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[House Document 107-38]
[From the U.S. Government Publishing Office]

                                     

107th Congress, 1st Session - - - - - - - - - - - - - House Document 107-38

 
 PERIODIC REPORT ON THE NATIONAL EMERGENCY CAUSED BY THE LAPSE OF THE 
EXPORT ADMINISTRATION ACT OF 1979 FOR AUGUST 19, 2000 TO NOVEMBER 13, 
                                 2000

                               __________

                             COMMUNICATION

                                  FROM

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

THE FINAL REPORT ON THE NATIONAL EMERGENCY DECLARED BY EXECUTIVE ORDER 
   12924 OF AUGUST 19, 1994, TO DEAL WITH THE THREAT TO THE NATIONAL 
 SECURITY, FOREIGN POLICY, AND ECONOMY OF THE UNITED STATES CAUSED BY 
  THE LAPSE OF THE EXPORT ADMINISTRATION ACT OF 1979, PURSUANT TO 50 
                             U.S.C. 1641(c)

February 6, 2001.--Referred to the Committee on International Relations 
                       and ordered to be printed
                                           The White House,
                                      Washington, February 1, 2001.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: As required by section 204(c) of the 
International Emergency Economic Powers Act (50 U.S.C. 1703(c)) 
and section 401(c) of the National Emergencies Act (50 U.S.C. 
1641(c)), I transmit herewith the final report on the national 
emergency declared by Executive Order 12924 of August 19, 1994, 
to deal with the threat to the national security, foreign 
policy, and economy of the United States caused by the lapse of 
the Export Administration Act of 1979.
            Sincerely,
                                                       George Bush.
  President's Periodic Report on the National Emergency Caused by the 
Lapse of the Export Administration Act of 1979--for August 19, 2000 to 
                           November 13, 2000

    On August 19, 1994 former President Clinton issued 
Executive Order No. 12924, declaring a national emergency under 
the International Emergency Economic Powers Act (IEEPA) (50 
U.S.C. 1701 et seq.) to address the threat to the national 
security, foreign policy, and economy of the United States 
caused by the lapse of the Export Administration Act of 1979, 
as amended (50 U.S.C. App. 2401 et seq.) (EAA) and the system 
of controls maintained under that Act. In Executive Order No. 
12924, he continued in effect, to the extent permitted by law, 
the provisions of the Export Administration Act of 1979, as 
amended, the Export Administration Regulations (15 CFR 730 et 
seq.), and the delegations of authority set forth in Executive 
Order No. 12002 of July 7, 1977 (as amended by Executive Order 
No. 12755 of March 12, 1991), Executive Order No. 12214 of May 
2, 1980, Executive Order No. 12735 of November 16, 1990 
(subsequently revoked by Executive Order No. 12938 of November 
14, 1994), and Executive Order No. 12851 of June 11, 1993. As 
required by the National Emergencies Act (50 U.S.C. 1622(d)), 
former President Clinton issued notices on August 15, 1995, 
August 14, 1996, August 13, 1997, August 13, 1998, August 10, 
1999, and August 3, 2000, continuing the emergency declared in 
Executive Order No. 12924.
    In 1996, then President Clinton issued two Executive Orders 
concerning the transfer of items from the United States 
Munitions List to the Commerce Control List. On October 12, 
1996, he issued Executive Order No. 13020 (regarding hot-
section technologies for commercial aircraft engines) and on 
November 15, 1996, then President Clinton issued Executive 
Order No. 13026 (regarding encryption products). On December 5, 
1995, he issued Executive Order No. 12981 setting forth the 
application review process. On March 31, 1999, he issued 
Executive Order No. 13117 deleting the reference to Arms 
Control and Disarmament Agency (ACDA).
    Then President Clinton issued Executive Order No. 12924 
pursuant to the authority vested in him as President by the 
Constitution and laws of the United States, including, but not 
limited to, IEEPA. At that time, he also submitted a report to 
the Congress pursuant to section 204(b) of IEEPA (50 U.S.C. 
1703(b)). Section 204 of IEEPA requires follow-up reports, with 
respect to actions or changes, to be submitted every six 
months. Additionally, section 401(c) of the National 
Emergencies Act (50 U.S.C. 1641(c)) requires that the 
President, within 90 days after the end of each six-month 
period following a declaration of a national emergency, report 
to the Congress on the total expenditures directly attributable 
to that declaration. To comply with these requirements, then 
President Clinton submitted combined activities and expenditure 
reports for the six-month periods ending February 19, 1995, 
August 19, 1995, February 19, 1996, August 19, 1996, February 
19, 1997, August 19, 1997, February 19, 1998, August 19, 1998, 
February 19, 1999, August 19, 1999, and February 19, 2000 and 
August 19, 2000.
    On November 13, 2000, then President Clinton signed into 
law H.R. 5239 providing for the extension of the EAA until 
August 20, 2001 (P.L. 106-508).
    The following report, submitted pursuant to section 204 of 
IEEPA and section 401(c) of the National Emergencies Act, 
provides information on the activities and expenditures during 
the final three-month period, from August 19, 2000 to November 
13, 2000 of the national emergency former President Clinton 
declared in Executive Order No. 12924. Detailed information on 
export control activities is contained in the most recent 
Export Administration Annual Report for Fiscal year 2000 and 
the January 2001 Report on Foreign Policy Export Controls, 
required by section 14 and section 6(f) of the Export 
Administration Act, respectively.
    Following the issuance of Executive Order No. 12924, the 
Department of Commerce continued to administer and enforce the 
system of export controls, including anti-boycott provisions, 
contained in the Export Administration Regulations (EAR). In 
administering these controls, the Department acted under a 
policy of conforming actions under Executive Orders No. 12924, 
13020, 13026, 12981, and 13117 to the provisions of the Export 
Administration Act, insofar as appropriate.
    The expenses incurred by the Federal Government in the 
three-month period from August 19, 2000 to November 13, 2000 
that are directly attributable to the exercise of authorities 
conferred by the declaration of a national emergency with 
respect to export controls were largely centered in the 
Department of Commerce, Bureau of Export Administration (BXA). 
Expenditures by the Department of Commerce for the reporting 
period are anticipated to be $9,286,000, most of which 
represents program operating costs, wage and salary costs for 
Federal personnel, and overhead expenses.
    Since the last report to the Congress, there have been 
several significant developments in the area of export 
controls:

                      A. MULTILATERAL DEVELOPMENTS

    Wassenaar Arrangement. The Wassenaar Arrangement on Export 
Controls is a multilateral regime consisting of 33 member 
countries. Its purpose is to contribute to regional and 
international security and stability by promoting transparency 
and greater responsibility in international transfers of 
conventional arms and dual-use goods and technologies.
     The United States Government has participated in 
submissions of export data made by member countries in the 
regime since the November 1996 implementation of the Wassenaar 
dual-use export control list. The Wassenaar members make dual-
use data submissions on a semi-annual basis in April and 
October.
     The Wassenaar Arrangement continues annual reviews 
of its control lists. In April and September 2000, BXA 
representatives attended Experts Group meetings to review the 
Wassenaar Arrangement's controls on conventional arms and dual-
use goods and technologies. Nearly 70 proposals were discussed 
to modify and streamline Wassenaar's Dual-Use and Munitions 
Lists, approximately 30 of which were submitted by the United 
States. The majority of the proposals were in the areas of 
electronics, computers, sensors, and machine tools. Nearly all 
proposals discussed during the April meeting required 
additional study by member countries. During the September 
Experts Group meeting, agreement was reached on a number of 
proposals for liberalizations in the area of electronics. 
However, no agreement was reached on proposals regarding 
controls on microprocessors and computers. In an attempt to try 
to resolve the differences in control levels for computers and 
microprocessors, an extraordinary meeting was held in December.
     In May and October 2000, BXA representatives 
participated in the Arrangement's General Working Group 
meetings designed to increase the general information exchange 
regarding regions and projects of concern to the United States 
(e.g., Sudan, Ethiopia and Eritrea). The groupdiscussed the 
specific information exchange on dual-use goods and technologies and 
the scope of dual-use notifications and procedures associated with 
cases requiring ``extreme vigilance.'' The group agreed to adopt a 
``best practices'' procedure for exercising extreme vigilance for Very 
Sensitive List items and to establish criteria for effective 
enforcement. Member countries are still studying U.S. proposals for 
expanding reporting of conventional arms exports, strengthening dual-
use export notification procedures by establishing a denial 
consultation procedure, and implementing controls on man-portable 
defense systems (MANPADS). The United States is continuing to work with 
interested countries to bridge the gap between dual-use items and arms 
in order to increase transparency and reduce differences in licensing 
practices.
    Missile Technology Control Regime (MTCR). The MTCR is a 
group of 32 countries that have agreed to coordinate their 
national export controls for the prevention of missile 
proliferation. Each member, under its own laws and practices, 
has committed to adhere to the MTCR Guidelines for export 
licensing policy for items found on the MTCR Equipment and 
Technology Annex.
     The MTCR held its annual Reinforced Point-of-
Contact Meeting September 9-13 in Paris, France. The agenda was 
dominated by the proposed Global Action Plan (GAP) against 
missile proliferation, a proposal that would encourage MTCR 
members and non-members alike to agree to an international 
missile nonproliferation code of conduct.
     The MTCR Plenary and associated Technical Experts 
Meeting (TEM) was held October 9-13 in Helsinki, Finland. The 
outline of the Global Action Plan to limit missile 
proliferation was established at the Plenary. Discussions on 
the specifics of the GAP will continue in future MTCR sessions. 
At the TEM, while some progress was made, final agreement could 
not be reached on measures to modify control parameters on 
certain missile-related items, and differing views also 
remained on how to define missile range and payload parameters. 
Participants agreed to continue to meet on these issues early 
this year.
    Nuclear Suppliers Group. The Nuclear Suppliers Group (NSG), 
composed of 38 member countries with the European Commission as 
a permanent observer, is a group of nations concerned with the 
proliferation of nuclear weapons. The NSG has established 
guidelines to assist member nations in administering national 
nuclear export control programs. Controls are focused on 
certain categories of goods: nuclear material, equipment and 
technology unique to the nuclear industry, and so-called 
nuclear dual-use items that have both nuclear and non-nuclear 
applications.
     The NSG Implementation Working Group, the 
Transparency Working Group, and the Dual Use Regime met in 
Vienna, Austria the week of October 16.
    The Implementation Working Group worked on a proposal to 
administratively combine the two branches of the NSG--the 
``trigger list'' items under the jurisdiction of the Nuclear 
Regulatory Commission and the ``dual-use'' items under the 
jurisdiction of the Commerce Department. While combining the 
administrative activities of the NSG related to these two 
branches will provide less duplication of effort on the part of 
those countries seeking membership, it will have no effect on 
how the United States controls NSG items.
    The Transparency Working Group made some progress in 
developing a proposal for the establishment of an Internet web 
site; the German Government, with the technical assistance of 
the European Community, will establish an official NSG web site 
in 2001.
    The Dual Use Regime meeting addressed member concerns 
regarding the proposal by one member to supply nuclear fuel to 
power plant reactors in India. Thus far, NSG members have 
refrained from making such exports to India as a result of 
India's detonation of a nuclear device in May 1998. Members 
agreed to formally consider the proposal to supply nuclear fuel 
to India.
    Australia Group. The Australia Group (AG) is a multilateral 
export control regime that seeks to impede the proliferation of 
chemical and biological weapons through the harmonization of 
export controls, an exchange of information on global 
proliferation activities, and outreach to nonmembers. The 32 
member countries meet annually and communicate between sessions 
to review and refine the list of controlled chemicals, 
biological agents, and related equipment and technology.
     Turkey and Cyprus became the newest members of the 
Australia Group (AG) at the Plenary held in Paris, France, on 
October 2-5. The U.S. delegation took the opportunity offered 
by the plenary to present U.S. positions in support of (1) the 
strengthening of export controls on graphite composite chemical 
manufacturing equipment, centrifugal separators, and 
impermeable protective suits; and (2) the removal of controls 
on medical diagnostic, analytical and food testing kits. At the 
request of the AG, the United States also presented a paper on 
export controls on intangible technology for future discussion.

             B. ENCRYPTION/HIGH PERFORMANCE COMPUTER POLICY

    Encryption. During the period August 20 to November 13, 
2000, BXA carried out a number of activities to implement 
revisions to the Clinton Administration's encryption policy. 
These activities included publishing new rules, meeting with 
industry representative and technical advisory committees, and 
working with interagency groups on emerging encryption policy 
initiatives.
     The Administration implemented significant updates 
to encryption export controls in January and October 2000. The 
policy continues a balanced approach by streamlining export 
controls while protecting critical national security interests. 
The most significant change in the October 19 rule is that a 
license is no longer required for exports of encryption items 
and technology to the European Union and several other major 
trading partners. The update is consistent with recent 
regulations adopted by the European Union; thus assuring 
continued competitiveness of U.S. industry in international 
markets. Other changes include streamlined export provisions 
for most mass-market products, beta test software, products 
that implement short-range wireless encryption technologies 
(e.g., Bluetooth), products that enable non-U.S.-sourced 
products to operate together and technology for standards 
development. Additionally, certain U.S.-origin encryption 
products incorporated into foreign products do not require a 
U.S. export license. Post-export reporting is no longer 
required for products exported by U.S.-owned subsidiaries 
overseas, or for generally available software pre-loaded on 
computers or handheld devices.
     The October update to encryption policy reflects 
the invaluable and ongoing dialogue between the Interagency 
Working group on Cryptography (IWG) and various industry, 
privacy advocates, and technical advisory groups. Through 
consultation with groups such as the President's ExportCouncil 
Subcommittee on Encryption (PECSENC), Regulations and Procedures 
Technical Advisory Committee (RPTAC), Alliance for Network Security 
(ANS), Americans for Computer Privacy (ACP), and Computer Systems 
Policy Project (CSPP), the new rules take into account technology 
trends and market realities which, if not addressed as a matter of 
policy, would only serve to disadvantage U.S. industry and undermine 
the national interest.
     To support and explain U.S. encryption policy in 
the international arena, BXA participated in several Wassenaar 
Arrangement working group meetings to discuss U.S. policy and 
our proposal to release encryption software considered ``in the 
public domain.'' Wassenaar members also discussed proposals to 
ease or lift key length restrictions for mass market products. 
BXA also held encryption export control policy discussions with 
other foreign delegations on a bilateral basis.
     BXA continued, during the reporting period, to 
educate exporters and the general public on the goals of the 
Clinton Administration's updated encryption policy, and advise 
the public on how to obtain export authorization through 
licensing and classification requests. BXA presented 
Information Technology workshops both domestically and 
internationally in Chicago, Illinois, Stockholm, Sweden and The 
Hague, Netherlands. Through regular meetings with U.S. 
companies and web site updates, BXA provides exporters with 
practical guidance concerning encryption export control policy 
and procedures.
    High Performance Computers. During the reporting period, 
BXA engaged in various activities to implement the Clinton 
Administration's High Performance Computer (HPC) export control 
policy, including updating export controls on HPCs, studying 
alternative methods for controlling HPCs, meeting with industry 
counterparts to assess their needs, and working on developing 
bilateral and multilateral relationships with certain countries 
to ensure appropriate safeguards are attached to the export of 
HPCs.
     On October 13, 2000, BXA published a rule in the 
Federal Register implementing the Clinton Administration's 
August 3 announcement updating the HPC export control policy. 
The rule raised the upper level for License Exception CTP for 
Computer Tier 2 countries from 33,000 to 45,000 Millions of 
Theoretical Operations Per Second (MTOPS), and for Computer 
Tier 3 countries, from 20,000 to 28,000 for both civil and 
military end users. This rule removed the distinction between 
civil and military end-users and end-uses in Computer Tier 3 
countries. Additionally, Argentina was moved form Tier 2 to 
Tier 1.
     The October 13, 2000, rule also raised the 
National Defense Authorization Act (NDAA) notification and post 
shipment reporting levels for HPC exports to Computer Tier 3 
countries from 12,500 to 28,000 MTOPS, effective February 26, 
2001. Additionally, the rule moved Estonia from Tier 3 to Tier 
2 effective December 28, 2000.
     The Information Security Technical Advisory 
Committee (ISTAC) continued to study alternative control 
parameters for HPCs. CTP-based control levels need to be 
continually updated in order to keep up with the rapid 
technological advances in the computer industry. The need for 
these significant adjustments calls into question the viability 
of the current approach for determining HPC control levels. For 
this reason, alternative control parameters that would provide 
the flexibility necessary to accommodate future advances in HPC 
and microprocessor technology are being explored.
     BXA participated in Wassenaar Arrangement working 
group meetings in September. BXA presented a proposal to change 
multilateral controls to match U.S. controls. BXA also engaged 
in bilateral negotiations with other HPC producing countries to 
ensure that appropriate safeguards and licensing mechanisms are 
in place to avoid exports or transfers to countries of concern 
and proliferation entities.

             C. BILATERAL COOPERATION/TECHNICAL ASSISTANCE

    As part of the Clinton Administration's effort to encourage 
other countries to strengthen their export control systems, the 
Department of Commerce and other agencies conducted a wide 
range of discussions with a number of foreign countries.
    Hong Kong. Under the Hong Kong Policy Act of 1992, the 
United States Government will continue its export licensing 
treatment that was in effect before the People's Republic of 
China regained control of Hong Kong, as long as Hong Kong 
maintains an effective and autonomous export control program. 
BXA aggressively monitors the status of Hong Kong's post-
reversion export control program to ensure that it continues to 
be effective and autonomous from Beijing. By openly and 
vigilantly observing Hong Kong's program, BXA supports Hong 
Kong's efforts to maintain the separation of it's export 
control system from that of the rest of China.
    India. BXA officials concluded successful bilateral talks 
with the Indian Government in New Delhi during August 7-11, 
2000. During the talks, the Indian Government indicated its 
interest in participating in several of the export control 
workshops that the United States Government proposed. The first 
of these programs, an export licensing workshop, was held on 
October 16-18, 2000, in Washington. The Indian delegation 
visited BXA licensing divisions and heard presentations by BXA 
attorneys, export licensing officials, export enforcement 
personnel, representatives of BXA industry advisory committees, 
and representatives form other agencies involved in dual-use 
licensing.
    Asia. BXA officials attended the annual Asian Export 
Control Seminar in Tokyo in November 2000. Sponsored by Japan, 
the United States, the United Kingdom and Australia, the 
conference was attended by representatives of Asian 
governments. The purpose of the annual seminar is to provide 
information on export controls to Asian governments, some of 
which have just begun to develop comprehensive systems. BXA 
plans to participate in the next annual meeting in Tokyo in 
March 2001.
    China. BXA hosted the first Sino-American export control 
seminar with China's Ministry of Foreign Trade and Economic 
Cooperation (MOFTEC) on October 26-27 in Shanghai, PRC. The 
seminar covered various legal and procedural aspects of the 
U.S. dual-use export control system. Participants included 180 
Chinese and foreign business representatives based in China as 
well as approximately 20 Chinese Government officials. After 
the seminar, BXA held bilateral talks with Chinese officials on 
export control policies and procedures, including the schedule 
of future cooperative events and end-use visits. The Chinese 
Government agreed that bilateral exchanges have been fruitful 
and should continue in 2001.
    South Korea. October 31, 2000, BXA officials participated 
in a seminar hosted by the U.S. Foreign Commercial Service and 
the American Chamber of Commerce in South Korea on export 
control policies and procedures. In addition to a general 
overview of recent changes and initiatives within BXA and 
theEAR, BXA officials spoke about the recent policy changes towards 
North Korea.
    Israel. On September 17-21, 2000, BXA participated in a 
visit to Israel to review bilateral cooperation on export 
control issues. Members of the U.S. delegation met with senior 
officials from the Israeli Ministries of Defense and Industry 
and Trade, and with representatives from Israeli and U.S. 
defense and high-technology companies. BXA officials conducted 
a seminar on U.S. export control issues for Israeli industry. 
During the visit, the Israelis pledged to strengthen their own 
export control practices and to continue to adhere with the 
multilateral export control regimes.
    Nonproliferation and Export Control International 
Cooperation. During the period August 20 through November 13, 
2000, BXA's Office of Nonproliferation and Export Control 
International Cooperation (NEC) hosted, participated in, and/or 
coordinated seven technical exchanges on export controls, as 
well as a multilateral conference on export controls in Oxford, 
England, for 32 countries. These programs sought not only to 
familiarize the governments of Central and Eastern Europe, the 
Baltic and the Balkans, the Caucasus, Canada, Hong Kong, Japan, 
Kazakhstan, Uzbekistan, and Turkey with the major elements 
comprising an export control system that meets international 
standards for effectiveness, but also to assist the governments 
in developing and strengthening their own national export 
control systems. These elements involve five functional areas: 
the legal and regulatory framework necessary for an effective 
export control system, licensing procedures and control lists, 
enforcement mechanisms, industry-government relations, and 
system administration and automation support. Programs 
conducted during this period also included special activities 
and other multilateral conferences that related to NEC 
objectives. These programs have contributed to a reduction of 
the proliferation threat from and through the participating 
countries by strengthening these countries' national export 
control systems.

              D. REGULATORY ACTIONS: PUBLISHED AND PENDING

    Crime control items. On September 13, 2000, BXA published a 
rule that expanded controls on exports of restraint devices, 
such as handcuffs, and discharge type arms, such as stun guns. 
BXA maintains export controls on these and other crime control 
items in support of U.S. foreign policy to promote the 
observance of human rights throughout the world. Prior to 
September 13, 2000, these items did not require a license for 
export or reexport to Australia, Japan, or New Zealand, or to 
NATO countries. A license is now required for all destinations, 
except Canada. This rule also modified BXA's license 
application review policy for crime control items to include 
consideration of whether there is civil disorder in the country 
or region to which crime control items are proposed to be 
exported.
    Australia Group. On October 3, 2000, BXA published a rule 
that implemented several export control changes agreed upon 
during the October 1999 Australia Group consultations. The 
Australia Group (AG) is a multilateral forum in which 30 
participating countries have agreed to maintain export controls 
on a list of chemicals, biological agents, and relevant 
equipment and technology that could be used in the production 
of chemical or biological weapons. The October 3, 2000, rule 
clarified the scope of controls that apply to ricin, saxitoxin, 
toxic gas monitoring systems, and cross-flow filtration 
equipment. The rule also authorized exports to most 
destinations, without a license, of certain medical products 
containing botulinum toxins and certain diagnostic and food 
testing kits that contain AG-controlled toxins. Finally, the 
rule implemented an AG agreement on how to deal with mixtures 
containing trace and unintended quantities of AG-controlled 
chemicals that are also identified as Schedule 1 chemicals 
under the Chemical Weapons Convention (CWC). Mixtures that 
contain less than 0.5% aggregate quantities of Schedule 1 
chemicals as unavoidable by-products or impurities do not 
require a license, provided that the Schedule 1 chemicals have 
not been intentionally produced or added.
    Serbia. On October 12, 2000, in the wake of Vojislav 
Kostunica's victory in the Serbian elections, the United States 
lifted certain economic sanctions on Serbia. Initially, this 
sanctions-easing initiative allowed U.S. commercial air 
carriers to fly in and out of Belgrade, and removed the ban on 
exports of petroleum and petroleum products to Serbia. In a 
concerted effort to continue targeted measures against Slobodan 
Milosevic and his close associates, however, the U.S. action 
maintained sanctions against exports to two Serbian oil 
companies (Jugpetrol and NIS-Nafta) and the Serbian national 
airline (Jugoslovenski Aerotransport aka JAT).
    In addition to the sanctions-easing actions (air travel and 
oil export bans lifted) related to the October 12 announcement, 
Commerce, Treasury and State worked to implement the removal of 
sanctions and return Serbia to the export control treatment it 
enjoyed prior to April 30, 1999. Pending publication of this 
rule, BXA changed its licensing policy on exports to Serbia 
from general denial to a case-by-case review.
    High Performance Computers. On October 13, 2000, BXA 
published a rule implementing the August 3 White House 
announcement updating the HPC export control policy (see 
detailed discussion under section B. above).
    Encryption. BXA published the Clinton Administration's 
second update of its encryption policy during 2000 on October 
19, 2000 (see detailed discussion under section B. above).

                     E. EXPORT LICENSE INFORMATION

    During the reporting period, BXA continued to receive many 
requests for export licensing information through the Freedom 
of Information Act and through discovery requests during 
enforcement proceedings. Under section 12(c) of the Export 
Administration Act, BXA continued to withhold from public 
disclosure information obtained for the purpose of 
consideration of, or concerning, export license applications, 
unless the release of such information was determined by the 
Under Secretary to be in the national interest, pursuant to the 
directive in Executive Order No. 12924 to carry out the 
provisions of the Export Administration Act, to the extent 
permitted by law, notwithstanding an adverse decision regarding 
BXA's authority to withhold such information.

                         F. EXPORT ENFORCEMENT

    Export Enforcement continued, through its three offices, 
its programs of prevention of diversions, investigation and 
enforcement of the export control provisions of the Export 
Administration Regulations, and enforcement of the antiboycott 
provisions of the Export Administration Regulations.

OFFICE OF ENFORCEMENT ANALYSIS

    Preventive/Compliance Activities. The Office of Enforcement 
Analysis (OEA) prevention activities included designing a 
systematic plan to target and prioritize pre-license checks 
(PLCs) and post-shipment verifications (PSVs) conducted by 
representatives of U.S. diplomatic posts. The purpose of the 
plan is to ensure that the PLC and PSV programs, which are 
coordinated by BXA's Export Enforcement, reflect the full 
rangeof U.S. export control concerns and use available resources as 
effectively as possible.
    PLCs validate information on export license applications 
including the reliability of end-users. In contrast, PSVs 
strengthen assurances that exporters, shippers, consignees, and 
end-users comply with the terms of export licenses and 
licensing conditions that are intended to deter diversions from 
approved end-users and end-uses of dual-use exports. The 
overall objective for conducting PLCs and PSVs is to detect and 
prevent the illegal transfer of controlled U.S.-origin goods 
and technology.
    Another major preventive enforcement activity of OEA is the 
compiling of information regarding parties of export control 
concern and maintaining these names on Export Enforcement's 
watch list. All of the parties included on this watch list are 
screened against names listed on export license applications 
received by BXA. OEA analysts review all applications in detail 
that include a match against a party on the watch list to 
assess diversion risks, identify potential violations, and 
determine the reliability of proposed end-users of controlled 
U.S.-origin commodities or technical data.
    NDAA Activities. OEA has responsibility for implementing 
the High Performance Computer post-shipment verification and 
annual report requirements of the National Defense 
Authorization Act for FY1998. OEA tracks all post-shipment 
reporting on exports of HPCs over a set operating level to 
``Tier 3'' counties, as defined by the NDAA, and oversees the 
post-shipment verifications performed on such exports. OEA has 
the responsibility for reporting the total number of HPCs 
exported and the number of NDAA HPC post-shipment verifications 
performed to Congress in an Annual Report.
    Visa Review Program. During the reporting period, OEA 
continued restructuring its Visa Application Review Program to 
prevent unauthorized access to controlled technology or 
technical data by foreign nationals visiting the United States. 
The Office has developed new criteria and thresholds for 
evaluating visa applications for targeting purposes. OEA has 
narrowed its focus and concentrated on specific products most 
often used in weapons of mass destruction projects. OEA's 
evaluation and analysis of visa application cable traffic 
involves preventive enforcement efforts such as recommending 
denial of certain visas and the referral of enforcement leads 
to Office of Export Enforcement (OEE) field offices for 
possible case development. In some instances, OEE Special 
Agents uncovered possible visa fraud on the part of the foreign 
applicant. These findings were forwarded to OEA and submitted 
to the State Department's Visa Fraud Unit for further 
investigation and action during the reporting period.
    Shipper's Export Declaration Review Program. OEA 
systematically reviews Shipper's Export Declarations (SEDs) 
filed by exporters. Using a computerized index of data fields, 
OEA produces a list of SEDs targeted for closer review. These 
reviews focus particularly on licensed and license exception 
shipments, shipments bound for destinations of concern, and 
shipments of strategic commodities of proliferation concerns. 
Through these reviews, OEA identifies SEDs that may indicate 
violations and refers them to OEE special agents for further 
enforcement actions.

OFFICE OF EXPORT ENFORCEMENT

    The Office of Export Enforcement opened 187 and closed 372 
investigations during the reporting period.

Office of Antiboycott Compliance Activities

    The Office of Antiboycott Compliance continued to supply 
the State Department with information on boycott requests 
received by U.S. persons. The State Department uses this 
information in its discussions with boycotting countries 
concerning ending the Arab boycott of Israel. The Office of 
Antiboycott Compliance opened four investigations during the 
reporting period.

                                
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