry

paged
Operations
Federal Register Online 4
Same Day Updates Online
Agreement Notes, Part Il: Estimating Values 5
No More "Worthless" Agreements, Please
Zeroing in on Munitions List Categories 6
Accurate Applications Speed Processing
DSP-119, Application for Amendment 6
What It Is and How to Use It
Arms Transfer Reorganization 7
Political-Military Review More Efficient
Foreign Export Control Cooperation and Assistance 11
The State Department's Role
Departments
Defense Trade Advisory Group Developments 12
Reinstatements & Debarments 15
Commodity Jurisdiction Determinations 17
Personnel Updates 19

Feedback, ELLIE & Training Forms 21


U.S. DEPARTMENT OF STATE

Defense

Trade |2 |
Advisory | |
Group | |

SHIVASV AMV.LOIN-TWOLLMOd 40 NvSUNE

DTAG Developments

On March 13, 1995, the Defense Trade
Advisory Group held its seventh plenary
meeting. The morning presentations, which
consisted of a keynote address by Deputy
Assistant Secretary for Export Controls Dr.
Martha Harris and reports from the DTAG
Working Groups, were open to all attendees.
Two informal working sessions on regional
issues, briefings on issues of concern, and
concluding remarks from Assistant Secretary
for Political-Military Affairs Thomas E.
McNamara made up the afternoon program.
The afternoon sessions were restricted to
DTAG members and USG officials to allow
for classified discussion.

Dr. Harris summarized major Administration
achievements in nonproliferation in the last
two years. First, Ukraine, Belarus, and
Kazakhstan have signed onto the Nuclear
Nonproliferation Treaty (NPT). START I has

entered into force, and the United States and
Russia are committed to ratifying the START
II Treaty this year. Second, Russia has
pledged adherence to the Missile Technology
Control Regime (MTCR) and will stop nuclear
exports to India. Third, in September 1994
President Yeltsin made a public commitment
to end future arms sales to Iran and fulfill
only existing contracts. Fourth, China has
agreed to halt exports of ground-to-ground
missiles targeted by the MTCR. This allowed
the United States to waive sanctions for
previous Chinese missile exports to Pakistan.
Last, the U.S./DPRK security agreement
establishes broad principles for North Korea
to dismantle its nuclear program. North
Korea has accepted full-scope IAEA
safeguards, and will work with South Korea
to implement an accord to denuclearize the
Korean peninsula.

Dr. Harris explained that the Conventional
Arms Transfer (CAT) policy, announced on
February 17, 1995, reaffirms that the United
States will support legitimate transfers, but
will prohibit those inconsistent with our
national security and foreign policy interests.
In terms of dollar values, FY94 exports
declined 11% from those of the previous year.
Moreover, about 80% of FY94 licenses
involve, but are not limited to, NATO
countries and traditional allies such as Japan.
and Israel. These figures disprove the
contention that the United States is fueling an

Jims race inthe Third World: arms transfers
to Latin America, South Asia, and Africa
made up less that 4% of 1994, commercial
sales.

In other CAT policy developments, Dr. Harris
outlined the U.S. position on arms transfers to
Central Europe. Previously the United States
prohibited lethal transfers to the Central
European states and reviewed proposed
lethal transfers to the Central European states
and reviewed proposed defensive exports on
a case-by-case basis. Because the CE
countries have participated in the Partnership
for Peace (PFP), expressed interest in joining
European security organizations, and

Page 12

Detense Trade News, Volume 6, Number 1, October 1995



Foreign Export Control Cooperation and Assistance

The State Department's Role

The Department of State is responsible for
developing and implementing, on an inter-
agency basis, policy for export control coop-
eration with countries whose control of
goods, technology and services is deemed
essential for stemming the proliferation of
weapons of mass destruction, their means of
delivery, and for avoiding build-ups of desta-
bilizing conventional military arms. This co-
operation and assistance contribute to impor-
tant US national security objectives.

Within that context, the State Department’s
Office of Arms Traffic andExport Control
Policy (ATEC) coordinates bilateral
consultations on export controls with many
countries around the world. These talks are
designed to encourage countries to commit to
responsible arms and dual-use technology
transfer policies and to develop or strengthen
export control systems to implement and
enforce those policies. In addition, ATEC
leads interagency efforts to develop assistance
programs.

In that regard, ATEC heads an interagency
working group on export control assistance
comprised of experts from U.S. Government
departments responsible for U.S. export
licensing and énforcement. These experts and
others from their departments interact with
their foreign counterparts to provide advice,
training and technical assistance. This effort
is geared toward strengthening and
developing comprehensive and effective
export control systems of countries whose
cooperation is essential to combat
proliferation.

Export control cooperation efforts are focused
ont ar states of the former Soviet
Union, but also include Central Europe, East

Aca_Latin America.and Africa, For example,
ATEC coordinated a training seminar for_

Central Burepean counties held-in- Budapest
ATEC also developed plans for installation in

Poland and other Central European sfates of a
communication and information network for
export licensing and enforcement which,
when operational, will enable rapid
interagency communication within the host
governments and will facilitate coordination
with U.S. and other Western officials. @

should be addressed to:

Change in Express Mail/Courier Delivery
to the Office of Defense Trade Controls

In consideration of physical security requirements, the Office of
Defense Trade Controls (PM/DTC) will no longer accept courier-
delivered materials, effective August 31, 1995. Such materials (e.g.,
license applications and other written requests for approval), when
sent outside the U.S. postal system or not personally presented by

| U.S. industry representatives with appropriate security clearances,
must be directed to the main Department of State building, which is
located at 2201 C Street, NW, Washington, D.C. Deliveries should be
made at 21st Street (“Joggers’ Entrance”). Materials for PM/DTC

U.S. Department of State
PM/DTC, SA-6, Room 200
Washington, DC 20522-0602

Defense Trade News, Volume 6, Number 1, October 1995



Leadership in Defense Trade

McNamara, Lowell, Hamilton

Thomas E. McNamara was confirmed as the
Assistant Secretary of State for Political-
Military Affairs on October 13, 1994,
succeeding Robert L. Gallucci. William J.
Lowell, replaces William B, Robinson as the
Director of the Office of Defense Trade
Controls. Mr. William B. Robinson serves the
Bureau as a Special Adviser to DTC.

Thomas E. McNamara. Previously the
Principal Deputy Assistant Secretary of State
for Political-Military Affairs since July, 1993.
Prior to this, Ambassador McNamara headed
the State Department Office of the
Ambassador-at-Large for Counterterrorism.

From 1988 to 1991, he was the U.S.
Ambassador to Colombia. Following that
assignment, Mr. McNamara returned to
Washington to work at the Nationa! Security
Council as Special Assistant to the President
for National Security Affairs and Senior
Director for International Programs and
African Affairs. A career diplomat, his
overseas experience included tours in Paris,
Lubumbashi, Bukavu, Moscow, and as
Deputy Chief of Mission in Kinshasa, Zaire.

Assistant Secretary McNamara has extensive
experience in political-military affairs,
focusing on arms control and regional
security. In the 1970s he was involved in
most major arms control issues, serving in.
embassies, on negotiating delegations, and in
the Department of State and the Arms
Control and Disarmament Agency. His
background in regional security affairs
includes every major area of the globe --
Europe, Mid-East, Africa, Asia, and Latin
America. He was responsible for regional
security affairs as Deputy Assistant Secretary
of State for Politico-Military Affairs, 1983-86,
before his first tour on the National Security
Council as Director for Counterterrorism and.
Counternarcotics.

Ambassador McNamara was born in New

Haven, Connecticut and received a B.A. and
an LLD (hon.) from Manhattan College, and
an M.A. from the University of Notre Dame.

William J. Lowell. Appointed Director to the
Office of Defense Trade Controls on
November, 27, 1994.

Mr. Lowell joined the Department in 1972,
serving first with the Bureau of Consular
Affairs in a number of positions until 1976. In
1976, he was reassigned to the Bureau of
Public Affairs, where he served until 1978.

In 1978, Mr. Lowell joined the Bureau of
Economic and Business Affairs, with
responsibilities for international
telecommunications negotiations. In 1983, he
transferred to the Office of Advanced
Technology with the Bureau of Oceans and.
International Environmental and Scientific
Affairs, with responsibilities for international
space and high technology negotiations. He
was appointed Deputy Director of that office
in 1984.

In 1991 he was appointed special assistant to
the Under Secretary for International Security
Affairs, and served in that capacity until the
end of January 1993. In January 1993 Mr.
Lowell was detailed to the personal staff of
the U.S. Special Envoy for the Former
Yugoslavia. In mid 1993 he rejoined the office
of the Under Secretary for International
Security Affairs, and remained in the position
until his recent appointment to the Office of
Defense Trade Controls.

Mr. Lowell has wide experience in
conventional arms issues and export control
policy.

A native of Massachusetts, he earned a B.A.
from the University of Massachusetts and an
M.A. from Georgetown University.

continued on page 10

Page 8

Defense Trade News, Volume 6, Number 1, October 1995



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 applicatioris. 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 DTC’s Remote On-line
Bulletin Board (ROBB). Access to ROBB and ELLIE requires a PC, a modem, and commu-
nications 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 ( )



OPERATIONS

Federal Register Online
Same Day Updates Online

What is it?

The Government Printing Office, through its
GPO Access online service, now provides an
online database for the Federal Register. The
database is updated by 6 a.m. each day the
Federal Register is published. It includes
both text and graphics beginning with [Vol-
ume 59, Number 1 (January 2, 1994)].

How Do | Gain Access?

The database is available on a Wide Area In-
formation Server (WAIS) through the Internet
and via asynchronous dial-in. To subscribe,
follow the procedure below:

Internet users:
1. telnet to wais.access.gpo.gov;

2. log in as newuser (all lowercase). No
password is required.

Dial-in users:

1. call (202) 512-1661 and log in as wais
(all lowercase). No password is re-
quired.

2. at the second log in prompt, log in as
newuser (again, all lowercase).

3. follow the instructions pn the screen.

What Is it Going to Cost?

The annual subscription fee for a single work-
station is $375 per year ($200 for a six-month
subscription and $35 for one month). Dis-
counts are available for multiple-workstation
subscriptions.

If You Need More Information...

Contact the GPO Access User Support Team
by sending an internet E-mail to
help@eids05.eids.gpo.gov, a fax to (202) 512-
1262, or calling (202) 512-1530 between 7 a.m.
and 5 p.m. Monday through Friday. @

Page 4

Defense Trade News, Volume 6, Number 1, October 1995



Reinstatements &
Debarments

Reinstatement of Export/Retransfer
Privileges

The following persons have had
export/retransfer privileges reinstated
pursuant to section 38 (g) (4) of the Arms
Export Control Act (AECA) (22 U.S.C. § 2778
(g) (4)) and section 127.11 (b) of the
International Traffic in Arms Regulations
(ITAR) (22 C.F.R. § 127.11 (b)) (Key -- Name;
City and State; Effective Date of
Reinstatement):

American Aviation Parts and Service Corp.
Arlington, Virginia
September 26, 1988

Napco, Inc. (a subsidiary of Thermo Electron
Corp.)

Terryville, Connecticut

October 11, 1988

Environmental Tectonics Corp.
Southhampton, Pennsylvania
April 21, 1989

Napco International, Inc. (Ventruian Corp.
parent company)

Hopkins, Minnesota

August 1, 1989

Olin Corp.
East Alton, ILiniois
January 4, 1990

Elder Industries, Inc.
Newport Beach, California
October 1, 1990

Charlotte Aircraft Corp.
Charlotte, North Carolina
January 4, 1992

Technical Service International
Miami, Florida
January 9, 1992

Mr. Clifford Kapel

Technical Service International
Miami, Florida

January 9, 1992

Mr. George McArthur Posey
Newport Aeronautical Sales
Costa Mesa, California

April 3, 1992

Forway Industries
Woodbury, New York
June 15, 1993

These persons may once again participate in
the export or retransfer of defense articles,
defense services, or related technical data
pursuant to section 38 of the AECA and the
ITAR.

Notice of these reinstatements was published
in the Federal Register (Vol. 59, No. 90, May 11,
1994, p. 24501-2).

Public Notice of Debarred Persons

The following persons have been debarred
for a period of three years following their
convictions for violating or conspiring to vio-
late the AECA (Key -- Name; Offense(s);
Date of Conviction; U.S. District Court):

Zeljko Vusir

22 U.S.C. § 2778 (violating the AECA)
May 6, 1992

District of Arizona

Mark Belinic

22 U.S.C. § 2778 (violating the AECA)
July 29, 1992

District of Arizona

Defense Trade News, Volume 6, Number 1, October 1995

Page 15



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 CJ 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 COMMODITY RULING
Actuator, 5 Rotary Incremental ccL** Data Encryption Standard, Specifically
Designed for Communications Security
Alarm, Bank Reporting System cc and Security of Stored Data USML XIII (b)(1)
Abhuminum Powder USML V (a) Data, Ectractor ccLlTM
Amplifier, High Temperature Quad Operational cei Detector, Automatic Explosives and Contraband ccL
Amplifier, X-Band Low Noise USML XI (a) Detonating Device, Remote USML IV (<)
Displays, Active Matrix Liquid Cryatal ccLTM
Antenna, Communications USML XI (d) ;
‘Antenna, Receiving Coupler USML XI (b) Electronic, Check Disbursement System cel
Antenna Whip System. cc Engine Forgings Vill @)
Battery, Nickel Cadmium Rechargeable ccL** Equalizer-Demodulator USML XI (b)
Board, Electronic Interface Generator, Pepper Fog USML XIV
With Data Encryption Capability USML XIII (b)(1) Glass Phenolic Molding Compound, not Specifically
Boat, Rigid inflatable ; Designed for Military Use ccL
Not Specfically Designed, Modified or Configured Grips, Wooden and Rubber for Pistols
‘or Military Application . and Revolvers USML I {a)
Specifically Designed, Modified, or Configured
for Military Appliation USML VI(a) Guide, Multimedia Presentations ccL
Gun, 37mm Gas cc”
Camera, Thermal Imaging Systems cc” Identification System, Automated Fingerprint cc”
Cartridges, 37mm Blank Launching USML xiv Tenaging System, Ball igh Resolution Remote | @
Cartridges, 37mm Multiple Wood, Foam, Infrared, Lightstick, Self-Activating Ligthstick,
and Rubber Pellet cc” Mini Lightstick, Bracelet, and Lightshape USML XII (£)
Infrared, Photodetector Staring Focal
Commercial CASS Compatable Test Systems USML VIII (k) Planar USML XII (c)
Computer Program, Rapid Aero Shape USMLIV (i) Inverters, Second Generation Fiber Optic Image USML XII (¢)
or
Lights, Tactical ights, ire Weapon
Croat htegatec Cyptocopmceser USL II HER atta Cg it ie Fre Weapon Mos
Configured for Military Application USML XII (a)
Not Specifically Designed, Modified, or
Configured for military Application cc”

Defense Trade News, Volume 6, Number 1, October 1995 . Page 17



Editor’s Note

1995 has brought substantial changes to the Political-Military
bureau and to DTC. This first issue of the year introduces
our readership to Thomas E. McNamara, Assistant Secretary
for Political-Military Affairs, Mr. Hugh (“Gerry”) Hamilton, Director of the Office of
Arms Transfer and Export Control Policy, and Mr. William J. Lowell, the new
Director of the Office of Defense Trade Controls. Mr. William B. Robinson, the
former director, now serves as the Special Advisor to DTC. It also addresses the
recent consolidation/reorganization of Arms Transfer policy in the Bureau.

As we continue to expand our customers service, let us know what we are doing well
or not so well. @

DTC Seminars Not Just for Industry

Keep in mind that DTC’s in-house seminars are not exclusively for
industry. Defense attaches, commercial officers, or other interested
employees of a foreign embassy, consulate, or other government
entity who are engaged in defense issues, import/export issues, etc.,
are welcome.

To register your interest and to be placed on the mailing list for the
next seminar, mail or fax the application form at the back of the
Defense Trade News and Export Policy Bulletin.

Defense Trade News, Volume 6, Number 1, October 1995

Page 3



SS

DEFENSE TRADE NEWS BULK RATE
United States Department of State POSTAGE & FEES PAID |
Washington, D.C. 20522-0602 US Department of State

| Permit No. G-130
OFFICIAL BUSINESS

PENALTY FOR PRIVATE USE $300

Address Correction Requested Feae :

SMAN BPelL BSUdJaQ IS JO JUBWed|aq SN

S661 4840199

LON ‘910A


Secretary of State
Warren Christopher

Assistant Secretary
of State for
Political-Military
Affairs
Thomas E, McNamara

Deputy Assistant
Secretary for
Export Controls
Martha Caldwell Harris

Executive Editor
Michael T. Dixon

Managing and
Production Editor
Nadia L. Brown

Contributing Editors
Commodity Jurisdiction:
Mal Zerden,

Allen Suchinsky,
Sam Capino

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 a 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.



advanced democratic and market reforms, the
United States now considers proposed
exports of lethal weaponry to certain
countries on a case-by-case basis.

Turning to multilateral export control issues,
Dr. Harris noted that Russia, as a major
supplier, must be factored into the COCOM
successor regime and any credible arms
restraint arrangement. The Administration is
working with the Russians to follow up on
President Yeltsin's pledge to end arms sales to
Iran. Resolving this issue will pave the way
for Russia’s participation in the new regime.
According to mutual agreement, new
members must adhere to international
nonproliferation norms, be committed to
responsible arms and sensitive dual-use
transfer policies, and have effective export
controls. By these standards, China is not yet
eligible to join the successor regime.

Dr. Harris also affirmed that export control
assistance is essential to making multilateral
control regimes effective, and she noted that
similar national technology control regimes
help level the playing field for U.S. exporters.
By strengthening economic ties between the
United States and participating nations,
export control assistance may lead to
increased defense trade between the United
States and certain CE states.

Under the Cooperative Threat Reduction
Program, we have advised Belarus,
Kazakhstan, and Ukraine, and the United
States hopes to offer export control assistance
to Russia in the near future.

Dr. Harris cited PM/DTC teaming
arrangements, the electronic licensing system
ELLIE, the Remote Online Bulletin Board
(ROBB), and the State Appeals Review
Process (SARP) as examples of how the
Department continues to improve its export
licensing process and procedures. The
existing commodity jurisdiction (C]) process
is effective; more than 400 CJ decisions were
made last year, and 62% of these resulted in
movement of an item to the CCL.

Following Dr. Harris’ presentation, the three
DTAG Working Groups reported on their
activities. The Policy Working Group (PWG)
is preparing studies on U.S. arms transfer
policy towards Latin America and policy
changes required to incorporate non-standard
subsystems into non-standard platforms. The
PWG will be considering defense export
financing, U.S: defense industrial cooperation
with our allies, and developing a foreign
availability database, all in connection with.
the CAT policy.

The DTAG Vise-Chair and others have
worked on revising the BATE import 2
regulations. They are examining whether
mergers and acquisitions among defense
companies necessitate changes in the ITAR or
methods of licensing, and_are following the
regulatory changes connected with Sections
36and.39 of the Arms Export Controls Act

(AECA) involving offsets.
The Regulatory Working Group (RWG)

recommended that because the number of
Commerce license applications has drastically
declined while munitions applications have
increased, Commerce should transfer some of
its full-time equivalency slots to State for
licensing purposes. Second, the Department
should summarize PM/DTC’s electronic
licensing advances in Defense Trade News.
Third, the Department should publish an
ITAR incorporating all amendments since the
July 1993 revision, and maintain a current
version available through subscription or
sale.

The Technical Working Group continues to
examine jet engine hot sections, space-related
components, and encryption technologies to
determine if they should be moved under
Commodity Control List (CCL) control.

After the open sessions in the morning, there
were regional briefings on Latin America and
Central Europe. Although the Latin America
region overall is making economic progress,
Department briefers cautioned that Latin

Defense Trade News, Volume 6, Number 1, October 1995

Page 13



Bet-Air, Inc.

18 U.S.C. § 371 (conspiracy to violate 22
U.S.C. § 2778) and 22 U.S.C. § 2778 (violating
the AECA)

April 23, 1993

Central District of California

J. Randall Shute

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

April 28, 1993

Northern District of Georgia

Louis J. Kocurek III

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

April 28, 1993

Northern District of Georgia

Lance B. Ordway

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

May 11, 1993

Northern District of Georgia

Bin Wu

18 U.S.C. § 371 (conspiracy to violate 22
U.S.C. § 2778) and 22 U.S.C. § 2778 (violating
the AECA)

September 17, 1993

Eastern District of Virginia

Jin Ping Li

18 U.S.C. § 371 (conspiracy to violate 22
U.S.C. § 2778) and 22 U.S.C. § 2778 (violating
the AECA)

September 17, 1993

Eastern District of Virginia

Pinzhe Zhang (aka “Peter Zhang”)

18 U.S.C. § 371 (conspiracy to violate 22
U.S.C. § 2778) and 22 U.S.C. § 2778 (violating
the AECA)

September 17, 1993
Eastern District of Virginia

Alexander Nikolic

18 U.S.C. § 371 (conspiracy to violate 22
U.S.C. § 2778) and 22 U.S.C. § 2778 (violating
the AECA)

November 22, 1993

Northern District of Illinois

Kem and Associates, Inc.

22 U.S.C. § 2778 (violating the AECA)
December 14, 1993

Western District of Texas

Bajro Hukic (aka “Bob Hukic” and “Bab
Hucici”)

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

January 19, 1994

Northern District of Illinois

Notice of these statutory debarments was
published in the Federal Register (Vol. 59, No.
166, August 29, 1994, p. 44451-2

Anyone needing additional information to
determine whether a person has been de-
barred or reinstated should contact the Com-
pliance Division of the Office of Defense
Trade Controls. @

Page 16

Defense Trade News, Volume 6, Number 1, October 1995