EXPORT CONTROLS:

National Security Risks

and Revisions To

Controls On Computer

Systems

Statement of Harold J. Johnson, Associate Director, International Relations

and Trade Issues, National Security and International Affairs Division

United States General Accounting Office

GAO Testimony

Before the Committee on Armed Services, U.S. Senate

For Release

On Delivery

At 9:30 AM

March 23, 2000

GAO/T-NSIAD-00-139
1

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss export controls for high performance computers.

My testimony is based on work that we have conducted over the past 3 years, particularly

the reports we issued in 1998 and 1999.1

U.S. policy with respect to the export of sensitive technology, including computers, is to

seek a balance between the U.S. economic interest in promoting exports with its national

security interests in both maintaining a military advantage over potential adversaries and

denying the spread of technologies used in developing weapons of mass destruction. The

United States has long controlled the export of high performance computers2 to sensitive

destinations, such as Russia and China. These computers have both civilian (dual use)

and military applications and technological advancements in computing power have been

rapid. The Department of Commerce has primary responsibility for managing the

licensing of these dual-use items and weighing the promotion of commercial interests in

exporting items against the protection of national security interests. For the past several

years, there has been continuing congressional concern about and debate over whether

our national security is being harmed by relaxing export controls on high performance

computers and over the rationale for subsequent revised controls.

Today, I will discuss our observations about how the executive branch (1) assesses the

national security risks associated with the export of high performance computers going to

countries of concern and (2) determines when the exports of computers at existing

performance levels can no longer be controlled.

RESULTS IN BRIEF

The executive branch has not yet clearly articulated the specific national security interests

to be protected in controlling the export of computers at various performance levels, nor

has it stated how countries of military concern could benefit from using such computers.

Without a clear statement of these interests, it is unclear how the executive branch

determines what are militarily critical applications that may affect U.S. national security.

In addition, the executive branch has revised export controls on computers because it

believes that these machines, at the previously approved levels, had become so widely

available in the market that their export is uncontrollable. However, we could not assess

the justification for the July 1999 export control levels because the terms “widely

available” and “uncontrollable” used to explain the policy change are not clearly defined

and are not found in law or regulation.

1

Export Controls: Information on the Decision to Revise High Performance Computer Controls

(GAO/NSIAD-98-196, Sept. 16, 1998) and Export Controls: Statutory Reporting Requirements for

Computers Not Fully Addressed (GAO/NSIAD-00-45, Nov. 5, 1999)

2 The Commerce Department considers a high performance computer to be one that exceeds a defined

performance threshold, thus requiring an export license.
2

BACKGROUND

The U.S. export control system is about managing risk; exports to some countries involve

less risk than to other countries and exports of some items involve less risk than do other

items.

Under U.S. law, the President has the authority to control and require licenses for the

export of items that may pose a national security risk or foreign policy concern. The

President also has the authority to remove or revise those controls as U.S. concerns and

interests change. The U.S. export control system is administered by two agencies. The

Commerce Department, through its Bureau of Export Administration, licenses sensitive

dual-use items (items with both civil and military uses) under the Export Administration

Act of 1979, as amended (P.L. 96-72).3 The State Department, through its Office of

Defense Trade Controls, licenses munitions items under the Arms Export Control Act

(P.L. 90-629). Since the end of the Cold War, the number of items subject to export

controls has been significantly reduced. For example, while 10 years ago, the Commerce

Department reviewed about 100,000 license applications annually, today that figure is

down to about 12,000 applications per year.

The U.S. government controls the export of high performance computers to certain

countries based on foreign policy and/or national security concerns. High performance

computers and related components (such as, processors) are controlled under the Export

Administration Act, as continued by executive order, and the Export Administration

Regulations. Executive Order 12981 authorizes the Departments of State, Energy, and

Defense to review export applications and to consider export control policy.

Since 1993, the President has revised U.S. export control requirements for high

performance computers four times, including a revision announced in February 2000. A

revised export control policy implemented in January 1996 removed license requirements

for most exports of computers with performance levels up to 2,000 millions of theoretical

operations per second (MTOPS)4 (an increase from 1,500 MTOPS). The policy also

organized countries into four computer "tiers," with each tier after tier 1 representing a

successively higher level of concern related to U.S. national security interests.5 A dualcontrol system was established for the 50 tier 3 countries, including China, Russia, India,

and Israel: a license for potential military end-users is required at a lower MTOPS

threshold than the threshold for civilian end-users. High performance computer exports to

3 The Export Administration Act terminated on August 20, 1994. Pursuant to Executive Order 12924,

issued on August 19, 1994 (59 Fed. Reg. 43437) the President, to the extent permitted by law, extended the

application of the act indefinitely. In addition, the Nuclear Regulatory Commission licenses exports of

nuclear reactors. Dual-use nuclear exports are licensed by Commerce in consultation with a number of

other agencies.

4 High performance computers are regulated based on their composite theoretical performance as measured

by MTOPS.

5 The policy placed no license requirements on tier 1 countries, primarily those in Western Europe and

Japan. Exports of high performance computers above 10,000 MTOPS to tier 2 countries in Asia, Africa,

Latin America, and Central and Eastern Europe continued to require licenses.
3

countries in tier 4 (for example, Iran, Iraq, and Libya) were essentially prohibited because

of national security and foreign policy concerns about these countries.

The Fiscal Year 1998 National Defense Authorization Act (P.L. 105-85) modified the

policy for determining whether an individual export license is needed and required

exporters to notify the Commerce Department of any planned sales of computers with

performance levels greater than 2,000 MTOPS to tier 3 countries. This level subsequently

was increased to 6,500 MTOPS effective January 2000. If the Department of Commerce,

Defense, State, or Energy, each of which reviews these notifications, objects to the export

within 10 days, the exporter must then submit a license application.6

In addition, the act required the President to submit a report to Congress justifying any

changes to the control levels for the notification process for the export of high

performance computers to tier 3 countries. The act requires the report, at a minimum, to

(1) address the extent to which high performance computers with capabilities between the

established level and the new proposed level of performance are available from other

countries, (2) address all potential uses of military significance to which high

performance computers at the new levels could be applied, and (3) assess the impact of

potential military uses on U.S. national security interests. We reviewed the report

submitted by the President on July 27, 1999, proposing changes to the current export

control levels for high performance computers. We reported in November 1999 that the

report did not fully satisfy the reporting requirements of the act.7 In particular, it did not

assess the impact of the military uses of high performance computers on U.S. national

security concerns.

On February 1, 2000, the President announced changes to the current export control

levels for high performance computers. These changes included raising the performance

threshold for computer exports that require a license for (1) tier 2 countries from 20,000

MTOPS to 33,000 MTOPS and (2) tier 3 countries from 6,500 MTOPS to 12,500

MTOPS for military end-users and from 12,300 MTOPS to 20,000 MTOPS for civilian

end-users. The announcement indicated that the changes for tier 3 military end-users are

to become effective in 6 months, while the changes for tier 3 civilian end-users become

effectively immediately. The changes also raised the performance threshold for computer

exports that require a notification to Commerce for tier 3 countries from 6,500 MTOPS to

12,500 MTOPS. By law, Congress has 6 months to review this decision, after which the

change in notification levels will go into effect.

ASSESSING NATIONAL SECURITY RISKS FOR

COMPUTER EXPORTS

Under U.S. export control policy, an analysis of establishing or revising controls on

computers and other sensitive commodities generally is made in the context of the U.S.

6 In addition to reviewing notifications, State, Defense, and Energy also review export license applications

that are submitted directly to Commerce.

7 Export Controls: Statutory Reporting Requirements for Computers Not Fully Addressed (GAO/NSIAD00-45, Nov. 5, 1999)
4

desire to limit the spread of technologies useful in both developing weapons of mass

destruction and protecting the military capabilities of the United States and its allies. In

many ways, the threat posed by an export is a relative one; that is, the threat depends on

the U.S. capability to respond to enhancements the export would bring to the potential

adversary’s military capabilities. In order to maintain military superiority, the United

States needs not only to control the spread of militarily sensitive technologies, but also to

invest in leading edge technologies. However, this investment leads to the leading

technologies of today becoming the “mass market” items in the future. Therefore, the

United States must also quickly incorporate existing technologies into current and next

generation weapon systems and manage the release of technology into the world market

to “stay ahead of the curve.”

While there appears to be general consensus that controlling high performance computers

at some level is important to maintaining U.S. national security, DOD and the executive

branch have not clearly articulated the specific national security interests to be protected

in controlling the export of computers at various performance levels. In addition, they

have not stated how countries of concern could benefit from using such computers.

Without a clear analysis and explanation of the national security interest in controlling

the export of high performance computers, the U.S. government cannot determine (1)

what militarily critical computer applications need to be controlled or (2) the most

effective way of implementing computer export controls. If such an analysis were made,

it might also lead to a conclusion that the current reliance on MTOPS as the sole measure

of a computer’s sensitivity would no longer be appropriate. Indeed, with the rapid

changes in computer architectures and the growth of what is called “distributed”

computing,8 new approaches may be necessary to protect the national security interests in

limiting potential adversaries’ use of such machines in their research and development

programs and their deployed weapon systems.

To illustrate the importance of identifying potential national security risks of computer

exports, let me briefly highlight for you some of the military applications of high

performance computers that have been identified in some Commerce- and Defense

Department-sponsored studies. These studies were conducted in 1995 and 1998 to

support decisions on revising export controls over these computers.9

 The Joint Strike Fighter has been designed using computers with 4,000 to 6,000

MTOPS of capability. Computers in this range now can be exported to military endusers in Russia or China without a license. Licenses for military end-users in these

countries are required only for computers with performance levels above 6,500

MTOPs.

8 “Distributed” or “parallel processing” means breaking computational problems into many separate parts

and having a large number of processors tackle those parts simultaneously. Greatly increased processing

speed is achieved largely through the sheer number of processors operating simultaneously, rather than

through any exceptional power in each processor.

9 Building on the Basics: An Examination of High-Performance Computing Export Control Policy in the

1990s (1995) and High-Performance Computing, National Security Applications, and Export Control

Policy at the Close of the 20th Century (1998).
5

 Computers at 8,000 to 9,000 MTOPs are used for algorithm development for

shipboard infrared search and track systems and modeling of submarine bottom

designs for shallow water operations. While these computers currently require a

license for export to military end-users in tier 3 countries, they would not be

controlled under newly revised controls announced by the President on February 1 of

this year. Under these new controls, only computers with more than 12,500 MTOPs

that are to be exported to military end-users in countries like Russia and China would

require a license.

 Designing submarines involves simulations of transmitting sounds through structures

and in water, which are conducted at computer performance levels that are only

slightly greater than the thresholds for which tier 3 countries may receive computer

exports without a license. A Commerce- and Defense Department-sponsored study

identified the use of a 21,000 MTOPS machine for this purpose. Some other related

applications, such as acoustic sensor development and associated acoustic modeling,

are executed on computers with performance only slightly greater than 20,000

MTOPS.

More generally, the 1995 Commerce- and Defense-sponsored study stated that there are

research, development, test and evaluation applications at or above the 20,000 MTOPS

level of great national security significance, the proliferation of which should be strictly

controlled. With the executive branch’s February export control change, high

performance computers up to 20,000 MTOPS will be available to countries like Russia

and China without a license. The appendix provides additional information on selected

military applications for high performance computers.

DETERMINING WHEN COMPUTER EXPORTS

CAN NO LONGER BE CONTROLLED

The previous examples illustrate the basis of our 1998 report’s conclusion that the

executive branch should clearly articulate the specific national security interests in

limiting computer exports to potential adversaries when revising controls on high

performance computers. In this regard, our September 1998 report10 recommended that

the Secretary of Defense assess and report on the national security threat and proliferation

impact of U.S. exports of high performance computers to countries of national security

and proliferation concern. We specified that, at a minimum, the assessment should

address (1) how and at what performance levels countries of concern use these computers

for military modernization and proliferation activities, (2) the threat of such uses to U.S.

national security interests, and (3) the extent to which the export of such machines is

controllable. The President’s July 1999 report justifying changes to the control levels for

computers did report that computers at all computing levels are important from the lowest

performance levels to the highest. This conclusion, however, is general and was not

supported by the level of analysis we recommended in our report, and does not address

10 Export Controls: Information on the Decision to Revise High Performance Computer Controls

(GAO/NSIAD-98-196, Sept. 16, 1998).
6

the serious concerns about the growing availability of high performance computers raised

in the Commerce- and Defense Department-sponsored study issued in November 1995.

Although the examples just provided use MTOPS, this should not be construed to mean

that MTOPS is the benchmark that should be used. Such a measure does not take into

account advances in computer architectures that now allow the development of a largescale, massively parallel computing resource from a cluster of commodity computing and

networking components. In essence, by combining a number of readily available

computers and networking components that would not require an export license, an

organization can produce a very high powered computing resource. The operating

system software that is necessary to utilize this resource is readily available from the

Internet. However, a high performance computer by itself does not convey the ability to

solve complex problems because application software is also necessary to conduct the

proper analyses.

The task I have just described for the executive branch is not an easy one. It involves

addressing difficult issues in an area of rapid technological change. Questions about the

use of technology, the computer market, and DOD’s own acquisition programs must be

answered. Some key questions include the following: Does U.S. national security

interest include maintaining a relative computing power advantage in deployed weapon

systems (for example, air defense radar or command and control systems)? Are different

strategies necessary to respond to the threats posed by the use of high performance

computers in research and development and in deployed weapon systems? Will the

availability of high performance computers help other countries develop and deploy new

weapons or allow them to counter U.S. superiority in certain military applications? Does

the growth of distributed computing make the use of MTOPS obsolete as an export

control measure by which to restrict computer exports?

Before leaving this topic, I want to point out that a critical analysis of national security

applications of concern may lead to conclusions that are very different regarding export

control levels than are currently in place or being proposed by the executive branch.

Indeed, DOD may conclude that significant national security concerns involve computer

performance levels that are higher than current control levels.

While the executive branch has not clearly articulated the national security interests in

controlling high performance computers, it has developed a general explanation for its

export decontrol decisions. In short, these decisions are based on conclusions that these

computers are becoming widely available and, therefore, are uncontrollable.

It is important to note that the President’s 1999 report to Congress concluded that there

are militarily significant applications in the new control range, and, if not for their

widespread availability, these applications would need to be controlled. These

applications include advanced aircraft design, antisubmarine warfare sensor development,

and radar applications. Consequently, the new control levels were not based on an

assessment that these higher computing performance levels do not involve national
7

security applications but rather that computers in this performance range are so widely

available that they are uncontrollable.

Our November 1999 review of the changes in export control levels indicated that the

administration’s conclusions that the capabilities of high performance computers and

related components, from both domestic and foreign sources, are generally increasing

were supported because the United States does not generally control the export of

computer processors and components. However, most sources of this supply are U.S.

companies. Our earlier 1998 review reported that subsidiaries of U.S. computer

manufacturers dominate the overseas high performance computer market and they must

comply with U.S. controls. The 1998 study sponsored by DOD and Commerce11

similarly found that the United States dominates the international computer market, at

least in the mid- and high-range performance categories. Under current regulations,

computer processors that perform up to 3,500 MTOPS can be directly exported to civilian

end-users in many tier 3 countries including China and Russia. Exports of processors to

such users in many other tier 3 countries, such as Israel and Saudi Arabia, are not subject

to any MTOPS limit that requires a license. Exports of other key components for

computer systems with four and eight processors are also not generally controlled; these

parts can be shipped to tier 3 countries for civilian end-users, which could then use them

to support the assembly of computers.

The administration’s latest changes in the control levels for high performance computers

were based on a determination that high performance computing capability is becoming

increasingly available. For example, the 1999 changes in control levels were based on

the conclusion that these capabilities are widely available and are therefore

uncontrollable. The President’s July 1999 report to Congress explaining these changes

stated that due to the rapid advances in processor speeds and related technologies, foreign

countries can obtain high performance computers directly or indirectly from a vendor, a

reseller, or another third party or assemble such a computer using U.S. processors and

components. According to administration officials, the specific export control levels

announced in July 1999, and that went into effect in January 2000 for tier 3 military endusers, were based on the expected performance levels of computers using four and eight

Intel Pentium processors that are projected to be on the market in July 2000.

While we found evidence to support the report’s conclusion that computers with greater

capabilities and related components are becoming increasingly available, we could not

assess the administration’s determination that computers rated below the new control

levels are so widely available that they are effectively uncontrollable. An assessment of

controllability involves critical evaluations of when and in what quantities an item should

be considered so widely available as to be uncontrollable, and is dependent upon the

resources applied by government and industry to control such exports. However, “widely

available” and “uncontrollable” are terms not defined in current export control laws or

regulations. Defense and Commerce Department officials stated that the analysis they

prepared in support of the President’s report relied on definitions that were developed in

11 High-Performance Computing, National Security Applications, and Export Control Policy at the Close of

the 20th Century (1998).
8

1995 and 1998 studies they jointly sponsored. However, the discussion of the terms in

these studies is general and without measurable criteria. Further, there is no mention in

the President’s 1999 report to Congress justifying the announced computer control

revisions that defines how these concepts have been applied in setting the new export

control levels. Thus, except to agree with the general conclusion in the President’s report

that the availability of computing power in the commercial marketplace is increasing, we

could not determine if the executive branch is correct in concluding that export controls

had to be relaxed for high performance computers. Consequently, our 1999 report

recommended that the administration develop specific criteria defining both “widely

available” and “controllability.”

This discussion brings me to one final point. The Senate bill (S. 1712) to establish a new

Export Administration Act uses the term “mass market status” as one determinant for

relaxing export controls. This term is defined very similarly to how the administration

appears to use the term “widely available” as it relates to high performance computers.

Both terms imply that an item is so commercially available that it cannot be controlled,

but without providing the quantifiable measures necessary to make such an analysis. S.

1712 does provide a number of general criteria that might be helpful in making decisions

about controlling the export of high performance computers. However, in developing the

implementing regulations, Commerce may wish to provide more objective and empirical

criteria to use in making these decisions. If it does not, then when this rather subjective

standard is applied in the future to items controlled under the act, it will be difficult to

assess whether this standard was applied appropriately.

-----

Mr. Chairman, this concludes my prepared testimony. I would be happy to respond to

any questions you or other members may have.

CONTACT AND ACKNOWLEDGEMENT

For future contacts regarding this testimony, please contact Harold J. Johnson at (202)

512-4128. Individuals making key contributions to this testimony included, F. James

Shafer and Jeffrey D. Phillips.
9

APPENDIX PERFORMANCE LEVELS OF COMPUTERS THAT SUPPORT SELECTED

APPLICATIONS OF MILITARY SIGNIFICANCE

Computer performance level

(MTOPS) Applications

4,000 to 6,000 Joint Attack Strike Aircraft design; nonacoustic antisubmarine

warfare sensor development; advanced synthetic aperture radar

computation

8,000 to 9,000 Bottom-contour modeling of shallow water in submarine design;

some synthetic aperture radar applications; algorithm

development for shipboards’ infrared search and track

10,457 to 21,125 Nuclear blast simulation

15,500 to 17,500 Computational fluid dynamics applications to model the

turbulence around aircraft under extreme conditions

20,000 to 22,000 Weather forecasting; impact of blasts on underground

structures; advanced aircraft design

21,125+ Submarine design; shallow water acoustics analysis

24,000+ Automatic target recognition template development

= 120,000 Multi-line towed array signal processing

Sources: Building on the Basics: An Examination of High-Performance Computing

Export Control Policy in the 1990s (1995) and High-Performance Computing, National

Security Applications, and Export Control Policy at the Close of the 20th Century.

(711514)
10

ORDERS BY INTERNET

For information on how to access GAO reports on the INTERNET, send an e-mail

message with “info” in the body to

Info@www.gao.gov

or visit GAO’s World Wide Web Home Page at

http://www.gao.gov

TO REPORT FRAUD, WASTE, AND ABUSE

IN FEDERAL PROGRAMS

Contact one:

• website: http://www.gao.gov/fraudnet/fraudnet.htm

• e-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)