2010 REPORT ON FOREIGN POLICY-BASED EXPORT CONTROLS 

 

U.S. Department of Commerce 

Bureau of Industry and Security 

 Table of Contents Page Number 

Chapter 1 Introduction 1 

Chapter 2 Crime Control/Human Rights 8 

Chapter 3 Regional Stability 19 

 

Chapter 4 Anti-Terrorism Controls 29 

Chapter 5 Embargoes and Other Special Controls 36 

Chapter 6 Toxic Chemicals, Chemical Precursors and Associated 

 Equipment, Technology and Software 68 

Chapter 7 Biological Agents and Associated Equipment and Technology 77 

Chapter 8 Missile Technology Controls 83 

Chapter 9 Encryption 90 

Chapter 10 Significant Items: “Hot Section” Technology 95 

Chapter 11 Nuclear Nonproliferation 99 

Chapter 12 Surreptitious Listening 103 

Chapter 13 Entity List 108 

Appendix I Summary of Public Comments on Foreign Policy Export Controls 113 

Appendix II Multilateral Export Control Regimes in 2009 115 

Appendix III Selected Rules Published by the Department of Commerce in 2009 117 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 1 

Introduction 

Export controls maintained for foreign policy purposes require annual extension 

according to the provisions of Section 6 of the Export Administration Act of 1979, as 

amended (the EAA). Section 6(f) of the EAA requires the President to submit a report to 

Congress to extend the controls. Such authority has been delegated to the Secretary of 

Commerce. Sections 6(b) and 6(f) of the EAA require the report to include certain 

considerations1 and determinations2 with respect to the criteria established in those 

sections. This report complies with all of the requirements set out in the EAA for 

extending, amending, or imposing foreign policy controls. 

The Department of Commerce is acting under the authority conferred by Executive Order 

13222 of August 17, 2001 (Executive Order), as extended by the Notice of August 13, 

2009 (74 FR 41325 (August 14, 2009)). In that Executive Order, the President, by reason 

of the expiration of the EAA, invoked his authority, including authority under the 

International Emergency Economic Powers Act (IEEPA), to continue in effect the system 

of controls that had been maintained under the EAA. Under a policy of conforming 

actions under the Executive Order to those under the EAA, the Department of 

Commerce, insofar as appropriate, is following the provisions of Section 6 of the EAA 

with regard to extending foreign policy controls. 

With this report, all foreign policy export controls discussed herein are hereby extended 

for the period from January 21, 2010, to January 20, 2011. The Bureau of Industry and 

Security (BIS) of the Department of Commerce is taking this action pursuant to the 

recommendation of the Secretary of State. As further authorized by the EAA, foreign 

policy export controls remain in effect for replacement parts and for parts contained in 

 

1 Section 6(b)(2) requires the Secretary to consider the criteria set forth in 

Section 6(b)(1) when extending controls in effect prior to July 12, 1985. In addition, the 

report must include the elements set forth in Sections 6(f)(2)(A) (purpose of the controls); 

6(f)(2)(C) (consultation with industry and other countries); 6(f)(2)(D) (alternative means 

attempted); and 6(f)(2)(E) (foreign availability). 

2 Section 6(b)(1) requires the Secretary to make determinations regarding the criteria set 

forth therein when imposing, extending, or expanding controls. The report must also 

contain the additional information required in Section 6(f)(2)(A), (C)-(E) (as set forth in 

footnote 1, supra).
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

goods subject to such controls. The controls administered in accordance with procedures 

established pursuant to Section 309(c) of the Nuclear Nonproliferation Act of 1978 

similarly remain in effect. 

Each Chapter of this report describes a particular category of foreign policy controls and 

delineates modifications that have taken place over the past year. Although this report 

covers the 2009 calendar year, most of the statistical data presented in the report are 

based on fiscal year 2009 export licensing statistics, unless otherwise noted. BIS 

generates this data from the computer system it uses to process and track export license 

activity. Due to the tabulating procedures used by the system in accounting for 

occasional license applications that list more than one country or destination, the system 

has certain limitations as a means of gathering data. In addition, BIS bases the data in 

this report on values contained in issued export licenses. Such values may not represent 

the values of actual shipments made against those licenses, because in some cases an 

exporter may ship only a portion of the value of an approved license or may not ship at 

all. 

Certain goods, technology, and software described in this report also may require a 

license for national security purposes for export to certain destinations in accordance with 

Section 5 of the EAA. 

Part I: Highlights in the 2010 Report 

Regional Stability 

On May 22, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 23941) revising regional stability controls on certain thermal imaging 

cameras and creating a new Export Control Classification Number (ECCN) for certain 

military commodities manufactured outside the United States that incorporate certain 

thermal imaging cameras subject to the EAR. 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

Embargoes and Other Special Controls 

Cuba

On September 8, 2009, the Department published a final rule in the Federal Register (74 

FR 45985) amending the EAR to create a new License Exception authorizing the export 

and reexport to Cuba of certain donated consumer communications devices and to revise 

the scope of existing licensing policy regarding certain telecommunications links between 

the United States and Cuba. This amendment also revised two existing License 

Exceptions concerning exports and reexports of gift parcels to Cuba and of personal 

baggage taken by individuals leaving the United States for travel to Cuba. 

Chemical and Biological Controls 

Changes Resulting from the 2008 Australia Group Intersessional Decisions 

On July 6, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 31850) to implement the 2008 Australia Group (AG) intersessional 

decisions. Among other changes, the scopes of ECCNs 2B350.g and 2B351 were revised 

and ECCN 2D351 was created to control dedicated software for toxic gas monitoring 

systems and their dedicated detecting components controlled under ECCN 2B351. 

Additionally, the EAR was amended to clarify controls on certain AG-related equipment 

and software. 

Missile Technology Controls 

Changes Resulting from the 2008 Missile Technology Control Regime (MTCR) 

Plenary 

On November 9, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 57581) amending the EAR to implement changes to the Missile 

Technology Control Regime (MTCR) Annex that were accepted by MTCR member 

countries at the November 2008 Plenary in Canberra, Australia. The amendment 

included revisions to controls on certain fiber placement machines, motion 

simulators/rate tables and centrifuges, and accelerometers and gyros.

Entity List

Clarification Regarding Transfers (In-Country) 

On September 8, 2009, BIS published a final rule in the Federal Register (74 FR 45990) 

expanding the scope of transactions covered by Sections 744.10, 744.11, and 744.20 of 

the EAR to include transfers (in-country) as an activity that requires a license. These 

three sections previously specified license requirements for exports and reexports to 

persons listed on the Entity List. However, the sections were silent regarding whether or 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

not the scope of the licensing requirements included transfers (in-country). This rule 

added transfers (in-country) to the scope of the license requirements under each of the 

three sections. 

Export Enforcement 

BIS export enforcement efforts focus on the most significant international threats facing 

U.S. national and homeland security, foreign policy, and economic interests: the 

proliferation of weapons of mass destruction (WMD), international terrorism and state 

sponsors of terrorism, and diversions of U.S. dual-use goods and technologies to 

unauthorized military end-uses. The ability of the United States to enforce the foreign 

policy controls that it imposes is one of the criteria that this report examines. Contained 

in the report are summaries of some of the more significant foreign policy-related 

enforcement cases that have occurred recently. 

Optical Sighting Devices to Various Locations - On November 11, 2008, Cabela’s 

Incorporated, an outdoor equipment outfitter based in Sidney, Nebraska, agreed to pay a 

civil penalty of $680,000 to settle allegations that it committed 152 violations of the EAR 

involving the export of controlled optical sighting devices to various countries 

worldwide. The allegations involved 76 exports of optical sighting devices for firearms 

in 2004 and 2005 to Argentina, Brazil, Canada, Chile, Finland, Ireland, Malaysia, Malta, 

Mexico, Pakistan, the Philippines, South Africa, Sweden, and Taiwan. These devices are 

controlled on the Commerce Control List (CCL) for crime control and firearms 

convention reasons and require a license to export to the various destinations at issue. 

BIS also alleged that Cabela’s failed to file the required Shipper’s Export Declaration for 

each of the 76 exports in question. 

Deemed Exports to Chinese and Iranian nationals - On July 1, 2009, J. Reece Roth, a 

Professor Emeritus at the University of Tennessee, was sentenced to 48 months in prison 

and two years of supervised release. On September 3, 2008, a federal jury in the Eastern 

District of Tennessee convicted Roth on 18 counts of conspiracy and Arms Export 

Control Act violations. Between January 2004 and May 2006, through the Tennesseebased company Atmospheric Glow Technologies, Inc., Roth engaged in a conspiracy to 

transmit export controlled technical data to foreign nationals from the People’s Republic 

of China and Iran. This controlled technical data was related to a restricted U.S. Air 

Force contract to develop plasma actuators for a military unmanned aerial vehicle. The 

Roth case was investigated by several agencies, including the Federal Bureau of 

Investigation, U.S. Immigration and Customs Enforcement, Air Force Office of Special 

Investigations, and BIS. 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

Fire Fighting Equipment to Iran - On December 10, 2008, Nicholas Groos was sentenced 

in U.S. District Court in the Northern District of Illinois to 60 days in prison, one year 

supervised release, a $249,000 criminal fine, and a $400 special assessment. On August 

11, 2008, Groos entered a guilty plea to three counts of violating the IEEPA and one 

count of making false statements. Groos devised a scheme to willfully transship U.S.-

origin fire fighting equipment to Iran using his position as Director of the Viking 

Corporation subsidiary located in Luxembourg, in violation of the Iranian Transaction 

Regulations and the EAR. 

Part II: Format of Analysis Used in Chapters 2-13 of this Report 

Chapters 2-13 of this report describe the various export control programs maintained by 

the Department of Commerce for foreign policy reasons. Each of these programs is 

extended for another year. The analysis required for such an extension is provided in 

each Chapter in the format described below. 

Export Control Program Description and Licensing Policy

This section defines the export controls maintained for a particular foreign policy purpose 

that are imposed or extended for the year 2010. Each of the following Chapters describes 

the licensing requirements and policy applicable to a particular control. 

Analysis of Controls as Required by Section 6(f) of the EAA

Section 6(f)(2) of the EAA requires that the Secretary of Commerce describe the purpose 

of the controls and consider or determine whether to impose or extend foreign policy 

controls based on specified criteria, including consultation efforts, economic impact, 

alternative means, and foreign availability. For each control program, the Department of 

Commerce’s conclusions are based on the following required criteria: 

A. The Purpose of the Controls 

This section provides the foreign policy purpose and rationale for each particular control. 

B. Considerations and/or Determinations of the Secretary of Commerce

This section describes the Secretary’s determinations or considerations with respect to the 

following criteria: 

1. Probability of Achieving the Intended Foreign Policy Purpose. Whether such 

controls are likely to achieve the intended foreign policy purpose in light of other factors, 

including the availability from other countries of the goods or technology subject to 

control, and whether the foreign policy purpose can be achieved through negotiations or 

other alternative means. 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

2. Compatibility with Foreign Policy Objectives. Whether the controls are 

compatible with the foreign policy objectives of the United States and with overall U.S. 

policy toward the country or the proscribed end-use subject to the controls. 

3. Reaction of Other Countries. Whether the reaction of other countries to the 

extension of such export controls by the United States is likely to render the controls 

ineffective in achieving the intended foreign policy purpose or to be counterproductive to 

other U.S. foreign policy interests. 

4. Economic Impact on United States Industry. Whether the effect of the controls 

on the export performance of the United States, its competitive position in the 

international economy, the international reputation of the United States as a reliable 

supplier of goods and technology, or the economic well-being of individual U.S. 

companies exceeds the benefit to U.S. foreign policy objectives.3 

5. Effective Enforcement of Controls. Whether the United States has the ability to 

enforce the controls. Some enforcement problems are common to all foreign policy 

controls.4 Other enforcement problems are associated with only one or a few controls. 

Each control has been assessed to determine if it has presented, or is expected to present, 

an uncharacteristic enforcement problem. 

C. Consultation with Industry 

This section discusses the results of consultations with industry leading to the extension 

or imposition of controls. In a September 8, 2009, Federal Register notice (74 FR 

46088), the Department of Commerce solicited comments from industry on the 

effectiveness of U.S. foreign policy-based export controls. In addition, comments were 

solicited from the public via the BIS website. Comments from the Department’s six 

Technical Advisory Committees are solicited on an ongoing basis and are not specific to 

 

3 Limitations exist when assessing the economic impact of certain controls because of the 

unavailability of data or because of the influence of other factors, e.g., currency values, 

foreign economic activity, or foreign political regimes, which may restrict imports of U.S. 

products more stringently than the United States restricts exports.

4 When the United States implements controls without the imposition of corresponding 

restrictions by other countries, it is difficult to prevent reexports from third countries to 

the target country, to secure third-country cooperation in enforcement efforts, and to 

detect violations abroad and initiate proper enforcement action. 
Chapter 1 Introduction 

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2010 Report on Foreign Policy-Based Export Controls 

this report. The comment period closed on October 8, 2009, and three comments were 

received. A detailed review of all public comments received can be found in Appendix I. 

D. Consultation with Other Countries 

This section reflects consultations on the controls with countries that cooperate with the 

United States on multilateral controls and with other countries as appropriate. 

E. Alternative Means

This section specifies the nature and results of any alternative means attempted to 

accomplish the foreign policy purpose, or the reasons for extending the controls without 

attempting any such alternative means. 

F. Foreign Availability

This section considers the availability from other countries of goods or technology 

comparable to those subject to the proposed export control. It also describes the nature 

and results of the efforts made pursuant to Section 6(h) of the EAA to secure the 

cooperation of foreign governments in controlling the foreign availability of such 

comparable goods or technology. In accordance with the EAA, foreign availability 

considerations do not apply to export controls in effect prior to June 12, 1985, to export 

controls maintained for human rights and anti-terrorism reasons, or to export controls in 

support of the international obligations of the United States.
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 2 

Crime Control/Human Rights 

(Sections 742.7, 742.11, 742.17)1

Export Control Program Description and Licensing Policy

As required by Section 6(n) of the Export Administration Act of 1979, as amended 

(EAA), the United States controls the exports of crime control and detection items 

because of human rights concerns in various countries. The U.S. Government requires a 

license to export most crime control and detection instruments, equipment, related 

technology, and software to all destinations, except Australia, Japan, New Zealand, and 

members of the North Atlantic Treaty Organization (NATO). A license is required to 

export certain crime control items, including restraint type devices (such as handcuffs) 

and discharge type arms (such as tasers), to all destinations except Canada. Specially 

designed implements of torture and thumbscrews, which are included in the crime control 

category, require a license for export to all destinations. In addition, the U.S. 

Government maintains concurrent export license requirements for certain crime control 

items in furtherance of the Inter-American Convention Against the Illicit Manufacturing 

of and Trafficking in Firearms, Ammunition, Explosives, and Other Related Materials. 

The Department of Commerce is currently reviewing items controlled for crime control 

reasons to ensure that export controls are up to date with new products and technologies 

that are primarily or exclusively used for crime control and detection. The Department of 

Commerce will consult with the Congress, other agencies, and the public as it conducts 

this review. 

Summary of 2009 Changes 

Licensing Policy 

The Bureau of Industry and Security (BIS) is currently reviewing and, where appropriate, 

revising the crime control license requirements in the Export Administration Regulations 

(EAR). The review examines what new technologies are available in the marketplace, 

and what additions or deletions might be proposed in order to enhance the existing 

controls. The review includes the criteria that subject an item to crime control export 

licensing requirements, new technologies for possible inclusion on the crime control list, 

the relevancy of existing controls, destinations and end-users that are subject to licensing 

 

1

 Citations following each of the foreign policy control programs refer to sections of the Export 

Administration Regulations (EAR), 15 CFR Parts 730-774, that describe the control program. 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

requirements, and the economic impact of modifying any aspect of the crime control 

export control regime. 

On March 19, 2008, BIS published a notice of inquiry seeking public comment on 

whether and how the crime control regulations should be changed. BIS received 11 

responses from the public. Generally, the comments reflected the need to update the 

crime control list by including next generation biometric equipment, security systems and 

internet tracking software, clarifying specific items on the Commerce Control List 

(CCL), reducing controls on items with wide commercial uses (such as fingerprint 

powder), and applying broad-based end-user/end-use controls to the People’s Republic of 

China (PRC) for basic technology that can be used to provide surveillance, tracking, and 

identification of individuals.

As a result, BIS published proposed revisions to the CCL on August 11, 2009. These 

proposed revisions include extensions, modifications, or removals of items already on the 

list or inclusion of items that have an easily identified crime control or law enforcement 

nexus. BIS is reviewing public comments on this proposed rule and will take them into 

consideration as it drafts the final rule. 

BIS is also drafting a proposed rule to be issued as a second phase of this crime control 

review to address more complex policy issues, such as destinations requiring a license 

and the inclusion of biometric identification systems, training simulators, and integrated 

data systems on the CCL. 

The U.S. Government has a general policy of denial for license applications to export 

crime control items to a country in which the government engages in a consistent pattern 

of gross violations of internationally recognized human rights. For other countries, the 

U.S. Government will consider applications for crime control items favorably, on a caseby-case basis, unless there is civil disorder in the country or region of concern, or there is 

evidence that the government may have violated human rights and that the judicious use 

of export controls would be helpful in minimizing regional instability, deterring the 

development of a consistent pattern of such violations, or in demonstrating U.S. 

Government opposition to such violations. 

Crime Control/Implements of Torture

The U.S. Government has a policy of denial for any license application to export 

specially designed implements of torture and thumbscrews. 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

People’s Republic of China

Following the 1989 military assault on demonstrators by the PRC government in 

Tiananmen Square, the U.S. Government imposed constraints on the export to the PRC of 

certain items on the CCL. Section 902(a)(4) of the Foreign Relations Authorization Act 

for Fiscal Year 1990-1991, Public Law 101-246, suspends the issuance of licenses under 

Section 6(n) of the EAA for the export of any crime control or detection instruments or 

equipment to the PRC. The President may terminate the suspension by reporting to 

Congress that the PRC has made progress on political reform or that it is in the national 

interest of the United States to terminate the suspension. The President has not exercised 

his authority to terminate this suspension. 

Indonesia

The U.S. Government denies applications to export certain crime control items to 

Indonesia, subject to narrow exceptions, consistent with Section 582 of the Foreign 

Operations, Export Financing and Related Programs Appropriations Act of 1995 and the 

Foreign Operations, Export Financing and Related Programs Supplemental 

Appropriations Act of 1994 (Public Law 103-306). This restriction could be lifted if the 

Secretary of State determines and reports to Congress that there has been significant 

progress made on human rights in Indonesia. The Secretary of State has not made such a 

determination. 

NATO

Certain crime control and detection instruments, equipment, related technology, and 

software may be exported to Australia, Japan, New Zealand, and members of NATO 

without a specific license, consistent with Section 6(n) of the EAA. 

Organization of American States Member Countries

In April 1999, the Department of Commerce published a rule implementing the 

provisions of the Organization of American States (OAS) Model Regulations for the 

Control of the International Movement of Firearms. The Department of Commerce 

designed these regulations to harmonize import and export controls on the legal 

international movement of firearms among OAS member states and to establish 

procedures to prevent the illegal trafficking of firearms among these countries. 

Under these provisions, the Department of Commerce maintains foreign policy controls 

on exports of Commerce-controlled firearms, including shotguns with a barrel length of 

18 inches or over and parts, buckshot shells, shotgun shells and parts, and optical sighting 

devices to all OAS member countries, including Canada. Items subject to these controls 

are identified by “FC Column 1” in the “License Requirements” section of the 

corresponding Export Control Classification Number (ECCN). In support of the OAS 

Model Regulations, the U.S. Government requires an Import Certificate (IC) for the 

export to all OAS member countries of those items affected by the regulations. In 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

general, the Department approves license applications for the export of firearms to OAS 

member countries if the application is supported by an IC. The Department denies 

applications that involve end-uses linked to drug trafficking, terrorism, international 

organized crime, and other criminal activities. 

Other Licensing Considerations

The Department of State annually compiles the Country Reports on Human Rights 

Practices. The Department of State prepares these reports in accordance with Sections 

116(d) and 502B(b) of the Foreign Assistance Act of 1961, as amended, for submission 

to Congress. The factual information presented in these reports is a significant element in 

licensing recommendations made by the Department of State. In accordance with the 

Foreign Assistance Act, there is a policy of denial for license applications to export crime 

control items to any country in which the government engages in a consistent pattern of 

gross violations of human rights. 

Additionally, targeted sanctions maintained by the Department of the Treasury’s Office 

of Foreign Assets Control (OFAC) are currently imposed against certain Belarusian, 

Burmese, and Zimbabwean regime officials and their supporters. Applications to export 

crime control items to countries that are not otherwise subject to economic sanctions or 

comprehensive embargoes are flagged for additional scrutiny in the review process. The 

Department of State reviews all license applications for these countries on a case-by-case 

basis and makes recommendations to Commerce as it considers appropriate. 

The International Religious Freedom Act of 1998 (IRFA) calls for the President to take 

diplomatic or other appropriate action with respect to any country that engages in or 

tolerates violations of religious freedom. IRFA also provides for the imposition of 

economic measures or commensurate actions when a country has engaged in systematic, 

ongoing, egregious violations of religious freedom accompanied by flagrant denials of 

the rights to life, liberty, or the security of persons, such as torture, enforced and arbitrary 

disappearances, or arbitrary prolonged detention. For such countries, IRFA provides that 

the Department of Commerce, with Department of State concurrence, shall include items 

on the CCL for reasons of crime control or detection, and require export licenses for, 

items that are being used, or are intended for use, directly and in significant measure, to 

carry out particularly severe violations of religious freedom. In addition, the IRFA 

requires that countries engaging in particularly severe violations of religious freedom be 

designated as Countries of Particular Concern. In September 2008, the Secretary of State 

redesignated eight countries as Countries of Particular Concern: Burma, the PRC, the 

Democratic People’s Republic of Korea (DPRK, or North Korea), Eritrea, Iran, Saudi 

Arabia, Sudan, and Uzbekistan. These are countries where governments have engaged in 

or tolerated particularly severe violations of religious freedom over the past year. Some 

of these countries are already subject to economic sanctions or comprehensive 

embargoes. Applications to export crime control items to countries that are not otherwise 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

subject to economic sanctions or comprehensive embargoes are flagged for additional 

scrutiny in the review process. The Department of State reviews all license applications 

for those countries on a case-by-case basis and makes recommendations to Commerce as 

appropriate. 

Analysis of Controls as Required by Section 6(f) of the Act 

A. The Purpose of the Controls 

These controls seek to ensure that U.S.-origin crime control equipment is not exported to 

countries where governments fail to respect internationally recognized human rights or 

where civil disorder is prevalent. Denial of export license applications to such countries 

helps to prevent human rights violations and clearly signals U.S. concerns about human 

rights in these countries. The license requirements for most destinations allow for close 

monitoring of exports of certain crime control items that could be misused to commit 

human rights violations. Controls on implements of torture similarly help to ensure that 

such items are not exported from the United States. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, in light of other factors, including availability of relevant items from other 

countries, and that the foreign policy purpose cannot fully be achieved through 

negotiations or other alternative means. The lack of complementary controls by other 

producer nations limits the effectiveness of these controls in preventing human rights 

violations. However, the controls restrict human rights violators’ access to U.S.-origin 

goods and provide important evidence of U.S. support for the principles of human rights. 

In addition, the imposition of stringent licensing requirements for crime control items 

enables the U.S. Government to monitor closely items that could be used in human rights 

violations. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and that the extension 

of this control program will not have any significant adverse foreign policy 

consequences. This control program is fully consistent with U.S. policy in support of 

internationally recognized human rights, as expressed by successive Administrations and 

by Congress. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

These controls are unique, serve a distinct foreign policy purpose, and arise out of deeply 

held convictions of the U.S. Government. Currently, other countries do not have 

equivalent regulations, but many have restrictions on exports of lethal products to areas 

of civil unrest. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to U.S. foreign policy objectives. In fiscal year 2009, the Department of 

Commerce approved 3,618 export license applications valued at over $921 million for 

crime control items. Table 1 lists the total number and value (by ECCN) of export 

licenses that the U.S. Government issued for crime control items during fiscal year 2009. 

Table 1: Crime Control Applications Approved, Fiscal Year 2009

ECCN Items Controlled Applications 

Approved

$ Value

0A978 Saps 0 $0 

0A979 Police helmets and shields 121 $5,225,905 

0A982 Restraint devices, e.g., leg irons, 

shackles, handcuffs 

466 $54,638,054 

0A983 Specially designed implements 

of torture 

0 $0 

 

0A984 Shotguns and buckshot shotgun 

shells 

721 $46,365,775 

0A985 Discharge type arms (stun guns, 

shock batons, etc.) 

256 $94,943,151 

0A986 Shotgun shells 116 $22,418,330 

0A987 Optical sighting devices for 

firearms 

1,070 $69,188,166 

0E982 Technology for items under 

0A982/0A985 

1 $500 

0E984 Technology for items under 

0A984 

4 $0 

1A984 Chemical agents including tear 

gas containing 1% or less of CS 

or CN 

76 $9,534,479 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

ECCN Items Controlled Applications 

Approved

$ Value

1A985 Fingerprinting powders, dyes, 

and inks 

160 $33,164,865 

 

3A980 Voice print identification and 

analysis equipment 

8 $233,366 

3A981 Polygraphs, fingerprint 

analyzers, cameras, and 

equipment 

531 $544,369,952 

3D980 Software for items under 3A980 

and 3A981 

72 $2,802,101 

3E980 Technology for items under 

3A980 and 3A981 

3 $2 

4A003* Digital computers for 

computerized fingerprint 

equipment only 

0 $0 

4A980 Computers for fingerprint 

equipment 

3 $1,885,000 

4D001* Software for items under 4A003 

only 

0 $0 

4D980 Software for items under 4A980 10 $37,213,635 

4E001* Technology for items under 

4A003 and 4D001 only 

0 $0 

4E980 Technology for items under 

4A980 

0 $0 

6A002.c* Police-model infrared viewers 

only 

 0 $0 

6E001* Technology for development of 

items under 6A002c only 

0 $0 

6E002* Technology for production of 

items under 6A002c only 

0 $0 

9A980 Mobile crime science 

laboratories 

0 $0 

TOTAL 3,618 $921,983,281 
Chapter 2 Crime Control/Human Rights 

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2010 Report on Foreign Policy-Based Export Controls 

NOTES: (1) To give the reader the broadest perspective of the items covered, Table 1 

lists all crime control ECCNs including those for which no license applications were 

submitted. (2) Those ECCNs marked with an asterisk (*) list items that are controlled for 

crime control reasons and for other reasons, but the corresponding statistics represent 

only the crime control items within the ECCN. 

In fiscal year 2009, the Department of Commerce denied 26 applications for crime 

control items with a total value of $1,952,316. 

Table 2: Crime Control Applications Denied, Fiscal Year 2009 

ECCN Description Applications Denied $ Value

0A979 Police helmets and shields 3 $94,050 

0A982 Restraint devices, e.g., leg irons, 

shackles, handcuffs 

3 $19,740 

0A984 Shotguns 1 $17,000 

0A985 Discharge type arms (stun guns, 

shock batons, etc.) 

4 $667,500 

0A987 Optical sighting devices 8 $583,110 

1A984 Chemical agents including tear 

gas containing 1% or less of CS 

or CN 

2 $60,915 

1A985 Fingerprinting powders, dyes, 

and inks 

1 $3,000 

 

3A981 Polygraphs, fingerprint 

analyzers, cameras, and 

equipment 

3 $507,000 

3E980 Technology for items under 

3A980 and 3A981 

1 $1 

TOTAL 26 $1,952,316 

In fiscal year 2009, the Department of Commerce approved 1,907 export license 

applications valued at $240 million for items affected by the foreign policy controls on 

firearms and ammunition instituted in 1999 in support of the OAS Model Regulations. 
Chapter 2 Crime Control/Human Rights 

16 

2010 Report on Foreign Policy-Based Export Controls 

Table 3: Applications for Firearms, Ammunition and Sights to OAS Countries 

Approved, Fiscal Year 2009 

ECCN Items Controlled Applications 

Approved

$ Value 

0A984 Shotguns and buckshot 

shotgun shells 

721 $46,365,775

0A986 Other shotgun shells 116 $22,418,330

0A987 Optical sighting devices 

for firearms 

1,070 $69,188,166

TOTAL2 2,166 $239,555,582

5. Effective Enforcement of Controls. The Secretary has determined that the 

United States has the ability to enforce these controls effectively. Crime control items 

and implements of torture are easily recognizable and do not present special enforcement 

problems related to detecting violations or verifying use. However, enforcement 

cooperation with other countries generally is difficult in cases involving unilaterally 

controlled items such as these, and often depends on the type and quantity of goods in 

question. In addition, enforcement of controls on reexports is challenging and rests in 

large part on the willingness of the recipient to abide by the terms of the export license. 

The U.S. Government conducts post-shipment verifications to ensure that the listed enduser has received the exports and to confirm that the end-user is using the controlled 

items in a way consistent with the license conditions. 

BIS conducted a number of enforcement actions regarding noncompliance with these 

export controls during fiscal year 2009. For example: 

Night Vision Rifle Scopes – On May 12, 2009, Donald Wayne Hatch was sentenced in 

U.S. District Court in the Southern District of Iowa to two years of probation and a 

$5,000 fine for causing false statements to be made. At the same proceeding, a fine of 

$90,000 was levied against Rigel Optics, Inc., for the unlicensed export of Generation II 

night vision goggles. On July 31, 2008, Donald Wayne Hatch and Rigel Optics Inc. 

 

2 Items in ECCN 0A986 are controlled only for Firearms Convention reasons. Items in 

ECCNs 0A984 and 0A987, however, are controlled both for Firearms Convention and 

Crime Control reasons. The statistics in this table for ECCNs 0A984 and 0A987 are a 

subset of the Crime Control statistics provided in Table 1 of this Chapter. 
Chapter 2 Crime Control/Human Rights 

17 

2010 Report on Foreign Policy-Based Export Controls 

entered a guilty plea before a U.S. Magistrate Judge in the Southern District of Iowa. 

Hatch pled guilty to one count of making false statements, and also entered a guilty plea 

on behalf of the corporation to one count of violating the Arms Export Control Act. 

Hatch and Rigel Optics, Inc. sold night vision optical equipment to various foreign 

customers. BIS and U.S. Immigration and Customs Enforcement jointly conducted this 

investigation. 

Optical Sighting Devices to Various Locations – On November 11, 2008, Cabela’s 

Incorporated, an outdoor equipment outfitter based in Sidney, Nebraska, agreed to pay a 

civil penalty of $680,000 to settle allegations that it committed 152 violations of the EAR 

involving the export of controlled optical sighting devices to various countries 

worldwide. The allegations involved 76 exports of optical sighting devices for firearms 

in 2004 and 2005 to Argentina, Brazil, Canada, Chile, Finland, Ireland, Malaysia, Malta, 

Mexico, Pakistan, the Philippines, South Africa, Sweden, and Taiwan. These devices are 

controlled on the CCL for Crime Control and Firearms Convention reasons and require a 

license to export to the various destinations at issue. BIS also alleged that Cabela’s failed 

to file the required Shipper’s Export Declaration for each of the 76 exports in question. 

C. Consultation with Industry

The Department of Commerce consults with the Regulations and Procedures Technical 

Advisory Committee, one of six technical advisory committees that advise BIS, in 

preparation for publication of major regulatory changes affecting crime controls. In 

addition, the Department of Commerce has consulted with exporters of crime control 

items and with human rights groups concerned about the potential for misuse of such 

items in various parts of the world. BIS has frequent consultations with exporters about 

specific items proposed for export to specific end-users and for specific end-uses. 

D. Consultation with Other Countries 

Most other countries that supply crime control and detection items have not imposed 

similar export controls. The United Kingdom and Canada maintain controls similar to 

U.S. controls on certain crime control commodities. Certain European Union member 

states prohibit or impose an authorization requirement on the export of dual-use items not 

covered by the multilateral export control regimes for reasons of public security or 

human rights considerations. 

E. Alternative Means 

Section 6(n) of the EAA requires the Department of Commerce to maintain export 

controls on crime control and detection equipment. Attempting to achieve the purposes 

of the crime control restrictions through negotiations or other alternative means would 
Chapter 2 Crime Control/Human Rights 

18 

2010 Report on Foreign Policy-Based Export Controls 

not meet this requirement. The U.S. Government does, however, use diplomatic efforts, 

sanctions, and other means to convey its concerns about the human rights situation in 

various countries. 

F. Foreign Availability 

The foreign availability provision does not apply to Section 6(n) of the EAA.3 Congress 

has recognized the usefulness and symbolic value of these controls in supporting U.S. 

Government policy on human rights issues, foreign availability notwithstanding.

 

3 Provisions pertaining to foreign availability do not apply to export controls in effect 

before July 12, 1985, under Sections 6(i) (International Obligations), 6(j) (Countries 

Supporting International Terrorism), and 6(n) (Crime Control Instruments). See the 

Export Administration Amendments Act of 1985, Public Law No. 99-64, Section 

108(g)(2), 99 Stat. 120, 134-35. Moreover, Sections 6(i), 6(j), and 6(n) require that 

controls be implemented under certain conditions without consideration of foreign 

availability.
Chapter 3 Regional Stability 

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2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 3 

Regional Stability 

(Section 742.6) 

Export Control Program Description and Licensing Policy 

Regional stability (RS) controls ensure that exports and reexports of controlled items do 

not contribute to the destabilization of the region to which the items are destined. These 

controls traditionally cover items specially designed or modified for military purposes 

and certain dual-use commodities that can be used to manufacture military equipment. A 

regulation published on May 22, 2009, (74 FR 23941) made substantial changes to RS 

controls as they relate to certain thermal imaging cameras. 

Licensing Requirements and Licensing Policy 

RS Column 1

Section 742.6 of the Export Administration Regulations (EAR) requires a license for RS 

reasons (RS Column 1 on the Commerce Control List (CCL)) to export certain imageintensifier tubes, infrared focal plane arrays, as well as certain software and technology 

for inertial navigation systems, gyroscopes, and accelerometers, to all destinations except 

Canada. These items are included in Export Control Classification Numbers (ECCNs) 

2E018, 6A002, 6A003, 6A008 6D001, 6D002, 6D991, 6E001, 6E002, 6E991, 7D001, 

7E001, 7E002, and 7E101. 

The U.S. Government reviews all license applications for these items on a case-by-case 

basis to determine whether the export could contribute, directly or indirectly, to a 

country’s military capabilities in a manner that would destabilize or alter a region’s 

military balance contrary to U.S. foreign policy interests. 

RS Column 2

In addition, Section 742.6 of the EAR imposes a license requirement for RS reasons (RS 

Column 2 on the CCL) to export explosive detection equipment and related software and 

technology, military-related items (e.g., searchlights, bayonets, certain vehicles and 

trainer aircraft), and certain commodities used to manufacture military equipment to all 

destinations except member nations of the North Atlantic Treaty Organization (NATO), 

Australia, Japan, and New Zealand. The U.S. Government will generally consider 

applications for such licenses favorably, on a case-by-case basis, unless the export would 
Chapter 3 Regional Stability 

20 

2010 Report on Foreign Policy-Based Export Controls 

significantly affect regional stability. These items are described on the CCL under 

ECCNs 0A918, 0E918, 1B018.a, 2A983, 2B018, 2D983, 2E983, 8A918, and 9A018.a 

and .b. 

In addition, there are RS controls in place for certain items when exported to Iraq (or 

transferred within Iraq). These items are covered under the following ECCNs: ECCN 

0B999 (specific processing equipment such as hot cells and glove boxes suitable for use 

with radioactive materials); ECCN 0D999 (specific software for neutronic calculations, 

radiation transport calculations, and hydrodynamic calculations/modeling); ECCN 1B999 

(specific processing equipment, such as electrolytic cells for fluorine production and 

particle accelerators); ECCN 1C992 (commercial charges containing energetic materials, 

n.e.s.); ECCN 1C995 (certain mixtures and testing kits); ECCN 1C997 (ammonium 

nitrate); ECCN 1C999 (specific materials, n.e.s.); and ECCN 6A992 (optical sensors not 

controlled under ECCN 6A002). The licensing policy for these items is set forth in 

Section 746.3 of the EAR, and is consistent with the broader controls maintained on Iraq 

pursuant to United Nations Security Council Resolution 1483. These controls are 

discussed in more detail in Chapter 5 of this report. 

Summary of 2009 Changes 

On May 22, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 23941). This rule imposed license requirements on certain thermal 

imaging cameras that incorporate uncooled focal plane arrays, i.e., cameras controlled by 

ECCN 6A003.b.4.b. These export and reexport license requirements and license review 

policies vary depending on certain technical specifications of the cameras as well as the 

proposed end-uses. Almost all cameras controlled by ECCN 6A003.b.4.b are controlled 

at the higher Regional Stability level (RS1) and require an export or reexport license for 

all destinations other than Canada; however, cameras that fall below certain technical 

thresholds can be subject to a more favorable license policy if they are packaged for civil 

use and destined only for Australia, Austria, Belgium Bulgaria, Canada, Cyprus, the 

Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, 

Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, 

New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, South Africa, 

South Korea, Spain, Sweden, Switzerland, Turkey, or the United Kingdom. Cameras 

controlled by ECCN 6A003.b.4.b that fall below certain technical thresholds are 

controlled at the lower Regional Stability control level (RS2) when fully packaged for 

use as a consumer-ready civil product. Applications to export or reexport these cameras 

will be considered favorably unless there is evidence the export or reexport would 

contribute significantly to the destabilization of the region to which the camera is 

destined. 

 
Chapter 3 Regional Stability 

21 

2010 Report on Foreign Policy-Based Export Controls 

The rule also imposed a license requirement on reexports of military commodities 

produced outside of the United States that incorporate one or more cameras controlled 

under ECCN 6A003.b.4.b. Under this rule, reexports of these military commodities 

require a license to all destinations except Canada, unless the military commodities are 

being reexported as part of a military deployment by a unit of the governments of 

Australia, Austria, Belgium, Bulgaria, Canada, Cyprus, the Czech Republic, Denmark, 

Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, 

Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Norway, Poland, 

Portugal, Romania, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, 

Switzerland, Turkey, the United Kingdom, or the United States. Applications for 

reexports of these military commodities will be reviewed applying policies for similar 

commodities that are subject to the International Traffic in Arms Regulations. 

Analysis of Controls as Required by Section 6(f) of the Act 

A. The Purpose of the Controls 

Regional stability controls provide a mechanism for the U.S. Government to monitor the 

export of controlled items, to restrict their use in instances that would adversely affect 

regional stability or the military balance within a region, and to protect the national 

security and foreign policy interests of the United States. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, although some of these items are increasingly available from abroad. The 

Secretary has also determined that the foreign policy purpose cannot fully be achieved 

through negotiations or other alternative means, and that most of the items subject to 

these controls are also controlled, as a result of international negotiations, by U.S. 

partners in the Wassenaar Arrangement and the Missile Technology Control Regime 

(MTCR). Regional stability controls contribute to U.S. national security and foreign 

policy objectives by enabling the United States to restrict the use or availability of certain 

sensitive U.S.-origin goods and technologies that would adversely affect regional stability 

or the military balance in certain areas. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and that the extension 

of these controls will not have any significant adverse foreign policy consequences. 

Regional stability controls are consistent with U.S. foreign policy goals to promote peace 

and stability and prevent U.S. exports that might contribute to weapons production, 

destabilizing military capabilities, or acts of terrorism. 
Chapter 3 Regional Stability 

22 

2010 Report on Foreign Policy-Based Export Controls 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

A number of other countries limit exports of items and technologies with military 

applications to areas of concern, recognizing that such items and technologies could 

adversely affect regional stability and military balances. For example, the United States 

and other member countries of the Wassenaar Arrangement each have their own national 

controls on the export of certain night vision devices. All members of the MTCR 

maintain controls on software and technology related to missile guidance and control 

devices. Although other countries may object to new unilateral RS controls, allies and 

partners of the United States support U.S. efforts against regional conflict and terrorism 

and appreciate the need to keep certain equipment and technologies from those who 

could misuse the items to destabilize countries or regions. 

4. Economic Impact on U.S. Industry. Although the Secretary has determined that 

the adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to U.S. foreign policy objectives, the controls on cameras controlled by ECCN 

6A003, which exceed the controls on similar products imposed by other producing 

countries, have significantly and adversely impacted the competitiveness of the affected 

industry sector. Items controlled for regional stability reasons generally require licenses 

for export to all destinations except NATO countries, Australia, Japan, and New Zealand. 

However, certain RS-controlled items, including those controlled concurrently for missile 

technology reasons as well as cameras controlled under ECCN 6A003, require licenses 

for export to all destinations except Canada. Cameras controlled by ECCN 6A003 

account for a large percentage of regional stability-controlled exports. Controls on these 

cameras have resulted in declining sales for U.S. companies in a rapidly growing global 

market. BIS made the changes to controls on ECCN 6A003.b.4.b cameras in May 2009 

in recognition of the emerging availability of these cameras around the world, the export 

licensing practices of other governments, and the potential use of these cameras in 

military applications. 

In fiscal year 2009, the Department of Commerce approved 2,126 license applications for 

items controlled for RS reasons, with a total value of $825 million. Eight applications 

were denied (six license applications for cameras controlled under ECCN 6A003 and two 

license applications for optical sensors controlled under ECCN 6A002), with a total value 

of $276,491. 
Chapter 3 Regional Stability 

23 

2010 Report on Foreign Policy-Based Export Controls 

Licensing volume for items controlled for RS reasons is somewhat lower than that for 

fiscal year 2008, during which the Department approved 2,767 license applications. This 

decline is attributable to fewer license applications for cameras controlled under ECCN 

6A003 following the May 2009 regulatory change. License applications for those 

cameras fell from 1,899 to 1,094. The value of RS-related licenses decreased from $939 

million in fiscal year 2008 to $825 million in fiscal year 2009. 

The table that follows lists the total number and value by ECCN of export licenses that 

the Department of Commerce issued for regional stability items during fiscal year 2009: 

Table 1: Regional Stability Applications Approved, Fiscal Year 2009

ECCN Description Number of 

Applications 

Dollar Value 

0A918 Power control searchlights and 

bayonets 

2 $22,316

0A919 Military commodities produced 

outside the U.S. incorporating 

6A003b.4.b cameras 

4 $1,031,700

0B999* Specific processing equipment 

such as hot cells and glove 

boxes for use with radioactive 

materials 

0 $0

0D999* Specific software for neutronic 

calculations, et al. 

0 $0

0E918 Technology for 

development/production of 

bayonets 

0 $0

1B018.a Equipment for the production 

of military explosives and solid 

propellants 

1 $267,988

1B999* Specific processing equipment 

such as electrolytic cells for 

fluorine production, et al. 

2 $886,332

1C992* Commercial charges containing 

energetic materials, n.e.s. 

11 $3,296,282

1C995* Certain mixtures and testing 

kits 

1 $1,952

1C997* Ammonium nitrate 0 $0

1C999* Specific materials, n.e.s. 0 $0

2A983 Explosives detection equipment 262 $176,403,543
Chapter 3 Regional Stability 

24 

2010 Report on Foreign Policy-Based Export Controls 

2B018 Equipment on the International 

Munitions List 

1 $225

2D983 Software for equipment in 

2A983 

37 $419,989

2E983 Technology for equipment in 

2A983 

44 $1,405,781

+

6A002.a.1, 

a.2., a.3, c, e 

Optical detectors and direct 

view imaging equipment 

incorporating image intensifier 

tube or focal plane arrays 

14 $8,948,024

+

6A003.b.3,b.4 Imaging cameras incorporating 

image intensifiers or focal plan 

arrays 

1,094 $145,034,279

6A008.j.1 Space-qualified LIDAR 

equipment 

0 $0

6A992* Optical sensors not controlled 

under 6A002 (gravity meters) 

2 $1,168,285

6A998.b Space-qualified LIDAR 

equipment for meteorological 

observation 

0 $0

6D001 Software for 

development/production of RScontrolled items in 6A002, 

6A003, 6A008 

0 $0

6D002 Software for the use of 6A008.j 0 $0

6D991 Software for 

development/production/use of 

6A002.e or 6A998.b 

0 $0

+

6E001 Technology for the 

development of RS-controlled 

items in 6A002, 6A003, and 

6A008 

14 $1,123,286

+

6E002 Technology for the production 

of RS-controlled items in 

6A002, 6A003, and 6A008 

10 $612,444

6E991 Technology for 

production/development/use of 

items in 6A998.b 

0 $0

+

7D001 Software for the development 

or production of equipment in 

7A or 7B 

7 $52,005
Chapter 3 Regional Stability 

25 

2010 Report on Foreign Policy-Based Export Controls 

+

7E001 Technology for the 

development of items in 7A, 

7B, or 7D 

42 $283,065

+

7E002 Technology for the production 

of items in 7A or 7B 

5 $132,001

+

7E101 Technology for the use of items 

in 7A, 7B, or 7D 

59 $330,441

8A918 Marine boilers 0 $0

+

9A018.a,b Military trainer aircraft and 

vehicles designed or modified 

for military use 

472 $483,088,936

+

9E018 Technology for the 

development of items in 

9A018.a.,b 

42 $695,315

TOTAL 2,126 $825,041,189 + NOTE: For ECCNs marked with “*”, RS controls apply only to exports to Iraq, 

as do statistics. For ECCNs marked with “+”, only a portion of the ECCN is 

subject to RS controls, but the total number of licenses and dollar value for the 

complete ECCN are given. In most cases, the subcategories under these ECCNs 

that are not controlled for regional stability reasons are minimal. 

5. Effective Enforcement of Controls. The Secretary has determined that the 

United States has the ability to enforce these controls effectively. Image intensifier tubes, 

infrared focal plane arrays, certain software and technology for inertial navigation 

systems, gyroscopes, and accelerometers, and other items controlled for regional stability 

purposes are almost all subject to multilateral controls for either national security or 

missile technology reasons. The multilateral nature of these controls aids in enforcement. 

The Department of Commerce effectively enforces RS controls by focusing on 

preventative enforcement, using regular outreach efforts to keep businesses informed of 

U.S. concerns, and gathering leads on activities of concern. Additionally, exporters are 

required to report to BIS on exports of thermal imaging cameras decontrolled by the May 

2009 regulatory change, enabling BIS to verify that the cameras are continuing to be sold 

to appropriate end-users and that the changes in controls are not jeopardizing U.S. 

national security or foreign policy interests. Given the enhanced anti-terrorism efforts of 

the U.S. Government, it is expected that industry will continue to support enforcement 

efforts. The following are examples of BIS enforcement actions regarding 

noncompliance with these export controls conducted during fiscal year 2009: 

Cameras to China – On July 27, 2009 and August 3, 2009, Zhi Yong Guo and Tah Wei 

Chao, respectively, were sentenced in U.S. District Court in the Central District of 

California. Chao was sentenced to 20 months in prison, three years of supervised 
Chapter 3 Regional Stability 

26 

2010 Report on Foreign Policy-Based Export Controls 

probation, a $3,000 fine, and issued a special assessment of $300. Guo was sentenced to 

60 months in prison, three years of supervised probation, a $12,500 fine, and issued a 

special assessment of $200. On February 23, 2009, a federal jury in the Central District 

of California found Guo guilty of conspiracy and exporting and/or attempting to export 

restricted items related to a plot to procure and export thermal imaging cameras to the 

People’s Republic of China (China) without obtaining the required licenses. 

On July 17, 2008, Chao pled guilty in the Central District of California to conspiracy and 

violating the International Emergency Economic Powers Act (IEEPA). Both Chao and 

Guo were arrested at the Los Angeles International Airport in April 2008 after authorities 

recovered 10 thermal imaging cameras that had been hidden in their suitcases, stuffed in 

shoes, and concealed in clothing. On August 25, 2008, Evan Zhang pled guilty in the 

Central District of California to one count of violating IEEPA and the EAR for his 

involvement in the conspiracy. This was a joint investigation with U.S. Immigration and 

Customs Enforcement (ICE), the Federal Bureau of Investigation, Customs and Border 

Protection, the Diplomatic Security Service, and the Transportation Security 

Administration. 

Thermal Imaging Cameras to South Korea – On March 25, 2009, David Lee, a.k.a. David 

Young, owner and sole operator of Lucena Technology Inc., pled guilty in U.S. District 

Court in the Northern District of Illinois to violating IEEPA. On December 16, 2008, 

Lee was indicted on charges that he knowingly and willfully exported seven thermal 

imaging cameras to South Korea. This investigation was conducted jointly by the BIS’s 

Office of Export Enforcement and ICE. 

C. Consultation with Industry 

In a September 8, 2009, Federal Register notice (74 FR 46008), the Department of 

Commerce solicited public comment on the effectiveness of U.S. foreign policy-based 

export controls, including controls on Regional Stability items. The comment period on 

the Federal Register notice closed on October 8, 2009. A detailed review of all public 

comments received can be found in Appendix I. In addition, comments were solicited 

from the public via the BIS website. Comments from the Department’s six Technical 

Advisory Committees are solicited on a regular basis, but are not detailed in this report. 

In particular, the Department holds quarterly consultations with the Sensors and 

Instrumentation Technical Advisory Committee (SITAC). The SITAC frequently 

addresses the RS controls on thermal imaging cameras and related items and technology. 
Chapter 3 Regional Stability 

27 

2010 Report on Foreign Policy-Based Export Controls 

D. Consultation with Other Countries 

The United States imposes RS controls on items that either are controlled, or were at one 

time controlled, by the Wassenaar Arrangement. Wassenaar Arrangement member 

countries hold extensive consultations, and certain member countries hold bilateral 

discussions regarding items on the Wassenaar control list. During 2009, the U.S. 

Government engaged in extensive consultations with its Wassenaar partners. Wassenaar 

participating states incorporate the Wassenaar Dual-Use Control List into their own 

national export controls to prevent exports that could contribute to destabilizing buildups 

of conventional arms. 

E. Alternative Means 

The United States has undertaken a wide range of actions to support and encourage 

regional stability and has specifically encouraged efforts to limit the flow of arms and 

militarily useful goods and other special equipment to regions of conflict and tension. 

U.S. regional stability export controls remain an important element in U.S. efforts to 

enhance regional stability. The United States opposes the use of U.S.-origin items to 

destabilize legitimate political regimes or fuel regional conflicts, notwithstanding the 

availability of such items from other sources. Accordingly, there are no alternative 

means to achieve this policy objective. 

F. Foreign Availability 

Some military vehicles and other military-type equipment that are controlled for regional 

stability purposes may be obtained from foreign sources. However, in many cases there 

are overlapping multilateral national security (NS) controls on many RS-controlled items. 

In fact, most of the commodities, related software, and technology controlled for regional 

stability purposes are also subject to multilateral controls for either national security or 

missile technology reasons under multilateral regimes. Therefore, controls imposed by 

multilateral regime members restrict foreign availability of these items. 

Manufacturers of imaging cameras controlled in ECCN 6A003 have voiced concern to 

the Department of Commerce that there is considerable foreign availability of these items 

from Europe, Japan, and China. The Department completed a comprehensive study of 

the industry’s condition, including data on foreign availability, in 2006 and found a 

growing market for thermal imaging cameras in commercial areas, including astronomy, 

firefighting, medical imaging, hunting, and wildlife observation. The study also found 

that U.S. exports of imaging and sensor products have grown steadily since 2001, but due 

to increasing competition from the European Union and Japan, U.S. market share has 

declined. In addition, there was a sharp decline in the value of U.S. exports of uncooled 

infrared (thermal) imaging cameras, while the global market for such products has 
Chapter 3 Regional Stability 

28 

2010 Report on Foreign Policy-Based Export Controls 

steadily increased. These cameras are used in the commercial electronics, medical, and 

automotive industries, and also for firefighting, search and rescue, and industrial safety 

purposes. U.S. manufacturers cite overly restrictive U.S. export controls as a key reason 

for this decline, noting that foreign competitors face far less restrictive licensing 

requirements. This foreign availability and differences in licensing practices were major 

factors that led to the decision to revise RS controls on certain thermal imaging cameras 

in the regulation published on May 22, 2008. This regulation eliminated controls on 

certain cameras when exported to 37 countries and has reduced the licensing volume 

significantly. 
Chapter 4 Anti-Terrorism Controls 

29 

2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 4 

Anti-Terrorism Controls 

(Sections 742.8, 742.9, 742.10, 746.2) 

Export Control Program Description and Licensing Policy

Pursuant to Section 6(j) of the Export Administration Act of 1979, as amended (EAA), 

the Secretary of State has designated four countries—Cuba, Iran, Sudan, and Syria—as 

nations with governments that have repeatedly provided support for acts of international 

terrorism.4

 Additionally, the United States maintains broad controls, and in some cases 

comprehensive embargoes, on exports and reexports to Cuba, Iran, Sudan, and Syria. 

The broader controls applicable to such countries are discussed in Chapter 5 of this 

report. 

Since December 1993, the United States has applied Section 6(j) of the EAA to license 

applications involving the export or reexport of five categories of dual-use items to 

certain sensitive end-users within countries designated as terrorist-supporting countries 

because these transactions meet the criteria set forth in Section 6(j)(1)(B) of the EAA. 

Specifically, on December 28, 1993, the Acting Secretary of State determined that these 

items, if exported to military, police, or intelligence organizations, or to other sensitive 

end-users in a designated terrorist-supporting country, could make a significant 

contribution to that country’s military potential or could enhance its ability to support 

acts of international terrorism. As a result, any such export is subject to a 30-day 

Congressional notification period prior to approval. The United States continues to 

control exports and reexports of such items to other end-users, as well as exports and 

reexports of items not specifically included in these five categories, to designated state 

sponsors of terrorism, for general foreign policy purposes under Section 6(a) of the EAA. 

Such transactions are also reviewed against the Section 6(j) standard on a case-by-case 

basis. These controls are identified in the Export Administration Regulations (EAR) as 

anti-terrorism (AT) controls. 

 

4 On October 11, 2008, the designation of North Korea was rescinded, although most 

export control requirements continue to apply to exports and reexports to the country on 

the basis of other laws and regulations, and in accordance with United Nations Security 

Council Resolution 1718 (UNSCR 1718).
Chapter 4 Anti-Terrorism Controls 

30 

2010 Report on Foreign Policy-Based Export Controls 

License Requirements and Licensing Policy

Pursuant to the 1993 determination of the Acting Secretary of State, and subsequent 

action consistent with such determination, certain items are controlled for AT reasons 

pursuant to Section 6(j) of the EAA, while others are controlled pursuant to Section 6(a). 

The Department of Commerce refers all license applications for items controlled for AT 

reasons to the Department of State for review. With respect to items controlled pursuant 

to Section 6(a) (including exports or reexports of items on the Commerce Control List 

(CCL) to non-sensitive end-users), a determination is made regarding whether the 

requirements of Section 6(j) apply. If the Secretary of State determines that the particular 

export “could make a significant contribution to the military potential of the destination 

country, including its military logistics capability, or could enhance the ability of such 

country to support acts of international terrorism,” the Departments of Commerce and 

State must notify the appropriate Congressional committees 30 days before issuing a 

license, consistent with the provisions of Section 6(j) of the EAA. Transactions not 

subject to such requirements are generally reviewed on a case-by-case basis. 

The following items are controlled pursuant to Section 6(j) to military, police, 

intelligence, and other sensitive end-users in all designated terrorist-supporting countries: 

• all items on the CCL subject to national security controls; 

• all items on the CCL subject to chemical and biological weapons proliferation 

controls; 

• all items on the CCL subject to missile proliferation controls; 

• all items on the CCL subject to nuclear weapons proliferation controls; and 

• all military-related items on the CCL (items controlled by CCL entries ending 

with the number 18). 

Transactions involving exports or reexports of items controlled pursuant to Section 6(j) to 

military or other sensitive end-users in all designated terrorist-supporting countries are 

subject to a general policy of denial. Pursuant to Section 6(a) of the EAA, the 

Department of Commerce requires a license for the export or reexport of the items 

specified above to non-sensitive end-users in all designated terrorist-supporting countries 

for AT reasons. Such exports or reexports are generally reviewed on a case-by-case 

basis. 

Pursuant to Section 6(a) of the EAA, the Department of Commerce requires a license for 

the export of certain items on the CCL to all end-users in all designated terroristsupporting countries, and for the reexport of certain items on the CCL to all designated 

terrorist-supporting countries for AT reasons. Additionally, certain other items on the 

CCL require a license for export and/or reexport to one or more of the designated 

terrorist-supporting countries for AT reasons. The applicable controls are contained in 
Chapter 4 Anti-Terrorism Controls 

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2010 Report on Foreign Policy-Based Export Controls 

the relevant EAR sections pertinent to each country. All export controls presently 

maintained for AT reasons pursuant to either Section 6(j) or Section 6(a) of the EAA 

continue in force. 

Moreover, as described further in Chapter 5, the United States maintains additional 

controls on exports and reexports to Cuba, Iran, Sudan, and Syria. As a result, the U.S. 

Government reviews license applications for exports and reexports of most items to these 

countries under a general policy of denial, with limited exceptions. 

Analysis of Controls as Required by Section 6(f) of the Act 

A. The Purpose of the Controls

Anti-terrorism controls are intended to prevent acts of terrorism and to distance the 

United States from nations that have repeatedly supported acts of international terrorism 

and from individuals and organizations that commit terrorist acts. The controls 

demonstrate U.S. resolve not to trade with nations or entities that fail to adhere to 

acceptable norms of international behavior. The policy provides the United States with 

the means to control U.S. goods or services that might contribute to the military potential 

of designated countries and to limit the availability of such goods for use in support of 

international terrorism. U.S. foreign policy objectives are also furthered by ensuring that 

items removed from multilateral regime lists continue to be controlled to designated 

terrorist-supporting countries. With respect to exports and reexports to Cuba, Iran, 

Sudan, and Syria, anti-terrorism controls are maintained as part of broader U.S. sanctions 

discussed in Chapter 5. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, in light of other factors, including the availability of these AT-controlled items 

from other countries. The Secretary has further determined that the foreign policy 

purpose cannot be achieved through negotiations or other alternative means. Although 

widespread availability of comparable goods from foreign sources limits the effectiveness 

of these controls, the controls do restrict access by these countries and persons to U.S.-

origin commodities, technology, and software, and demonstrates U.S. determination to 

oppose and distance the United States from international terrorism. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and specifically with 

overall U.S. policy toward the designated terrorist-supporting countries. The Secretary 

has further determined that the extension of these controls will not have any significant 
Chapter 4 Anti-Terrorism Controls 

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2010 Report on Foreign Policy-Based Export Controls 

adverse foreign policy consequences. These controls affirm the U.S. commitment to 

restrict the flow of items and other forms of material support to countries, individuals, or 

groups for terrorist purposes. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

Most countries are generally supportive of U.S. efforts to fight terrorism and to stop the 

proliferation of weapons of mass destruction in countries of concern. 

4. Economic Impact on United States Industry. The Secretary has determined that 

the adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to United States foreign policy objectives. The AT controls maintained on 

designated terrorist-supporting countries as a whole have had some impact on U.S. 

industry. The economic impact of broader controls maintained on Cuba, Iran, Sudan, and 

Syria is described further in Chapter 5. On the whole, the impact on U.S. industry is 

modest while stopping state sponsorship of terrorism is a very high priority of the U.S. 

Government. 

5. Effective Enforcement of Controls. The Secretary has determined the United 

States has the ability to effectively enforce these controls. Because of the well-publicized 

involvement of these countries in acts of international terrorism, there is public 

knowledge of and support for U.S. controls, which facilitates enforcement. The large 

number of items exported in normal trade to other countries, including some aircraft 

items and consumer goods that have many producers and end-users around the world, 

creates innumerable procurement opportunities for brokers, agents, and front companies 

working for these countries. In addition, differences in export laws and standards of 

evidence for violations complicate law enforcement cooperation among countries. 

Nonetheless, the overriding foreign policy objective of maintaining these controls 

outweighs the difficulties of effective enforcement. The Department of Commerce views 

these controls as a key enforcement priority, and uses outreach efforts and other programs 

to keep businesses informed of concerns, gather leads on activities of concern, and 

conduct sentinel visits to verify end-use and end-users of U.S. commodities. The 

Department is moving to implement a strong program to address procurement by or for 

designated terrorist-supporting countries. This program includes enhanced agent 

training, development of a targeted outreach program to familiarize U.S. businesses with 

concerns, and close cooperation with lead agencies working on terrorism issues. 

BIS conducted a number of enforcement actions regarding noncompliance with these 

export controls during Fiscal Year 2009. For example: 
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2010 Report on Foreign Policy-Based Export Controls 

Aircraft Parts To Iran – On June 11, 2009, Traian Bujduveanu, the owner and operator of 

Orion Aviation of Plantation, Florida, was sentenced in U.S. District Court in the 

Southern District of Florida to 35 months in prison followed by three years of supervised 

release. On April 2, 2009, Bujduveanu pled guilty to conspiracy to violate the 

International Emergency Economic Powers Act and the Arms Export Control Act 

(AECA) in connection with his role in the illegal export of civilian and military aircraft 

parts to Iran Defense Industries Organizations. On January 26, 2009, Hassan Saied 

Keshari and his corporation, Kesh Air International, pled guilty in U.S. District Court in 

Miami, Florida, to conspiracy for their role in the illegal export scheme. Keshari, an 

Iranian national and naturalized United States citizen, purchased aircraft parts through 

Kesh Air International on behalf of purchasers in Iran, and exported the aircraft parts to 

Iran by way of freight forwarders in Dubai, United Arab Emirates. This was a joint 

investigation by BIS and U.S. Immigration and Customs Enforcement (ICE). 

Deemed Exports to Chinese and Iranian Nationals – On July 1, 2009, J. Reece Roth, a 

Professor Emeritus at the University of Tennessee, was sentenced to 48 months in prison 

and two years of supervised release. On September 3, 2008, a federal jury in the Eastern 

District of Tennessee convicted Roth on 18 counts of conspiracy and AECA violations. 

Between January 2004 and May 2006, through the Tennessee-based company 

Atmospheric Glow Technologies, Inc., Roth engaged in a conspiracy to transmit export 

controlled technical data to foreign nationals of the People’s Republic of China and Iran. 

This controlled technical data was related to a restricted U.S. Air Force contract to 

develop plasma actuators for a military unmanned aerial vehicle. The Roth case was 

investigated by several agencies, including the Federal Bureau of Investigation, ICE, Air 

Force Office of Special Investigations, and BIS. 

Aircraft Parts to Iran – On March 13, 2009, Laura Wang Woodford, a U.S. citizen and 

owner and operator of Monarch Aviation, Ltd., located in Singapore, pled guilty to 

conspiracy in U.S. District Court in the Eastern District of New York. Laura Wang 

Woodford and her husband, Brian D. Woodford, a United Kingdom citizen who served as 

chairman and managing director of Monarch, were originally charged on January 15, 

2003 in a 20-count indictment. Brian Woodford remains a fugitive. On May 22, 2008, a 

superseding indictment was returned charging both Laura Wang Woodford and Brian 

Woodford with 21 counts of violations of the EAR, Iranian Transaction Regulations, 

conspiracy, and money laundering. According to the superseding indictment, between 

January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts 

from the United States to companies in Singapore and Malaysia and then re-exported 

those items to companies in Tehran, Iran, without obtaining the required export licenses. 

OEE and ICE jointly conducted this investigation. 
Chapter 4 Anti-Terrorism Controls 

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2010 Report on Foreign Policy-Based Export Controls 

C. Consultation with Industry 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry and the public on the effectiveness of U.S. 

foreign policy-based export controls. Comments from the Department’s six Technical 

Advisory Committees are solicited on an ongoing basis and are not specific to this report. 

In particular, the Department has engaged in an ongoing dialogue with the Regulations 

and Policy Technical Advisory Committee (RPTAC) concerning items controlled only 

for AT reasons. The RPTAC has noted that many such items are widely available from 

foreign sources, and therefore, has questioned the effectiveness of the controls. The 

RPTAC also has noted that every country currently subject to AT controls is also subject 

to comprehensive sanctions or embargo. The comment period closed on October 8, 2009. 

A detailed review of all public comments received can be found in Appendix I. 

D. Consultation with Other Countries

The United States continues to consult with a number of countries, both on a bilateral and 

a multilateral basis, on activities of designated terrorist-supporting countries. In general, 

most countries are supportive of U.S. anti-terrorism efforts but do not implement export 

control programs similar to that of the United States. 

E. Alternative Means

The United States has taken a wide range of diplomatic, political, and security-related 

steps, in addition to economic measures such as export controls, to persuade certain 

countries to stop their support for terrorist activities. The methods that the United States 

uses against a country, terrorist organization, or individual vary and are dictated by the 

circumstances prevailing at any given time. In general, the United States believes that 

maintenance of AT controls is an appropriate method to demonstrate the obligation of 

each of the designated terrorist-supporting countries to act against terrorist elements 

within their jurisdiction or control. See also Chapter 13 for a discussion of the Entity 

List, a list set forth in the EAR of entities to which license requirements apply based on 

criteria that include support for terrorism. 

F. Foreign Availability

The foreign availability provision does not apply to items determined by the Secretary of 

State to require control under Section 6(j) of the EAA5

. Congress specifically excluded 

 

5 Provisions pertaining to foreign availability do not apply to export controls in effect 

before July 12, 1985, under sections 6(i) (International Obligations), 6(j) (Countries 

Supporting International Terrorism), and 6(n) (Crime Control Instruments). See the 
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2010 Report on Foreign Policy-Based Export Controls 

AT controls from foreign availability assessments otherwise required by the Act, due to 

the value of such controls in emphasizing the U.S. position on countries supporting 

international terrorism. However, the Department of Commerce has considered foreign 

availability of items controlled to designated terrorist-supporting countries under Section 

6(a) of the EAA. Although there are numerous foreign sources for commodities similar 

to those subject to control, the continued maintenance of sanctions by many other 

countries limits foreign availability for some destinations more than for others. In 

addition, the continued U.S. Government anti-terrorism controls serve foreign policy 

interests that override the impact of foreign availability. 

 

Export Administration Amendments Act of 1985, Public Law 99-64, section 108(g)(2), 

Stat. 120, 134-35. Moreover, Sections 6(i), 6(j), and 6(n) of the EAA require that 

controls be implemented under certain conditions without consideration of foreign 

availability.
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2010 Report on Foreign Policy-Based Export Controls 

Chapter 5 

Embargoes and Other Special Controls 

(Sections 744.8, 744.12, 744.13, 744.14, 744.18, 744.20, 744.22, 746.2, 

746.3, 746.4, 746.7, and General Order No. 2 to Part 736) 

Export Control Program Description 

This Chapter discusses the Department of Commerce’s implementation of comprehensive 

and partial embargoes, and other special controls maintained by the U.S. Government 

pursuant to the Export Administration Regulations (EAR), either unilaterally or to 

implement United Nations (UN) Security Council Resolutions. Specifically, the U.S. 

Government maintains either partial or comprehensive economic embargoes on Cuba, 

Iran, Sudan, Syria, and certain designated terrorist persons or groups. The U.S. 

Government also maintains certain special export control programs, including programs 

relating to Iraq, North Korea, and certain other countries, consistent with international 

obligations. Finally, the U.S. Government maintains special controls on certain persons 

or entities, including those engaged in the proliferation of weapons of mass destruction. 

See also Chapter 13 for a discussion of the Entity List.

Summary of 2009 Changes 

Cuba

On September 8, 2009, the Department of Commerce published a final rule in the 

Federal Register (74 FR 45985) amending the EAR to create a new License Exception 

authorizing the export and reexport to Cuba of certain donated consumer communications 

devices and to revise the scope of existing licensing policy regarding certain exports and 

reexports related to telecommunications links between the United States and Cuba. This 

amendment also revised two existing License Exceptions concerning exports and 

reexports of gift parcels to Cuba and of personal baggage taken by individuals leaving the 

United States for travel to Cuba. No new license requirements were imposed by this 

amendment. 

Licensing Requirements and Licensing Policy 

Certain Designated Parties 

The Department of Commerce requires a license for the export or reexport of all items 

subject to the EAR to Specially Designated Global Terrorists (SDGTs), Specially 

Designated Terrorists (SDTs), and Foreign Terrorist Organizations (FTOs), and a general 

policy of denial applies to all applications for such exports or reexports. SDGTs, SDTs, 

and FTOs are identified with the bracketed suffixes [SDGT], [SDT], and [FTO], 
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2010 Report on Foreign Policy-Based Export Controls 

respectively, on a list of designated parties maintained by OFAC in Appendix A to 31 

CFR Chapter V. Exports and reexports to SDGTs and SDTs that are authorized by OFAC 

generally do not require additional BIS authorization (this rule does not apply to FTOs). 

Furthermore, the Department of Commerce requires a license for exports and reexports of 

all items subject to the EAR to persons designated in or pursuant to Executive Order 

13382 of June 28, 2005 (Weapons of Mass Destruction Proliferators and their 

Supporters), and a general policy of denial applies to all applications. The parties whose 

property or interests in property are blocked pursuant to Executive Order 13382 (74 FR 

2355) are identified by OFAC in Appendix A to 31 CFR Chapter V with the bracketed 

suffix [NPWMD]. Exports and reexports to NPWMDs that are authorized by OFAC 

generally do not require additional BIS authorization. 

In addition, the Department of Commerce requires licenses for exports, reexports, and 

transfers to persons whose property and interests in property related to Burma are 

blocked pursuant to Executive Order 13310 of July 28, 2003, Executive Order 13448 of 

October 18, 2007, and Executive Order 13464 of April 30, 2008, and a general policy of 

denial applies to all applications. These license requirements apply to all items subject to 

the EAR other than agricultural commodities, medicine, or medical devices designated as 

EAR99. All persons listed in or designated pursuant to Executive Orders 13310, 13448, 

or 13464 are identified by OFAC in Appendix A to 31 CFR Chapter V with the bracketed 

suffix [BURMA]. Exports, reexports, or transfers to entities designated in or pursuant to 

these Executive Orders that are authorized by OFAC generally do not require additional 

BIS authorization. 

Cuba

The Department of Commerce requires a license for export or reexport to Cuba of 

virtually all commodities, technology, and software subject to the EAR, with a few 

narrow exceptions including: 

• certain exports to meet basic human needs; 

• some types of personal baggage; 

• certain foreign-origin items in transit through the United States; 

• shipments for U.S. Government personnel and agencies; 

• certain donated consumer communications devices; and 

• gift parcels containing items normally exchanged as gifts between individuals, 

including food, medicine, clothing, and certain consumer communications devices, 

provided that the value of non-food items does not exceed $800.6

 

6

 An individual donor does not require a license to send a gift parcel addressed to an individual recipient. A 

gift parcel consolidator who exports multiple parcels in a single shipment for delivery to Cuba does require 

a license. (See note to Section 740.12 (a) of the EAR.) 
Chapter 5 Embargoes and Other Special Controls 

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2010 Report on Foreign Policy-Based Export Controls 

The Department of Commerce generally denies license applications for exports or 

reexports to Cuba. However, the Department considers applications for a few categories 

of exports, including the following, on a case-by-case basis: 

• exports from foreign countries of non-strategic, foreign-made products containing 

20 percent or less U.S.-origin parts, components, or materials, provided the exporter 

is not a U.S.-owned or controlled foreign firm in a third country; 

• exports and reexports of items necessary to provide efficient and adequate 

telecommunications links between the United States and Cuba, including links 

established through third countries, and including the provision of satellite radio or 

satellite television services to Cuba; 

• exports of business and office equipment destined to human rights organizations or to 

individuals and non-governmental organizations that promote independent activity; 

• exports of certain commodities and software for U.S. news bureaus in Cuba; 

• exports of certain agricultural items not eligible for License Exception Agricultural 

Commodities (AGR); and 

• temporary exports of certain vessels and aircraft on temporary sojourn to Cuba. 

The Department of Commerce reviews applications for exports of donated and 

commercially supplied medicine or medical devices to Cuba on a case-by-case basis, 

pursuant to the provisions of Section 6004 of the Cuban Democracy Act of 1992. The 

United States does not restrict exports of these items, except in the following cases: 

• to the extent Section 5(m) of the Export Administration Act of 1979, as amended 

(EAA) or Section 203(b)(2) of the International Emergency Economic Powers Act 

(IEEPA) would permit such restrictions; 

• when there is a reasonable likelihood the item to be exported will be used for 

purposes of torture or other human rights abuses; 

• when there is a reasonable likelihood the item to be exported will be reexported; 

• when the item to be exported could be used in the production of any biotechnological 

product; or 

• when the U.S. Government determines it would be unable to verify, by on-site 

inspection and other appropriate means, that the item to be exported will be only for 

the use and benefit of the Cuban people. This exception does not apply to donations 

of medicine for humanitarian purposes to non-governmental organizations in Cuba. 

The Department authorizes exports and certain reexports of agricultural commodities to 

Cuba under License Exception AGR, pursuant to section 906(a)(1) of TSRA. Under 

License Exception AGR, an exporter must submit prior notification of a proposed 

transaction to the Department of Commerce. The exporter may proceed with the 

shipment when the Department confirms that no reviewing agency has raised an 
Chapter 5 Embargoes and Other Special Controls 

39 

2010 Report on Foreign Policy-Based Export Controls 

objection (generally within 12 business days), provided the transaction meets all of the 

other requirements of the license exception. This expedited review includes the 

screening of the ultimate recipient of the commodities to ensure that it is not involved in 

promoting international terrorism. 

On September 8, 2009, the Department published in the Federal Register an amendment 

to the EAR to create a new License Exception authorizing the export and reexport to 

Cuba of certain donated consumer communications devices and to revise the scope of 

existing licensing policy regarding certain exports and reexports in support of 

telecommunications links between the United States and Cuba. Donated consumer 

communications devices eligible under the new License Exception include certain 

computers and software, mobile phones, and satellite receivers. Telecommunications 

links addressed under the revised licensing policy include satellite radio and satellite 

television services. 

This amendment also revised two existing License Exceptions concerning exports and 

reexports of gift parcels to Cuba and of personal baggage taken by individuals leaving the 

United States for travel to Cuba. The revision to the License Exception for gift parcels 

adds clothing, personal hygiene items, seeds, veterinary medicines and supplies, fishing 

equipment and supplies, soap-making equipment, and non-sensitive items normally sent 

as gifts between individuals as items eligible for export or reexport to Cuba in gift 

parcels. It also removes requirements that the donee be a member of the immediate 

family of the donor and that only one gift parcel per month be sent to the same household 

in Cuba. As revised, License Exception Gift Parcels and Humanitarian Donations (GFT) 

authorizes a donor to send one gift parcel per month to any individual (other than certain 

Cuban Government or Cuban Communist Party officials) or to a charitable, educational, 

or religious organization in Cuba that is not administered or controlled by the Cuban 

government. For example, hospitals or schools administered or controlled by the Cuban 

Government are not eligible recipients under this License Exception. Further, this rule 

revises the License Exception to increase the combined total domestic retail value of all 

non-food items included in a gift parcel from $400 to $800. The revision to the License 

Exception for personal baggage removes the 44 pound weight limit on the personal 

baggage of most travelers from the United States to Cuba. 

BIS made these changes in response to the President’s April 13, 2009, memorandum 

directing certain actions intended to enhance the free flow of information to and from 

Cuba and to promote contacts between Americans and their relatives who reside in Cuba 

as a means of encouraging positive change in Cuba. These changes are consistent with 

the ongoing support the United States has provided to individuals and nongovernmental 

organizations that support democracy-building efforts in Cuba and do not suspend or 

terminate the United States embargo of Cuba. 
Chapter 5 Embargoes and Other Special Controls 

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2010 Report on Foreign Policy-Based Export Controls 

Iran

OFAC administers the U.S. Government’s comprehensive trade and investment embargo 

against Iran. No person may export or reexport items subject to the EAR if such 

transaction is prohibited by OFAC’s Iranian Transactions Regulations and not authorized 

by OFAC. Virtually all trade and investment activities with Iran by U.S. persons, 

wherever located, are prohibited by OFAC regulations. Certain trade activities by nonU.S. persons, including some reexports, are also prohibited by OFAC. 

The Department of Commerce imposes license requirements for exports and reexports to 

Iran of most items on the CCL. The Iran-Iraq Arms Non-Proliferation Act of October 23, 

1992, requires BIS to deny licenses for items controlled to Iran for national security 

(Section 5 of the EAA) or foreign policy (Section 6 of the EAA) reasons. License 

applications for exports or reexports of these items are subject to a general policy of 

denial, absent contract sanctity or a Presidential waiver of restrictions under the Act. In 

some cases, the EAR impose license requirements on items designated as EAR99 that are 

(1) destined to end-users listed in either the EAR or OFAC’s list of Specially Designated 

Nationals, or (2) destined to end-uses prohibited by Part 744 of the EAR. The license 

requirements for items designated as EAR99, because they are not specific to Iran, are 

listed in either this Chapter’s description of controls on Specially Designated Nationals, 

or in Chapter 13’s discussion of the BIS Entity List. 

Notwithstanding Department of Commerce license requirements and licensing policies, 

OFAC is the primary licensing agency for exports and reexports to Iran, and BIS does 

not, in practice, receive or process license applications for transactions involving Iran 

except in the following circumstances: (1) the license is for the deemed export of 

technology subject to the EAR to Iranian nationals in the United States; or (2) the license 

is for the export or reexport of items to certain end-users or for certain end-uses in Iran 

that are prohibited pursuant to provisions of the EAR that are not specific to Iran. 

BIS enforces violations of the Iran-related provisions of the EAR. To reinforce controls 

administered by the Department of the Treasury, it is a violation of the EAR to export or 

reexport to Iran any item that is subject to the EAR—including items designated as 

EAR99—if such transaction is prohibited by the Department of the Treasury’s Iranian 

Transaction Regulations and not authorized by OFAC. 

On January 15, 2009, the Department of Commerce published in the Federal Register an 

amendment to the EAR extending licensing requirements for reexports of items classified 

under ten ECCNs (ECCNs 2A994, 3A992.a, 5A991.g, 5A992, 6A991, 6A998, 7A994, 

8A992.d, .e, .f, and .g, 9A990.a and .b, and 9A991.d and .e) that previously did not 

require a license for reexport to Iran under the EAR (74 FR 2355). As with other exports 

or reexports of items on the CCL, the Department of the Treasury is the agency that 
Chapter 5 Embargoes and Other Special Controls 

41 

2010 Report on Foreign Policy-Based Export Controls 

would receive or process applications for exports or reexports of these items to Iran. 

Iraq

Pursuant to controls related to UN Security Council Resolution 1483, which retains 

restrictions on the sale or supply to Iraq of arms and related material, the Department of 

Commerce requires a license for the export or reexport to Iraq, or transfer within Iraq, of 

the following: 

• any item that is destined for use in Iraqi civil nuclear or military nuclear activity 

(except for use of isotopes for medical, industrial, or agricultural purposes); 

• machine tools controlled for national security (NS) or nuclear nonproliferation 

(NP) reasons; and 

• any item controlled for crime control (CC) or United Nations (UN) reasons, or 

any item controlled under an ECCN ending in the number “018” that would make 

a material contribution to the production, research, design, development, support, 

maintenance, or manufacture of Iraqi weapons of mass destruction, ballistic 

missiles, or arms and related materiel. 

The Department of Commerce reviews license applications for these items under a 

general policy of denial. 

In addition, the Department requires a license for the export, reexport, or transfer of items 

subject to the EAR if the exporter knows, has reason to know, or is informed by the 

Department that the item will be, or is intended to be, used in Iraq for a “military enduse” or a “military end-user,” as defined in Section 746.3 of the EAR. As defined 

specifically for Iraq, a military end-user is any person or entity whose actions or 

functions are intended to support “military end-uses” and who is not recognized as a 

legitimate military organization by the U.S. Government. “Military end-use” is the 

incorporation of an item into a military item described on the U.S. Munitions List 

(USML) (22 CFR Part 121, International Traffic in Arms Regulations (ITAR)), or the 

Wassenaar Arrangement Munitions List (WAML); or use, development, or deployment 

of military items described on the USML or the WAML. The Department reviews 

license applications destined to such end-users under a policy of denial. 

Unless already authorized by the Department of the Treasury, the Department of 

Commerce requires a license for exports, reexports, or transfers of any item subject to the 

EAR to persons listed in the Annex to Executive Order 13315, as amended (“Blocking 

Property of the Former Iraqi Regime, Its Senior Officials and Their Family Members, and 

Taking Certain Other Actions”), as well as persons subsequently designated by the 

Secretary of the Treasury pursuant to that executive order. License applications for such 

transactions are reviewed under a general policy of denial by the Department of 

Commerce. 
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2010 Report on Foreign Policy-Based Export Controls 

North Korea

On October 11, 2008, the Secretary of State rescinded North Korea’s designation as a 

state sponsor of terrorism. BIS will continue to work with its interagency partners to 

determine what changes to the EAR may be appropriate. However, the rescission does 

not impact other sanctions imposed on North Korea based on its nuclear and ballistic 

missile tests, proliferation activities, and human rights violations, which will continue to 

apply on the basis of other relevant laws and regulations. Consistent with UN Security 

Council Resolutions 1718 and1874, and as set forth in Section 746.4 of the EAR, BIS 

still requires a license for the export or reexport of all items subject to the EAR and 

destined for North Korea, except food and medicines designated as EAR99. 

UN Security Council Resolution 1718 requires all UN Member States to prevent the 

supply, sale, or transfer of luxury goods, arms and related materiel, items listed in UN 

documents S/2006/814, S/2006/815, and S/2006/853, and other items that could

contribute to North Korea’s nuclear, ballistic missile, or weapons of mass destruction 

(WMD) programs. Consistent with that resolution, on January 26, 2007, the Department 

of Commerce amended the EAR to implement changes in U.S. export controls with 

respect to North Korea (72 FR 3722). This amendment implemented license 

requirements for exports and reexports of all items subject to the EAR to North Korea, 

with the exception of food and EAR99 medicines (i.e., medicines subject to the EAR but 

not controlled on the CCL). On June 12, 2009, the UN Security Council adopted 

Resolution 1874, which extended the sanctions imposed under UN Security Council 

Resolution 1718 to all arms and related materiel, financial transactions, training advice, 

services, and assistance related to the provision, manufacture, maintenance, or use of 

such arms and materiel. The additional sanctions did not affect export controls for North 

Korea under the EAR. 

Pursuant to Section 746.4 of the EAR, applications for items requiring a license for 

export or reexport to North Korea are subject to case-by-case review, except as follows: 

• Applications to export luxury goods (e.g., luxury automobiles; yachts; gems; 

jewelry; other fashion accessories; cosmetics; perfumes; furs; designer clothing; 

luxury watches; rugs and tapestries; electronic entertainment software and 

equipment; recreational sports equipment; tobacco; wine and other alcoholic 

beverages; musical instruments; and antiques and collectible items, including but 

not limited to rare coins and stamps) are subject to a general policy of denial. 

• Applications to export or reexport arms and related materiel, items specified by 

UN documents S/2006/814, S/2006/815 and S/2006/853, and other items that the 

UN Security Council or the Sanctions Committee established pursuant to UN 

Security Council Resolution 1718 has determined could contribute to North 
Chapter 5 Embargoes and Other Special Controls 

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2010 Report on Foreign Policy-Based Export Controls 

Korea's nuclear-related, ballistic missile-related or other weapons of mass 

destruction-related programs are subject to a general policy of denial. 

• Applications to export or reexport items controlled for NP and missile technology 

reasons (except ECCN 7A103 items) are subject to a general policy of denial. 

• Applications to export or reexport items controlled for chemical and biological 

weapons and NS reasons, as well as applications to export or reexport many items 

controlled for AT-only reasons, are subject to a general policy of denial. 

• Applications to export or reexport humanitarian items (e.g., blankets, basic 

footwear, heating oil, and other items meeting subsistence needs) intended for the 

benefit of the North Korean people; items in support of UN humanitarian efforts; 

and agricultural commodities or medical device items that are determined by BIS, 

in consultation with the interagency license review community, not to be luxury 

goods are subject to a general policy of approval. 

Persons Sanctioned by the State Department 

Pursuant to Section 744.20 of the EAR, the Department of Commerce may impose, as 

foreign policy controls, export and reexport license requirements and set licensing policy 

with respect to certain entities that have been sanctioned by the State Department. 

Entities upon which export and reexport license requirements under Section 744.20 of the 

EAR have been imposed are listed on the Entity List, Supplement No. 4 to Section 744 of 

the EAR. 

Sudan

The U.S. Government requires a license for the export and reexport of nearly all items on 

the CCL to Sudan. Many items controlled on the CCL to Sudan may require a license 

from both the Departments of Commerce and the Treasury. License applications may be 

submitted to both agencies concurrently. 

The Department of Commerce reviews under a general policy of denial applications for 

the export and reexport of all items controlled for chemical, biological, missile, and 

nuclear proliferation reasons, military-related items controlled for national security or 

regional stability reasons (CCL entries ending in the number 018), and certain items 

controlled for national security or foreign policy reasons, such as aircraft, cryptologic 

items, and explosive device detectors, for all end-users in Sudan. Other items controlled 

to Sudan for national security or foreign policy reasons are subject to a general policy of 

denial for military end-users or end-uses, and case-by-case review for non-military endusers or end-uses. 
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Pursuant to Executive Orders 13067 (November 3, 1997) and 13412 (October 13, 2006), 

the Department of the Treasury maintains trade restrictions on exports and reexports to 

Sudan. OFAC also requires a license for the export of many EAR99 items to Sudan. 

However, Executive Order 13412 eased the licensing requirements with respect to 

exports to Southern Sudan, with limited exceptions. The Department of the Treasury is 

solely responsible for licensing the export of agricultural and medical items not listed on 

the CCL to Sudan under TSRA. 

Syria

On May 11, 2004, the President issued Executive Order 13338 to implement Sections 

5(a)(1) and 5(a)(2)(A) of the Syrian Accountability and Lebanese Sovereignty 

Restoration Act (SAA). In compliance with the President’s action, the Department of 

Commerce revised its license requirements and licensing policy for Syria to restrict all 

exports or reexports to Syria of items subject to the EAR, as specified in General Order 

No. 2 to Supplement No. 1 to Part 736 of the EAR, which was published in the Federal 

Register on May 14, 2004 (69 FR 26766). 

The Department of Commerce requires a license for the export or reexport to Syria of all 

commodities, technology, and software subject to the EAR, except: 

• personal baggage for individuals leaving the United States; 

• items for the use of the news media under certain conditions; 

• exports for U.S. Government personnel and agencies; 

• certain operation technology and software, sales technology, and software 

updates; 

• temporary sojourn of certain civil aircraft reexported to Syria; 

• food; and 

• medicine designated as EAR99. 

The Department of Commerce generally denies license applications for exports or 

reexports to Syria. However, the Department considers applications for the following on 

a case-by-case basis: 

• items in support of U.S. Government activities; 

• medicine on the CCL; 

• medical devices; 

• parts and components intended to ensure the safety of civil aviation and safe 

operation of commercial passenger aircraft; 

• aircraft chartered by the Syrian Government for the transport of Syrian 

Government officials on official Syrian Government business; 
Chapter 5 Embargoes and Other Special Controls 

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2010 Report on Foreign Policy-Based Export Controls 

• telecommunications equipment and associated computers, software, and 

technology (to include items for general academic, administrative, business, and 

personal use); and 

• items in support of UN operations in Syria. 

Rwanda

On July 10, 2008, the UN Security Council adopted Resolution 1823, which terminated 

the remaining prohibitions on the sale or supply of arms and arms-related materiel to 

Rwanda. In fiscal year 2010, the Department of Commerce expects to amend its 

regulations in accordance with UN Security Council Resolution 1823. 

Other Countries 

The United Nations Security Council maintains embargoes on the export of certain arms 

and related materiel to several countries, geographic regions, or entities within certain 

countries. UN embargoes, or partial embargoes, are currently in place for the DRC, Côte 

d'Ivoire, Iraq, Lebanon, Liberia, North Korea, Sierra Leone, Somalia, and Sudan. The 

Department of Commerce expects to implement these arms embargoes for purposes of 

the EAR through a regulation to be published in the Federal Register. 

Analysis of Controls as Required by Section 6(f) of the EAA

A. The Purpose of the Controls 

Certain Designated Parties 

The purpose of controls on designated terrorist persons and groups and proliferators of 

weapons of mass destruction and their supporters is to restrict exports of items that would 

be useful in enhancing the capability of these parties to undertake activities that support 

terrorism or contribute to the development of WMD. 

The purpose of the Burma controls is to impose economic sanctions on political and 

military leaders and other parties that contribute to civil unrest and suppression of basic 

rights and freedoms in those countries. These controls seek to prevent the acquisition of 

items by regimes or entities that may use the items to carry out activities that are or 

would be detrimental to U.S. foreign policy interests. 

Cuba

The United States imposed an embargo on Cuba over four decades ago because Cuban 

Government actions posed a serious threat to the stability of the Western Hemisphere and 

the Cuban Government expropriated property of U.S. citizens without compensation. In 

March 1982, the Secretary of State designated Cuba as a state sponsor of terrorism under 

Section 6(j) of the EAA. The purpose of the controls is to restrict exports that would 

allow Cuba to act as a destabilizing force and/or to support terrorism. The controls 
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46 

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demonstrate the United States’ resolve to maintain stability in the region and to actively 

work against the threat of terrorism and those who support it. At the same time, U.S. 

support for the export of food, “gift packs,” and other humanitarian items, such as 

medicines and medical devices, ensures that the Cuban population is not deprived of 

basic human supplies. 

Iran

The purpose of the controls is to restrict exports of items that would be useful in 

enhancing Iran’s terrorist-supporting capabilities and to address other U.S. foreign policy 

concerns, including nonproliferation, human rights, and regional stability. By restricting 

the export of items with military use, the controls demonstrate the resolve of the United 

States not to provide any direct or indirect military support for Iran and to support other 

U.S. foreign policy objectives. The United States’ support for exports and reexports of 

food items, medical supplies, and medical equipment is designed to ensure that U.S. 

export controls on Iran do not prevent the Iranian population from receiving what it needs 

for humanitarian purposes. 

Iraq

The purpose of the controls is to restrict exports to insurgents within Iraq and other 

inappropriate military end-users in Iraq, including the former Iraqi leadership, thereby 

limiting their ability to enhance or expand their activities.

North Korea 

The purpose of the controls is to restrict certain exports and reexports to North Korea to 

comply with the United States’ obligations as a member of the United Nations, and to 

demonstrate the United States’ concern over North Korea’s development, testing, and 

proliferation of nuclear weapons, missiles and missile technology, and other weapons of 

mass destruction. 

Persons Sanctioned by the State Department 

The purpose of the controls is to restrict exports to individuals and entities engaged in 

activities that are contrary to the foreign policy interests of the United States and/or have 

violated U.S. export control laws. These controls demonstrate the United States’ 

opposition to activities of concern as well as its resolve to actively work against the 

diversion of sensitive items to unauthorized end-users or end-uses. 

Sudan

The U.S. embargo and export controls remain in place against Sudan to restrict access to 

items that could make a significant contribution to Sudan’s military capability. Although 

the Government of Sudan has cooperated with U.S. counterterrorism efforts, the United 

States will not fully normalize relations with Sudan until the situation in Darfur is 

satisfactorily addressed. The controls maintained by BIS pursuant to the EAR support 
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2010 Report on Foreign Policy-Based Export Controls 

the broader embargo maintained by OFAC pursuant to several Executive Orders and 

consistent with other applicable laws. 

Syria 

The Syrian Government continues to host Palestinian groups in Syria and to provide 

political and material support to Hezbollah and other terrorist organizations in Lebanon. 

Moreover, the Syrian Government allows Iran to re-supply Hezbollah through Syrian 

territory. The U.S. Government also remains concerned about Syria’s interference in 

Lebanon's internal affairs, the flow of foreign fighters through Syria destined for Iraq, 

and Syrian nuclear, missile, and chemical/biological programs. U.S. export controls 

reflect U.S. opposition to these activities. The controls also promote other U.S. foreign 

policy interests, including the promotion and protection of human rights and the 

encouragement of regional stability. 

United Nations Security Council Arms Embargoes

The controls on arms-related items to the DRC, Côte d’Ivoire, Iraq, Liberia, Lebanon, 

North Korea, Sierra Leone, Somalia, and Sudan will be implemented to prevent any U.S. 

contribution to potential conflict within these countries and to conform to United 

Nations-mandated sanctions. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving Intended Foreign Policy Purpose. The Secretary has 

determined that the controls described in this Chapter are likely to achieve the intended 

foreign policy purpose, in light of other factors, including foreign availability from other 

countries. He has further determined that the foreign policy purpose cannot be achieved 

through negotiations or other alternative means. For each of the controls described in this 

Chapter, the Secretary has determined that such restrictions have denied the targeted 

countries and entities access to resources for use in their unacceptable activities and 

purposes. The controls described in this Chapter seek to have the targeted entities or 

governments modify their actions. In addition, the applicable controls may serve to 

reduce the potential for conflict. 

Certain Designated Parties

The Secretary has determined that foreign policy controls will thwart the access that these 

persons and groups have had to U.S.-origin items that could support terrorist operations, 

WMD proliferation, or other restricted activities. 
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2010 Report on Foreign Policy-Based Export Controls 

Cuba 

The Secretary has determined that the embargo will help to bring about a peaceful 

transition toward democracy and a free market economy in Cuba while providing for the 

basic human needs of the Cuban people. 

Iran

The Secretary has determined that foreign policy controls will restrict Iran’s access to 

specified U.S.-origin items that could contribute to Iranian support of terrorism and 

instigation of regional threats to U.S. interests. 

Iraq

The Secretary has determined that foreign policy controls will restrict the ability of 

terrorists and insurgent groups to obtain and use U.S.-origin items to attack U.S. forces 

and the Multinational Force in Iraq or to destabilize the current Government of Iraq. 

North Korea 

The Secretary has determined that the foreign policy controls will meet U.S obligations 

under relevant UN Security Council resolutions and impede North Korea’s development, 

testing, and proliferation of nuclear weapons and other WMDs. 

Persons Sanctioned by the State Department 

The Secretary has determined that foreign policy controls will thwart the access that these 

persons have to U.S.-origin items and their ability to divert such items to unauthorized 

end-users or end-uses. 

Sudan 

The Secretary has determined that foreign policy controls will restrict the Government of 

Sudan’s ability to obtain and use U.S.-origin items in support of military activities in 

Darfur. The controls are also likely to impede terrorist activities in Sudan and support 

international efforts to end the humanitarian crisis in Darfur. 

Syria 

The Secretary has determined that foreign policy controls will contribute to the 

Government of Syria ending its support of terrorist groups and interference in Lebanon. 

United Nations Security Council Arms Embargoes

The Secretary has determined that embargoes and partial embargoes on exports of armsrelated items to the Democratic Republic of Congo, Côte d’Ivoire, Iraq, Liberia, 

Lebanon, North Korea, Sierra Leone, Somalia, and Sudan will meet U.S. obligations 

under relevant UN Security Council resolutions. 
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2010 Report on Foreign Policy-Based Export Controls 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives, and that the extension 

of these controls will not have any significant adverse foreign policy consequences. The 

controls complement U.S. foreign policy and other aspects of U.S. relations with these 

persons and countries. They encourage these persons and governments to modify their 

actions with the goal of improving conditions in their region. These controls are 

consistent with U.S. foreign policy goals of promoting peace and stability, and preventing 

weapons proliferation and human rights abuses. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

Notwithstanding the fact that most countries have not imposed embargoes as 

comprehensive as those of the United States, and that some countries have challenged 

certain U.S. controls as unwarranted extraterritorial regulations, the overriding foreign 

policy objective of maintaining these controls outweighs negative foreign reactions. 

Opposition to U.S. foreign policy-based controls by many of our major trading partners, 

including some close allies, continues to be a point of contention. This reaction has led 

some foreign firms to design-out U.S. components or to cite the lack of their own 

national sanctions as a marketing tool to secure business contracts that might have gone 

to U.S. companies. In some instances, foreign governments have instructed foreign firms 

to ignore U.S. reexport controls. However, in certain areas, such as the nuclear threat 

posed by Iran and North Korea and the genocide in the Darfur region of Sudan, the 

United States has received broader international support for its sanctions policies from 

other countries. 

Certain Designated Parties 

Many countries support U.S. efforts to ensure that exports and reexports of U.S.-origin 

items are not used in terrorist activities, the development of WMD, or by entities or 

foreign governments that are perpetrating or promoting civil unrest in their own or other 

countries. The Department of Commerce implements these objectives by blocking 

designated groups and individuals from acquiring commodities that could aid or assist 

these groups in committing future acts deemed to support these activities. Although 

some countries are considering restrictive legislation, very few maintain export controls 

similar to those implemented by the United States. 

Cuba

Although most countries recognize the right of the United States to determine its own 

foreign policy and security concerns and share U.S. concerns regarding the Cuban 

regime, many countries continue to oppose controls on trade between the United States 

and Cuba. Many nations, however, have joined the United States in promoting political 

freedom, as a result of the Cuban Government’s jailing of pro-democracy advocates. 
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2010 Report on Foreign Policy-Based Export Controls 

Iran

Other countries share U.S. concerns regarding Iran’s support of terrorism, human rights 

abuses, and attempts to acquire WMD. This is especially the case in the nuclear context, 

where international concerns with Iran’s intentions vis-à-vis its nuclear program have led 

to the unanimous adoption of two UN Security Council resolutions imposing sanctions on 

Iran pursuant to Chapter VII of the UN Charter. The member states of the Group of 

Eight, the European Union, the members of the Nuclear Suppliers Group, and other 

multilateral bodies have joined the United States in expressing their concern over Iran’s 

pursuit of a nuclear weapons capability and have called on Iran to cooperate fully and 

transparently with the International Atomic Energy Agency (IAEA). In general, 

however, U.S. controls on commercial goods to Iran are more stringent than most other 

countries’ controls. 

Iraq

The United States continues to impose an arms embargo on military end-users and enduses that are not affiliated with the Multinational Force in Iraq or the Iraqi Government in 

accordance with its obligations as a member of the United Nations. Many other member 

states also comply with these obligations and impose an arms embargo on Iraq. Other 

nations also share U.S. concerns about insurgent activities in Iraq. 

North Korea

The United States maintained a comprehensive trade embargo against North Korea for 

almost 50 years, until 1994. In general, during that time period, U.S. allies largely acted 

in concert with the United States to deny North Korea strategic equipment and 

technology. Similarly, the easing of U.S. sanctions toward North Korea and the removal 

of some U.S. controls in June 2000 were echoed by other Western countries. However, 

as a result of North Korea’s nuclear and missile tests in 2006 and 2009, the United 

Nations Security Council adopted UN Security Council Resolutions 1718 and 1874 

imposing additional sanctions on North Korea and demonstrating international 

disapproval of North Korea's nuclear and ballistic missile-related activities. Pursuant to 

these UN sanctions, and on the basis of other relevant laws and regulations, the 

Department of Commerce continues to apply sanctions on North Korea which other 

countries generally support. 

Persons Sanctioned by the State Department 

Although other countries share U.S. concerns regarding the diversion of goods to 

unauthorized end-users or end-uses, few countries maintain controls similar to those 

implemented by the United States. 

Sudan 
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2010 Report on Foreign Policy-Based Export Controls 

In 1997, the United States imposed an embargo on Sudan in response to credible 

evidence that it assisted international terrorist groups, destabilized neighboring 

governments, and violated human rights. Although the Government of Sudan has 

cooperated with U.S. counterterrorism efforts, the United States will not fully normalize 

relations with Sudan until, among other steps, Sudan allows for the full and effective 

deployment of the peacekeeping force mandated by UN Council Resolutions 1706 and 

1769. The United States continues to consult with other countries regarding the 

humanitarian crisis in Darfur bilaterally and multilaterally, including through the United 

Nations.

Syria 

The United States maintains controls in response to Syria’s lack of concrete steps to end 

its support for the terrorist groups, interdict the flow of foreign fighters destined for Iraq, 

and refrain from interfering in Lebanon's internal affairs. Although many other countries 

concur that Syria’s regional activities are destabilizing, few countries maintain controls 

similar to those implemented by the United States. 

United Nations Security Council Arms Embargoes

Amendments to the EAR implementing UN arms embargoes and partial embargoes on 

the DRC, Côte d’Ivoire, Iraq, Liberia, Lebanon, North Korea, Sierra Leone, Somalia, and 

Sudan will be consistent with UN objectives. The U.S. Government has received no 

significant objections to these UN Security Council-mandated controls. 

4. Economic Impact on United States Industry. The Secretary has determined that 

any adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to U.S. foreign policy objectives. 

Certain Designated Parties

The Department of Commerce did not review any license applications for the particular 

parties designated by the Treasury Department in fiscal year 2009. As a result, the 

economic impact of these controls is presumably minimal. The Department of the 

Treasury maintains restrictions on activities of U.S. persons involving designated terrorist 

entities, proliferators, and those involved in civil unrest and suppression of basic rights 

and freedoms in Burma, which the Department of Commerce’s controls augment. 

Cuba

The U.S. Government requires authorization in the form of either a license or an 

agricultural license exception notice for the export and reexport to Cuba of most U.S.-

origin commodities, technology, and software subject to the EAR. The number of license 

applications and notices that the Department of Commerce issued for exports or reexports 
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2010 Report on Foreign Policy-Based Export Controls 

to Cuba increased significantly from 1998 through 2002, declined through 2008, and then 

increased in 2009. 

The increase in approved export license applications to Cuba from 1998 through 2002 

can be attributed to changes in U.S. export policies made during the late 1990s, including 

the resumption of direct flights, exports of medicines and medical supplies and 

equipment, exports of food and certain agricultural commodities, and the expansion of 

agricultural commodities eligible for export authorization under the procedures specified 

in License Exception AGR to the Cuban Government. 

The decline in the number of approved licenses and notices to Cuba through 2008 may 

be, to some degree, ascribed to Cuba’s inability or unwillingness to meet financial 

transaction rules requiring the U.S. seller to receive payment from the Cuban buyer 

before vessels carrying goods leave U.S. ports. However, the decline may be more 

attributable to Cuba’s efforts to diversify import suppliers, particularly with the objective 

of strengthening strategic geopolitical relationships. Although the number of licenses and 

notices continued to decline through 2008, the dollar value of the exports authorized 

actually increased. For example, the number of agricultural license exception notices 

filed in fiscal year 2008 actually dropped by three, but the dollar value of the exports 

increased by about $1.3 billion over the previous year. It is important, however, to note 

that the value of the licenses is the maximum that could be shipped and usually not the 

actual value of the goods shipped. 

In fiscal year 2009, the Department of Commerce approved 286 license applications 

valued at over $1.2 billion for Cuba. There was a noticeable increase in the number of 

license applications approved in fiscal year 2009 in comparison with fiscal year 2008. 

This increase may, to some degree, be ascribed to licenses approved in response to the 

basic human needs of the Cuban people in the immediate aftermath of three hurricanes 

that made landfall in Cuba during 2008. In the first quarter of fiscal year 2009, the 

Department authorized 40 licenses for the export of food, medicine and medical supplies, 

clothing, household goods, personal hygiene items, and shelter materials valued at over 

$95 million. Of note, the response to the 2008 hurricanes illustrates the U.S. 

Government’s commitment to ensure that export controls do not hinder efforts to provide 

humanitarian aid to the Cuban people. 

In fiscal year 2009, the Department returned without action 139 license applications, 

valued at over $800 million, and rejected 5 license applications, valued at over $220,000. 

Errors and deficiencies were the primary reasons for the number of returned applications. 

The Department did not revoke any previously valid licenses during this period. Also 

during fiscal year 2009, the Department issued 179 notices of authorization valued at 

approximately $3.2 billion under License Exception AGR. The Department of 

Commerce and reviewing agencies had no objections to these notices. 
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2010 Report on Foreign Policy-Based Export Controls 

Table 1: Approved Commerce Export License Applications and License Exception 

AGR Notifications Authorized for Cuba, Fiscal Years 1996-2009 

Fiscal Year Number of Applications / 

Notifications

Total Value

in U.S. Dollars 

1996 83 $592,738,313

1997 87 $493,414,819

1998 128 $544,659,988

1999 181 $75,840,789

2000 310 $737,108,231

2001* 241 $454,908,260

2002 582 $2,521,457,648

2003 528 $2,801,868,688

2004 537 $3,096,634,000

2005 483 $3,091,221,021

2006 452 $2,840,600,000

2007 364 $3,523,536,224

2008 348 $4,486, 954,924

2009 465 $4,417,538,817

TOTAL 4,789 $29,678,481,722

 * Notifications under License Exception AGR first became available in 2001. 

The majority of export licenses approved for Cuba in fiscal year 2009 were for items 

designated as EAR99, largely medicines and medical equipment, instruments, and 

supplies. 

Other countries have not imposed restrictions on their exports to Cuba comparable to the 

U.S. embargo. According to the Central Intelligence Agency’s (CIA) World Factbook 

2009, Cuba imported an estimated $14.5 billion in commodities in 2008 (the most recent 

year for which statistics are available), up from $10.01 billion the year before. Leading 

Cuban imports included petroleum, food, machinery and equipment, and chemicals. 

Cuba’s leading suppliers were Venezuela (31.5 percent), the People’s Republic of China 

(11.8 percent), Spain (10.6 percent), Canada (6.7 percent), Italy (5.5 percent), and the 

United States (6.6 percent, an increase of 1.8 percent over 2007). 

Iran

The U.S. Government maintains a policy of denial for license applications for exports of 

items on the CCL to Iran, consistent with the provisions of the Iran-Iraq Arms Non-
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2010 Report on Foreign Policy-Based Export Controls 

Proliferation Act of 1992, contained in the National Defense Authorization Act of Fiscal 

Year 1993 (NDAA), and the U.S. trade and investment embargo of 1995. Statistical data 

on past exports to Iran provided in Table 3 demonstrate the economic impact of 

sanctions, as mandated for this report. 

In the early 1990s in response to Iran’s removal of certain import restrictions, and prior to 

the NDAA and the imposition of the embargo, U.S. exports to Iran rose sharply. From 

1991 through 1994, U.S. exports to Iran totaled close to $2.2 billion, making the United 

States the sixth-largest exporter to Iran during this period. Such exports, however, 

amounted to only five percent of Iran’s total imports and less than one percent of overall 

U.S. exports. As a result of the denial policy mandated by the NDAA and the 1995 U.S. 

trade and investment embargo, U.S. exports to Iran fell dramatically. In 2001, as the 

result of the implementation of TSRA, the U.S. Government could authorize exports and 

reexports of food, agricultural equipment, medicine, and medical supplies and equipment. 

According to the U.S. Census Bureau statistics, in 2008, total U.S. exports to Iran were 

valued at $683 million. The top U.S. commodities exported to Iran were agricultural 

commodities, medical equipment and pharmaceutical preparations. 

Since 1997, the Department of the Treasury has had primary jurisdiction for the export 

and reexport of items subject to the EAR to Iran, and the Department of Commerce has 

sole jurisdiction for “deemed exports” (transfers of controlled U.S. technology to Iranian 

nationals in the United States). As noted in Table 2, during fiscal year 2009, the 

Department of Commerce approved 27 deemed export licenses for Iranian nationals. 

Table 2: Approved Commerce Export License Applications for Iran, 

Fiscal Years 1991-2009 

Fiscal Year Number of 

Applications

Total Value

in U.S. Dollars

1991 89 $ 60,149,182

1992 131 $567,559,528

1993 44 $ 63,834,952

1994 10 $ 16,774,377

1995 0 $0

1996 0 $0

1997 5 $19

1998 6 $10,012

1999 10 $20,408

2000 23 $35
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2010 Report on Foreign Policy-Based Export Controls 

2001 19 $32

2002 10 $23

2003 16 $36

2004 31 $173

2005 31 $60

2006 38 $172

2007 53 $286

2008 49 $376

2009 27 $221

TOTAL 561 $708,349,892

The U.S. trade and investment embargo transformed the composition of U.S. trade with 

Iran. As Table 3 demonstrates, the agricultural, aerospace, and oil industries have been 

among those most directly affected by the embargo. From 1991 through 1994, U.S. 

exports of aircraft engine parts to Iran totaled nearly $9.4 million, averaging $2.3 million 

per year and peaking at more than $7.5 million in 1994. By 1996, aerospace exports to 

Iran declined to virtually zero. 

Prior to the embargo, the United States competed with Iran’s major trading partners in 

exports of industrial machinery, motor vehicles and auto parts, power generating 

machinery, measuring and controlling devices, computers, plastics and resins, and 

industrial organic chemicals. According to the CIA World Factbook 2009, Iran imported 

an estimated $67.25 billion worth of industrial raw materials and intermediate goods, 

capital goods, foodstuffs and other consumer goods, and technical services in 2008. 

Iran’s leading suppliers were China (13.5 percent), the United Arab Emirates (UAE) (9.8 

percent), Germany (9.1 percent), South Korea (6.1 percent), Russia (5.6 percent), and 

Italy (5.1 percent). 
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2010 Report on Foreign Policy-Based Export Controls 

Table 3: Top U.S. Exports to Iran, Calendar Years 1991-1995 (FAS Value) 

S.I.C. 

Number 

Description of Goods Total Value

in U.S. Dollars

3511 Turbines and turbine generator sets $322.5 million

3531 Construction machinery and parts $307.8 million

3533 Oil and gas field equipment $250.1 million

2044 Milled rice and by-products $166.3 million

0115 Corn $137.4 million

2873 Nitrogenous fertilizers $124.2 million

3714 Motor vehicle parts and accessories $50.8 million

2821 Plastics materials and resins $45.4 million

3743 Railroad equipment and parts $42.7 million

3569 General industrial machinery and equipment $41.8 million

The U.S. embargo on Iran has had a damaging impact on U.S. industry because of the 

reaction of foreign firms to U.S. reexport requirements. U.S. exporters report that their 

products are often “designed-out” of foreign manufactured goods to ensure that foreign 

exports do not fall within the scope of U.S. controls. This “designing-out” damages U.S. 

exports, both for sales to embargoed countries and non-embargoed countries. 

Iraq 

Although the security situation and the presence of foreign fighters supporting the 

insurgency in Iraq, among other issues, continue to be of concern to the United States, the 

United States also fully supports Iraq’s reconstruction and economic revival. Current 

licensing policy and requirements reflect the complexity and challenges of doing business 

in Iraq. 

In 2008, according to the most recent U.S. Census Bureau statistics available, U.S. 

exports to Iraq were worth $2.1 billion. In addition to agricultural commodities, other 

strong categories of U.S. exports to Iraq included telecommunications equipment, 

industrial engines and machines, and electronics, as well as military-related items. 

The Department of Commerce’s July 30, 2004, rule on U.S. export control policy and 

regulations for Iraq was designed to address two significant foreign policy goals (69 FR 

46070). In particular, the rule advances the goal of ensuring that exports and reexports of 

controlled items destined to civil infrastructure rebuilding are processed in a timely 

manner. At the same time, in furtherance of applicable UN Security Council resolutions 

and U.S. foreign policy interests, the rule revised Section 746.3 of the EAR and retained 
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2010 Report on Foreign Policy-Based Export Controls 

substantial restrictions on exports to Iraq destined for inappropriate end-users or enduses. 

Since licensing jurisdiction for Iraq was returned to the Department of Commerce, the 

majority of license applications received have been for equipment in support of or for use 

in reconstruction of Iraq and training activities for its police and military. In fiscal year 

2009, the Department approved 84 license applications for Iraq valued at over $126 

million. The number and value of approvals in 2009 were relatively unchanged from 

2008. The Department returned 53 license applications without action in 2009 valued at 

over $83 million, primarily due to exporters submitting applications for transactions that 

did not require licenses. In 2009, the Department did not deny any license applications 

for Iraq. 

Table 4: Approved Commerce Export License Applications for Iraq, 

Fiscal Years 2005-2009 

Fiscal Year Number of 

Applications

Total Value

in U.S. Dollars

2005 100 $206,170,161

2006 88 $298,795,631

2007 100 $222,845,105

2008 83 $138,626,063

2009 84 $126,241,256

TOTAL 455 $992,678,216

According to the CIA World Factbook 2009, Iraq imported an estimated $37.22 billion in 

commodities in 2008 (the most recent year for which statistics are available), up 

significantly from an estimated $25.67 billion in 2007. Leading Iraqi imports included 

food, medicine, and manufactures. Iraq’s leading suppliers were Syria (26.4 percent), 

Turkey (19.7 percent), the United States (10.7 percent), Jordan (6.5 percent), and the 

People’s Republic of China (6.0 percent). 

North Korea

As a result of the small size of the North Korean economy, U.S. export sanctions on 

North Korea have had a minimal impact on U.S. industry. North Korea’s total imports 

historically average about $1-2 billion annually, with primary imports including minerals, 

metallurgical products, and manufactured goods, including armaments, textiles, and 

fishery products. The CIA World Factbook 2009 estimates that North Korean imports 

totaled $3.05 billion in 2007 (the most recent year for which figures are available) with 

primary imports including petroleum, coking coal, machinery and equipment, textiles, 
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and grain. North Korea’s leading sources of imports in 2007 were China (46 percent), 

South Korea (34 percent), and Thailand (6 percent).

Based on U.S. Census Bureau statistics, total U.S. exports to North Korea, although far 

below the levels of other countries, generally increased with the signing of the U.S.-North 

Korea Agreed Framework in October 1994, but have dropped substantially in recent 

years. In 2006, Census Bureau statistics recorded the lowest level of exports to North 

Korea in the past decade, with only $3,000 in books and printed matter shipped. 

Although exports rose from this low to $1.7 million in 2007 and to $52.2 million in 2008, 

exports for the first seven months of calendar year 2009 showed a significant decrease to 

$400,000. Exports to North Korea are comprised of mostly agricultural products and 

humanitarian goods. Agricultural products and medicines designated as EAR99 are 

exempt from licensing requirements for North Korea. 

Table 5: U.S. Exports to North Korea, Calendar Years 2000-2008 (U.S. millions) 

2000 2001 2002 2003 2004 2005 2006 2007 2008 

$2.7 $0.6 $25.0 $8.0 $23.8 $5.8 $.003 $1.7 $52.2 

SOURCE: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 

20233

Export license applications approved by the U.S. Government for North Korea increased 

from a low of six in fiscal year 1994 to an annual average of 38 licenses in fiscal years 

1995-1999 (see Table 5). In September 1999, as a result of North Korea’s actions at that 

time, President Clinton announced a decision to ease sanctions maintained against North 

Korea. Implemented in June 2000, the new policy made most U.S. consumer goods, 

including humanitarian goods and low-level consumer items, eligible for export without a 

license to North Korea. This change helps to account for the decline in license 

applications for North Korea from fiscal years 2000-2007, in which the Department 

approved fewer than ten licenses per year. 

However, license applications for exports to North Korea increased from 2008 through 

2009 as the U.S. Government imposed additional licensing requirements on North Korea 

following its test of nuclear devices and ballistic missiles in 2006 and 2009. The U.S. 

Government authorized 14 licenses in fiscal year 2008 and 23 licenses in fiscal year 

2009. Overall dollar value, however, remained low as most license applications were for 

the export of items in support of humanitarian efforts or for vessels on temporary sojourn 

to ship the humanitarian goods. 

Currently, a license is required for the export and reexport of all items subject to the EAR 

to North Korea, with the exception of food and medicines designated as EAR99 (i.e., 

medicines subject to the EAR but not controlled on the CCL). 
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Table 6: Approved Commerce Export License Applications for North Korea, 

Fiscal Years 1994-2009 

Fiscal Year Number of 

Applications

Total Value

in U.S. Dollars

1994 6 $66,443

1995 27 $366,498,433

1996 39 $209,134,369

1997 47 $393,281,396

1998 43 $129,113,580

1999 32 $407,887,147

2000 10 $31,130,643

2001 7 $1,187,232

2002 9 $2,947,044

2003 0 $0

2004 3 $140,625

2005 3 $15,665

2006 1 $217,519

2007 9 $26,435,444

2008 14 $802,248

2009 23 $20,728,077

TOTAL 270 $1,589,585,865

In fiscal year 2009, the Department returned without action 12 license applications, 

valued at $28 million, and rejected 1 license application, valued at $39,750. The 

Department did not revoke any previously valid licenses. The large dollar value of the 

applications returned without action is attributable to a single application for 

humanitarian goods valued at $18 million, which was returned for errors and deficiencies. 

The applicant subsequently re-filed, and was authorized to export similar items, with a 

smaller total value. 

Persons Sanctioned by the State Department 

The impact on U.S. industry of these controls is minimal as they target only certain 

entities listed on the Entity List (Supplement No. 4 to Part 744 of the EAR). 

Sudan 
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After the United States imposed sanctions in 1997, the Department of the Treasury 

assumed licensing responsibility for the export and reexport of items subject to the EAR 

to Sudan. However, the Department of Commerce’s regulations remained in place. 

Therefore, exporters are currently required to obtain authorization to export items 

controlled on the CCL to Sudan from both the Departments of the Treasury and 

Commerce. In November 2004, the two agencies began to process applications 

simultaneously to minimize shipping delays, especially for non-governmental 

humanitarian organizations. Additionally, the Department of Commerce has licensing 

jurisdiction for the “deemed export” of technology to Sudanese nationals. The 

Department of the Treasury is solely responsible for licensing the export of agricultural 

commodities, medical items not listed on the CCL under the provisions of TSRA, and 

other items not listed on the CCL. 

U.S. unilateral export sanctions on Sudan have had a minor impact on U.S. industry. 

Before the U.S. embargo went into effect on November 4, 1997, most of the small 

number of items that Sudan imported from the United States did not require an export 

license and thus were not affected by export controls. As a result, BIS issued few 

licenses for exports to Sudan between 1998 and 2004. 

In 2005, licensed exports to Sudan began to increase as a result of United Nations 

Security Council Resolution 1590, which established the United Nations Mission in 

Sudan, and the growth of humanitarian relief efforts following the signing of the 

Comprehensive Peace Agreement which ended the civil war in Sudan. After increasing 

from 2005 to 2008, licensed exports decreased slightly in fiscal year 2009, a possible 

result of the Khartoum Government's seizure of assets and eviction of certain nongovernmental organizations working in Northern Sudan following the International 

Criminal Court indictment of President Omar al-Bashir. 

U.S. Census Bureau statistics show that in 2008, U.S. exports to Sudan were valued at 

$143.3 million, and consisted primarily of agricultural exports. The CIA estimates that 

Sudan’s total imports from all sources were valued at $9.3 billion in 2008. Leading 

suppliers to Sudan were China (24.9 percent), Saudi Arabia (8 percent), UAE (5.9 

percent), India (5.8 percent), and Egypt (5.3 percent). Leading imports were foodstuffs, 

manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, 

and wheat. 

In fiscal year 2009, the Department of Commerce approved 111 license applications for 

Sudan valued at $42.8 million. During the same period, 34 applications valued at $5 

million were returned without action. Most of these applications were for EAR99 items 

that did not require a BIS license for export to Sudan. During fiscal year 2009, the 

Department of Commerce denied two license applications valued at $170 thousand. 
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Table 7: Approved Commerce Export License Applications for Sudan, 

Fiscal Years 1993-2009

Fiscal Year Number of 

Applications 

Total Value

in U.S. Dollars

1993 2 $5,404,000

1994 0 $0

1995 0 $0

1996 7 $571,992

1997 10 $7,095,973

1998 0 $0

1999 1 $1

2000 1 $1

2001 0 $0

2002 0 $0

2003 0 $0

2004 4 $10,646,641

2005 29 $20,246,720

2006 42 $26,955,168

2007 64 $40,207,142

2008 103 $58,287,788

2009 111 $42,796,755

TOTAL 374 $212,212,181

Syria

The U.S. Government requires a license for the export and reexport to Syria of all U.S.-

origin commodities, technology, and software subject to the EAR except for food and 

certain medicine. The number of license applications that the Department of Commerce 

approved to Syria declined from 2003 to 2004 following implementation of the SAA but 

doubled in 2005, apparently because license applicants better understood that certain 

categories of items, particularly medical devices and telecommunications equipment, 

were subject to policies of case-by-case review based on the Presidential waiver 

exercised when the SAA was implemented. 

Table 8: Approved Commerce Export License Applications for Syria,

Fiscal Years 1991-2009
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Fiscal Year Number of 

Applications 

Total Value

in U.S. Dollars

1991 8 $1,041,504

1992 31 $46,366,527

1993 106 $42,896,103

1994 167 $76,379,096

1995 139 $68,298,135

1996 80 $81,006,877

1997 100 $107,003,346

1998 81 $80,707,010

1999 100 $86,534,591

2000 121 $141,539,669

2001 106 $70,269,323

2002 95 $108,101,460

2003 127 $200,664,118

2004 100 $246,979,100

2005 210 $325,088,347

2006 168 $257,417,642

2007 231 $1,036,749,878

2008 215 $247, 483,495

2009 339 $1,475, 405,252

TOTAL 2,544 $4,699,931,473

The number of approved license applications for exports to Syria has been trending 

upward in recent years, while dollar value has remained relatively steady with the 

exception of a spike in fiscal year 2007 at $1.04 billion. This reflects a significant 

increase from fiscal year 2006, mostly due to a select few applications in the beginning of 

that year for specific telecommunications exports. Although, the number of licenses and 

their dollar values shifted back toward typical values in fiscal year 2008, the number and 

dollar value of approved license applications increased in fiscal year 2009, due largely to 

increased exports of medical items. 

In fiscal year 2009, the Department approved 339 license applications, valued at 

approximately $1.5 billion for Syria. Also during fiscal year 2009, the Department 

returned without action 66 license applications, valued at over $685 million, and rejected 

8 license applications, valued at over $8 million. The Department did not revoke any 

previously valid licenses. 
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Only the United States maintains comprehensive sanctions on Syria. According to the 

CIA World Factbook 2009, Syria imported an estimated $14.5 billion in commodities in 

2008. Leading Syrian imports include machinery and transport equipment, electric 

power machinery, food and livestock, metal and metal products, chemicals and chemical 

products, plastics, yarn, and paper. Syria’s leading suppliers were Saudi Arabia (11.8 

percent), China (8.8 percent), Russia (6.5 percent), Italy (5.9 percent), Egypt (5.8 

percent), and the UAE (5.8 percent). 

United Nations Security Council Arms Embargoes 

Rwanda

The arms embargo on Rwanda has had little impact on U.S. industry. According to the 

CIA World Factbook 2009, total Rwanda imports were estimated to be valued at 

approximately $809 million in 2008 (the most recent year for which statistics are 

available). Leading imports for Rwanda were foodstuffs, machinery, steel, petroleum 

products, cement, and construction material. Leading sources of Rwandan imports in 

2008 were Kenya (17.1 percent), China (6.2 percent), Uganda (6 percent), Belgium (5.9 

percent), and Germany (5.1 percent). In 2008, U.S. exports to Rwanda were valued at 

$20.4 million, and were primarily comprised of foodstuffs, computers and computer 

accessories, business machines and equipment, medicinal equipment, and 

telecommunications equipment. 

The embargo against Rwanda was initially imposed through UN Security Council 

Resolution 918 on May 17, 1994 and continued through subsequent resolutions, 

including Resolution 1011 on Aug. 16, 1995. BIS implemented embargo in Section 

746.8 of the EAR. UN Security Council Resolution 1823, adopted on July 10, 2008, 

terminated the arms embargo against Rwanda. BIS will continue to work with its 

interagency partners to determine what changes to the EAR may be necessary following 

this development. 
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5. Effective Enforcement of Controls 

The Secretary has determined the United States has the ability to effectively enforce these 

controls. Controls on exports to embargoed and sanctioned countries and persons, 

including those discussed in this Chapter, raise a number of challenges. These include 

the need to concentrate limited resources on priority areas, develop new strategies to limit 

reexport violations, strengthen the cooperative relationship with other law enforcement 

agencies in the United States and overseas, and maintain a consistent outreach effort to 

help limit U.S. business vulnerability. Overall, the embargoes are generally understood 

and supported by the U.S. public. Voluntary cooperation from most U.S. exporters is 

common. 

The Department conducted a number of enforcement actions regarding noncompliance 

with these export controls during fiscal year 2009. For example: 

Radiographic Equipment to Iran – On June 17, 2009, Jeffery Weiss, owner of Atlantis 

Worldwide of Yonkers, NY, was sentenced in U.S. District Court in the Southern District 

of New York to three years probation and a $20,000 fine. On January 20, 2009, Weiss 

pled guilty in U.S. District Court in the Southern District of New York to making false 

statements on Shipper’s Export Declarations related to the illegal export of medical 

equipment to Iran through the United Arab Emirates. On October 28, 2008, Weiss’ 

associate, Behram “Ben” Meghazehe, was sentenced in U.S. District Court in the 

Southern District of New York to five years of probation, a $2,000 criminal fine, six 

months of home confinement, and a $100 special assessment. On May 14, 2008, 

Meghazehe pled guilty to one count of false statements in connection with the illegal 

shipment of radiographic equipment to Iran. This was a joint investigation with the 

Federal Bureau of Investigation. 

Laboratory Equipment to Iran – On January 30, 2009, James Gribbin, a former sales 

manager for Oyster Bay Pump Works in Hicksville, New York, was sentenced in U.S. 

District Court in the Eastern District of New York to three years of probation, and a $100 

special assessment. On July 17, 2007, Gribbin pled guilty to conspiracy to violate the 

IEEPA and the EAR in connection with an attempted export of laboratory equipment, 

valued at approximately $300,000, to Iran via the United Arab Emirates. On May 1, 

2008, Patrick Gaillard, President of Oyster Bay Pump Works, was sentenced in U.S. 

District Court in the Eastern District of New York to 30 days in prison, a $25,000 

criminal fine, three years of probation, and a $300 special assessment. On June 15, 2007, 

Gaillard pled guilty to conspiracy to violate the IEEPA related to the same attempted 

export. 

Fire fighting equipment to Iran – On December 10, 2008, Nicholas Groos was sentenced 

in U.S. District Court in the Northern District of Illinois to 60 days in prison, one year 
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2010 Report on Foreign Policy-Based Export Controls 

supervised release, a $249,000 criminal fine, and a $400 special assessment. On August 

11, 2008, Groos entered a guilty plea to three counts of violating the IEEPA and one 

count of making false statements. Groos devised a scheme to willfully transship U.S.-

origin fire fighting equipment to Iran using his position as Director of the Viking 

Corporation subsidiary located in Luxembourg, in violation of the Iranian Transaction 

Regulations and the EAR. 

C. Consultation with Industry

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry and the public on the effectiveness of U.S. 

foreign policy-based export controls. In addition, comments were solicited from the 

public via the BIS website. Comments from the Department’s six Technical Advisory 

Committees are solicited on a regular basis and are not specific to this report. The 

comment period closed on October 8, 2009. A detailed review of all public comments 

received can be found in Appendix I. 

D. Consultation with Other Countries 

The U.S. Government has made reasonable efforts to achieve the purposes of the U.S. 

embargoes and sanctions through negotiations with other countries, through international 

fora, and through the United Nations, as outlined in the specific country descriptions that 

follow. 

Certain Designated Parties 

The United States cooperates with allies and partners and shares information on the 

activities of designated terrorist entities. It is expected that strong international support 

for the U.S. fight against terrorism will further facilitate dialogue on foreign export 

control expansion. 

Cuba 

The U.S. Government has worked diligently with other nations, especially countries in 

Europe and Latin America, to resolve disputes that arise as result of the U.S. embargo. 

Differences remain between the United States and other countries concerning the best 

method to encourage democracy and human rights. However, many nations share with 

the United States the ultimate goal of a free, peaceful, democratic, and market-oriented 

Cuba. 

Iran

The United States has an ongoing dialogue with its allies and partners on Iran’s activities, 

particularly the permanent members of the United Nations Security Council and 

Germany (P5+1), as well as other members of the United Nations Security Council the 
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2010 Report on Foreign Policy-Based Export Controls 

IAEA Board of Governors, and like-minded countries. The United States continues to 

work with other states to prevent Iran’s acquisition of a nuclear weapons capability by 

pursuing a dual track strategy that includes pressure on Iran to comply with its 

international obligations and offers of engagement. The United States is also working 

with the IAEA to ensure that it has the capabilities it needs to verify Iran’s compliance 

with its safeguards agreement, work with Iran to resolve the outstanding questions and 

issues regarding Iran’s nuclear program, and monitor UN Security Council requests that 

Iran suspend its proliferation sensitive nuclear activities as required in UN Security 

Council Resolutions 1737, 1747 and 1803. 

Iraq

Prior to Operation Iraqi Freedom and the lifting of the embargo on Iraq, the United States 

maintained an ongoing dialogue with other United Nations member states, as well as 

separately, with its allies and partners. Since the lifting of the embargo, the United States 

has continued discussions with many other countries on both a bilateral and multilateral 

basis. 

North Korea

The United States continues multilateral and bilateral discussions with countries 

participating in the Six-Party Talks (China, Japan, the Republic of Korea (South Korea), 

and Russia) on the ongoing issues concerning the nuclear and ballistic missile-related 

activities of North Korea. The United States will continue to work with these countries to 

achieve the verifiable denuclearization of the Korean Peninsula. 

Persons Sanctioned by the State Department 

The United States consults on a regular basis with other countries on proliferation and 

trafficking-related issues. Although other countries share U.S. concerns regarding the 

diversion of goods to unauthorized end-users or end-uses, few countries maintain controls 

similar to those implemented by the United States. 

Sudan

The United States continues to consult with the United Nations, in addition to other 

countries and entities in both bilateral and multilateral forums, regarding the internal 

conflict in Sudan and to address the humanitarian needs of the population. 

Syria 

The United States is in constant communication with other countries regarding the Syrian 

Government’s interference in Lebanon and support for terrorism. Additionally, the 

United States has communicated its concerns to the Government of Syria directly and 

forcefully through the U.S. Embassy in Syria and the Syrian Ambassador in Washington. 
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United Nations Security Council Arms Embargoes 

Most countries support international efforts to stabilize affected countries in order to 

prevent further ethnic conflict and regional instability, including through compliance with 

the United Nations arms embargoes. 

E. Alternative Means 

The U.S. Government imposes embargoes and sanctions in an effort to make a strong 

statement against a particular country’s policies or a person’s actions. Restrictions on 

exports can supplement other actions that the U.S. Government takes to change the 

behavior of the target countries and persons, including such actions as severing 

diplomatic relations, banning imports into the United States, seeking UN denunciations, 

and curtailing or discouraging bilateral educational, scientific, or cultural exchanges. The 

U.S. Government has had some success using these alternative means to reach the 

intended foreign policy objectives. Nonetheless, these trade sanctions remain a critical 

part of the U.S. Government’s foreign policy. U.S. Government embargoes and 

sanctions complement diplomatic measures and continue to be used to influence the 

behavior of these countries. 

F. Foreign Availability

The foreign availability of items controlled under Section 6(a) of the EAA has been 

considered by the Department of Commerce. In general, numerous foreign sources of 

commodities and technology similar to those subject to these controls are known, 

especially for items controlled by the U.S. Government. Although the embargoes and 

comprehensive sanctions described in this Chapter are widely followed and many have 

significant multilateral support, the U.S. Government’s continued use of embargoes and 

sanctions serve foreign policy interests that override the impact of foreign availability. 
Chapter 6 Toxic Chemicals, Chemical Precursors, and Associated Equipment, Technology, and Software 

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CHAPTER 6 

Toxic Chemicals, Chemical Precursors, and Associated Equipment, 

Technology, and Software 

(Sections 742.2, 742.18, 744.4, 744.6, and 745)7

Export Control Program Description and Licensing Policy

The U.S. Government maintains export controls on certain chemicals, equipment, 

materials, software, technology, and entire plants to further U.S. foreign policy and 

prevent proliferation and use of chemical weapons. The U.S. Government implements 

these controls in coordination with the Australia Group (AG), an informal forum of 40 

nations and the European Commission dedicated to halting the proliferation of chemical 

and biological weapons. (See Appendix II for a complete list of AG members.) Also, the 

United States fulfills its obligations under the Chemical Weapons Convention (CWC) by 

maintaining controls on certain chemicals.8

Australia Group Controls

The AG was formed in 1985 when the United States and 14 other nations agreed to 

enhance and harmonize controls on chemicals that could be used to produce chemical 

weapons. Since then, the AG has expanded its membership and has expanded its export 

control list to cover toxic biological agents and dual-use chemical and biological 

production related equipment and technologies. Member countries use the AG common 

control list and guidelines as a basis for developing and imposing their domestic export 

controls. The AG has a “no-undercut” policy, which requires consultation with another 

AG partner that had previously denied an AG-controlled item if the transaction is 

essentially identical. 

 

7 Chapter 7 of this report addresses U.S. biological controls.

8 The Convention on the Prohibition of the Development, Production, Stockpiling and 

Use of Chemical Weapons and on their Destruction (the “Chemical Weapons 

Convention” or CWC) was ratified by the United States on April 25, 1997, and entered 

into force on April 29, 1997. 
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License Requirements and Licensing Policy for AG Controls 

The licensing requirements for chemicals, equipment, materials, software, technology, 

and entire plants imposed in accordance with AG commitments are noted below. There 

are 20 entries on the Commerce Control List (CCL) that are subject to chemical controls. 

The U.S. Government requires a license for the export to all destinations other than AG 

member countries of the following items: all chemical weapons precursor and 

intermediate chemicals, as identified on the AG common control list; technology for the 

development, production, and/or disposal of such items; relevant process control 

software, and; the facilities designed to produce such chemicals. 

The U.S. Government requires a license for export to all destinations other than AG 

member countries certain chemical manufacturing facilities and equipment, toxic gas 

monitoring systems and detectors that can be used in the production of chemical warfare 

agents, and the technology for the development, production, and/or disposal of such 

items. The countries to which these licensing requirements apply are listed in Column 

CB2 of the Commerce Country Chart, Part 738, and Supplement No. 1 of the Export 

Administration Regulations (EAR). These licensing requirements also apply to the 

export of these items to designated terrorist-supporting countries. 

The U.S. Government also controls all items subject to the EAR because of chemical or 

biological end-use or end-user concerns as part of the Enhanced Proliferation Control 

Initiative (EPCI). 

• The U.S. Government requires a license for the export of any commodity, 

technology, or software to all destinations, worldwide, including to AG member 

countries, when the exporter knows that it will be used in the design, 

development, production, stockpiling, or use of chemical weapons. In addition, 

the U.S. Government may inform an exporter or reexporter that a license is 

required due to an unacceptable risk that the items will be used in, or diverted to, 

chemical weapons proliferation activities anywhere in the world. 

• No U.S. person may knowingly support such an export, reexport, or transfer 

without a license. “Support” is defined as any action, including financing, 

transportation, or freight forwarding that facilitates the export, reexport, or 

transfer of these items. 

• In addition, no U.S. person may, without a license, perform any contract, service, 

or employment knowing that it will directly assist the design, development, 

production, stockpiling, or use of chemical weapons in, or by, any country or 

destination worldwide. 
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The Department of Commerce, in coordination with the Departments of Defense, Energy, 

and State, reviews applications for licenses to export AG-controlled items on a case-bycase basis to determine whether the export would make a material contribution to the 

design, development, production, stockpiling, or use of chemical weapons. For licenses 

to export AG-controlled items to the People’s Republic of China, Section 742.2 of the 

EAR imposes an additional review standard—whether the items will make a direct and 

significant contribution to China’s military capabilities. When the Department of 

Commerce determines after interagency review, that an export will make a contribution 

meeting these criteria, the Department will deny the license. 

Trade Restrictions under the Chemical Weapons Convention 

The CWC, which entered into force in April 1997, bans the development, production, 

stockpiling, retention, use, or transfer of chemical weapons, and establishes an extensive 

verification regime. The CWC Annex on Chemicals groups specified chemicals, 

including toxic chemicals and chemical precursors, into three “Schedules.” Chemicals 

are listed in a schedule based on factors specified in the Convention, such as the level of 

toxicity and other properties that enable their use in chemical weapons applications. 

The toxic chemicals and precursors on Schedule 1 were previously developed or used as 

chemical weapons, or pose a high risk based on the dangers identified in the Convention 

and have few, if any, commercial applications. The toxic chemicals and precursors on 

Schedule 2 pose a significant risk, in light of the dangers identified in the CWC, and are 

not produced in large commercial quantities. The toxic chemicals and precursors on 

Schedule 3 have been produced or used as chemical weapons or pose a risk based on the 

dangers identified in the CWC, and are produced in large commercial quantities. 

The Department of State, under the International Traffic in Arms Regulations (ITAR), 

controls exports of the chemical warfare agents deemed to have military application, 

which by their ordinary and direct chemical action produce a powerful physiological 

effect. The State Department controls all CWC Schedule 1 chemicals except ricin and 

saxitoxin, which are under the control of the Department of Commerce. The Department 

of Commerce controls all Schedule 2 chemicals except six chemical precursors that are 

under the jurisdiction of the State Department. All Schedule 3 chemicals are controlled 

by the Department of Commerce. 

License Requirements and Licensing Policy for CWC Controls

The following is a summary of the export restrictions and licensing requirements for 

chemicals subject to the EAR that are imposed to fulfill CWC treaty obligations: 
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2010 Report on Foreign Policy-Based Export Controls 

A. A license is required for the export or reexport of CWC Schedule 1 chemicals 

destined to all CWC States Parties, including Canada. Additionally, there are advance 

notification and annual reporting requirements for such exports. A license is also 

required for the export or reexport of Schedule 2 chemicals to countries that have not 

ratified or acceded to the CWC (States not Party to the CWC). Exports of Schedule 3 

chemicals destined to States not Party to the CWC require a license unless the exporter 

obtains from the consignee an End-Use Certificate (issued by the government of the 

importing country) prior to exporting the Schedule 3 chemicals and submits it to BIS. 

Reexports of Schedule 3 chemicals require a license when they are reexported from a 

State not Party to the CWC to any other State not Party to the CWC. 

B. Export license applications for Schedule 1 chemicals to CWC States Parties are 

reviewed on a case-by-case basis. The Department of Commerce approves exports only 

to CWC States Parties and only for purposes not prohibited by the treaty. There is a 

policy of denial for applications to export Schedule 1 and Schedule 2 chemicals to States 

not Party to the CWC. Additionally, there is a policy to deny applications to export 

Schedule 3 chemicals to States not Party to the CWC unless the importing country 

provides an End-Use Certificate. In addition, the U.S. Government reviews exports and 

reexports of technology related to the development and production of mixtures containing 

PFIB, phosgene, cyanogen chloride, and hydrogen cyanide on a case-by-case basis. 

Summary of 2009 Changes 

On July 6, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 31850) to implement the 2008 AG intersessional decisions by revising 

Export Control Classification Number (ECCN) 2B350.g on the CCL to control valves 

(including casings or preformed casing liners therefor) made from certain ceramic 

materials. Additionally, the rule revised ECCN 2B351 to clarify that it controls certain 

types of dedicated detecting components for toxic gas monitoring systems and created a 

new ECCN 2D351 to control dedicated software for toxic gas monitoring systems and 

their dedicated detecting components controlled under ECCN 2B351. This rule also 

amended the EAR to update the list of States Parties to the CWC in Supplement No. 2 to 

Part 745 of the EAR by adding “Bahamas,” “Dominican Republic,” “Iraq,” and 

“Lebanon,” which recently became States Parties to the CWC. However, because of the 

special EAR controls that apply to Iraq, items controlled under the EAR for Chemical 

Weapons Convention (CW) reasons continue to require a license for export or reexport to 

Iraq, or for transfer within Iraq.
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2010 Report on Foreign Policy-Based Export Controls 

Analysis of Control as Required by Section 6(f) of the Act

A. The Purpose of the Controls

The purpose of these controls is to support the efforts of the AG to halt the development 

and production of chemical weapons and to comply with international obligations under 

the CWC. In addition, these controls implement certain measures specified in Executive 

Order 12735 of November 16, 1990, its successor, Executive Order 12938 of November 

14, 1994, and the EPCI announced on December 13, 1990. In so doing, the controls 

provide the U.S. Government with the authority to regulate the export or reexport of any 

item from the United States when there is a significant risk that it will be used for 

chemical weapons proliferation purposes. 

The AG works to further nonproliferation objectives through harmonizing export 

controls, exchanging information, and through other diplomatic means. In addition to 

furthering the objectives of the AG, these controls support U.S. compliance efforts with 

the CWC. To ensure that States Parties to the Convention do not transfer chemicals that 

could assist other states to acquire chemical weapons, the CWC requires that States 

Parties restrict the export of certain chemicals listed in the CWC’s Annex on Chemicals. 

The controls also support the goals of the 1925 Geneva Protocol for the Prohibition of the 

Use in War of Asphyxiating, Poisonous or other Gases, and of Bacteriological Methods 

of Warfare. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, in light of other factors, including availability of relevant items from other 

countries, and that the foreign policy purpose cannot fully be achieved through 

negotiations or other alternative means. Many of the items covered by these controls 

have commercial uses and are widely available from foreign sources. Some of the major 

sources of these items are located in industrialized countries that are members of the AG 

and States Parties to the CWC. Although it is not expected that export controls alone can 

prevent the proliferation of chemical weapons, these controls strengthen U.S. and likeminded states’ efforts to stem the spread of such weapons and continue to be a significant 

part of the overall nonproliferation strategy of the United States. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and that the extension 

of these controls will not have any significant adverse foreign policy consequences. The 

U.S. Government has a strong interest in remaining at the forefront of international 

efforts to stem the proliferation of chemical weapons. These controls are compatible with 
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the multilateral export controls for chemicals and related equipment and technology 

agreed to by the AG. Moreover, the U.S. Government has a binding international 

obligation under the CWC to: prohibit and eliminate chemical weapons; prevent anyone 

from assisting in any way chemical weapons activities; and control certain chemical 

exports. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

The U.S. Government continues to discuss chemical export controls with countries 

outside of the AG to advance the goals of nonproliferation. The governments of some 

developing countries claim that AG export controls discriminate against less 

industrialized nations by depriving them of goods and assistance in the field of chemical 

technology. The United States considers that these assertions are incorrect. In fact, in 

international forums, the U.S. Government has sought to dispel this perception by 

clarifying the purpose of the controls and by demonstrating that the U.S. Government 

denies few export license requests for shipment to developing countries. 

4. Economic Impact on United States Industry. The Secretary has determined that 

any adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to U.S. foreign policy objectives. 

In fiscal year 2009, the Department of Commerce approved 2,515 license applications, 

valued at $ 1,235,987,728 for the export or reexport of chemical precursors and 

equipment. The majority of the value of these approvals (81.2 percent) was for precursor 

chemicals controlled under ECCN 1C350, which are chemicals that have many 

commercial uses. The remaining value of these approvals (18.8 percent) was for 

chemical processing equipment controlled under ECCN 2B350 and monitoring 

equipment controlled under ECCN 2B351, which is equipment with many commercial 

uses. The Department denied 2 license application valued at $378, 984 and returned 

without action 184 license applications valued at $127,631,135. The primary reason for 

returning applications was for insufficient information about the transaction. The actual 

trade in these controlled commodities is significantly greater than the value of the license 

applications submitted because exporters may export many of these commodities to AG 

member countries without a license. 

5. Effective Enforcement of Control. The Secretary has determined the United 

States has the ability to enforce these controls effectively. The size, dispersion, diversity, 

and specialized nature of the dual-use chemical industry make detecting and investigating 

potential violations difficult for enforcement personnel. Challenges include 

distinguishing commercial procurement from chemical weapons-related transactions, and 
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establishing appropriate commodity thresholds for targeting and tracking exports and 

reexports for verification of end-use and end-users. It is also difficult to detect and 

investigate cases under the “knowledge” standard set by the EPCI “catch-all” provision 

and some countries have different standards for “catch-all,” which complicates law 

enforcement cooperation. In addition, enforcement officers may be exposed to personal 

safety risks when seizing and inspecting chemical materials. 

To meet the challenge of effective enforcement of these controls, the Department of 

Commerce has directed resources toward preventive enforcement, in addition to 

continued efforts to pursue all leads provided by intelligence, industry, and other sources 

on activities of concern. Also, the Department of Commerce’s extensive outreach 

program educates companies about export controls related to chemical products and helps 

prevent the illegal export of dual-use products that can be used to make chemical 

weapons. In cases where unlicensed shipments of chemical materials have already taken 

place, the Department of Commerce has found that, as in other export control 

enforcement cases, analysis of commercial shipping documentation can lead to successful 

investigations and prosecutions. 

C. Consultation with Industry

The Department of Commerce interacts with the chemical industry in a number of ways, 

including with individual companies seeking export licenses, through technical advisory 

committees (TACs), and through trade associations. BIS consults regularly with 

exporting firms on proposed export transactions and marketing plans to facilitate the 

thorough, yet prompt, review of export license applications. Through the TACs, the 

Department of Commerce keeps industry representatives abreast of proposals for the 

review of items on the CCL and gives them the opportunity to provide technical input. 

The Department of Commerce works with chemical industry associations, including the 

American Chemistry Council and the Synthetic Organic Chemical Manufacturers 

Association, and with government agencies, such as the Departments of State and 

Defense and the Federal Bureau of Investigation, to gain valuable input regarding CWC 

implementation and to meet the United States’ CWC responsibilities. 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public via the BIS website. Comments from the 

Department’s six TACs are solicited on an ongoing basis and are not specific to this 

report. 
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D. Consultation with Other Countries

These controls are consistent with the multilateral export control criteria of the AG, 

which includes many of the world’s major chemical producers and traders. As such, the 

controls have been agreed through negotiations with the member countries of the AG. In 

addition, a number of non-AG countries, including Russia and China, have taken steps to 

adopt AG-type controls. An important element of the AG’s efforts to curb the 

development of chemical weapons is contacting non-members to encourage them to 

observe similar export controls. The U.S. Government continues to encourage 

harmonization of export control provisions among AG participants to ensure a level 

playing field for U.S. exporters. 

E. Alternative Means 

The U.S. Government continues to address the problem of the proliferation of chemical 

weapons on a number of fronts. Direct negotiations with countries intent on acquiring 

chemical weapons are not likely to prevent the use of controlled materials in such 

activities, nor are such negotiations likely to affect the behavior of these countries. 

Alternative means to curtail the acquisition and development of chemical warfare 

capabilities, such as diplomatic negotiations, do not obviate the need for controls. 

Examples of additional means that the U.S. Government has and will continue to use, in 

an attempt to curb the use and spread of weapons of mass destruction include: 

• Sanctions: U.S. laws such as the Chemical and Biological Weapons Control and 

Warfare Elimination Act of 1991 (Pub. L. 102-182, Title III, Dec. 4, 1991, 105 

Stat. 1245), the Iran-Iraq Arms Non-Proliferation Act of 1992 (Pub. L. 102-484) 

(Title XVI), the Iran Nonproliferation Act of 2000 (Pub. L. 106-178), the Iran 

Nonproliferation Amendments Act of 2005 (Pub. L. 109-112), and the North 

Korea Nonproliferation Act of 2006 (Pub. L. 109-353) provide for the imposition 

of sanctions on foreign entities and countries for certain kinds of chemical and 

biological weapons-related activity. The U.S. Government has imposed sanctions 

under these authorities on certain entities for chemical weapons-related activities. 

• Universality of the CWC: The CWC imposes a global ban on the development, 

production, stockpiling, retention, and use of chemical weapons by States Parties 

and prohibits States Parties from assisting, encouraging or inducing a non-State 

Party to engage in such activities. The CWC also prohibits the direct or indirect 

transfer of chemical weapons, restricts trade in certain chemicals to States not a 

State Party to the CWC, and has created an international organization to monitor 

the destruction of chemical weapons and the production, use, and trade of toxic 

chemicals and chemical precursors in and among States Parties to the CWC. 
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As part of its CWC implementation activities, the Department of Commerce also collects 

industry reports regarding the production, processing, consumption, import, and export of 

toxic chemicals and chemical precursors for purposes not prohibited by the CWC (e.g., 

industrial, agricultural, and other peaceful purposes), which are forwarded to the 

Organization for the Prohibition of Chemical Weapons (OPCW) as part of the U.S. 

declaration. The Department of Commerce also acts as the lead, host and escort for 

OPCW inspection teams as they inspect certain U.S. chemical facilities to verify that 

activities are consistent with the information provided in the U.S. declaration. 

F. Foreign Availability 

Past reviews conducted by the Department of Commerce revealed that a wide range of 

AG chemical precursors and production equipment are available from non-AG countries. 

Non-AG suppliers of precursors and/or related production equipment include Brazil, 

Chile, Colombia, India, Mexico, China, South Africa, the countries of the former Soviet 

Union, Taiwan, and Thailand. However, most of the Non-AG suppliers, including all of 

the aforementioned, have become States Parties to the CWC and will take steps under 

this treaty to prevent chemical weapons development and production. As such, the U.S. 

Government has made efforts through its membership in both the AG and CWC to secure 

the cooperation of foreign governments to control the foreign availability of chemical 

precursors and production equipment.
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CHAPTER 7 

Biological Agents and Associated Equipment and Technology 

(Sections 742.2, 744.4 and 744.6)9

Export Control Program Description and Licensing Policy 

The U.S. Government controls the export of certain microorganisms, toxins, biological 

equipment, and related technology to further U.S. foreign policy interests in opposing the 

proliferation and use of biological weapons. The U.S. Government implements these 

export controls multilaterally in coordination with the Australia Group (AG), a forum of 

40 nations and the European Commission cooperating to halt the proliferation of 

chemical and biological weapons. The U.S. Government also supports international 

efforts to secure a total ban on biological weapons in compliance with the Convention on 

the Prohibition of the Development, Production and Stockpiling of Bacteriological 

(Biological) and Toxin Weapons and on Their Destruction (BWC).10 

Australia Group Controls 

The AG was formed in 1985 when the United States and 14 other nations agreed to 

enhance and harmonize controls on chemicals that could be used to produce chemical 

weapons. Since then, the AG has expanded its membership and has expanded its export 

control list to cover toxic biological agents and dual-use chemical and biological 

production related equipment and technologies. AG member countries use the AG 

common control list and guidelines as a basis for developing and imposing their domestic 

export controls. The AG has a “no-undercut” policy, which requires consultation with 

another AG partner that had previously denied an AG-controlled item if the transaction is 

essentially identical. 

Licensing Requirements and Licensing Policy 

The licensing requirements for biological agents, related equipment, and technology, 

imposed in accordance with AG commitments, are noted below. There are 12 entries on 

the Commerce Control List (CCL) that are subject to biological controls. 

 

9 Chapter 6 of this report addresses U.S. chemical controls. 

10 The Convention on the Prohibition of the Development, Production and Stockpiling of 

Bacteriological (Biological) and Toxin Weapons and on Their Destruction (BWC) was 

signed in 1972 and ratified by the United States in 1975.
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A. The U.S. Government requires a license for the export to all destinations of certain 

human pathogens, zoonoses, toxins, animal pathogens, genetically modified 

microorganisms and plant pathogens, and the technology for their production and/or 

disposal. 

The U.S. Government also requires a license for the export to specified countries of 

certain dual-use equipment and materials that can be used to produce biological agents 

and its related technology. The countries for which this licensing requirement applies are 

those indicated in Column CB2 (Chemical and Biological Weapons, Column 2) of the 

Commerce Country Chart, Supplement No. 1 to Part 738 of the Export Administration 

Regulations (EAR), as well as the embargoed destinations identified in Part 746 of the 

EAR. 

The U.S. Government also controls items subject to the EAR because of biological enduse or end-user concerns. These controls are part of the Enhanced Proliferation Control 

Initiative (EPCI), announced by President George H.W. Bush on December 13, 1990. 

• The U.S. Government requires a license for the export of any commodity, 

technology, or software when the exporter knows that it will be used in the 

design, development, production, stockpiling, or use of biological weapons in, or 

by, any country anywhere in the world, including AG member countries. In 

addition, the U.S. Government may inform an exporter or reexporter that a license 

is required due to an unacceptable risk that the items will be used in, or diverted 

to, biological weapons proliferation activities anywhere in the world. 

• No U.S. person may knowingly support such an export, reexport, or transfer 

without a license. “Support” is defined as any action, including financing, 

transportation, or freight forwarding that facilitates the export, reexport, or 

transfer of these items. 

• In addition, no U.S. person may perform, without a license, any contract, service, 

or employment knowing that it will directly assist the design, development, 

production, stockpiling, or use of biological weapons in, or by, any destination or 

country anywhere in the world. 

B. The Department of Commerce, in coordination with the Departments of Defense, 

Energy, and State, reviews applications for licenses on a case-by-case basis to determine 

whether the export would make a material contribution to the design, development, 

production, stockpiling, or use of biological weapons. When the Department of 

Commerce determines as a result of an interagency review that an export will make such 

a contribution, it will deny the application. For licenses to export AG-controlled items to 

the People’s Republic of China, Section 742.2 of the EAR imposes an additional review 

standard—whether the items will make a direct and significant contribution to China’s 
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2010 Report on Foreign Policy-Based Export Controls 

military capabilities. When the Department of Commerce determines after interagency 

review, that an export will make a contribution meeting these criteria, the Department 

will deny the license. 

Summary of 2009 Changes 

On July 6, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 31850) amending the EAR to implement the 2008 AG intersessional 

decisions regarding cross (tangential) flow filtration equipment. The rule clarified the 

EAR controls on such equipment to specifically identify equipment using disposable or 

single-use filtration components. In addition, the rule amends the AG-related software 

entries in the EAR to include references to several definitions that were recently added to 

the AG “Guidelines for Transfers of Sensitive Chemical or Biological Items.” 

Analysis of Controls as Required by Section 6(f) of the Act 

A. The Purpose of the Controls 

The controls described above are intended to prevent a U.S. contribution to the 

proliferation and illegal use of biological weapons and to U.S. foreign policy objectives 

that seek to inhibit the proliferation of biological weapons. The controls also provide the 

regulatory authority to stop the export of any item from the United States when there is a 

significant risk that it will be used for biological weapons purposes. In addition, the 

controls implement certain measures directed in Executive Order 12735 of November 16, 

1990; its successor, Executive Order 12938 of November 14, 1994; and the EPCI, 

announced on December 13, 1990. 

The U.S. Government implements these controls in coordination with the AG. The AG 

works to accomplish multilateral objectives through harmonizing export controls, 

exchanging information, and other diplomatic means. In addition, these controls 

demonstrate the commitment of the United States to its obligation under the BWC not to 

develop, produce, stockpile, acquire, or retain biological agents, weapons, equipment, or 

the means of delivery for warfare purposes, or to assist others in such activities. The 

controls also advance the goals of the 1925 Geneva Protocol for the Prohibition of the 

Use in War of Asphyxiating, Poisonous or other Gases and of Bacteriological Methods of 

Warfare (Geneva Protocol). 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, in light of other factors, including availability of relevant items from other 
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countries, and that the foreign policy purpose cannot fully be achieved through 

negotiations with its partners in the AG and in the BWC. The Secretary has made this 

determination despite the existence of certain factors, including availability of these items 

from other sources, which challenge the full achievement of foreign policy goals. These 

controls affirm U.S. opposition to the development, proliferation, and use of biological 

weapons and serve to distance the United States from such activities. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and that the extension 

of these controls will not have any significant adverse foreign policy consequences. The 

U.S. Government has a strong interest in remaining at the forefront of international 

efforts to stem the proliferation of biological weapons. Also, these controls are 

compatible with the multilateral export controls for biological materials agreed to by the 

AG. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

The U.S. Government continues to discuss biological export controls with countries 

outside of the AG to advance the goals of nonproliferation. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any 

adverse effect of these controls on the economy of the United States, including on the 

competitive position of the United States in the international economy, does not exceed 

the benefit to United States foreign policy objectives. 

In fiscal year 2009, the Department of Commerce approved 1,164 license applications, 

valued at $67,614,280 for the export or reexport of biological agents, vaccines and 

equipment. The majority of the value of these approvals (54.7 percent) was for biological 

processing and handling equipment controlled under Export Control Classification 

Number (ECCN) 2B352. The Department denied 6 license applications valued at 

$286,557 and returned without action 62 license applications valued at $5,534,790. The 

primary reason for returning applications was for insufficient information about the 

transaction. 

5. Effective Enforcement of Controls. The Secretary has determined the United 

States has the ability to enforce these controls effectively. Enforcing controls on 

biological weapons-related materials poses problems similar to the enforcement of 

chemical controls, but with additional difficulties. Biological materials are microscopic 

organisms that require technical expertise and specialized facilities to identify and to 

handle. Because of their size, biological agents can often be concealed and transported 

with ease. 
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2010 Report on Foreign Policy-Based Export Controls 

To meet the challenge of effectively enforcing these proliferation controls, the 

Department of Commerce focused resources toward preventive enforcement. Commerce 

personnel conduct an extensive, ongoing outreach program to educate industry about 

export controls. The program is designed to increase industry’s awareness of suspect 

orders for products or equipment that could be used for biological weapons proliferation. 

In cases where unlicensed shipments of biological materials have already taken place, the 

Department of Commerce has found that, as in other export control enforcement cases, 

analysis of commercial shipping documentation can lead to successful investigations and 

prosecutions. 

C. Consultation with Industry 

Biological products exporters include commercial firms as well as academic and 

government entities. The Department of Commerce maintains ongoing interaction with 

individual exporters, TACs, and trade associations to discuss proposed export 

transactions and marketing plans to facilitate the thorough, yet prompt, review of export 

license applications. Through the TACs, the Department keeps industry representatives 

abreast of licensing proposals for items on the control list and gives them the opportunity 

to provide technical input. 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public via the BIS website. Comments from the 

Department’s six TACs are solicited on an ongoing basis and are not specific to this 

report. 

D. Consultation with Other Countries

Recognizing that multilateral coordination of export controls and enforcement actions is 

the most effective means of restricting proliferation activities, the U.S. Government 

coordinates its controls on biological items with other countries in the AG. 

The U.S. Government continues to address the problem of biological weapons 

proliferation through a variety of international forums and urges other AG members to 

pursue export control cooperation with non-members on a bilateral or regional basis. 
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2010 Report on Foreign Policy-Based Export Controls 

E. Alternative Means

The U.S. Government continues to address the problem of biological weapons 

proliferation on a number of fronts. Direct negotiations with countries intent on 

acquiring biological weapons are not likely to prevent the use of U.S.-origin materials for 

such activities and negotiations are unlikely to affect the behavior of these countries. 

Alternative means to curtail the acquisition and development of biological warfare 

capabilities, such as diplomatic negotiations, do not obviate the need for controls. The 

following examples demonstrate additional means that have been, and will continue to 

be, used in an attempt to curb the use and spread of weapons of mass destruction: 

• Regulations issued by the Public Health Service (42 CFR Part 72) pursuant to 

“The Antiterrorism and Effective Death Penalty Act of 1996” (Sec. 511 of Pub. 

L.104-132, April 24, 1996, 110 Stat. 1214) place additional shipping and handling 

requirements on laboratory facilities that transfer or receive select infectious 

agents capable of causing substantial harm to human health. 

• The Chemical and Biological Weapons Control and Warfare Elimination Act of 

1991 (Pub. L.102-182, Title III, December 4, 1991, 105 Stat. 1245), the Iran-Iraq 

Arms Non-Proliferation Act of 1992 (Pub. L. 102-484) (Title XVI), the Iran 

Nonproliferation Act of 2000 (Pub. L. 106-178), the Iran Nonproliferation 

Amendments Act of 2005 (Pub. L. 109-112), and the North Korea 

Nonproliferation Act of 2006 (Pub. L. 109-353) provide for the imposition of 

sanctions on foreign persons or countries for certain kinds of chemical and 

biological weapons-related activity. The U.S. Government has imposed sanctions 

under these authorities on certain entities for chemical and biological weaponsrelated activities. 

The negotiations and alternative means undertaken by the U.S. Government demonstrate 

that it has made reasonable efforts to achieve the purposes of the controls; however, these 

actions have not had results that are as effective as the maintenance and renewal of the 

controls. 

F. Foreign Availability 

Most of the AG-controlled biological agents, and related equipment to produce them, are 

available from many sources (biological agents are, in fact, endemic). Notwithstanding 

the difficulties related to controlling these items effectively, the United States and its AG 

partners consider it necessary to maintain controls in order to stem shipments to potential 

weapons developers. Foreign availability is a factor considered by the AG member 

countries in their coordination of controls. 
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2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 8

Missile Technology Controls 

(Sections 742.5 and 744.3)

Export Control Program Description and Licensing Policy

The U.S. Government maintains export controls on certain equipment, materials, 

software, and technology to further the U.S. foreign policy of stemming the proliferation 

of missiles capable of delivering weapons of mass destruction (WMD). The U.S. 

Government implements these controls in coordination with the members of the Missile 

Technology Control Regime (MTCR), an informal political arrangement of 34 nations 

that cooperate to halt the proliferation of such missiles. (See Appendix II for a complete 

list of MTCR members.) Of note, several other countries, including India, Israel, 

Romania, and Slovakia, unilaterally adhere to the MTCR Guidelines. 

Section 1512 of the National Defense Authorization Act for Fiscal Year 1999 permits the 

export to the People’s Republic of China (PRC) of “missile-related equipment or 

technology,” as defined in Section 74 of the Arms Export Control Act, only if the 

President certifies to Congress that (1) the export is not detrimental to the United States 

space launch industry and (2) the equipment or technology to be exported, including any 

indirect technical benefit that could be derived from the export of the items, will not 

measurably improve the missile or space launch capabilities of the PRC. In 2009, the 

President delegated the authority to make such certifications to the Secretary of 

Commerce. 

Missile Technology Control Regime Controls 

On April 16, 1987, the United States, Canada, France, Germany, Italy, Japan, and the 

United Kingdom created the MTCR to limit the proliferation of missiles capable of 

delivering nuclear weapons. Member countries agreed to further expand the MTCR 

controls in 1993 to include missile delivery systems for all types of WMD. The MTCR 

Equipment, Software, and Technology Annex lists missile-related items controlled 

pursuant to the MTCR Guidelines. It is divided into two categories. Category I items 

include missile systems and major subsystems, production facilities, and production 

equipment for missile systems capable of delivering at least a 500 kilogram (kg) payload 

to at least a 300 kilometer (km) range. Category II items include materials, components, 

and production and test equipment associated with Category I items, as well as missile 

systems, major subsystems, production facilities, and production equipment for missile 

systems with a range equal to or greater than 300 km, regardless of payload. 
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2010 Report on Foreign Policy-Based Export Controls 

Licensing Requirements and Licensing Policy for MTCR Controls 

The Department of Commerce is responsible for administering controls on manufacturing 

equipment for Category I items and all dual-use items in Category II. The MTCR 

Guidelines and the Equipment, Software, and Technology Annex form the basis for U.S. 

missile technology controls, providing guidance for licensing policy, procedures, review 

factors, and standard assurances on missile technology exports. 

Approximately 120 entries on the Commerce Control List (CCL) are subject to missile 

technology controls. Category I items are subject to a strong presumption of denial 

regardless of purpose, and the transfer of production facilities for Category I items is 

prohibited. The Department will approve the export of Category II items only after a 

case-by-case review consistent with U.S. law, policy, regulations, and international 

nonproliferation commitments. The United States observes the multilateral commitment 

to honor the denial of licenses for MTCR Annex items by other MTCR members and to 

support such denials through a “no undercut” policy. This policy enhances efforts to 

prevent missile proliferation and prevents unfair commercial advantage among regime 

members. 

Licensing Requirements and Licensing Policy

In summary, the licensing requirements and policy for missile technology controls 

described in Sections 742.5 and 744.3 of the Export Administration Regulations (EAR) 

are as follows: 

• The U.S. Government requires a license for the export or reexport to all 

destinations except Canada of dual-use items specifically identified on the CCL as 

controlled for missile technology reasons. 

• The U.S. Government also controls items subject to the EAR due to end-use or 

end-user concerns related to the proliferation of certain rocket systems and 

unmanned aerial vehicles (UAVs), including missile systems. The U.S. missile 

catch-all policy meets U.S. nonproliferation objectives and is consistent with the 

MTCR Guidelines. The Department of Commerce reviews applications for 

licenses on a case-by-case basis to determine whether the export would make a 

material contribution to the proliferation of certain rocket systems or UAVs. 

When the Department of Commerce determines that an export will make such a 

contribution, the application will be denied. 
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2010 Report on Foreign Policy-Based Export Controls 

Summary of 2009 Changes 

On November 9, 2009, the Department of Commerce published a final rule in the Federal 

Register (74 FR 57581) amending the EAR to reflect changes to the MTCR Annex that 

were accepted by MTCR member countries at the November 2008 Plenary in Canberra, 

Australia. The controls were amended by adding additional text to expand the scope of 

equipment controlled in MTCR Annex Item 6.B.1 to include certain fiber placement 

machines to the types of equipment controlled under paragraph (a). New text clarifying 

the controls on motion simulators/rate tables and centrifuges was added to MTCR Annex 

Items 9.B.2.c.2 and 9.B.2.e. Specifically, the additional text on slip rings was added for 

greater clarity regarding intent of the control, and the text on non-contact devices was 

added to reflect accepted provisions by the MTCR members. The control text for 

accelerometers and gyroscopes in MTCR Annex Item 9.A.5 was amended to clarify that 

only accelerometers and gyroscopes that are designed for use in inertial navigation 

systems or in guidance systems of all types fall within its scope. This entry was further 

amended by adding a note to clarify that Export Control Classification Number (ECCN) 

7A101 does not include accelerometers that are designed to measure vibration or shock. 

This more precise text will clearly indicate to the public what accelerometers and 

gyroscopes are within the scope of this ECCN.

Analysis of Controls as Required by Section 6(f) of the Act

A. The Purpose of the Controls

These controls curtail the availability of goods and technology and other support that 

could contribute to missile proliferation. U.S. export controls on specific types of 

missile-related equipment and technology, in coordination with other supplier countries, 

limit the proliferation of missile systems and related technology. These controls 

complement U.S. and international nuclear, chemical, and biological nonproliferation 

efforts by blocking the development of unmanned delivery systems for WMD. These 

controls provide U.S. support to the collective effort of the MTCR to address mounting 

international concern regarding missile proliferation. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that these controls are likely to achieve the intended foreign policy 

purpose, in light of other factors, including the limited foreign availability of items 

controlled for Missile Technology (MT) reasons, and that the foreign policy purpose 

cannot fully be achieved through negotiations or other alternative means. The controls at 

issue have been in part achieved through international or multilateral negotiations. 

Although some controlled items are available from other countries, cooperation among 
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2010 Report on Foreign Policy-Based Export Controls 

the United States, its MTCR Partners, and other like-minded countries, many of which 

are major producers of the items under control, has hindered the efforts of proliferators to 

develop or acquire militarily effective missiles. The Secretary has determined that 

extending these controls is likely to limit the spread of missile delivery systems. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives and that the extension 

of these controls will not have any significant adverse foreign policy consequences. 

Halting the spread of missiles and related equipment and technology worldwide is a key 

U.S. national security and nonproliferation objective. Missile technology export controls 

are consistent with, and contribute to, achieving this objective. U.S. membership in the 

MTCR complements existing nuclear, chemical, and biological nonproliferation policies 

by curbing the spread of missile technology and equipment for the delivery of WMD. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to these controls is not likely to render the controls ineffective, nor will any 

adverse reaction by other countries be counterproductive to U.S. foreign policy interests. 

The United States is confident that other members of and unilateral adherents to the 

MTCR, many of which are also the leading suppliers of missile-related technology, will 

continue to support and strengthen this control regime. MTCR Partners share 

information regarding denials of Annex items and are committed to a “no undercut 

policy.” MTCR Partners also share information about potential activities of proliferation 

concern and have cooperated to interdict specific shipments of proliferation concern. The 

number of non-MTCR countries willing to cooperate with the regime has increased over 

the past several years. Finally, the United States and its MTCR Partners are actively 

engaged in an outreach program to encourage additional countries to adhere to the 

Guidelines and implement effective export controls on MTCR items. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any 

adverse effect of these controls on the U.S. economy, including on the competitive 

position of the United States in the international economy, does not exceed the benefits to 

U.S. foreign policy objectives. Only a narrow list of items is subject to missile controls, 

and the effect on overall U.S. trade is limited. The commitment by MTCR to a “no 

undercut policy” helps ensure that no member obtains an unfair commercial advantage in 

the international marketplace. 

In fiscal year 2009, the Department of Commerce approved 1,908 applications, valued at 

$3.2 billion dollars, for the export or reexport of missile technology-controlled items. In 

addition, the Department rejected 21 applications valued at $1.1 million and returned 

without action 370 applications valued at $141.3 million. Comparatively few licenses for 

missile technology items are denied because: (1) exporters do not generally pursue 

transactions they understand will be rejected (based on the applicable licensing policy); 
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and (2) most of the applications involve exports to destinations, and for end-uses, that do 

not pose missile proliferation concerns. Under the EPCI control related to missile 

technology, the Department of Commerce approved 17 applications, valued at $12.8 

million, denied nine licenses valued at $1.0 million, and returned without action ten 

applications valued at $3.0 million. In these applications, EPCI missile concerns were 

the basis for the license requirement. 

5. Effective Enforcement of Controls. The Secretary has determined the United 

States has the ability to enforce these controls effectively. Multilateral controls on 

missile technology provide a strong framework for cooperative enforcement efforts 

overseas. However, there are challenges for the enforcement of controls on dual-use 

goods related to missile development. First, it is difficult to detect and investigate cases 

under the “knowledge” standard set forth in the EPCI “catch-all” provision. Second, 

some countries have different standards for “catch-all,” which complicates law 

enforcement cooperation. Third, identifying illegal exports and reexports of missilerelated goods requires significant investigative resources. 

To enforce these controls effectively, the Department of Commerce continues to focus on 

preventive enforcement, including an outreach program to educate companies about 

export controls and to increase awareness of “red flags” that may indicate a risky 

transaction. This program is an important component of the Department of Commerce’s 

efforts to prevent companies from illegally exporting dual-use products or equipment that 

could be used to make missiles. Recognizing the importance of export enforcement, the 

MTCR held its ninth Licensing and Enforcement Experts Meeting (LEEM) at the MTCR 

Plenary in Rio de Janeiro, Brazil, in November 2009. 

Among other enforcement activities, the Department of Commerce ensured that criminal 

penalties were assessed against the following individual who committed acts in violation 

of U.S. missile-technology export controls: 

Electronic Components to China – On May 14, 2009, Joseph Piquet was sentenced in 

U.S. District Court to 60 months in prison and two years of probation. On March 5, 

2009, a federal trial jury in Fort Pierce, Florida found Joseph Piquet, President of 

Alphatronx Inc., guilty of conspiracy and violations of the Arms Export Control Act and 

the International Emergency Economics Powers Act following a four-day trial. Piquet 

was convicted based on his role in a conspiracy to purchase high-tech, military-use 

electronic components from a domestic corporation, and to then ship the items to Hong 

Kong and the People's Republic of China without first obtaining the required export 

licenses. Among the commodities involved in this conspiracy were high-power 

amplifiers designed for use by the U.S. military in early warning radar and missile target 

acquisition systems, and low noise amplifiers that have both commercial and military use. 
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The Bureau of Industry and Security and U.S. Immigration and Customs Enforcement 

jointly conducted this investigation. 

C. Consultation with Industry

The Department of Commerce holds discussions with industry representatives on issues 

related to the MTCR Annex through the Transportation Technical Advisory Committee, 

and other relevant technical advisory committees (TACs) as appropriate. The 

Department of Commerce also participates in interagency working groups that review 

proposed changes to the Annex, and engages in discussions of the proposals with 

companies that have relevant expertise. 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public via the BIS website. Comments from the 

Department’s six TACs are solicited on an ongoing basis and are not specific to this 

report. 

D. Consultation with Other Countries

Consultation with other MTCR members is a fundamental element of U.S. missile 

technology control policy. Consultations with non-MTCR countries also are essential to 

U.S. missile nonproliferation policy. The U.S. Government exchanges information with 

other countries about activities of missile proliferation concern and seeks to cooperate 

with them to prevent or stop certain transactions. The United States also shares denial 

information with its MTCR Partners, who are committed to the Regime’s “no-undercut” 

policy. 

MTCR member countries seek to foster the cooperation of non-member countries in 

limiting the spread of delivery systems for WMD, including by encouraging all countries 

to apply the MTCR Guidelines on a national basis. The MTCR’s outreach efforts have 

included workshops and seminars, at which MTCR members and invited non-members 

share experiences aimed at improving export controls and preventing missile 

proliferation. 

E. Alternative Means

The missile sanction provisions in Section 73 of the Arms Export Control Act and 

Section 11B of the Export Administration Act of 1979, as amended (EAA), provide for 

the imposition of export, import, and procurement sanctions on foreign entities engaged 
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in certain kinds of activities relating to the transfer of MTCR Annex items to non-MTCR 

adherent countries. In the past, the United States has imposed missile sanctions on 

entities in Egypt, India, Iran, Macedonia, Moldova, North Korea, Pakistan, China, Russia, 

South Africa, and Syria. Missile sanctions are used to encourage the governments of the 

sanctioned entities to adopt responsible nonproliferation behavior and to send a clear 

message about the United States’ strong commitment to missile nonproliferation. 

The United States and its MTCR Partners are continuing their diplomatic efforts to 

encourage additional countries to adhere unilaterally to the MTCR Guidelines. Such 

efforts are aimed at encouraging non-MTCR members to implement and enforce 

effective missile technology export controls. Although the United States has an 

obligation to maintain and renew its export controls based on its membership in the 

MTCR, it also has pursued alternative means to achieve the purposes of the controls 

through its consultations with non-MTCR countries. 

F. Foreign Availability

Possible suppliers of missile technology that are not MTCR members include, but are not 

limited to, China, North Korea, Egypt, India, Iran, Israel, and Taiwan. Some of these 

countries, such as India and Israel, adhere unilaterally to the MTCR Guidelines. The 

United States continues to approach other nations, including those that produce MTCR 

Annex-controlled items, urge their vigilance in applying MTCR Guidelines to help 

prevent missile proliferation. 
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CHAPTER 9 

Encryption 

(Section 742.15)

Export Control Program Description and Licensing Policy 

To protect and preserve national security and foreign policy interests, the United States 

maintains export controls on encryption items. Encryption items may be used to maintain 

the secrecy of information, and therefore may be used by persons abroad to bring harm to 

U.S. national security and foreign policy interests. The U.S. Government has a critical 

interest in ensuring that the legitimate needs for protecting important and sensitive 

information of the public and private sectors are met, and that persons opposed to the 

United States are not able to conceal hostile or criminal activities. 

When dual-use encryption items were transferred from the United States Munitions List 

(USML) to the Commerce Control List (CCL) on December 6, 1996, a foreign policy 

reason for control, Encryption Item (EI), was imposed on these items. A license is 

required to export or reexport EI-controlled items (classified under Export Control 

Classification Numbers (ECCNs) 5A002, 5D002 and 5E002 on the CCL) to all 

destinations except Canada. All items controlled for EI reasons are also controlled for 

National Security (NS) reasons. 

Licensing Requirements and Licensing Policy for Encryption Controls 

Most EI-controlled items are eligible for export and reexport to non-government endusers under the terms and conditions of License Exception Encryption Commodities, 

Software and Technology (ENC) after review by the Bureau of Industry and Security 

(BIS) and the National Security Agency, and many items are also eligible for export and 

reexport to government end-users under this License Exception. Because EI-controlled 

software remains subject to the Export Administration Regulations (EAR) even when 

publicly available, License Exception Technology and Software–Unrestricted (TSU) is 

available for exports of publicly available encryption software after a notification 

requirement is met. License applications to export or reexport EI-controlled items are 

subject to case-by-case review for consistency with U.S. national security and foreign 

policy interests. EI-controlled items are also eligible for Encryption Licensing 

Arrangements (ELAs), which authorize exports and reexports of unlimited quantities of 

encryption commodities or software to national or federal government bureaucratic 

agencies for civil use, and to state, provincial or local governments, in all destinations, 

except countries listed in Country Group E:1. 
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Analysis of Controls as Required by Section 6(f) of the Act

A. The Purpose of the Controls

Encryption products can be used to conceal the communications of terrorists, drug 

smugglers, and others intent on harming U.S. interests. Cryptographic products and 

software also have military and intelligence applications that, in the hands of hostile 

nations, could pose a threat to U.S. national security. The national security, foreign 

policy, and law enforcement interests of the United States are protected by export 

controls on encryption items. 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that U.S. export controls on encryption items implement technical review 

procedures for commercial encryption items and restrict the export of encryption items in 

situations that would be contrary to U.S. national security or foreign policy interests. The 

Secretary has determined that these controls are likely to achieve the intended foreign 

policy purpose in light of other factors, including the availability of encryption items 

from other countries, and that the foreign policy purpose cannot be achieved solely 

through agreements on the items to be controlled with the participating states of the 

Wassenaar Arrangement or through alternative means. This determination is under 

review as the electronic commerce industry and the Internet grow, as new security 

protocols emerge for, among other things, short-range wireless communications, and as 

the number of countries with the technology to produce highly sophisticated, dual-use 

encryption products expands. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

these controls are compatible with U.S. foreign policy objectives, and that the extension 

of these controls will not have significant adverse foreign policy consequences. The 

controls are consistent with the U.S. foreign policy goal of preventing U.S. exports (and 

subsequent reexports) that might contribute to the capabilities of international terrorists or 

criminals. 

3. Reaction of Other Countries. The Secretary has determined that the continued 

implementation of U.S. encryption export controls is generally accepted in the 

international community, and that any adverse reaction to these controls is not likely to 

render the controls ineffective, nor are they counterproductive to the foreign policy 

interests of the United States. Other countries, particularly the Wassenaar participating 

states, recognize the need to control exports of such products for national security 

reasons. 

4. Economic Impact on U.S. Industry. The Secretary has determined that the 

continued implementation of encryption regulations that are periodically updated will 
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allow U.S. industry to maintain a leadership position in the global market for encryption 

products. 

In fiscal year 2009, the Department of Commerce processed a substantial number of preexport encryption review requests for a variety of products with encryption features. This 

activity continues to reflect the ever-expanding trade in encryption items, and the wide 

commercial applicability of such items. The Department processed 2,340 review 

requests for controlled encryption products, components, toolkits, and source code items. 

Types of products reviewed include commodities and software for desktop and laptop 

computers, wireless handheld devices, e-business applications, network security, and 

telecommunications platforms. These encryption reviews comprised 32 percent of the 

7,369 commodity classifications conducted by the Department of Commerce in fiscal 

year 2009. 

Additionally, during fiscal year 2009, the Department of Commerce approved 2,194 

license applications for “restricted” encryption items (such as high-end routers and other 

network infrastructure equipment) and technology. By increasing the use of ELAs, the 

number of approved encryption license applications was reduced by 16 percent between 

fiscal year 2008 and fiscal year 2009. In fiscal year 2009, there were no denials of 

encryption items based on issues specific to encryption-related licensing policy. 

5. Effective Enforcement of Controls. The Secretary has determined the United 

States has the ability to enforce these controls effectively. Detection of some encryption 

transactions is difficult because encryption components are often incorporated into other 

products and encryption software can be transferred over the Internet. 

The following is an example of a BIS enforcement action regarding noncompliance with 

these controls conducted during fiscal year 2009: 

Telecommunications and GPS Equipment to Iraq – On March 25, 2009, Dawn Hanna 

was sentenced in U.S. District Court in the Eastern District of Michigan to six years in 

prison for her role in exporting mobile telecommunications equipment containing 

encryption properties to Iraq, in violation of the U.S. embargo on Iraq. The court also 

entered a money judgment against Hanna for over $1.1 million dollars which represents 

the profits from the illegal transactions. Hanna was employed by Technical Integration 

Group (TIGS), located in Rochester, Michigan. On October 2, 2008, a jury in U.S. 

District Court in the Eastern District of Michigan found Hanna guilty of conspiracy, 

money laundering, false statements, and violating the International Emergency Economic 

Powers Act. The equipment involved was transshipped to Iraq via Damascus, Syria; 

Amman, Jordan; and the United Arab Emirates. Darrin Hanna, Dawn's brother and 

owner of TIGS, was acquitted of all charges related to the violations. This investigation 

was conducted jointly by BIS’s Office of Export Enforcement, U.S. Immigration and 
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Customs Enforcement, U.S. Customs and Border Protection, the Internal Revenue 

Service, and Her Majesty's Revenue and Customs in the United Kingdom. 

C. Consultation with Industry

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited form the public via the BIS website. Comments from the 

Department’s six Technical Advisory Committee (TACs) are solicited on an ongoing 

basis and are not specific to this report. 

The U.S. Government continually consults with U.S. industry regarding encryption 

policy. The objective of these consultations is to develop updated policy solutions to 

assist law enforcement, protect U.S. national security, ensure continued U.S. 

technological leadership, and promote the privacy and security of U.S. firms and citizens 

engaged in electronic commerce in an increasingly networked world. Such consultations 

have proven successful, as evidenced by the increasing number of encryption items 

submitted for technical review and constructive industry input on matters of regulations 

and policy. 

D. Consultation with Other Countries

The U.S. Government participates in global efforts to prevent international criminals, 

terrorists, and designated state sponsors of terrorism from acquiring sophisticated 

encryption products. Major industrial partners of the U.S. Government maintain export 

controls on encryption equipment and technology. U.S. encryption policy reflects 

continual consultation with other participating states of the Wassenaar Arrangement. 

Encryption items are included under the Wassenaar Arrangement’s Basic List of dual-use 

goods and technologies, with controls based on the encryption strength (e.g., key length) 

and use of specified dual-use items. In addition, the Wassenaar Arrangement’s 

Cryptography Note provides for release from national security controls “mass market” 

encryption items otherwise covered by the Wassenaar control list. 
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E. Alternative Means

EI foreign policy controls are almost coextensive with national security controls placed 

on encryption items. Therefore, if EI controls on encryption items were removed, 

national security controls would remain in place. National security controls are 

maintained cooperatively with the other members of the Wassenaar Arrangement. 

F. Foreign Availability

The United States recognizes the ongoing adoption and widespread use of encryption 

world wide, and the continued development of foreign-made encryption hardware and 

software. The U.S. Government continues to monitor global IT marketplace and 

encryption policy developments so that updated U.S. regulations will enable American 

companies to maintain their technological leadership in a manner that safeguards U.S. 

national security and public safety interests. The U.S. Government does consult with 

other governments to secure cooperation in controlling the availability of encryption 

items.
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CHAPTER 10 

Significant Items: “Hot Section” Technology 

(Section 742.14)

Export Control Program Description and Licensing Policy

Certain technology transferred from the United States Munitions List (USML) to the 

Commerce Control List (CCL) is subject to “enhanced control.” This technology is 

designated by the acronym “SI,” which stands for “Significant Items.” The technology 

controlled for SI reasons is “hot section” technology for the development, production, or 

overhaul of commercial aircraft engines, components, and systems. Technology 

controlled for SI reasons is classified under various paragraphs of Export Control 

Classification Number (ECCN) 9E003 (specifically ECCN 9E003.a.1 through a.11, and 

9E003.h). The “significant item” controls supplement the national security controls that 

also apply to this technology. 

License Requirements and Licensing Policy for Significant Items 

The licensing policy for “hot section” technology is as follows: 

• A license is required for exports and reexports to all destinations, except Canada. 

• The United States reviews license applications for “hot section” technology on a 

case-by-case basis to determine whether the proposed export or reexport is 

consistent with U.S. national security and foreign policy interests. 

Analysis of Control as Required by Section 6(f) of the Act

A. The Purpose of the Control

This control provides a mechanism for the United States to monitor closely the export of 

this technology to prevent its use in a manner that would adversely affect U.S. 

nonproliferation goals or the military balance within a region. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that this control is likely to achieve the intended foreign policy purpose, 

notwithstanding various factors, including the availability of these SI-controlled items 

from other countries, and that the foreign policy purpose has only been partially achieved 
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through negotiations on export controls with the participating states of the Wassenaar 

Arrangement. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

this control is compatible with U.S. foreign policy objectives, and that the extension of 

this control will not have any significant adverse foreign policy consequences. The 

control is consistent with U.S. foreign policy goals to promote peace and stability and to 

prevent U.S. exports that would contribute to inappropriate military capabilities abroad. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to this control is not likely to render the control ineffective, nor will any adverse 

reaction by other countries be counterproductive to U.S. foreign policy interests. “Hot 

section” technology for commercial jet engines is subject to dual-use export controls by 

other allied countries. These countries also recognize the desirability of restricting goods 

that could compromise shared security and foreign policy interests. 

4. Economic Impact. The Secretary has determined that any adverse effect of this 

control on the economy of the United States, including on the competitive position of the 

United States in the international economy, does not exceed the benefit to U.S. foreign 

policy objectives. In fiscal year 2009, the Department of Commerce approved 205 

licenses for technology controlled under ECCN 9E003. Most of the 205 licenses 

approved involved the export of “hot section” technology, of which 81 involved deemed 

exports (i.e., the transfer of “hot section” technology to foreign nationals who are in the 

United States). The total dollar value of the items subject to the licenses approved was 

$14.4 million in fiscal year 2009. There were no license applications rejected involving 

engine “hot section” technology in fiscal year 2009. In addition, 38 applications 

involving items valued at a total of $2.0 million were returned without action.

5. Effective Enforcement of Control. The Secretary has determined that the United 

States has the ability to enforce this control effectively. The U.S. Government does not 

experience any unusual problems in enforcing this control. Manufacturers and 

intermediary companies are familiar with U.S. controls on these products and 

technologies. With the exception of “hot section” technology not covered by ECCN 

9E003.a.1 through 9E003.a.11, which is currently used in civil derivatives of military 

engines controlled on the U.S. Munitions List (ECCN 9E003.h), all of these items also 

are subject to multilateral controls. Therefore, cooperation from foreign government 

enforcement agencies is useful in preventing and punishing violators. 
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C. Consultation with Industry

As needed, the Department of Commerce consults with the Transportation Technical 

Advisory Committee (TransTAC), although there are no major changes anticipated 

regarding this control on the CCL. 

In a September 8, 2009 Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public through the BIS website. Comments from the 

Department’s six TACs are solicited on an ongoing basis and are not specific to this 

report. 

D. Consultation with Other Countries

The United States has taken the lead in international efforts to stem the proliferation of 

sensitive items, urging other supplier nations to adopt and apply export controls 

comparable to those of the United States. The major industrial partners of the United 

States maintain export controls on almost all of this equipment and technology and 

control them as dual-use commodities. Pursuant to their agreement to establish a regime 

for the control of conventional arms and sensitive dual-use goods and technologies, the 

participants in the Wassenaar Arrangement have agreed to control these items (with the 

exception of items subject to ECCN 9E003.h noted above, which the United States has 

not sought to control in Wassenaar) and to ensure that transfers of such items are carried 

out responsibly and in furtherance of international peace and security. 

E. Alternative Means

The U.S. Government has undertaken a wide range of diplomatic endeavors, both 

bilateral and multilateral, to encourage proper control over these items, and has been 

successful in reaching multilateral agreement in the Wassenaar Arrangement to control 

most of these items. The United States has specifically encouraged efforts to prevent the 

unauthorized use or diversion of these items to activities contrary to U.S. national 

security and foreign policy concerns. However, these efforts do not replace the continued 

need for the additional control. 

F. Foreign Availability

Although the United States has been the world leader in this technology, other countries 

produce “hot section” technology. Most countries that are producers of “hot section” 

technology are participants in the Wassenaar Arrangement and control these items (with 
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2010 Report on Foreign Policy-Based Export Controls 

the exception of items controlled under ECCN 9E003.h noted above) as dual-use items in 

accordance with their national licensing policies. The commitment of the U.S. 

Government and its Wassenaar partners to maintain controls reflects the cooperation 

among governments to reduce foreign availability. 
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2010 Report on Foreign Policy-Based Export Controls 

CHAPTER 11

Nuclear Nonproliferation 

(Sections 742.3 and 744.2)

Export Control Program Description and Licensing Policy

The U.S. Government maintains controls on exports of nuclear-related items under the 

authority of the Nuclear Nonproliferation Act of 1978 (NNPA) to further the United 

States’ nuclear nonproliferation policy. Because these controls are primarily based on the 

NNPA and not the Export Administration Act (EAA), they are not subject to this report. 

However, BIS has included information on nuclear nonproliferation controls because 

they usually are grouped with other nonproliferation controls that are subject to this 

report. In addition, controls based on nuclear end-uses and end-users are maintained 

under the authority of Section 6 of the EAA as part of the Enhanced Proliferation Control 

Initiative (EPCI). EPCI controls are described in detail in Chapters 6, 7, and 8 of this 

report. The Entity List, maintained in Supplement No. 4 to Part 744 of the Export 

Administration Regulations (EAR) and discussed in Chapter 13 of this report, also 

prohibits certain transactions involving end-users and end-uses involved in nuclear 

activities described in section 744.2 of the EAR. 

Nuclear Nonproliferation Regime Controls 

These controls support U.S. international nuclear nonproliferation obligations. The 

United States is a member of the multilateral Nuclear Suppliers Group (NSG). The NSG, 

which has 46 members (the most recent member, Iceland, joined in June 2009), sets forth 

export control guidelines applicable to a list of nuclear-related dual use items (see 

Appendix II for a complete list of regime members). The United States also is a member 

of the Zangger Committee, a multilateral group formed in the early 1970s to establish 

guidelines for the export control provisions of the Nuclear Nonproliferation Treaty. The 

United States regularly consults with non-NSG members as well in coordinating export 

controls for nuclear nonproliferation purposes. 

Licensing Requirements and Licensing Policy

The Department of Commerce requires a license for the export of the following items: 

• commodities, related technology, or software that could be of significance for 

nuclear explosive purposes (i.e., the Nuclear Referral List (NRL) included in the 

Commerce Control List (CCL)); and 
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2010 Report on Foreign Policy-Based Export Controls 

• any commodity, related technology, or software that the exporter knows, or has 

reason to know, will be used directly or indirectly in any of the following 

activities: 

 – nuclear explosive activities including the design, development, 

manufacture, or testing of nuclear weapons or nuclear explosive devices; 

 – unsafeguarded nuclear activities, including the design, development, or 

manufacture of any nuclear reactor, critical facility, facility for the 

fabrication of nuclear fuel, facility for the conversion of nuclear material 

from one chemical form to another, or separate storage installation where 

there is no obligation to accept International Atomic Energy Agency 

(IAEA) safeguards at the facility or installation, when it contains any 

source of special fissionable material, or where any such obligation is not 

met; or 

 – safeguarded and unsafeguarded nuclear activities, including the design, 

construction, fabrication, or operation of the following facilities, or 

components for such facilities: (i) facilities for the chemical processing of 

irradiated special nuclear or source materials; (ii) facilities for the 

production of heavy water; (iii) facilities for the separation of isotopes of 

source and special nuclear material; or (iv) facilities for the fabrication of 

nuclear reactor fuel containing plutonium. 

The Department of Commerce may inform the exporter that a license is required for any 

item subject to the Export Administration Regulations (EAR) when there is an 

unacceptable risk of use in, or diversion to, any of the activities described above. 

Factors considered in reviewing applications for licenses include: 

• the stated end-use of the item; 

• the significance for nuclear purposes of the particular component and its 

availability elsewhere; 

• the types of nuclear nonproliferation assurances or guarantees given in a 

particular case; and 

• the nonproliferation credentials of the recipient country. 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited public comment on the effectiveness of foreign policy-based 

controls, including controls on nuclear-related items. The comment period closed on 

October 8, 2009. A detailed review of all public comments received can be found in 

Appendix I. In addition, comments were solicited from the public via the BIS website. 

Moreover, comments from the Department’s six Technical Advisory Committee (TACs) 

are solicited on a regular basis, but are not detailed in this report. 
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Analysis of Controls as Required by Law11

Section 17(d) of the EAA and Section 309(c) of the NNPA provide that: (1) nuclear 

nonproliferation controls do not expire annually and determinations to extend them are 

thus not required; and (2) the criteria and other factors set forth in Sections 6(b) through 

6(f) of the Act are not applicable to these controls. The Department of Commerce is, 

therefore, notifying Congress that these controls continue in effect. These controls 

further the nuclear nonproliferation policy of the United States and have made it more 

difficult for nations to acquire sensitive nuclear technology or equipment. 

The Departments of Commerce and Energy, in consultation with the Departments of 

State and Defense and the Nuclear Regulatory Commission, regularly review and revise 

the NRL pertaining to U.S. dual-use items controlled for nuclear nonproliferation 

reasons. The NRL is used to meet the United States’ NSG commitments with respect to 

nuclear dual-use items. During fiscal year 2009, there were no additions or updates to the 

NRL.

The following are BIS enforcement actions regarding noncompliance with these controls 

during fiscal year 2009: 

Electronic Sensors to a Listed Entity – On May 11, 2009, Sam Peng was sentenced in 

U.S. District Court in the Central District of California to three years of probation, five 

months of home confinement, 400 hours of community service, and a $6,000 fine. Peng 

pled guilty in September 2007 to exporting electronic sensors and vibration test 

equipment to a company in India that was listed on the Entity List for proliferation 

activities while acting as the Export Compliance Manager for Endevco Corporation. 

Toray Carbon Fiber to China – On October 28, 2008, Koktong Lim, Jian Wei Ding, and 

Ping Cheng were indicted in Minnesota. On February 13, 2009, Cheng, of Prime 

Technology Corporation, pled guilty to violating the International Emergency Economic 

Powers Act. On March 10, 2009, Lim, of the Singapore companies Firmspace, Far 

Eastron, and Jowa Globaltech, also pled guilty to conspiracy to violate the EAR. On 

March 20, 2009, Ding pled guilty in U.S. District Court in the District of Minnesota to 

conspiracy to violate the EAR. Ding, Lim, and Cheng’s guilty pleas were pursuant to 

their roles in a conspiracy to illegally export Toray Carbon fiber for an ultimate 

destination of the China Academy of Space Technology. The Bureau of Industry and 

 

11 The analysis, required by law, differs for nuclear nonproliferation controls. It is 

governed by the Nuclear Nonproliferation Act of 1978 (NNPA). Therefore, the headings 

under this section differ from the rest of the report. 
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Security’s Office of Export Enforcement and the U.S. Immigration and Customs 

Enforcement jointly conducted this investigation. 
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CHAPTER 12 

Surreptitious Listening 

(Section 742.13)

Export Control Program Description and Licensing Policy

On November 20, 2006, the Department of Commerce published an amendment to the 

Export Administration Regulations (EAR) to impose foreign policy controls on exports 

of devices primarily useful for the surreptitious interception of wire, oral, or electronic 

communications, and on related software and technology (71 FR 67034). The U.S. 

Government maintains these controls in order to: prevent the unlawful interception of 

oral, wire, or electronic communications by terrorists and others who may put the 

information gained through intercepted communications to an unlawful use; promote the 

protection of privacy of oral, wire, or electronic communications; and protect against 

threats of terrorism around the world. 

The amendment imposed Anti-Terrorism (AT) controls and created a new foreign policy 

control, Surreptitious Listening (SL), for devices used for the surreptitious interception of 

wire, oral, or electronic communications controlled under Export Control Classification 

Number (ECCN) 5A980. It also imposed the same controls on related software and 

technology by creating ECCNs 5D980 (software) and 5E980 (technology). 

Licensing Requirements and Licensing Policy

A license is required for the export or reexport to any destination of any electronic, 

mechanical, or other device primarily useful for surreptitious interception of wire, oral, or 

electronic communications. The Department of Commerce will generally approve 

applications for the export and reexport of items classified as ECCNs 5A980, 5D980, or 

5E980, other than to destinations for which a license is required for AT reasons, for 

providers of wire or electronic communication service acting in the normal course of 

business; or to officers, agents, or employees of, or persons under contract with, the 

United States, a State, or a political subdivision thereof, when engaged in the normal 

course of government activities. License applications from other parties will generally be 

denied. 

The license requirements set forth in the EAR are independent of the requirements of 

section 2512 of the Omnibus Crime Control and Safe Streets Act of 1968, as amended 

(18 U.S.C. 2512). These controls do not supersede, nor do they implement, construe, or 

limit the scope of any of the statutory restrictions of section 2512 of the Omnibus Crime 
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Control and Safe Streets Act of 1968, as amended, that are enforced by the U.S. 

Department of Justice. 

Analysis of Control as Required by Section 6(f) of the Act

A. The Purpose of the Control

The purpose of the imposition of surreptitious listening controls is to: prevent the 

unlawful interception of oral, wire, or electronic communications by terrorists and others 

who may put the information gained through intercepted communications to an unlawful 

use; promote the protection of privacy of oral, wire, or electronic communications; and 

protect against threats of terrorism around the world. The controls distance the United 

States from nations that have repeatedly supported acts of terrorism and from individuals 

and organizations that commit terrorist acts. 

B. Considerations and/or Determinations of the Secretary of Commerce

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that the surreptitious listening controls are likely to achieve the intended 

foreign policy purpose, notwithstanding the availability of these controlled items from 

other countries, and that the foreign policy purpose cannot be achieved through 

negotiations or other alternative means. 

Because sending or carrying the devices in foreign commerce is already subject to 

independent criminal sanction, the imposition of foreign policy-based controls on these 

devices and related software and technology will enhance the probability of achieving the 

intended foreign policy purposes of: preventing the unlawful interception of oral, wire, 

or electronic communications by terrorists and others who may put the information 

gained through intercepted communications to an unlawful use; promoting the protection 

of privacy of oral, wire, or electronic communications; and protecting against threats of 

terrorism around the world. 

Although the availability of comparable goods from foreign sources limits the 

effectiveness of the surreptitious listening controls, these controls restrict access by the 

countries and persons subject to these controls to U.S.-origin commodities, technology, 

and software, and demonstrate U.S. determination to prevent the unlawful interception of 

communications, to promote privacy protection, and to oppose and distance itself from 

international terrorism. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

the imposition of these controls is consistent with the foreign policy objectives of the 
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United States and will not have any significant adverse foreign policy consequences. The 

imposition of surreptitious listening controls will enhance the U.S. Government’s ability 

to stop the supply of U.S.-origin items to persons engaged in, or supportive of, unlawful 

uses of intercepted communications, privacy violations, and acts of terrorism. The 

imposition of these controls is also compatible with overall U.S. policy toward Cuba, 

Iran, North Korea, Sudan, and Syria. The U.S. Government intends to promote privacy 

protection and aid in deterring criminal activities, including terrorism, through these 

foreign policy-based controls. 

3. Reaction of Other Countries. The Secretary has determined that any adverse 

reaction to the imposition of surreptitious listening controls is not likely to render the 

controls ineffective, nor will any adverse reaction by other countries be 

counterproductive to U.S. foreign policy interests. Most countries are generally 

supportive of U.S. efforts to prevent unlawful uses of intercepted communications, 

including uses of intercepted communications by terrorists, and to stop the proliferation 

of weapons of mass destruction in countries of concern. In addition, the sending or 

carrying of the devices in foreign commerce is already subject to independent criminal 

sanction. The imposition of foreign policy-based controls on these devices and related 

software and technology is not expected to result in any adverse reaction by other 

countries. 

4. Economic Impact on U.S. Industry. The Secretary has determined that any 

adverse effect of these controls on the economy of the United States, including the 

competitive position of the United States in the international economy, does not exceed 

the benefit to U.S. foreign policy objectives. Because sending or carrying the devices in 

foreign commerce is already subject to independent criminal sanction, the imposition of 

foreign policy-based controls on the devices and related software and technology will not 

have a discernable economic impact. 

In fiscal year 2009, the Department of Commerce approved one application for the export 

or reexport of SL controlled items. In addition, the Department returned without action 

four applications for items valued at $369,560. No applications were rejected. During 

the same time period, the Department of Commerce completed three commodity 

classification determination requests that resulted in classifying the items under ECCNs 

5A980, 5D980, or 5E980. 

5. Effective Enforcement of Controls. The Secretary has determined that the 

United States has the ability to enforce these controls effectively. The imposition of 

foreign policy-based controls on the devices and related software and technology will 

enhance effective enforcement because the new controls have been introduced pursuant 

to the export control authorities delegated to the Department of Commerce. The U.S. 
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Government can effectively enforce these controls by focusing on preventive 

enforcement, using regular outreach efforts to keep industry informed, and gathering 

leads on activities of concern. 

C. Consultation with Industry 

This November 2006 amendment to the EAR was published in the Federal Register in 

final form. Although there was no formal comment period, public comments on this 

amendment are welcome on a continuing basis. 

The Department of Commerce consults with the Regulations and Procedures Technical 

Advisory Committee (RPTAC), one of six such committees that advise the Bureau of 

Industry and Security (BIS), in preparation for publication of major regulatory changes 

affecting foreign policy controls. BIS did consult with the RPTAC prior to the 

publication of this rule. 

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public via the BIS website. Comments from the 

Department’s six technical advisory committees are solicited on a regular basis and are 

not specific to this report. 

D. Consultation with Other Countries 

The United States continues to consult with a number of countries, both on a bilateral and 

a multilateral basis. In general, most countries are supportive of measures designed to 

prevent the unlawful use of intercepted communications, protect privacy, and combat 

terrorism, but do not implement strict export controls on these items similar to the United 

States’ export controls. The United States will consult with other countries as necessary 

regarding these changes in order to ensure compliance and encourage their efforts to 

deter terrorism and other criminal activity. 

E. Alternative Means 

The U.S. Government continually reviews the means by which it can curtail privacy 

violations and terrorism and has taken a wide range of diplomatic, political, and securityrelated steps to support this effort. Imposing these foreign policy-based controls 

enhances the aforementioned efforts in order to prevent terrorist-supporting countries 

from acquiring items subject to U.S. export control jurisdiction. In addition, these 
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controls underscore the United States’ commitment to prevent criminal activity 

worldwide. 

F. Foreign Availability 

The commodities subject to these controls are likely available from foreign suppliers. 

The Department of Commerce is aware that these new controls will not prevent the 

shipment of such foreign-origin items from other countries, but the regulation minimizes 

the risk of diversion of U.S.-origin devices and related software and technology primarily 

useful for surreptitious interception of wire, oral, or electronic communications to endusers without a legitimate commercial need for such devices.
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CHAPTER 13 

Entity List 

(Supplement No. 4 to Part 744) 

Export Control Program Description and Licensing Policy

To best address national security and foreign policy threats to the United States in the 

post-Cold War era, BIS has adopted export controls that focus on individuals or entities 

that pose a threat to the national security or foreign policy of the United States and has 

taken steps to provide additional information to the public about these individuals or 

entities of concern. The Entity List (Supplement No. 4 to Part 744 of the Export 

Administration Regulations (EAR)) provides notice to the public that certain exports, 

reexports, and transfers (in-country) to the companies and individuals identified on the 

Entity List require a license from the Bureau of Industry and Security (BIS) and that the 

availability of License Exceptions in such transactions is limited. 

Established in 1997, the Entity List provides notice of a prohibition against activities and 

transactions involving end-users and end-uses that meet the criteria listed in Sections 

744.2, 744.3, 744.4, 744.10, 744.11, and 744.20 of the EAR, unless specifically 

authorized by BIS. Sections 744.2, 744.3, and 744.4 of the EAR are foreign policy-based 

end-use controls that prohibit exports and reexports of items subject to the EAR for use in 

defined nuclear, missile, chemical and biological activities. Sections 744.10, 744.11 and 

744.20 are foreign policy-based end-user controls that restrict transactions to certain 

individuals. 

Entity List entries specify the license requirements imposed on each listed entity. These 

license requirements are in addition to any license requirements imposed on the 

transaction elsewhere in the EAR. 

The End-User Review Committee (ERC), chaired by the Department of Commerce, 

implements changes to the Entity List, making all decisions to add entries to the List by 

majority vote and all decisions regarding removals from or changes to licensing 

requirements or policy for a specific entry by unanimous vote. The ERC is composed of 

representatives of the Departments of Commerce, State, Defense, Energy, and—where 

appropriate—the Treasury. 

Section 744.16 of the EAR provides for a mechanism whereby entities on the Entity List 

may request their removal from the list or a modification of their status on the list. The 

ERC conducts an annual review of all entities on the Entity List to correct and update the 

list. 
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Summary of 2009 Changes 

On September 8, 2009, BIS published a final rule in the Federal Register (74 FR 45990) 

expanding the scope of transactions covered by Sections 744.10, 744.11, and 744.20 of 

the EAR to include transfers (in-country) as an activity that requires a license. These 

three sections previously specified license requirements for exports and reexports to 

persons listed on the Entity List. However; the sections were silent regarding whether or 

not the scope of the licensing requirements included transfers (in-country). This rule 

added transfers (in-country) to the scope of the license requirements under each of the 

three sections. 

On July 21, 2009, BIS published a final rule in the Federal Register (74 FR 35797) 

adding 13 additional persons to the Entity List on the basis of Section 744.11 of the EAR. 

The rule also removed three persons from the Entity List. One was removed as a result of 

a determination made by the United States Government during the annual review of the 

Entity List conducted by the ERC and two were removed as a result of responses to 

requests for removal as outlined in Section 744.16 of the EAR. 

On March 18, 2009, BIS published a final rule in the Federal Register (74 FR 11472) 

removing two persons from the Entity List. These persons were removed because of 

determinations made by the United States Government during the annual review of the 

Entity List conducted by the ERC. 

On February 24, 2009, BIS published a final rule in the Federal Register (74 FR 8182) 

removing one person from the Entity List. This person was removed from because the 

ERC decided to approve this person’s request for removal from the Entity List as outlined 

in Section 744.16 of the EAR. 

Licensing Policy 

The licensing policy for each entity on the Entity List is set by the ERC when an entity is 

added to the Entity List, and varies from entity to entity. The license review policy is 

described with each entity’s listing on the Entity List. 

Analysis of Controls as Required by Section 6(f) of the Act

A. The Purpose of the Controls

The purpose of the U.S. foreign policy controls included for individual entries on the 

Entity List is to protect and enhance the United States’ foreign policy interests by 
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demonstrating U.S. resolve to restrict trade with entities that fail to adhere to acceptable 

norms of international behavior, or with entities whose behavior threatens U.S. interests. 

Specifically, the purpose of these controls is to focus export control efforts more closely 

on problematic potential recipients of items that are subject to the EAR, and who may be 

engaging in activities defined by the criteria currently set forth in Sections 744.2, 744.3, 

744.4, 744.10, 744.11, or 744.20. As a result of these controls, the public is put on notice 

regarding the restrictions placed on export and reexports to listed entities. The U.S. 

Government may conduct prior review and make appropriate licensing decisions 

regarding proposed exports and reexports to such recipients to the degree necessary to 

protect its interests. 

B. Considerations and/or Determinations of the Secretary of Commerce 

1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary 

has determined that the imposition of foreign policy controls as part of the licensing 

requirements imposed on individual entries to the Entity List is likely to achieve the 

intended national security and foreign policy purposes. 

Although the United States regularly engages in negotiations with other countries on how 

best to achieve export control goals, these negotiations may not achieve U.S. export 

control objectives aimed at individual entities. In cases where U.S. interests are at stake, 

the United States retains the authority to impose controls that reflect unilateral foreign 

policy objectives. 

These license requirements are intended to deter actions contrary to U.S. interests by 

preventing the acquisition of certain items by parties who might take actions that are 

detrimental to U.S. policy goals. The United States seeks to prevent the use of U.S.-

origin items in connection with such conduct. The controls exercised through the Entity 

List enable BIS to focus export license requirements more precisely to target specific 

entities without imposing overly broad license requirements on a large array of items to a 

large number of destinations. 

2. Compatibility with Foreign Policy Objectives. The Secretary has determined that 

imposing these controls is compatible and consistent with the national security and 

foreign policy objectives of the United States. Specifically, these controls are consistent 

with the U.S. policy of prohibiting exports, reexports, and transfers (in-country) when 

specific and articulable facts provide reasonable cause to believe that the parties to whom 

the items will be provided are involved in activities contrary to the national security or 

foreign policy interests of the United States, or pose a significant risk of becoming 

involved in such activities. Additionally, the Department of State’s representation on the 

ERC assures that the decisions based on this rule will be compatible with U.S. foreign 
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policy interests. The Secretary has further determined that these expanded controls will 

not have significant adverse foreign policy consequences. 

3. Reaction of Other Countries. The Secretary has determined that although other 

countries may raise objections to the Entity List, any adverse reaction to the expansion of 

the Entity List is not likely to render the Entity List ineffective, nor will any adverse 

reaction by other countries be counterproductive to U.S. foreign policy interests. Further, 

the Department of Commerce works closely with the Department of State to consult with 

countries impacted by changes to the Entity List. These consultations are also completed 

in advance of any changes to the List. 

4. Economic Impact on United States Industry. The Secretary has determined that 

the cost to industry resulting from the maintenance of these controls does not exceed the 

benefit to U.S. foreign policy. These controls provide an effective alternative to 

imposing additional and overly broad end use or geographic license export control 

requirements. The publication of entity names on a consolidated list also reduces 

uncertainty for U.S. industry. Thus, these controls minimize the economic impact on 

industry while allowing BIS to achieve U.S. foreign policy objectives through the 

strengthening of U.S. export controls. Additionally, interagency representation on the 

ERC provides reasonable assurance that additions to the Entity List will reflect 

significant U.S. foreign policy concerns. 

5. Effective Enforcement of Controls. The Secretary has determined that the 

United States has the ability to enforce these controls effectively. Imposing license 

requirements on clearly identified entities via the Entity List will facilitate the U.S. 

Government’s identification of actual and potential violations. In addition, listing entities 

will facilitate industry’s compliance with the controls by allowing for a more automated 

review of proposed transactions, and will facilitate industry efforts to assist the 

Government in enforcing these controls by allowing industry to know what entities to 

specifically look for in export transactions. 

C. Consultation with Industry

In a September 8, 2009, Federal Register notice (74 FR 46088), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased export controls. The comment period closed on October 8, 2009. A detailed 

review of all public comments received can be found in Appendix I. In addition, 

comments were solicited from the public via the BIS website. Comments from the 

Department’s six technical advisory committees are solicited on an ongoing basis and are 

not specific to this report. 
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D. Consultation with Other Countries 

The United States continues to consult with a number of countries, on both a bilateral and 

multilateral basis, regarding the parties on the Entity List and those proposed for addition. 

These consultations are based on specific facts that provide reasonable cause to believe 

that the parties pose a significant risk of becoming involved in activities contrary to the 

national security or foreign policy interests of the United States and other countries. 

Most countries are supportive of U.S. efforts in the export and reexport control and 

enforcement arena. 

E. Alternative Means 

The United States continually reviews the means by which it can curtail activities that are 

contrary to U.S. interests. The United States has taken a wide range of diplomatic, 

political, and security-related steps to support this effort. 

F. Foreign Availability

The Department of Commerce is aware that these controls will not necessarily prevent 

the acquisition of sensitive goods or technologies by parties listed on the Entity List. 

However, the United States is sending a strong message by publishing and enforcing this 

Entity List that may deter other suppliers from participating in transactions with listed 

entities. Additionally, the United States intends to work in cooperation with other 

governments to curtail transactions by other suppliers.
Appendix I Summary of Public Comments on Foreign Policy-Based Export Controls 

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2010 Report on Foreign Policy-Based Export Controls 

APPENDIX I

Summary of Public Comments 

on Foreign Policy-Based Export Controls

The Department of Commerce’s Bureau of Industry and Security (BIS) requested public 

comments on existing foreign policy-based export controls maintained under Section 6 of 

the Export Administration Act of 1979, as amended (EAA), and on the Entity List 

(Supplement No. 4 to Part 744 of the Export Administration Regulations (EAR)) through 

a Federal Register notice published September 8, 2009 (74 FR 46088). In addition, 

comments were solicited from the public through the BIS Web page. Comments from 

the Department’s six Technical Advisory Committees are solicited on an ongoing basis 

and are not specific to this report. 

BIS requested comments on how existing foreign policy controls have affected exporters 

and the overall public. The notice invited public comments about issues such as: the 

effectiveness of controls when foreign availability exists; whether the goals of the 

controls can be achieved through other means such as negotiations; the compatibility of 

the controls with the overall U.S. policy toward a country in question; the effect of 

controls on U.S. economic performance; and the ability to enforce the controls. 

The comment period closed on October 8, 2009. BIS received two comments from the 

following organizations: The Boeing Company and GTP Greenville, Inc. BIS has made 

all comments available for review in the BIS Freedom of Information Act Reading Room 

available on the BIS Web page. BIS also makes the comments available for public 

review upon request. This Appendix summarizes the comments received. 

Industry Comments

On October 13, 2009, The Boeing Company (Boeing) submitted comments 

recommending that the Department reform foreign policy-based export controls. Boeing 

stated that the foreign policy-based export controls are incompatible with the fluid and 

dynamic foreign policy environment and are an impediment to Boeing as it strives to 

maintain the safety-of-flight of U.S.-origin commercial aircraft abroad. Additionally, 

Boeing argued that the foreign availability of comparable items that are not subject to the 

same level of controls by foreign countries puts U.S. exporters at a disadvantage. 

Boeing indicated that the intended foreign policy purposes of the export controls are not 

necessarily clear to industry and that the controls could result in unintended 

consequences, such as fostering of “gray” markets, encouraging foreign competition, and 

reducing reliance on U.S. parts and components. Boeing argued that passenger safety 
Appendix I Summary of Public Comments on Foreign Policy-Based Export Controls 

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2010 Report on Foreign Policy-Based Export Controls 

and the credibility and reputation of the United States could be negatively impacted by 

export restrictions on safety-of-flight-related items to sanctioned countries. Ultimately, 

U.S. jobs could also be affected by foreign policy-based export controls, Boeing argued. 

Boeing recommended that the U.S. Government place more of a priority on the use of 

diplomacy, direct interventions, harmonization of control regimes with other countries, 

and other means to meet the intended foreign policy objectives. Additionally, Boeing 

also suggested utilizing more entity-based and time-sensitive export controls, 

streamlining the U.S. export control system, and creating an exception to existing 

controls for the export of safety-of-flight-related items. 

On September 25, 2009, GTP Greenville, Inc. (GTP) submitted comments recommending 

the elimination of unilateral export controls on general products. The company claimed 

lost business opportunities to foreign competitors whose governments do not maintain 

comparable export controls on countries embargoed or sanctioned by the United States. 

GTP described specific instances in which it lost orders for its products – accessories for 

textile machines – destined for Iran and Syria due to U.S. export controls. Moreover, 

GTP indicated that it loses additional business from foreign companies that resell 

products globally because those companies do not want to be burdened by U.S. reexport 

controls on embargoed and sanctioned countries. GTP concluded that only the U.S. 

economy and jobs are harmed by unilateral export controls on general products and that 

the United States should only maintain export controls on those items when done on a 

multilateral basis. 
Appendix II Multilateral Export Control Regimes in 2009 

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2010 Report on Foreign Policy-Based Export Controls 

APPENDIX II 

Multilateral Export Control Regimes in 2009

WASSENAAR AG MTCR NSG

Argentina Argentina Argentina Argentina 

Australia Australia Australia Australia 

Austria Austria Austria Austria 

 Belarus 

Belgium Belgium Belgium Belgium 

 Brazil Brazil 

Bulgaria Bulgaria Bulgaria Bulgaria 

Canada Canada Canada Canada 

Croatia Croatia Croatia 

 Cyprus Cyprus 

Czech Republic Czech Republic Czech Republic Czech Republic 

Denmark Denmark Denmark Denmark 

Estonia Estonia Estonia 

 European Union (Observer) European Union (Observer) 

Finland Finland Finland Finland 

France France France France 

Germany Germany Germany Germany 

Greece Greece Greece Greece 

Hungary Hungary Hungary Hungary 

 Iceland Iceland Iceland 

Ireland Ireland Ireland Ireland 

Italy Italy Italy Italy 

Japan Japan Japan Japan 

 Kazakhstan 

Latvia Latvia Latvia 

Lithuania Lithuania Lithuania 

Luxembourg Luxembourg Luxembourg Luxembourg 

Malta Malta Malta 

Netherlands Netherlands Netherlands Netherlands 

New Zealand New Zealand New Zealand New Zealand 

Norway Norway Norway Norway 

 People’s Republic of China 

Poland Poland Poland Poland 

Portugal Portugal Portugal Portugal 

Rep. of Korea (South Korea) Rep. of Korea (South Korea) Rep. of Korea (South Korea) Rep. of Korea (South Korea) 

Romania Romania Romania 

Russian Federation Russia Federation Russian Federation 

Slovak Republic Slovak Republic Slovak Republic 

Slovenia Slovenia Slovenia 

South Africa South Africa South Africa 

Spain Spain Spain Spain 

Sweden Sweden Sweden Sweden 

Switzerland Switzerland Switzerland Switzerland 

Turkey Turkey Turkey Turkey 

Ukraine Ukraine Ukraine Ukraine 
Appendix II Multilateral Export Control Regimes in 2009 

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2010 Report on Foreign Policy-Based Export Controls 

WASSENAAR AG MTCR NSG

United Kingdom United Kingdom United Kingdom United Kingdom 

United States United States United States United States 

AG: Australia Group; MTCR: Missile Technology Control Regime; NSG: Nuclear Suppliers Group 
Appendix III Selected Rules Published by the Department of Commerce in 2009 

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APPENDIX III 

Selected Rules Published by the Department of Commerce in 2009 

Publication Date Federal Register

Citation

Rule

11/09/09 74 FR 57581 Wassenaar Arrangement 2008 Plenary Agreements 

Implementation: Categories 1, 2, 3, 4, 5 Parts I and II, 6, 

7, 8 and 9 of the Commerce Control List, Definitions, 

Reports 

09/08/09 74 FR 45990 Revisions to Certain End-User Controls under the Export 

Administration Regulations; Clarification Regarding 

License Requirements for Transfers (in-country) to 

Persons Listed on the Entity List 

09/08/09 74 FR 45985 Cuba: Revisions to Gift Parcel and Baggage Restrictions, 

Creation of License Exception for Donated Consumer 

Communications Devices and Expansion of Licensing 

Policy Regarding Telecommunications 

08/11/09 74 FR 40117 Revisions to the Commerce Control List to Update and 

Clarify Crime Control License Requirements (Proposed 

Rule) 

07/21/09 74 FR 35797 Addition and Removal of Certain Persons on the Entity 

List: Addition of Persons Acting Contrary to the National 

Security or Foreign Policy Interests of the United States; 

Removal of Persons based on ERC Annual Review and 

Removal Requests; and Entry Modified for Purposes of 

Clarification 

07/06/09 74 FR 31850 Implementation of the 2008 Australia Group (AG) 

Intersessional Decisions; Additions to the List of States 

Parties to the Chemical Weapons Convention (CWC) 

07/02/09 74 FR 31620 Authorization Validated End-User (VEU): List of 

Approved End-Users and Respective Eligible Items for 

India 

05/22/09 74 FR 23941 Revisions to License Requirements and License Exception 

Eligibility for Certain Thermal Imaging Cameras and 

Foreign Made Military Commodities Incorporating Such 

Cameras 

04/29/09 74 FR 19382 Additions and Revisions of the List of Approved EndUsers and Respective Eligible Items for the People’s 

Republic of China (PRC) Under Authorization Validated 

End-User (VEU) 

03/18/09 74 FR 11472 Removal and Modification of Certain Entries from the 

Entity List: Person Removed or Modified Based on ERC 

Annual Review 

02/24/09 74 FR 8182 Removal and Modification of Certain Entries from the 

Entity List: Person Removed Based on Removal Request 

and Clarification of Certain Entries 
Appendix III Selected Rules Published by the Department of Commerce in 2009 

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Publication Date Federal Register

Citation

Rule

01/15/09 74 FR 2355 License Requirements Policy for Iran and for Certain 

Weapons of Mass Destruction Proliferators 

01/08/09 74 FR 770 Burma: Revision of Restrictions on Exports, Reexports 

and Transfers to Persons Whose Property and Interests in 

Property Are Blocked Pursuant to Executive Orders