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THE IMPACT OF U.S. EXPORT CONTROLS ON

NATIONAL SECURITY, SCIENCE AND

TECHNOLOGICAL LEADERSHIP

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

SECOND SESSION

JANUARY 15, 2010

Serial No. 111–80

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

HOWARD L. BERMAN, California, Chairman 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

BILL DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

DIANE E. WATSON, California 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

MICHAEL E. MCMAHON, New York 

JOHN S. TANNER, Tennessee 

GENE GREEN, Texas 

LYNN WOOLSEY, California 

SHEILA JACKSON LEE, Texas 

BARBARA LEE, California 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

MIKE ROSS, Arkansas 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

JIM COSTA, California 

KEITH ELLISON, Minnesota 

GABRIELLE GIFFORDS, Arizona 

RON KLEIN, Florida 

VACANT 

ILEANA ROS-LEHTINEN, Florida 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

BOB INGLIS, South Carolina 

GUS BILIRAKIS, Florida 

RICHARD J. KESSLER, Staff Director 

YLEEM POBLETE, Republican Staff Director 

EDMUND RICE, Senior Professional Staff Member 

RILEY MOORE, Deputy Clerk 

(III)

C O N T E N T S 

Page

WITNESSES 

John L. Hennessy, Ph.D., President, Stanford University and Co-Chairman, 

Committee on Science, Security and Prosperity, National Research Council . 12

William C. Potter, Ph.D., Director, James Martin Center for Nonproliferation 

Studies, Monterey Institute of International Studies ....................................... 26

Ms. Karen Murphy, Senior Director, Trade, Applied Materials, Inc. .................. 43

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Dana Rohrabacher, a Representative in Congress from the 

State of California: Excerpt from pages 66–69 of the 2009 U.S.-China Security and Economic Review Commission Report ................................................. 5

John L. Hennessy, Ph.D.: Prepared statement ..................................................... 16

William C. Potter, Ph.D.: Prepared statement ...................................................... 31

Ms. Karen Murphy: Prepared statement ............................................................... 46

APPENDIX 

Hearing notice .......................................................................................................... 70

Hearing minutes ...................................................................................................... 71

The Honorable Howard L. Berman, a Representative in Congress from the 

State of California, and Chairman, Committee on Foreign Affairs: Prepared 

statement .............................................................................................................. 72

(1)

THE IMPACT OF U.S. EXPORT CONTROLS ON 

NATIONAL SECURITY, SCIENCE AND TECHNOLOGICAL LEADERSHIP 

FRIDAY, JANUARY 15, 2010

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The committee met, pursuant to notice, at 10:30 a.m., at Stanford University, Arrillaga Alumni Center, First Floor, 326 Galvez 

Street, Palo Alto, California, Hon. Howard L. Berman (chairman of 

the committee) presiding. 

Chairman BERMAN. To everyone, good morning. And to those 

who may be watching these proceedings in Washington via the 

Internet, good afternoon. 

Today’s hearing is on the impact of U.S. export controls on our 

Nation’s national security and our leadership in science and technology. We are holding it here in Silicon Valley because no State 

is more heavily affected by export controls than California—with 

our cutting-edge high technology industry, academic institutions 

and scientific and research establishments—and no region of the 

State has more experience with such controls than this one. 

We are very grateful to Stanford University—and most especially 

to Dr. Hennessy, one of our witnesses—for hosting these proceedings and for all of the technical and logistical support they provide to make this day possible. 

For the benefit of the people who are new to the subject, let’s 

start with defining our terms. Through export controls, the Federal 

Government restricts the international transfer of what are called 

‘‘dual-use’’ technologies—those that have legitimate civilian uses 

but also can be used for military purposes. This is a critical aspect 

of our national security policy. 

But there is a growing consensus among security experts as well 

as academics and industry leaders that our current system of export controls needs to be updated in order to continue protecting 

sensitive technologies while also maintaining U.S. technological 

leadership. 

So this hearing serves at least two related purposes. The testimony will help our committee prepare for a complete revision of 

the statute that authorizes our system of licensing and controlling 

dual-use technologies. And what we learn today will contribute to 

congressional oversight of the export control policy review that 

President Obama has ordered, and that is now underway. 

2

Joining us on the dais today is a valued member of the committee for many years, Dana Rohrabacher from Southern California, who brings both a background and deep interest in national 

security issues but also many years of experience on the Science 

and Technology Committee in the House and a great interest in 

those issues as well; and Zoe Lofgren, who is the chair of the California Democratic congressional delegation and certainly familiar 

to people from this particular area and who, in fact, I remember 

back—it seems like 8 or 10 years ago—being heavily engaged in 

one aspect of this in the encryption issue; and Anna Eshoo, in 

whose district Stanford University is located and who is chair of 

the Intelligence Community Management Subcommittee of the 

House Permanent Select Committee on Intelligence, as well as 

many other things. So great interest and background for all of the 

people who are on the panel today. 

While neither Zoe nor Anna are members of the Foreign Affairs 

Committee, they are highly interested in the issue. And given the 

nature of this as a field hearing, I have invited them to participate 

as if they were members of the committee. 

Export controls don’t get a lot of public or media attention. They 

have been an important part of the U.S. national security establishment since 1949, when our current control system began as a 

part of NATO. 

Here in California, many of our 61,000 exporting firms, such as 

Applied Materials in Santa Clara, and an increasing number of our 

academic and research establishments, such as Stanford, have significant compliance responsibilities. 

You practically have to have a Ph.D., or a law degree—or maybe 

both—in order not to run afoul the increasingly complex U.S. export control regimes. The regulations now fill more than 2,000 

pages. There are frequent changes—two dozen were announced last 

year alone. More than 2,600 items and technologies are subject to 

controls, just in the dual-use area. 

Exporters and universities are required to check six separate 

lists of potentially dangerous individuals and groups, with thousands of entries, before allowing access to controlled goods and 

technological information. 

In many cases, government approval is required, and the growth 

rate in applications and approvals of licenses is phenomenal: 

21,000 licenses were issued in 2008; double the number from 10 

years ago. 

Universities and other research institutions face a particular set 

of compliance challenges, as the U.S. moves to broaden and tighten 

the rules governing access by foreign students and researchers to 

science laboratories and research facilities. 

These rules, aimed at regulating the transfer of technological 

knowledge—as opposed to goods—increasingly are affecting our 

high-tech companies as well. 

Moreover, the worldwide diffusion of sensitive goods and technological knowledge has a significant impact on national security. 

These are the same technologies that drive scientific advances and 

commercial progress. 

Examples: Thermal imaging cameras are being used in the latest 

collision avoidance systems for vehicles, while remaining a key adVerDate 0ct 09 2002 18:21 Mar 23, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\WORK\FULL\011510\54471 HFA PsN: SHIRL
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vantage for our forces on the battlefield; encryption is an important 

defense for individuals, companies and governments against 

cyberwarfare and cybercrime—this has been in the news lately—

while at the same time shielding communications among terrorists 

from interception by law enforcement authorities; commercial software reportedly is being used to defeat our unmanned drones in Afghanistan; bioengineering and nanotechnology carry the promise of 

prolonging life and curing disease, but can also be turned to designing a new generation of bioweapons. These are just four examples; 

there are countless others. 

This area of public policy raises complex questions—and there 

are no easy answers. Clearly, our national security requires a continued effort to prevent our adversaries from misusing the benefits 

of science and industry against us and our allies. 

But just as clearly, we need to refine and update our export control policy and attendant regulations to sustain America’s leadership in scientific research and discovery, and technology-driven industry. That, too, is part of protecting our national security. 

Our committee, the Foreign Affairs Committee, is beginning the 

process of trying to enact a new statute to be the foundation in this 

area for U.S. policy. And today’s hearing is in some ways the first 

formal step in that process. 

I now would like to yield to my friend and colleague from the 

committee, Mr. Rohrabacher, for any opening comments he may 

wish to make. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. And, 

although there seems to have been a snafu caused by the holiday 

and communication between the Republican staff and the Democratic staff, I am sure that that will be corrected and more care will 

be taken. But I am very pleased to be here today to represent the 

Republican side of this issue. Although this is an issue that doesn’t 

have, really, Republican and Democrat sides, it basically is an 

issue among all of us Americans about what standards we are 

going to have. 

So it is appropriate we have a hearing on export control here in 

Palo Alto, which, of course, has been the seed bed for technological 

innovation in our country. No doubt we hold this hearing for the 

reason that current export control regime regulations are a serious 

impediment to much of the work that is being done here. 

Let me state at the outset that I support export control reform. 

I support streamlining the system. I support removing barriers 

that hamstring U.S. companies. However, this reform needs to reflect the fact that there are nations who seek to do harm to both 

our national well-being and as far as our economic security as well. 

There are nations that are controlled by repressive and dictatorial governments which are hostile to the United States and to the 

democratic ideals that we represent. These nations should not benefit from any reform of U.S. export control laws. 

I strongly believe in free trade between free people, but trade 

with dictatorships almost by definition is trade that is manipulated, at least on one side of the equation. That would mean that 

it might end up being harmful to the United States economically 

as these repressive regimes manipulate the rules of the game on 

their end of the equation so that it helps their economy as comVerDate 0ct 09 2002 18:21 Mar 23, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\WORK\FULL\011510\54471 HFA PsN: SHIRL
4

pared to mutually beneficial trade, but also they manipulate it in 

a way in which they can receive the benefits of technological research that has taken place in the United States and now will be 

put to use benefitting not only their economy but their military 

power as well. 

I strongly support, then, a two-tiered system that rewards our allies and other democratic countries while keeping dictatorships and 

other rogue regimes at arm’s length. 

I would like to place in the record at this point some information 

from U.S. economic China report and studied review by commission 

report that was frequently issued, which talks about how China, in 

particular, has manipulated our trade and gotten their hands on 

technology and has been abusive to some of the standards that we 

would think are essential to providing guarantees that our country 

is not hurt by such trade. 

Chairman BERMAN. Without objection, that will be included in 

the record. 

[The information referred to follows:]

5


54471e-1.eps
6


54471e-2.eps
7


54471e-3.eps
8

Mr. ROHRABACHER. Thank you. It will be part of my statement 

here. 

The bottom line is that if you export to what seems to be an innocuous civilian entity in places like China, you are essentially exporting U.S. technology straight into the hands of the Chinese military. And we have learned that lesson before, Mr. Chairman. 

We learned it the hard way in the 1990s when China received 

rocket design information from U.S. companies and that there was 

a transfer of technology that allowed China to perfect its missile 

technology. 

Now, just last week the Chinese demonstrated an anti-missile 

system. We have to conclude that their ability to do this was probably helped back 15 years ago by U.S. companies. That’s a travesty. 

We are trying to reform the system to make trade with technology products easier among democratic nations. We must make 

sure that we do nothing that is going to help the Chinese build better rockets or build rockets that can shoot down our rockets. 

Today we want to make sure that, for example, one of the issues 

that confronts us today is whether or not we are going to make our 

satellite companies more competitive by legislation that will permit 

them to launch their satellites on Chinese rockets. We should have 

learned our lesson 15 years ago when our national security was severely compromised by this very same policy. 

Let me finish by saying that while companies at Silicon Valley 

stand perhaps the most to gain from export control reforms, they 

also stand the most to lose if we don’t do export controls right because while so much is developed here at the cost of so many invested dollars and also the investment of the genius of our people 

who work here, if indeed we end up with laws that are so lax that 

our competitors or the competitors of these people end up with this 

technology, we are doing not our Nation a disservice, but we are 

doing the high tech industries here in this area a disservice. 


54471e-4.eps
9

And, finally, Mr. Chairman, it is fitting that we hold this meeting today considering that yesterday Google announced that it may 

be closing shop in China. Let me just note that by doing this, 

Google has demonstrated a very high standard, its patriotism, its 

high standards, commitment to ideals. Unfortunately, that does not 

reflect the same commitment from many people who head our corporations in the United States of America. 

I would say to the President of Google—and I sent him a letter 

yesterday commending him as a moral giant, as compared to some 

of the moral pygmies that we have seen in other industries anxious 

to make short-term profit. 

So today as we discuss this, let’s keep that in mind. And, again, 

I would use this forum to applaud the high standards of patriotism 

and morality that the leaders of Google and I would hope that the 

rest of our technological leaders would follow their example. 

Thank you very much, Mr. Chairman. 

Chairman BERMAN. Thank you, Mr. Rohrabacher. 

Congresswoman Eshoo? 

Ms. ESHOO. Thank you. And good morning, Mr. Chairman, and 

welcome to not only Stanford but to the 14th congressional district, 

which I am so proud and privileged to represent to Congressman 

Rohrabacher. 

Thank you for being here. You two honor us with your presence 

here and, of course, to my partner and outstanding friend, Congresswoman Zoe Lofgren, who has distinguished herself on these 

issues over the years. We have a great sense of pride about our relationship because we like to think that in her district, that there 

are two Members of Congress that work for them. And I know that 

there are two who work for my constituents because she is my 

partner. 

It is so important, Mr. Chairman, to hold this hearing about potential legislative action to amend the Export Administration Act 

because of who and what we have here. Your leadership on this 

issue is vital to the future of our Nation’s technology sector. And 

this hearing comes, as has been noted, at a very critical time in 

America’s history. 

Your decision to overhaul the current law will finally update a 

system plagued by restrictive relics. How we deal with this issue 

will help determine our future as either a global leader in innovation or a nation that sacrificed our economic future at the altar of 

inefficient, outdated, and unnecessary security options. 

I commend your decision to jump start a debate that has been 

waiting so long for an effective champion. And a champion you are. 

We should all note that Howard Berman, Congressman Berman, is 

one of the most respected members of not only the House but the 

entire Congress. His knowledge of the issues that he takes on, no 

one really matches his knowledge. And so when I say an effective 

champion, I couldn’t mean it more. 

Anything approaching a complete overhaul of this legal framework was last completed, imagine this, during the Carter administration. At that time, no one could have foreseen laptops on every 

desk and phones in everyone’s hip pocket. Some here recall using 

a typewriter at that time. I certainly do. [Laughter.] 

10

I was really good at it. Spell check meant using Webster’s Dictionary. And we considered a calculator to be the epitome of technological innovation. We chuckle now, but that is when this issue 

was really last seriously addressed. Computers were mostly relegated to the most very progressive office environments. 

So obviously the world has changed. And our policies must as 

well if we are going to survive as a player in the current worldwide 

marketplace. There is a saying, ‘‘Adapt or perish.’’ It is that simple. 

So with your leadership, Chairman Berman, we will quickly fast 

forward away from the Cold War era export control policies that 

still linger today. As we initiate this revision, we need to make certain that our legislative efforts actually accomplish our goals. 

At the most basic level, the export control debate represents the 

age-old tension between commercial and national security concerns. 

I identify with many of the things that Congressman Rohrabacher 

said. I have a serious and longstanding appreciation for the need 

to balance national security concerns with international competitiveness. 

As the chairman said, I not only serve as a member of the House 

Energy and Commerce Committee but also the House Intelligence 

Committee. So we have to address both concerns. And I believe 

that we can, we should, and we will. 

I am committed to safeguarding our borders, whether they’re virtual or physical, but this security has to be smart. It has to be strategic and not a knee-jerk reaction to individual incidents. 

Most of all, our policies and our laws should serve as an actual 

national security purpose and not put restrictions on exports of 

products that are already widely available. 

This past week, as Congressman Rohrabacher stated, we were 

reminded of the importance of these industries, their integral relationship to daily life, and the bull’s-eye placed on them by outside 

forced intent on theft and vandalism. When that vandalism takes 

place, I might add, it is the hijacking of American genius, intellectual property, and all that goes with it. 

The massive cyberattack on Google and as many as 20 other 

companies should serve as a reminder that we have to safeguard 

our cyber resources. At the same time, we have to keep our competitive edge. 

Decontrolling encryption products and making them more widely 

available globally will work to ensure that our data is protected 

and that the victims of attacks will be protected in the future. 

Policy decisions, such as decontrolling encryption and revising 

export control regulations, also will advance the competitive position of our country and its companies in the global marketplace. 

This is another reason that fear cannot drive commercial and security policies. 

So it is fitting that we are here, both at Stanford, which is in the 

heart of Silicon Valley. No region of the country is more heavily affected by export controls on technology. Our research institutions 

and cutting-edge technology companies play key roles in this discussion. 

And a special thanks to President John Hennessy for not only 

hosting us but for being a witness here today, to Dr. Potter, to Ms. 

Murphy, thank you for being willing to cast light on this issue. 

11

Congressional hearings are amongst the most important things 

that Members of Congress undertake. Without the hearings, without the expertise of those that bring forward information, we really 

cannot shape the kinds of policies that are befitting of our great 

country. 

So, Mr. Chairman, thank you once again for your leadership and 

for the courage for taking this on because it is a heavy lift, but it 

is a lift that we really must take on so that we can allow American 

technology companies to compete on a level playing field with their 

foreign competitors while retaining the essential safeguards to keep 

our Nation and our innovative economic assets secure. 

So thank you very, very much. And thank you to everyone that 

is in the audience as well. 

Chairman BERMAN. Thank you very much. And thank you for the 

very kind comments. 

Ms. Lofgren? 

Ms. LOFGREN. Thank you, Mr. Chairman. And thank you for 

coming once again to the Silicon Valley. You have come here in the 

past on patent issues and other intellectual property issues. And 

we know of your commitment to make sure that the export control 

scheme that we have serves America well. 

This, as you have mentioned, is something that has been of great 

interest to me for many years. As has been mentioned, the export 

control scheme was really devised during the Cold War. And certainly the economy that we have today is quite different than at 

that time with information moving globally, the pace of technological change astronomically faster, even in the military arena 

with the civilian production of material, as compared to during the 

Cold War. 

So it is important that as we look at renewing the system, that 

we make sure that the controls are not over-broad, that they are 

not over-complicated, and that they are necessary. As we move forward, I know that we will be looking at what is in America’s best 

interest as we control the export of material. 

As you know, I chair the Immigration Subcommittee in the 

House Judiciary Committee. And so I want to touch on something 

that many people don’t even know about, and that is something 

called deemed exports. When I mention that, people go ‘‘What the 

heck is that?’’

Well, a deemed export is essentially sharing information with a 

citizen of another country. And if that information is controlled, it’s 

not classified but controlled. Then there are prohibitions. 

That is very problematic when it comes to a university setting. 

And I hope that Dr. Hennessy will mention it here, especially when 

you look at our wonderful advantage in American higher education 

by getting bright students from all across the world who come here 

and then want to stay here. 

If you take a look, for example, according to the United States 

Department of Education, in engineering, 42 percent of master’s 

students and 64 percent of Ph.D. students in American universities 

are nonresident aliens. In computer and information sciences, 39 

percent of master’s students, 61 percent of Ph.D. students are nonresident aliens. 

12

According to the National Science Foundation, of all science and 

engineering doctorate recipients, 43 percent were non-U.S. citizens. 

Specifically non-U.S. citizens comprised 64 percent of Ph.D. graduates in computer science, 67 percent of Ph.D. graduates in engineering, 57 percent of Ph.D. graduates in math, and 51 percent of 

Ph.D. graduates in the physical sciences. And here at Stanford, 

more than 50 percent of the engineering and physical science Ph.D. 

students are foreign nationals. 

Now, certainly the vast majority of these graduate students wish 

to stay and become Americans here with us. And I am hopeful that 

as we move forward in this Congress, we will come up with a sensible way to allow the best and the brightest in the world who want 

to become Americans and stay here and throw in their lot with us 

to more easily do that. 

At any university setting, to prohibit science, basic science research, to half of your graduate students is a terrific impediment 

to the advance of basic science. And we have to come up with some 

solutions to this question. 

I remember a number of years ago, I was visiting the science departments in Berkeley, our competitor, and they talked about a 

science study measuring waves from the sun. It was on a satellite, 

but it had nothing to do with satellite technology and that because 

it was launched, the foreign students from France and from Germany and Asia couldn’t work on the basic science. 

That really impedes the advance of knowledge. It doesn’t help 

the Untied States in any way. So I am hopeful that we can update 

these rules and make sure that America is number one and stays 

number one when it comes to science research. 

And I thank you, Mr. Chairman, for being here and Stanford for 

hosting us. 

Chairman BERMAN. Thank you very much, Zoe. And I think 

President Hennessy’s prepared testimony gets into a few of those 

issues as well. 

We are done for a while. [Laughter.] 

The reason we came here was to hear you. President Hennessy, 

again, thank you very much. And I want to thank all of the staff, 

both of the university and of our committee. It is not such an easy 

job to set up one of these things in a field hearing context. And Ed 

Rice and everybody else who worked on this, I am very grateful for 

their help. 

Dr. Hennessy? 

STATEMENT OF JOHN L. HENNESSY, PH.D., PRESIDENT, STANFORD UNIVERSITY AND CO–CHAIRMAN, COMMITTEE ON 

SCIENCE, SECURITY AND PROSPERITY, NATIONAL RESEARCH COUNCIL 

Mr. HENNESSY. Thank you, Mr. Chairman. And thank you all for 

coming today to talk about this important issue. We appreciate 

your interest. 

As you all know, I am President of Stanford University. And I 

also served as the co-chair with General Scowcroft of the National 

Academy’s Committee on Science, Security, and Prosperity, which 

last year released the report, ‘‘Beyond Fortress America: National 

13

Security Controls on Science and Technology in a Globalized 

World.’’

Although I will reference the committee’s findings in my remarks 

today, I speak on behalf of the higher education and scientific research community, rather than as a representative of the committee or the academy. 

It has become a broadly accepted principle that United States 

leadership in science and technology is crucial, both to our national 

security and our country’s economic prosperity. What is less wellunderstood, however, is how dramatically the conduct of science 

and the technology has changed over the past two decades. 

In this new century, the conduct of science takes place in a highly collaborative and geographically distributed research community. 

Thirty years ago, the United States dominated in many fields of 

science and technology. Today, the United States is still the overall 

leader. But in many fields, we are one of the leaders, rather than 

the sole leader. And in a few fields, including things such as flat 

panel displays, semiconductor memory, and advanced battery technologies, the United States is, arguably, not at the top. 

Consider the source of papers published over the past 25 years 

by the American Physical Society. As you will see in the handout 

we attached to my written testimony, the trend is clear. The rate 

of publication among physicists outside of the United States and 

Western Europe has increased at an astonishing rate. 

In the coming decades, remaining a leader requires that we fully 

participate in the international research community. To do so requires that unclassified information be able to flow among researchers and industry leaders in the various fields. And it requires the United States to continue to attract the best and brightest minds from around the world to work in our laboratories. 

There is absolutely no question that the U.S. needs export controls to maintain military advantage on the battlefield and to sustain the homeland. However, as advances in science and technology 

have transformed our world and our ways of conducting research, 

many of the export control regulations that served the United 

States well 40 years ago no longer met the country’s needs. The 

current system actually impedes our national security and thwarts 

our ability to compete. 

Leadership in science and technology begins with attracting the 

best minds. We have a long and rich tradition of doing so. The 

United States Twentieth Century dominance in science and technology owes much to immigrants, such as Nikola Tesla, Albert Einstein, Edward Teller, Enrico Fermi, and An Wang. Indeed, Intel, 

Google, Yahoo!, and Sun Microsystems, as well as an estimated 52 

percent of the Silicon Valley start-ups have one or more founders 

who were born outside of the United States. 

At Stanford, we attract leading researchers and faculty from 

around the world. And, as Congresswoman Lofgren mentioned, 

more than half of our Ph.D. students in the physical sciences and 

engineering come from outside the United States. 

As a matter of policy, we do not engage in classified research. 

That would limit participation of any of our students or faculty on 

the basis of citizenship. Our focus is on fundamental research, 

14

which, by its very nature, is intended to be open to all and freely 

communicated. 

Nonetheless, current export controls and related security measures have caused us great difficulties. For example, in the gravity 

probe B project, we see a situation similar to the one mentioned by 

Congresswoman Lofgren. A satellite launches the gravity probe 

project, but the instrument itself is a space telescope designed to 

test Einstein’s theory of relativity. The design and the fabrication 

were basic research, and the technical details were openly published. It doesn’t have a strategic use, but it happens to be on a 

satellite. 

Because of ITARs, the international traffic and arms regulations, 

satellites are treated as munitions. Stanford researchers cannot 

share information about the particular design with foreign nationals. That limits our ability to publish about the design and to ensure that our colleagues accept and believe the results from the 

measurements. It also limits us with respect to deemed export as 

well, which requires us to monitor how that information might be 

shared with students here on our campus. 

In another example, a U.S.-based Fortune 100 high tech company was given a DARPA contract to build a microchip that will 

attempt to simulate the human brain based on what we know 

about its electrical properties, clearly basic research. 

A team from Stanford consisting of a faculty leader who is a U.S. 

citizen and a half-dozen students, some of whom come from the 

United States, but two are also from China, were proposed to collaborate on the project. But after the project began, we learned 

that the use of export control technology was central to the work. 

For the Stanford team to participate, our Chinese students would 

have to be excluded. 

Stanford does not, nor will it, restrict participation of students on 

the basis of citizenship. Since the export control technology was 

deemed central to the project, the Stanford research team involvement and the benefit of their contributions have been greatly reduced. 

A closely related problem was encountered in the area of biosecurity. Professor Stanley Falkow, one of the world’s most distinguished researchers in the area of microbial pathogenesis, had been 

working on a non-pathogenic version of plague, a version that is actually used in the construction of the vaccine. After the USA PATRIOT Act, this organism was designated as a select agent, requiring greatly enhanced security and background checks on lab personnel. 

Falkow viewed this as incompatible with his research approach. 

He ended up destroying the organism and stopped working in the 

area. The result was clearly a net loss for our country. 

In these examples, our Nation can lose multiple times. We lose 

the benefits of the research. We lose senior faculty leadership in a 

field. And we reduce our ability to engage and retain young researchers. 

As these examples illustrate, the negative impacts of control regulations can lead to a loss of scientific leadership and a reduction 

in our Nation’s security. 

15

Our goal should be to design national security controls without 

negatively impacting our ability to conduct fundamental research 

that can benefit the United States economically and militarily. 

The growing trend to label fundamental research as ‘‘sensitive 

but unclassified’’ is a deep concern, since it would further blur the 

lines between controlled and uncontrolled research in an unpredictable fashion. There are policies in place that can serve as a 

straightforward and rational interpretation of export controls. 

Through national security decision directive 189, for example, 

government agencies with concerns about work could specify restrictions when they issue the contract, including, when appropriate and necessary, classifying the work. Maintaining the openness of basic research as clearly intended in NSDD–189 is crucially 

important for the long-term health of U.S. academic research. 

Export controls are a challenging and complex topic, and I am 

very pleased that this committee has undertaken this important 

task of examining them and considering the need for reform, which 

in the view of many is long overdue. 

As you move forward, if there is any way my colleagues in higher 

education and the scientific community can assist you, we would be 

honored to do so. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Hennessy follows:]

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Chairman BERMAN. Thank you, Dr. Hennessy. 

And, of course, I did proceed with your testimony without the introduction I was supposed to make of you regarding your background. I think it is probably known to most, but let me just for 

anyone who doesn’t know remind people that, in addition to being 

the President of Stanford University, Dr. Hennessy started his career here as a professor of electrical engineering, chaired the Computer Science Department, served as the Dean of the School of Engineering, University Provost until now as President. And then in 

the information technology field, he is known internationally for his 

research and development of a revolutionary computer architecture. To this day, he continues his research in high-performing 

computing and as a co-founder of the MIPS Computer Systems, a 

cutting-edge developer of microprocessors. 

And, most importantly for purposes of today’s testimony, he is cochair of the Committee on Science, Security, and Prosperity of the 

National Research Council, which has a number of national security science and industry leaders. 

The committee issued a report last spring on national security 

controls, on science and technology. And that report was part of 

what got us to focus on moving ahead with our own project in this 

area. 

Dr. William Potter is our next witness. Here the introduction will 

come before the testimony. [Laughter.] He is Director of the James 

Martin Center for Nonproliferation Studies at the Monterey Institute for International Studies. Dr. Potter is one of the nation’s leading experts on nonproliferation, arms control, technology transfer, 

and security. 

Twenty years ago he founded the Center for Nonproliferation 

Studies at the Monterey Institute. Under his direction, the center, 

now known as the James Martin Center, has become a recognized 

leader in the research and scholarship and the national security 

field. 

Dr. Potter continues his academic work as the Sam Nunn and 

Richard Lugar Professor of Nonproliferation Studies at the institute. He has written extensively on security issues, including his 

latest book, ‘‘The Global Politics of Combating Nuclear Terrorism.’’

I have personally known and worked with Bill for many years. 

His institute does a very important job, I think, for our country and 

for the world in terms of the expertise and the people that it produces to work in this critical field. And he is well-prepared to give 

us expert advice on the security issues to be considered in updating 

and strengthening our export control system. 

I will now also introduce Karen Murphy. And then we can go 

right to both of your testimonies. She is Senior Director for Trade 

at Applies Materials located in Santa Clara. 

Ms. Murphy is responsible for export control compliance and 

other trade issues for this cutting-edge leader in nanotechnology, 

semiconductor manufacturing, and related fields. She has wide experience in the practical aspects of import and export, including as 

a licensed U.S. Customs broker. In recognition of her expertise, she 

serves on the Commerce Department’s Advisory Committee on Export Control Regulations and has served on the Export Control 

26

Subcommittee of the President’s Export Council. We are pleased to 

have you with us today. 

Dr. Potter, why don’t you go ahead? 

STATEMENT OF WILLIAM C. POTTER, PH.D., DIRECTOR, JAMES 

MARTIN CENTER FOR NONPROLIFERATION STUDIES, MONTEREY INSTITUTE OF INTERNATIONAL STUDIES 

Mr. POTTER. Thank you. It is my honor and great pleasure to 

speak at the field hearing of the Committee on Foreign Affairs. I 

think the subject is very timely and important, and I applaud the 

committee and Chairman Berman for undertaking this initiative. It 

also is always a pleasure to return to Stanford, where I spent a 

wonderful time as a postdoctoral fellow many, many years ago. 

By way of introduction and as a caveat, I wish to emphasize that 

while the center I direct covers the entire range of weapons of mass 

destruction and their delivery systems, my own expertise lies primarily in the nuclear sector and issues associated with illicit nuclear trafficking and the dangers posed by nuclear terrorism. And, 

as such, my remarks will emphasize these areas. 

I also want to note that my remarks this morning constitute a 

much abbreviated version of my written testimony, which I have 

provided to the committee. 

A number of recent studies, including the important NRC Council report, ‘‘Beyond Fortress America,’’ have correctly observed that 

many U.S. export controls developed during the Cold War are illsuited to meet today’s national security challenges. 

It is also the case that in an increasingly globalized world, one 

must be very cautious about imposing restrictions on the flow of information, technology, and scientists in the name of national security without very carefully weighing the costs and benefits of such 

action. It would be equally shortsighted, however, for the United 

States to abandon prudent export controls on dual-use technologies 

and materials directly relevant to nuclear, chemical, and biological 

weapons in the name of economic competitiveness on the grounds 

that some other states have failed to adopt stringent export controls. 

Similarly, it would be most unfortunate from the standpoint of 

weapons of mass destruction proliferation were the United States 

to signal its diminished support for adherence to the export control 

guidelines of existing international nonproliferation regimes, based 

on the premise that some states have already disregarded inconvenient nonproliferation export control norms and practices. 

Unfortunately, one can point to recent examples of both outmoded U.S. and international approaches to export controls and 

changes to export policy that have been detrimental to U.S. national security. 

Illustrative of the problem of outmoded U.S. export controls are 

current nonimmigrant visa regulations that make it difficult for 

credentialed academic researchers to work with U.S.-based colleagues and for international students with advanced degrees in 

the science and engineering sectors to extend their stays in the 

United States for employment purposes. And here I fully endorse 

the NRC’s recommendations with respect to remedies in this 

27

sphere, but I also would note the need for more nonproliferation 

education and training in U.S. industry and academe. 

Greater self-awareness and self-regulation regarding the security 

and export of WMD-related material, technology, and know-how 

may be the best antidote to more intrusive government controls. 

Regrettably, it is also the case that U.S. national security was 

impaired when in the name of economic competitiveness and in 

pursuit of a new strategic partnership with India the United States 

gutted important components of its own domestic export control 

laws and led the charge to exempt one country from the export 

guidelines of the Nuclear Suppliers Group. 

A similarly ill-considered congressional initiative in 2005 to make 

it easier to export highly enriched uranium to U.S. allies, promoted 

in the name of economics and medical necessity, directly undermined U.S. efforts to persuade other countries to combat nuclear 

terrorism by minimizing the use of highly enriched uranium in the 

civilian nuclear sector. 

My point is not to contest the desirability of reviewing and, 

where appropriate, revising export policies to reflect new realities. 

I fully endorse such a general approach. It is essential, however, 

to guard against changes in those U.S. export controls that have 

served us well in curbing the spread of WMD and whose abandonment might inadvertently contribute to the proliferation of nuclear, 

chemical, and biological weapons. 

Therefore, in thinking about where possible reform of export control regulations should be pursued, it may make sense to distinguish between export controls targeting WMD-relevant items and 

those directed at the much larger body of dual-use strategic goods 

unrelated to weapons of mass destruction. 

Moreover, it is important to recognize that to the extent that the 

United States wishes other states to attach greater priority to the 

development and implementation of domestic nonproliferation export controls, as is required by U.N. Security Council Resolution 

1540, it must lead by example. 

I will leave it to leaders from industry and science to depict the 

shortcomings of the current U.S. export control system as they pertain to economic competitiveness and the unfettered exchange of 

ideas and information. 

What I would like to highlight in my remarks this morning are 

several new nonproliferation realities and how associated WMD 

proliferation risks are compounded by gaps and weaknesses in the 

U.S. export control system and related international controls. I will 

then conclude with a few specific recommendations about what 

might be done to improve the situation. 

Although the post-Cold War international environment has reduced the risks of a superpower nuclear exchange, it also has contributed to the growth of new challenges involving the spread and 

potential use of weapons of mass destruction. These challenges include the tendency on the part of many states to subordinate nonproliferation considerations to economic and political interests, the 

development of a global black market in sensitive dual-use technology and material related to the production and delivery of weapons of mass destruction, and the rise of non-state actors as nuclear 

suppliers, middlemen, and end users. 

28

Although discussions of nuclear terrorism typically focus on the 

potential use by non-state actors of nuclear explosives, it is important to recognize the proliferation risks posed by non-state actors 

as suppliers of nuclear material, technology, know-how, weapons 

design, and conceivably the weapons themselves. 

The extensive nuclear supplier network masterminded by Pakistani scientist A. Q. Khan is illustrative of this proliferation challenge. An analytically distinct but variant of this threat is the operation of non-state actors as middlemen, connecting nuclear suppliers, both state and non-state entities, with end users, which also 

might be either state or non-state actors. 

Most available information indicates that Dr. Khan was the entrepreneur behind the emergence of what former IAEA Director 

General Mohamed El-Baradei has called a ‘‘nuclear weapons WalMart.’’

Nevertheless, one should take care not to equate that international network with one individual or to assume that his enforced retirement has put illicit non-state nuclear suppliers out of 

business. Indeed, the so-called Khan network was relatively nonhierarchical and involved international leadership that was widely 

dispersed around the globe, including locations in Europe, Dubai, 

South Africa, and Malaysia. Few of its members were ever prosecuted, and even fewer were convicted and served prison terms. 

It is to be expected that middlemen seeking business in 

brokering illicit nuclear trade will gravitate toward bases of operations in states with weak or nonexistent export control regulations 

and underdeveloped enforcement mechanisms. 

Unfortunately, these traits are not limited to the developing 

world. Indeed, one is hard-pressed to find examples anywhere of 

successful prosecutions of illicit nuclear trafficking in which the accused received more than a slap on the wrist, leading some to conclude that there are greater penalties for driving under the influence in most countries than for driving with illicit nuclear goods. 

The NRC study, among other reports, catalogues a long list of 

shortcomings in the current U.S. system of dual-use exports, most 

of which pertain primarily to controls outside of the narrow area 

of WMD-related commodities. 

In my written testimony, I call attention to a number of those 

that do have relevance to the WMD sphere, including a cumbersome bureaucratic structure, morale problems among Customs 

inspectors and investigators, and the challenge of devising effective 

export controls in areas where new technologies are emerging most 

rapidly. 

Here I would only emphasize that the logic of adjusting export 

controls to changing conditions should not mean simply relaxing or 

reducing controls. In some instances, it may be necessary to introduce more sophisticated and tailored approaches that are more effective as well as simply more efficient. 

To be sure, one can identify significant shortcomings in both the 

design and performance of the major export control regimes internationally: The Nuclear Suppliers Group, the Missile Technology 

Control Regime, the Australia Group, and the Wassenaar Arrangement. 

29

These deficiencies include non-membership of some key exporting 

countries, inconsistent implementation of catch-all and no-undercut 

provisions, inadequate reporting and intelligence sharing practices 

among member states, and a lack of familiarity by industry in 

member states of the provisions governing exports. These problems, 

however, should not obscure the very useful contribution to WMD 

nonproliferation made by the NSG, the MTCR, and the Australia 

Group. 

It also should be noted that these nonproliferation regimes were 

not driven primarily by Cold War considerations or attempts to stymie the Soviet Union’s quest for weapons of mass destruction. 

Indeed, in the nuclear sector during much of the Cold War, the 

United States and the Soviet Union pursued remarkably similar 

nuclear export control and nonproliferation policies. And, in fact, 

Washington often found it easier to cooperate closely with Moscow 

on nuclear nonproliferation and export control issues than it did 

with some of its close allies. As such, I would argue, it does not follow logically that these export control arrangements should be 

scrapped or substantially modified simply because the Cold War 

has ended. 

As one contemplates reforms for the U.S. export control system, 

one must be aware of the liabilities that result from divergent 

international practices and priorities as well as the shortcomings 

of existing international export control regimes. 

It is also the case, however, that many states do follow the U.S. 

lead on nonproliferation export policy and that, by and large, nonproliferation export control norms and practices globally have become more prudent and widespread over time. 

Although I would argue that the 2008 NSG exemption granted 

to India marked a major step backward in the international nuclear export control arena, it is all the more imperative to strengthen the NSG and other international mechanisms that focus on 

WMD proliferation. 

A sound U.S. approach to nonproliferation export controls requires in my mind a two-pronged approach: First, recognition and 

retention of those aspects of the system that have performed well; 

and, secondly, introduction of new features that will enhance economic competitiveness and information and technology flow without weakening the international nonproliferation regime. 

Let me conclude my prepared remarks by suggesting how these 

dual objectives may be pursued in tandem. Whatever the United 

States does, it must be very careful not to make matters worse for 

WMD proliferation. This dictum cautions against acceptance of the 

advice of those who would like to dilute or restrict further the 

catch-all provision that specifies the dual-use items or technologies 

not on the commerce control list may still require an export license 

if the exporter has reason to believe that the item is intended for 

the development, production, or delivery of nuclear, biological, or 

chemical weapons. 

In fact,—and I think this is a particularly important point—an 

increasing number of companies today have made strides in incorporating the catch-all philosophy into their internal compliance 

programs, and greater efforts should be made to encourage the 

30

adoption of WMD nonproliferation objectives as a component of corporate social responsibility goals. 

A major step forward in promoting WMD-related export controls 

internationally was taken in April 2004 when the U.N. Security 

Council adopted resolution 1540, which, among other things, requires all U.N. member states to adopt and enforce effective laws 

which prohibit non-state actors from acquiring WMD, their delivery 

systems, and the materials needed to produce them. 

Although few states directly challenge this mandate, its implementation has been undermined in many countries due to lack of 

resources and poor understanding of the relevance of the measure 

for their own security interests. 

If U.N. Security Council resolution 1540 is to be effective as an 

export control initiative, it will be necessary for the United States 

to increase its support for regional and national 1540 training programs. 

In the U.S., effective export control enforcement continues to be 

hampered by the lack of sufficient personnel to undertake proper 

end-use checks and aggressively pursue investigations of suspected 

violations. It does little good, for example, to identify new cases 

that merit investigation if one is unable to assign trained personnel 

to conduct investigations at home and abroad. 

It is a necessary but not sufficient condition to adopt new rules 

and regulations internationally with respect to WMD-related exports. Equally important is the need to build a global nonproliferation and security culture in which government and industry officials, scientists, faculty, and graduate students who work with dual 

use WMD-related technology and materials in the nuclear, biological, and chemical fields learn to appreciate the potential dangers 

posed by these items and become familiar with the domestic and 

international regulations governing their use. 

I will conclude my remarks by touching on the issue of nonproliferation export controls as it pertains to the university environment. At a time when the great majority of U.S. Government 

officials and politicians of different political persuasions agree on 

the dangers posed by WMD proliferation, it is surprising how limited the opportunities are for students at all levels of education to 

acquire formal training in the field. 

In a very small way, the Monterey Institute of International 

Studies is trying to address this knowledge gap by offering a new 

master’s degree program in nonproliferation and terrorism studies, 

the first of its kind in the world. But many more universities will 

need to follow suit if we are to train the next generation of nonproliferation specialists or even introduce our future leaders in government, science, and industry to the subject. 

One practical step to remedy the problem, at least in the United 

States, would be to pass a National Nonproliferation Education 

Act, perhaps modeled after the National Defense Education Act or 

the National Security Education Act. 

Such legislation, ideally funded by a one-time appropriation of 

about $50 million, would provide up to 50 fellowships per year to 

graduate students to pursue advanced multidisciplinary training in 

nonproliferation studies at the universities of their choice. 

31

An act of this sort would have the dual positive benefit of attracting top-notch young talent to the field and encouraging more universities to offer courses on nonproliferation issues, including export controls, in order to attract tuition-paying students. 

While not a short-term solution to our current predicament, this 

approach would help to create the next generation of experts on 

whom the United States will rely to tackle increasingly complex 

tasks of preventing the proliferation of nuclear, biological, and 

chemical weapons of mass destruction. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Potter follows:]


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Chairman BERMAN. Thank you very much, Dr. Potter. You have 

some very interesting ideas in there. 

And, Ms. Murphy, we look forward to hearing from you. 

STATEMENT OF MS. KAREN MURPHY, SENIOR DIRECTOR, 

TRADE, APPLIED MATERIALS, INC. 

Ms. MURPHY. Okay. Mr. Chairman and members of the committee, member of the committee, and distinguished guests, again, 

I am Karen Murphy, the Senior Director for Trade at Applied Materials. I thank you for holding this hearing on export controls and 

for offering me the opportunity to testify before you today. 

Mr. Chairman, in addition, thank you for your editorial in today’s Mercury News. I particularly appreciated the comment on 

how export controls get little media attention. Holding a hearing in 

Silicon Valley is important because of the number of companies 

who have experience with these regulations and are located here. 

I think the fact that the room is full of such representatives is 

in support of this premise. And probably no one in this room 

doubts the need for updating our export control system. 

Applied Materials is based here in the Silicon Valley. We are a 

global leader in manufacturing equipment used to produce computer chips, flat panel displays, and solar photovoltaic cells. In our 

last fiscal year, our revenues were approximately $5 billion, of 

which more than 80 percent came from sales outside the United 

States. With so much of our business overseas, we devote considerable resources to trade compliance and welcome this opportunity to 

share our views. 

An important concern, in addition to the comments around the 

Cold War, is that current regulations were really written around 

a business model that a company designed the product, made the 

product, and sold the product to one end user. Over the past 30 

years, this model has evolved into a global supply chain, including 

engineering collaboration over the Internet and distribution partners located in countries close to our customers. 

Today I will focus my oral comments on principles we need to 

keep in mind as we move forward on any export reform legislation 

and eventually regulations. My written testimony contains additional information you may find useful. 

These principles are both U.S. national security and economic 

competitiveness depend on a strong, technologically advanced industrial base. R&D and technological innovation are now global in 

nature. Control mechanisms must be cognizant of and keep pace 

with advances in technology. Control regimes should be premised 

on a cooperative effort between government and industry. Export 

controls should be multilateral. And, finally, the export control 

process should be clear and simple, from its policy foundations to 

its execution and review. 

We believe a modernized export control system built on these 

principles would do a much better job of protecting U.S. national 

security and facilitating our global competitiveness. 

I would like to now spend a few moments describing how a revamped system would affect Applied Materials. In every one of our 

business segments, we face intense international competition. In 

44

every business line, we are always looking for ways to run faster 

than that competition. This is why we spend more than $1 billion annually on research 

and development. We look for scientific and engineering talent 

wherever we can find it, but being able to hire and retain this 

brain power is often difficult and sometimes impossible. 

In physical terms, we perform research and development, both 

inside and outside the U.S. And, again, flexibility is essential if we 

are going to outrun our foreign competitors. 

Another tool we use to stay competitive is through our global 

supply chain. In short, everything about our business, employees; 

facilities; suppliers; and our customers; and, of course, our competitors, are globalized. We need a system that recognizes this. 

An effective control system should also be able to respond to 

technological changes. Our current system falls short, resulting in 

too many controls on technologies that are readily available from 

outside the United States. 

For example, one of our tools is an etch system, which is used 

to create nano-scale circuits. We have a competitor in China that 

is proving technically competent and is making gains in the marketplace. It is also important to note that there are no U.S. etch 

tools, whether from our company or our U.S. competitor, installed 

at the leading U.S. manufacturer of semiconductor devices. 

Our control lists are woefully outdated. And any updates to the 

Wassenaar control list take far to long to implement—that it is important to note that at the world’s leading-edge manufacturer of 

semiconductor devices, there are no U.S. etch semiconductor pieces 

of equipment at that factory. 

Chairman BERMAN. Because of controls? 

Ms. MURPHY. No. Yes. No. [Laughter.] 

Capability. What I am trying to say is the capability of the foreign equipment is clearly catching up, has caught up with the U.S. 

Chairman BERMAN. Got it. 

Ms. MURPHY. So here is another example. We have a competitor 

in China who makes similar semiconductor equipment that is proving technically competent and is making gains in the marketplace. 

Our control lists are woefully outdated. And any updates to the 

Wassenaar control list take far too long to be implemented here. 

Recent example, the 2008 Wassenaar review list, the U.S. just 

published a few weeks ago, over 11 months after list changes were 

made. Is this acceptable? I don’t believe so. 

Controls are published as multilateral, but they must be multilateral in more than just their formal sense. Implementation 

should be similar among regime members so American companies 

are not always at a disadvantage. 

Our competitors, including those in regimes and outside of regimes, are not subject to cumbersome multi-agency review process 

and conditions of approval that U.S. exporters are. Conditions are 

a problem for many U.S. exporters. Among our customers, for example, we have instances of identical tools with identical capabilities next to one another on a factory floor but with different license 

conditions. 

This is crazy. I have got one with a pink bow, a red bow, a green 

bow. And depending what day it is, you can do this or that. 

45

Finally, as technology and economies become more complex and 

intertwined around the world, the need for clarity and simplicity 

becomes even more imperative in an export control system. Our 

Cold War-based system implemented under IEPA is too creaky and 

unwieldy and, as the National Academies has pointed out, benefits 

no one but our competitors and adversaries. 

In closing, Mr. Chairman, we are encouraged by the current appetite for change among all stakeholders. The stars are aligned as 

never before among Congress, the Executive Branch, academia, 

and industry. We hope and urge that this concurrence can produce 

an export control system that serves the interest of all of us. 

I urge you to move forward to develop legislation that indeed protects the national security of the United States while enabling our 

global competitiveness. 

[The prepared statement of Ms. Murphy follows:]

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Chairman BERMAN. Well, thank you. Thank all of you very much. 

You have all touched on important aspects of this with slightly different perspectives. And it has been very helpful. 

We are not on a clock or anything, but maybe we will just sort 

of self-ration ourselves, which is dangerous when you deal with 

Members of Congress, [laughter] in terms of questions and perhaps 

have a few rounds, rather than asking every question I can think 

of before I yield to the next person. 

I have some questions I have based on the prepared testimony. 

But something that occurred to me in the context of your testimony, Dr. Hennessy, and Zoe Lofgren’s discussion of deemed exports, in the late 1990s, everyone now is focused on Iran’s nuclear 

program and their missile program. But this was an issue as far 

back as the late 1990s. 

At that time, one of the concerns was that Russian institutes 

were training Iranian students in some of the state-of-the-art technologies that they had and that as part of the desire for funding, 

it wasn’t even so much of a calculated policy approach or to ensure 

you want to have technology but simply to finance the institute’s 

work and pay the salaries of professors and all of that. 

This line of basic research versus training in the knowledge of 

specific technologies that would have relevance for WMD programs 

or the means to deliver them, could you talk a little bit more about 

some of your thoughts on that? 

Mr. HENNESSY. It is a very important area, obviously, Mr. Chairman. I think we neither seek from the university perspective to see 

people enter this country that would be a threat to the country. We 

don’t want them as students. We don’t want them as visitors. So 

I think an adequate visa screening process is certainly appropriate 

there. 

We also by focusing our research on what we truly believe to be 

basic research; that is, research that is intended to be published, 

we believe, that that simply excludes the university from working 

in certain areas that would create the kind of example that you 

have alluded to here between Russia and Iran. 

So, for example, in the case of building a highly precise telescope 

to go up in a missile, we are not dealing with the issue of how to 

design the missile or how to control it. We are simply designing the 

instrument that will ride atop that missile. 

In fact, we don’t need to have specific details about how the missile works. We may need to know some things, like how much vibration and stress will be induced on the satellite for the purpose 

of designing the satellite, but we don’t need to know the kinds of 

details that would be important, for example, to an individual who 

might be interested in using that to build a missile to attack the 

United States. 

Chairman BERMAN. Your research council that you co-chaired 

concluded that many of our current export control regulations no 

longer meet the country’s needs. And that was a theme also of 

other witnesses here. 

Because of that, the current system impedes our national security and thwarts our ability to compete, even as you acknowledge 

that we do still need export controls. This is sort of the heart of 

54

the question for us as we embark on this process. Dual-use technologies by their nature can be used for benefit and for harm. 

So I’m curious. How did your committee deal with sort of the fundamental question, what are the criteria that should be used by us, 

although I think the last thing we want is Congress writing the 

lists, maybe on campaign technologies but not on the process for 

who write the lists, what are the criteria that should be used to 

determine what should be controlled? This I think is almost essential for what we want to try and do here. 

Mr. HENNESSY. I agree 100 percent. It goes to the heart of the 

question. What should be controlled? 

I think here I would completely support what Dr. Potter said. We 

need to build very high walls around a set of very dangerous technologies, particularly related to weapons of mass destruction. That 

is the clear case that we absolutely need to deal with in our export 

controls. And we need to ensure that we are doing that in a way 

that is as effective as possible. 

There is a related set of truly dual-use technologies, as opposed 

to certain technologies, which are really only for use in devising 

weapons. There is a set of related technologies that are used perhaps not for weapons of mass destruction but related things. That 

is where we begin to get into an area where you need a rational 

way for dealing with it. 

I think one of the difficulties you see with the lists is that they 

tend to grow, they don’t tend to shrink very much. So things go on 

the list. They never or rarely come off the list. 

That obviously impedes both our ability to do our work as well 

as our competitive interests. And so a rational method that would, 

for example, sunset the list, forcing a review based on some methodology, as opposed to simply taking the easy way out, which is you 

leave things on the list, I think would be a rational approach to try 

to deal with that problem. 

Chairman BERMAN. Dr. Potter, any thoughts on this? 

Mr. POTTER. Well, I agree with what Dr. Hennessy just said, particularly the part where he agrees entirely with me. [Laughter.] 

I think, indeed, it is important to distinguish those items which 

are dual-use WMD-related and the much, much larger category of 

strategic items, which when I read the——

Chairman BERMAN. Stop right there, though. If I were to take a 

list of, say, the Nuclear Suppliers Group, I would find technologies 

are directly for a nuclear weapons program, but wouldn’t I also find 

dual-use technologies on such a list as well? 

Mr. POTTER. That is correct. I mean, you have basically two lists 

for the Nuclear Suppliers Group. The one that was adopted, I think 

in 1992, focuses on dual-use nuclear technologies. 

And so I don’t want to suggest that you will not have difficulties 

in defining where you are going to want to retain controls, but it 

is still the case that those items constitute a very, very small fraction of exports. And you have a relatively small number of countries who are involved in commerce in those items. 

So my sense is that the thrust of the NRC report really were related to those items which were not the focal point of my discussion, which was WMD-related. I think that distinction is probably 

55

a good starting point in terms of where you are going to be able 

to make meaningful reform. 

The greater difficulty is probably not in the nuclear sector, where 

the technologies have not been as dynamic. And so I think the lists 

basically that have served us well in the past continue to be for the 

most part useful. 

You have more difficulties when you move into the biological sector. And so you may also note when I talked about the international regimes, which I thought generally have been doing a good 

job, I did not include the Wassenaar agreement because it moves 

away from my own focus on WMD technologies, equipment, and 

material. 

Chairman BERMAN. I think for this round, I would like to ask 

one more question. Then I will pass it on to Mr. Rohrabacher. Go 

ahead. Yes, please? 

Ms. MURPHY. I sort of want to comment on——

Chairman BERMAN. Come into this, absolutely. 

Ms. MURPHY [continuing]. The control list philosophy. 

Chairman BERMAN. Absolutely. Absolutely. 

Ms. MURPHY. So I think that the control list should be—those 

items which you can control. So if there is no foreign competition 

and it has been identified as critical for the manufacturing of weapons or non-civilian products, then maybe that item should be on 

the list. 

However, what is happening in the semiconductor device industry is that our customers are requiring us to achieve more and 

more devices in smaller and smaller spaces. And a lot of the materials that we are required to use and even some of the parts and 

components, such as items on the nuclear and chemical list, like 

baratrons and specialized valve and pressure systems, are on our 

machines now because those items achieve the results that our customers require. 

So no longer can you look at a piece of semiconductor equipment 

and see 100 percent dual-use items contained on the machine, but 

as our customers require more and more solutions to their problem, 

we have to seek what I would call better, tighter restrictions or 

tighter specifications on some of the delivery systems and especially some of the materials. 

And so I think that it is important to also acknowledge these requirements on clearly Applied Materials’ and other companies’ desire to have legitimate end users who make commercial products 

for civilian use. 

Chairman BERMAN. Dr. Potter, how would you deal with that 

very specific example? 

Mr. POTTER. I think it is important to start by asking what the 

purpose is of export controls. And you have alluded to that in your 

opening remarks. This is something that also is addressed in the 

National Research Council report. 

I see export controls, first and foremost, as making it more difficult for some state and non-state actors to acquire military capabilities that could endanger U.S. national security. And although 

they may have the effect of impeding some legitimate U.S. exports, 

I think it is important that efficiency not be the only touchstone 

for determining what should constitute our reforms. I think one 

56

also has to talk about effectiveness. I mean, economic cost is certainly important, but it is not the only criterion. 

So I don’t have a magic bullet to offer here. In some respects in 

the nuclear sector, it is even more complicated because you have 

Article 4 of the nonproliferation treaty, which also points to the inalienable right to peaceful use. And many countries will argue that 

they are not, in fact, being provided with the nuclear assistance to 

which they are entitled. So this simply further complicates the 

issue. 

I would argue that, by and large, in the nuclear sector our export 

controls, including those in the international sphere—for example, 

the Nuclear Suppliers Group—have served us well. And so we need 

to be very, very careful in the name of reform not to inadvertently 

act in a fashion that compromises our national security in the 

weapons of mass destruction sphere. 

So it is more of a principle. I can’t give you a more specific response. 

Chairman BERMAN. Shifting away from the nuclear, but let’s 

take one of your examples, Dr. Hennessy. You talk about Professor 

Falco’s work on plague vaccine and the obstacle that he ran into 

when security was tightened. It is a compelling story, but isn’t 

there a case to be made that, especially with the plague, security 

needs to be tighter on that kind of research? 

Mr. HENNESSY. I agree, Mr. Chairman, that there is a case for 

tightening security. Had he been working with the actual pathogen 

itself, then I think there was a very good case for it. He is working 

with a non-pathogenic version of the virus, specifically used in the 

design of the vaccine. 

So there is a lower level, particularly, of security. And I think the 

key is to distinguish these extremely complicated cases. And I 

think we all have to agree that when we get into these kinds of 

issues, we are getting into issues where we need a level of expertise that is very hard to find to judge how to structure——

Chairman BERMAN. The kind you normally find in Congress. I 

understand. [Laughter.] 

Mr. POTTER. I think that Karen made a point which applies to 

this case as well as others. And that really is the need for much 

greater cooperation among government, industry, and academe. If 

there is a readiness to try to be creative to address the legitimate 

security concerns as well as the obvious interests in academic freedom, then in most instances, one can find a reasonable solution. 

I think you mentioned, President Hennessy, that Falco viewed it 

as incompatible with his research approach. I mean, that may be 

the case, but at many universities, there is work being done on 

these issues, and we have been able to satisfy also the export control requirement. 

One can point to other cases at other universities where there 

have been clear violations. And most people would agree that the 

rules should have been followed and when they weren’t, that there 

should have been consequences. 

So I think the key here, really, is the spirit of cooperation, an attempt to reduce the bureaucracy where it is unnecessary. There is 

a great deal that can be reduced, but also there is an educational 

role here. 

57

It is really important for those who choose to work in areas 

where there are these restrictions to better understand the restrictions and to also understand the reasons why there are restrictions. Nonproliferation awareness is crucial. And I don’t think that, 

for the most part, industry and research on campuses have adequate access to that information and awareness. 

Chairman BERMAN. Mr. Rohrabacher? 

Mr. ROHRABACHER. Thank you, Mr. Chairman. 

As usual, I don’t think the issue is as complicated as is being 

presented. It is just that it requires tough decisions and requires 

us to be brutally frank about who is our enemy and a potential 

enemy of the United States and who isn’t. 

See, so far we have talked about how difficult it is to identify 

which technologies, et cetera, but if we, instead, spend our time 

and effort focusing on trying to identify which countries should 

have the controls, that takes a lot of pressure off identifying which 

technologies if you believe in a relatively free trade with certain 

people as long as the final destination is that country. 

I am just going to ask the panel ‘‘Yes’’ or ‘‘No.’’ Would you agree 

that reforms that loosen control over the export of our technologies, 

which loosens those controls to democratic and friendly countries, 

while maintaining controls and perhaps even expanding them on 

countries that are controlled by tyrannical regimes that may be 

hostile to America’s national security interest is an acceptable approach as how to go forward with looking at these export controls? 

Basically I am asking you if——

Mr. POTTER. I would say that here simplicity is, unfortunately, 

not helpful. [Laughter.] 

I am not sure how you characterize non-——

Mr. ROHRABACHER. So you are a no. What are you? [Laughter.] 

Mr. HENNESSY. I am in favor of more complexity in a complicated 

issue. 

Mr. ROHRABACHER. You are a no. [Laughter.] 

Ms. MURPHY. I am not authorized to answer that question. 

[Laughter.] 

Mr. ROHRABACHER. Well, let me just note if we are talking about 

Adolf Hitler or Joseph Stalin, there wouldn’t be any laughs in the 

audience right now. 

Mr. HENNESSY. Right. 

Ms. MURPHY. Right. 

Mr. ROHRABACHER. No, no. Let me. It is my time. Let me just 

note that in China, you have religious figures to this day that are 

being put in prison and the Falun Gong end up being put in these 

cells and they disappear. And we know what comes out of those 

prisons: The sale of human organs. 

We are dealing with a ghoulish regime here that a lot of people 

are making profit off of. What is troubling me most about this issue 

is that we are treating China like we would treat Belgium or England. 

The fact is we have a potential adversary that is the worst 

human rights abuser in the world, but we have companies that are 

making enormous profits, short-term profits, by taking our technology over there and improving their capabilities. 

58

My theory about the technology that we are talking about that 

they have in China now that you just talked about is that you can 

trace it right back to some American capitalist who went over there 

to make a short-term profit or it can be traced right back to research that we financed by the United States Government somehow getting over there. But now you don’t have the technology, and 

they do. 

Well, I don’t mind that when it comes to the English. I don’t 

mind that if it comes to the Italians. I don’t mind if it comes to 

some democratic country. But when you have a country that is still 

run by a group of people who throw people in prison for their religious convictions, a country that still looks at the United States as 

its long-term enemy, then there is something wrong. 

I think that we had better start discriminating about which 

countries we treat as our friends because we treat our friends the 

same way we treat our enemies. Our enemies are going to take advantage of what we give them. 

Back to your example, Dr. Hennessy, do you realize that Chinese 

students—have you ever read anything that Chinese students have 

been used by Chinese military intelligence to accomplish their 

goals? 

Mr. HENNESSY. I am aware of that. 

Mr. ROHRABACHER. Okay. And still you can make a statement to 

this committee that you are not going to discriminate against Chinese students? 

Mr. HENNESSY. We are not going to take on research that would 

require us to exclude some students from the research program. 

Mr. ROHRABACHER. Yes. And the one you were complaining about 

if I read it correctly was based on a DARPA grant. 

Mr. HENNESSY. Correct. 

Mr. ROHRABACHER. Okay. DARPA is what——

Mr. HENNESSY. Defense Research——

Mr. ROHRABACHER. Defense. My gosh. There is a relationship between defense and that grant. And you are complaining that we 

don’t want to have Chinese students that will then take their 

knowledge back and be utilized by the world’s worst human rights 

abuser? 

Mr. HENNESSY. I think I am illustrating the difficulty that occurs 

in deemed export. The opportunity, then, is to conclude that you 

shouldn’t do this kind of basic research in a university setting if 

you believe it really represents a threat to the country’s security. 

Mr. ROHRABACHER. Well, I would suggest that universities need 

to think that they are patriotic Americans, too, and that when we 

are up against an Adolf Hitler 10 years down the road, that yes, 

maybe it is a good idea that the American universities are helping 

build our capabilities. Don’t you think that is true? 

Mr. HENNESSY. I absolutely believe that. And I think you only 

have to look at this country’s history to see that, in fact, academic 

scientists——

Mr. ROHRABACHER. Well, that is not consistent with what you 

just said. You know, the fact is that American universities don’t 

have to worry about what we are building, the technology advances 

that we have as a country, and the competitiveness that we will 

have by that if, indeed, we are ensuring that that information isn’t 

59

going to people who hate the very ideals that represent the heart 

of America. 

Scientists, university people are not citizens of the world because 

part of that world are people who are hostile gangsters who are 

murdering their fellow citizens to stay in power. The United States 

of America has higher ideals than that. And hopefully people in 

academe and hopefully people in the high tech industries understand that. 

Now, what has happened from my perspective—and I have been 

following this for 20 years—is we have got so many corporations 

going over there to make short-term profit that we can’t make 

those decisions. And all of this inability to set different standards 

for different kinds of countries comes down to that: Money. 

Am I wrong that a lot of these big corporations finance this university and that that may be impacting decisions on what we can 

do to confront the possible hostile intent of China in the future? 

Mr. HENNESSY. That is not a correct statement. 

Mr. ROHRABACHER. Okay. 

Mr. HENNESSY. While we do have money from various companies, the vast majority of our funding does not come from industry. 

Mr. ROHRABACHER. Right. So there are not grants that have been 

brought in by major corporations to your university? 

Mr. HENNESSY. There are grants from companies, but it is vastly 

overwhelmed by both the universities’ own research dollars as well 

as, of course, research dollars coming down from the Federal Government. 

Mr. ROHRABACHER. Not just this university, but I have seen this 

throughout our system where, time and again, we have these big 

corporate interests that are going over there to make a quick profit, 

by the way, at the expense of the American worker, who now 

doesn’t make as much money because they have set up competition 

overseas. 

And those same companies were supposed to influence the Chinese to make them more democratic. That was the theory. But, instead, what we have done is we have allowed them to use their influence economically and otherwise to influence our policy right 

here in this country. 

And I think that this hearing is getting right to one of the very 

heart of the matter, that we are unable to set things up in a way 

that will prevent the Chinese, which is a potential hostile government to the United States, actually is hostile, maybe a potential 

enemy of our country, that it is impossible for us to differentiate 

between that and democratic countries. That is what is not working for us right now. That is why it is so complicated. 

And, Mr. Chairman, I will just note that I have gotten passionate 

about the issue again. And I exposed myself. But I do feel passionately about it. 

Chairman BERMAN. I know you do. I just will interject here. We 

had during the Cold War, my recollection of export control policies, 

the organization COCOM, which predated Wassenaar,——

Mr. ROHRABACHER. Right. 

Chairman BERMAN [continuing]. Was about saying that there 

were certain countries for which we will not send certain kinds of 

dual-use technologies. But I do wonder as you carry out that logic, 

60

does that mean that universities that want to do the kind of research that Dr. Hennessy talked about don’t take Chinese students? 

And, by the way, my recollection from 1989 was ones of the 

strongest forces for the democracy movement in China that culminated in Tiananmen Square was Chinese students who were in 

the United States at that time and who did not let us and Congress 

forget about what was going on there, the nature of their repression. I mean, in other words, the question is, how do we take what 

you say, which bears I think a lot of truth, and extrapolate into a 

logical policy that helps? 

Mr. HENNESSY. Let me just say none of us is naive about the 

issues we face here. As a board member of the company you earlier 

praised, Google, and as the president of a university who had one 

of its undergraduates’ account’s hacked by this attack, a young 

woman who has participated in the free Tibet movement, we are 

not naive about it. We understand there are real challenges there. 

Whether this country decides it needs to engage China or keep 

China at a distance I think is an important topic to discuss at the 

highest levels. 

Mr. ROHRABACHER. Let us know this. If we have a student, Mr. 

Chairman, if a student comes here from China and he is a graduate student, and we are giving him the training and the access 

he needs to produce great things and he goes back to China, what 

we have done is subsidize China to the tune of hundreds of millions 

of dollars of research that that Chinese Ph.D. student now knows 

and can duplicate. 

Some of the competitiveness that we were just talking about 

comes from the fact that we have provided our economic adversary 

and an adversary to our democratic ideals with this type of treasure that we have invested in——

Chairman BERMAN. Zoe, let’s give him a green card. [Laughter.] 

[Applause.] 

Mr. ROHRABACHER. All right. Thank you, Mr. Chairman. 

Chairman BERMAN. Anna? 

Ms. ESHOO. Thank you, Mr. Chairman. 

I said in my opening statement how important congressional 

hearings are. And for anyone who is in the audience who has never 

been a part of one, you are getting a real earful. You are being exposed to the various views that the Congress holds. And I think 

that it is healthy. 

Having said that, it was not that many years ago when we all 

celebrated the triple birth to the Rohrabachers, triplets. And now 

I don’t know whether they will eventually want to apply to Stanford or not. 

Mr. ROHRABACHER. Oh, no. [Laughter.] 

Ms. ESHOO. At any rate, thank you to our witnesses. What you 

have said is enlightening all the way around. Dr. Hennessy, from 

an academic standpoint, a scientific standpoint, unclassified materials, and how we grow that but also protect our national security. 

As you said, no one here is naive. We are all patriots. We are 

all patriots. And in reauthorizing this and writing all the new protocols that guide us, there will not be any naivete ́ built into the legislation. We owe that to our great nation. 

61

Dr. Potter, the spotlight that you placed on WMD and your extensive experience in this area is really invaluable to us. And to 

Ms. Murphy, from a commercial standpoint and from a company 

that is very important, not only here but to our country and around 

the world, your testimony is extraordinarily valuable, too. 

I should add that there was an important announcement that 

that Secretary of Energy, Secretary Chu, made this morning. And 

I can say something about it because it was embargoed only up 

until 9 o’clock a.m. Pacific time. And that is that there are more 

than $37 million for next generation lighting. And obviously that 

creates opportunities for energy savings and manufacturing jobs. 

And Applied Materials will benefit significantly from that. So congratulations to you. 

What each one of you said, there were an awful lot of heads that 

were nodding. So as we take your individual slice of this, we agree 

with you. I agree with you anyway. 

I would like to mix it up a little bit. Where do you disagree with 

each other? Is there a disagreement? That would be helpful to us 

in how we draw this up. 

I would like to give some credence to what Mr. Rohrabacher is 

saying. I wouldn’t state it the same way, nor do I think that at this 

stage of life on this planet that we can afford isolationism. On the 

other hand, there are non-state actors and others obviously that 

are actively plotting and planning against us. That is my intelligence hat. I know that. I am not naive about it. We can build in 

the safeguards, I believe, to safeguard our country. 

Where do you disagree with each other? Is there something in 

the testimony or knowledge that you have? Well, I am just asking 

you to kind of mix it up and maybe raise some red flags about what 

someone else said. 

And this is all in a professional setting. So no one is going to 

take offense. But I think that it would be helpful to me and to the 

members here and those that are going to draw up the legislation 

because it is all part of the record. 

Who would like to go first? Dr. Potter? 

Mr. POTTER. Yes. I found the NRC report, which——

Ms. ESHOO. Can you move your microphone just a little closer so 

everyone can hear you? 

Mr. POTTER. Excuse me. I thought that the National Academy, 

National Research Council report was, by and large, right on. And 

I think that Dr. Hennessy and Brent Scowcroft deserve a great 

deal of credit for it. 

I would have preferred had there been a greater focus on how 

one could improve export controls in the WMD area, which I realize 

was not the principal orientation. 

Ms. ESHOO. Yes. That was not the focus of their report, though. 

Mr. POTTER. Right. The one area where I would take exception 

has to do with the support for the creation of an economic competitiveness exemption, which would eliminate, as I understand it from 

the report and from subsequent discussion, export controls on dualuse technologies where they or their functional equivalents are 

available without restriction in markets outside of the United 

States. 

62

In my view, that recommendation, if implemented, would both be 

at odds with some international nonproliferation regimes to which 

the United States is party, and would also if it applied to the WMD 

area be foolhardy if a major U.S. national security goal is to make 

it more difficult for state and non-state actors to acquire sensitive 

WMD-related materials and technology. 

These export controls may not preclude the acquisition by other 

states of their desired technology, but they may raise the costs and 

increase the time. They may have to go to countries whose products 

are not regarded as highly as U.S. products. 

And so, if you wanted to put this more crudely, just because others are willing to sell us rope to hang ourselves, I don’t think that 

means we should sell them the rope and make their task easier. 

You asked. I mean, you are trying to be provocative, stir things 

up. And, while I would agree with a very large number of the recommendations, both in the NRC report and in Dr. Hennessy’s testimony, we have to be very careful not to give all of our attention 

to economic competitiveness without also bearing in mind other 

threats to national security, particularly in the WMD area. 

Chairman BERMAN. Would you yield? 

Ms. ESHOO. I would be glad to, Mr. Chairman. 

Chairman BERMAN. Wouldn’t Dr. Hennessy if he were speaking 

right now say, ‘‘Well, we never intended that this exception apply 

in areas where we are parties to international agreements, treaty 

obligations,’’——

Mr. HENNESSY. Correct. 

Chairman BERMAN [continuing]. ‘‘Maybe even more informal 

groups, that that exception would trump controls for which there 

is a multilateral consensus’’? 

Mr. HENNESSY. Correct. I think that is a correct interpretation. 

And, as well, neither would this exemption, this competitiveness 

exemption, apply to truly strategic weapons materials. I don’t think 

that was ever the intention as well. 

The intention was to provide a rational way of dealing with the 

export controls around truly technologies which have true commercial use outside of that. And I think that was it. 

I think, responding to Congresswoman Eshoo’s question, I think 

the place where we would have an intensive debate, I suppose, 

would be when we got to various dual-use issues in the biological 

sphere. We have not had a large-scale international biowarfare attack on the U.S., either by a non-state actor or by a state. 

The difficulty in the bio area is that essentially many of the core 

technologies other than, of course, the organisms themselves, are 

dual-use in nature. And that makes it extremely difficult. 

If you want to be manufacturing drugs, you need to use certain 

instruments, which, of course, could also be used to manufacture 

biowarfare agents. 

That is an extremely difficult area and one that has to be carefully looked at. It is one where the academic community and the 

scientific community have done some self-policing. And I think that 

perhaps gets back to something Dr. Potter said encouraging the use 

of the community to actually act as a self-policing strategy with respect to certain technologies. 

Ms. ESHOO. Ms. Murphy? 

63

Ms. MURPHY. It is hard to analyze the other speakers’ testimony 

because, again, Applied Materials and most of the commercial companies, even here in the audience today, are not in the business of 

weapons. Our customers are not necessarily in the business of 

manufacturing weapons or delivery systems. 

Our customers are making equipment or devices that are the display, the televisions, the solar panels. And even the chips that most 

of our customers build with our machines are for computers, communications, your cell phones, and other types of electronic equipment used for a variety of commercial uses. Even I think my refrigerator has more chips in it than my old microwave oven did. So it 

is just becoming more and more, our cars with a lot of the devices 

in them today. 

But, again, the goal, again, is, really—I think some of the other 

comments—and I am sorry Mr. Rohrabacher left the room. I mean, 

we do have sanction availability to specific entities of concern. And 

we can’t be scared to use that. 

Export control legislation, this usually ends up happening that 

we get to this point, and we can’t argue that this is a very complicated area—we don’t want bad people to make things that will 

be of harm to the U.S. 

So we do have sanctions available that we should use and lists 

of entities of concern that we can use as well in harmony with a 

rationalized control legislation. 

Also, we touched on immigration, which is not a purview of this 

committee, obviously, but those regulations as well, again, need to 

be in harmony to prevent——

Chairman BERMAN. We do have the chair of the Immigration——

[Laughter.] 

Ms. MURPHY. Yes, I know. We visit her all the time as one of our 

employees was also impacted by being arrested and impacted by 

issues around immigration. Again, students and other people who 

come to the U.S. under temporary permissions should be able to 

stay here quicker under legal programs, such as permanent residency and citizenship. 

So, export controls should not be the focus of these other very 

complicated issues, such as sanctions and immigration. We still 

need a rationalized export control program that truly deals with 

the dual-use and commercial commodities. 

Ms. ESHOO. Thank you. 

I just have two other quick questions. Based on the testimony relating to the private sector and the university community, do you 

think, Dr. Hennessy, that they should be held to separate sets of 

export control laws and regulations? Would that help to bring a 

much clearer definition to the roles? 

Mr. HENNESSY. It probably would because obviously there are 

different concerns that——

Ms. ESHOO. Right. 

Mr. HENNESSY [continuing]. And different issues that come up. 

And I think what the universities really want to ensure is the freedom of research around basic research, fundamental research, and 

less so about applications of various pieces. 

Ms. ESHOO. Something that hasn’t come up in the testimony, we 

haven’t mentioned it here at the dais, and that is that the agencies 

64

that are charged with the responsibility of carrying out the export 

control laws that we have, State Department and the Commerce 

Department, both very different in terms of their missions. 

Is that where all of this should be? Should they continue with 

their shared responsibility? Should we be looking at a new model? 

Has anyone given any thought to this? And if so, what might you 

suggest? 

Mr. HENNESSY. I think there has been some thought about it. 

And I think what I would say is the current shared authority results in far more complexity and complication——

Ms. ESHOO. Right. 

Mr. HENNESSY [continuing]. Than is necessary, I think, to do a 

good job with export controls. 

Ms. ESHOO. Anyone else? 

Ms. MURPHY. Yes. I believe it is touched in my testimony, the 

fact that, again, our partners in the regimes don’t have the multiagency. It is kind of a one-stop shop. They do seek expertise from 

their laboratories and their experts in defense community when 

making those difficult decisions. 

Ms. ESHOO. Who has the best model, do you think? 

Mr. ROHRABACHER. Don’t say Germany. 

Ms. MURPHY. Don’t say Germany? 

Ms. ESHOO. Don’t say China. [Laughter.] 

We are going to have the Fourth of July here. 

Ms. MURPHY. Actually, I have been having very good experience 

with the Singapore government, who is not in the Wassenaar arrangement. Their Customs authority is the group that handles export licensing. And we have been having some very good discussions with them; and then maybe, secondarily, the U.K. 

We have good discussions with them when we find we need export controls from their agency. 

Ms. ESHOO. Thank you very, very much. Thank you, Mr. Chairman. 

Chairman BERMAN. Zoe Lofgren? 

Ms. LOFGREN. Well, thank you, Mr. Chairman. 

It is interesting what seems obvious and we all agree on when 

you get down to the details becomes more difficult. And I think this 

is a prime example of that. 

You know, in terms of controlling the export of material from the 

U.S., I think all of us agree that that is a burden and it is a burden 

that needs to be assumed if there is a benefit. The question I guess 

really can go, is there a benefit of any value that would justify that 

burden? 

I remember hearing Dr. Hennessy a few weeks ago saying it is 

the buy it at Fry’s standard, which is something I have actually 

used on the floor of the House. If you can buy it at Fry’s, it is too 

late. So it goes to not only what is on the list but how fast that 

list changes. 

At one point, a Sony PlayStation had too much computing power 

to be exported. And no one agreed that that was sensible. And, yet, 

it was impossible to change in any prompt way. 

So I think some of what needs to come out of this change in the 

legislation is a system that is agile and quick, I mean, that is accurate but doesn’t take forever so that the technology has moved so 

65

much faster than the government has and that also that it has to 

be some way to inform the decision-makers about the technology. 

We had big fights on MTOP standards and is that the right 

standard and supercomputers. Meanwhile the world moved past 

that into network computers. So the argument was meaningless. 

And, yet, we continue to hamper ourselves for no good reason. 

The burden did not yield the benefit and security of the U.S. So 

I am hopeful that we can come up with some way, perhaps even 

the National Academy or the Research Council, who there is no 

way the government itself is going to necessarily possess the 

breadth of that information, but there ought to be a very meaningful advisory capacity that helps us avoid those mistakes. 

In terms of—and I want to get back to the deemed export issue 

and what this means for universities today and where it leads us 

to. It has been interesting. Now, we know that if we are going to 

remain the first, we have to get the best minds in the world into 

our university systems and, to the maximum extent possible, allow 

those brightest people in the world to become Americans and be 

part of our team. That is part of our strategy for success. 

We have touched on the immigration issues that we hope to remedy, but part of that is, how do you compete for the smartest people 

in the world? 

Now, if you take a look at the universities—I mean, I don’t want 

to give a whole list but Stanford and University of California and 

Harvard and M.I.T.—and others are others—are among the top 

universities in the world. And, yet, I have noticed in terms of competition for the elite minds of the world, we are now getting competition from Australia and Britain and other places for a variety 

of reasons. 

What role does the deemed export rule have in terms of being 

able to attract the very top? I am not talking about undergraduate, 

but for your Ph.D. programs, what role does that have in the competition for the elite scientific minds in the Ph.D.-level student 

competition, Dr. Hennessy? 

Mr. HENNESSY. I would say that students don’t immediately see 

deemed export. They see the normal visa process as the thing they 

encounter. And I must say there have been a lot of improvements 

in the visa process since the difficult days that occurred as quite 

predictable after 9/11, but we would have a difficult time, student 

visas. But there has been a lot of improvement in that. 

One of the lingering difficulties around visas is that there are 

still significant problems for short-term visitors coming to attend a 

conference. The result has been that a number of agencies have 

moved major conferences outside the United States. That means A) 

we are less well-represented at that conference but also that we 

don’t send graduate students to international conferences. So our 

participation of our young people in that conference is hurt. 

The more immediate difficulty of deemed export, then, becomes 

when we are doing a research project that has the potential of a 

deemed export control around it. It simply makes it impossible for 

us to participate in that research because we would not only have 

to have the students undergo, essentially provide all of the information for a background check, international students, but they 

would be prohibited from talking to other students, they would be 

66

prohibited from having an open research group meeting, where a 

student who wasn’t cleared couldn’t come into the meeting and participate in the meeting. They couldn’t discuss it with their fellow 

students. So all of the things I think that makes the U.S. academy 

work so well in terms of its intellectual vitality would break down 

if we started doing a lot of research that involved deemed exports. 

Ms. LOFGREN. So essentially the universities are going to have 

to withdraw from an element of basic research? 

Mr. HENNESSY. That is what basically happens. We basically 

don’t do it or we at least try to limit it or we will try to find an 

industrial partner that can deal with that aspect of the research. 

One of the things that became quite a concern a few years ago 

was the notion that all uses of potentially export controlled equipment would be controlled. That would have basically prevented foreign students from walking into a large number of our laboratories 

in the biological sciences and chemistry and engineering and using 

the equipment in pursuit of perfectly legitimate basic research that 

had nothing to do with an export controlled entity, but because the 

instrument itself was export controlled, the use of the instrument 

would be covered by deemed exports. 

Ms. LOFGREN. As mentioned, this is complicated stuff, but it 

seems to me that if we want to stay number one, we have got to 

find a way to make sure that the top minds in the world want to 

come here and be on our team. And getting this right is part of 

that answer. 

So I thank you, Mr. Chairman, for your work on this. And I look 

forward to not only following it but hopefully playing a positive role 

as we put together a sensible response to these challenges. 

And I yield back. 

Chairman BERMAN. Well, thank you. I notice it is 12:30. I have 

about 3 hours of questions left, but I think I am going to try and 

contain myself and follow up with some of you as individuals on 

some of these issues. 

Do any of my colleagues want to get into—I mean, we really just, 

I think very helpfully, scratched the surface of this. I would love 

to, but this is not the last. It is the first, but it is not the last, of 

these hearings. And I thank you both for helping to, in many ways 

all of you to helping to, join the issue for us, understand some of 

the ideals we are going to have to face. 

And I do want to make special note because I think Dana’s comments about China, this will not be the last time that issue is 

raised. For one thing, Dana is going to still be around. [Laughter.] 

And, secondly, it is going to be on people’s minds. And even the 

events of the last couple of days have renewed that. Finding a sensible way through all of that and what is really effective, as opposed to what might feel good or something is very important for 

us. 

Just on the issue of how do we in the U.S.—this is not the subject of this hearing, but the Internet repressive regimes and how 

should we react to them. They are different approaches. I think it 

is something our committee has to take another look at. 

We have actually systematically questioned information for a 

number of companies, many in this area, on their concerns regarding joining the global network initiative, which advocates the comVerDate 0ct 09 2002 18:21 Mar 23, 2010 Jkt 000000 PO 00000 Frm 00070 Fmt 6633 Sfmt 6633 F:\WORK\FULL\011510\54471 HFA PsN: SHIRL
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panies adopt corporate responsibility guidelines and collaborate 

with human rights NGOs to push back on some of these Internet 

repressive regime demands. I think we have to look at this more, 

but meanwhile we are going to proceed ahead with looking at the 

Export Administration Act. 

I came to Congress in 1983 and went on the Trade Subcommittee. And, actually, you are right. The real reform of this, the 

real act was done in 1979, in Carter’s last year. We made one reauthorization effort, did some changes. It was a very arduous process 

in 1985 and ’86. 

And I remember the fight was very much defined by the notion 

that you could not export an embedded microprocessor. But the 

Counsel General for the Soviet Union could walk down the street 

to the nearest toy store in San Francisco and buy a bunch and take 

them back with him when he went home. 

But it is a different time now. And that is where your, Dr. Potter’s, I think, presence here is very important. There are still 

hugely critical national security issues we have to deal with. 

Thank you all for coming. We appreciate it. And, with that, the 

hearing will be adjourned. 

[Applause.] 

[Whereupon, at 12:32 p.m., the hearing was concluded.] 

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