2009 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 7 

Chapter 3 Regional Stability 18 

 

Chapter 4 Anti-Terrorism Controls 26 

Chapter 5 Embargoes and Other Special Controls 33 

Chapter 6 Toxic Chemicals, Chemical Precursors and Associated 

 Equipment, Technology and Software 67 

Chapter 7 Biological Agents and Associated Equipment and Technology 76 

Chapter 8 Missile Technology Controls 83 

Chapter 9 Encryption 90 

Chapter 10 Significant Items: “Hot Section” Technology 95 

Chapter 11 Nuclear Nonproliferation 98 

Chapter 12 Surreptitious Listening 102 

Chapter 13 Entity List 106 

Appendix I Summary of Public Comments on Foreign Policy Export Controls 111 

Appendix II Multilateral Export Control Regimes in 2007 114 

Appendix III Selected Rules Published by the Department of Commerce in 2007 115 
Chapter 1 Introduction 

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2009 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 Act). Section 6(f) of the Act 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 Act 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 Act 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 July 23, 2008 

(73 Fed. Reg. 43,603 (July 25, 2008)). In that Executive Order, the President, by reason 

of the expiration of the Act, 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 Act. Under a policy of conforming 

actions under the Executive Order to those under the Act, the Department of Commerce, 

insofar as appropriate, is following the provisions of Section 6 of the Act 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, 2009, to January 20, 2010. 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 Act, foreign 

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

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. 

 

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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2009 Report on Foreign Policy-Based Export Controls 

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 2008 calendar year, most of the statistical data presented in the report are 

based on fiscal year 2008 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 Act. 

Part I: Highlights in the 2009 Report 

Anti-Terrorism (AT) Controls on Designated Terrorist States 

North Korea

On October 11, 2008, the Secretary of State rescinded North Korea’s designation as a 

state sponsor of terrorism. As a result of this rescission, BIS intends to publish an 

amendment to the Export Administration Regulations (EAR) (15 C.F.R. Part 730 et seq.) 

that will remove North Korea from Country Group E:1 (Supplement No. 1 to Part 740 of 

the EAR). Other conforming changes will be required. The rescission does not impact 

other sanctions imposed on North Korea based on its detonation of a nuclear explosive 

device on October 9, 2006, proliferation activities, and human rights violations, which 

will continue to apply on the basis of other relevant laws and regulations. In particular, 

consistent with United Nations Security Council Resolution (UNSCR) 1718 and as set 

forth in Section 746.4 of the EAR, BIS will continue to require a license for the export or 

reexport of all items subject to the EAR and destined for North Korea, except food and 

medicines classified as EAR99. 

Iran 

On September 22, 2008, the Department published in the Federal Register an amendment 

to the EAR to add twenty-four Iranian entities to the Entity List (73 FR 54499). These 

persons have been determined by the U.S. Government to be acting contrary to the 

national security or foreign policy interests of the United States. 
Chapter 1 Introduction 

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2009 Report on Foreign Policy-Based Export Controls 

Embargoes and Other Special Controls 

Burma 

On January 8, 2009, the Department published in the Federal Register an amendment to 

the EAR extending licensing requirements to persons whose property and interests in 

property are blocked by Executive Order 13464 of April 30, 2008. (74 FR 770) 

Cuba

On June 13, 2008, the Department published in the Federal Register an amendment to the 

EAR to allow the export of mobile phones and related software and equipment as gifts 

sent by individuals to eligible recipients in Cuba (73 FR 33671). The terms of License 

Exception Gift Parcels and Humanitarian Donations (GFT) were revised to allow the 

inclusion of those items in gift parcels. 

Iran 

On January 15, 2009, the Department published in the Federal Register an amendment to 

the EAR extending licensing requirements for reexports to Iran of items classified under 

ten Export Control Classification Numbers (ECCNs) that previously did not require a 

license, making items controlled under these ECCNs “controlled U.S. content” subject to 

the EAR. The rule also imposes license requirements on parties who have been listed as 

proliferators of weapons of mass destruction, or supporters of such proliferators, pursuant 

to Executive Order 13382. (74 FR 2355) 

Chemical and Biological Controls 

Changes Resulting from the 2007 Australia Group Plenary 

On July 8, 2008, the Department published a final rule in the Federal Register

implementing changes made to the Commerce Control List (CCL) deriving from 

understandings reached at the April 2008 Australia Group (AG) Plenary meeting (73 FR 

38908). 

Among other changes, the rule amended the list of countries that currently are States 

Parties to the Chemical Weapons Convention (CWC) by adding “Congo (Republic of 

the)” and “Guinea Bissau,” which recently became CWC States Parties. The rule also 

revised the CCL entry that controls animal pathogens on the AG “Control List of 

Biological Agents” by revising the listing for avian influenza viruses. The rule replaced 

the description of highly pathogenic avian influenza (HPAI) with new HPAI language 

that is based on the definition currently used by the World Organization for Animal 

Health (OIE). 

Missile Technology Controls 
Chapter 1 Introduction 

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2009 Report on Foreign Policy-Based Export Controls 

Changes Resulting from the 2007 Missile Technology Control Regime (MTCR) 

Plenary 

On June 16, 2008, the Department published in the Federal Register an amendment to the 

EAR to implement changes to the MTCR Annex that member countries agreed to at the 

October 2007 Plenary in Athens, Greece (73 FR 33882). The payload definition of 

“other UAVs” (unmanned aerial vehicles) was amended in two areas to include the 

munitions support and deployment structure as part of the definition. A new entry 

(4.C.4.b.5.) for Hexanitrohexaazaisowurtzitane (CL-20) was added; CL-20 is an oxidizer 

substance usable in solid propellant rocket motors. The control text for two polymeric 

substances (HTPB and CTPB) was clarified (4.C.5.a. and 4.C.5.b.). New text clarifying 

vibration test modes (15.B.1.a.), closing a loophole, and strengthening the controls for 

environmental chambers (15.B.4.) were adopted. An Index, provided for reference as a 

separate document from the Annex, was created and will be updated consequent to each 

update of the Annex. 

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. 

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 2009. 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 Act

Section 6(f)(2) of the Act 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, 
Chapter 1 Introduction 

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2009 Report on Foreign Policy-Based Export Controls 

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. 

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. 

 

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 
Chapter 1 Introduction 

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2009 Report on Foreign Policy-Based Export 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, 2008, Federal Register notice (73 FR 

52006), 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 

this report. The comment period closed on October 8, 2008, 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 Act to secure the 

cooperation of foreign governments in controlling the foreign availability of such 

comparable goods or technology. In accordance with the Act, 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.

 

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

detect violations abroad and initiate proper enforcement action. 
Chapter 2 Crime Control/Human Rights 

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2009 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 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 will 

consult with the Congress, other agencies, and the public as it conducts this review. 

Summary of 2008 Changes 

Licensing Policy 

BIS is currently reviewing and, where appropriate, revising the crime control license 

requirements in the Export Administration Regulations (EAR). In connection with the 

effort, BIS published a notice of inquiry on March 19, 2008, seeking public comments on 

whether the scope of items and destinations that are subject to crime control license 

requirements should be changed (73 FR 14769). After reviewing the public comments 

and conducting its own policy deliberations, BIS plans to proceed with this review in 

stages. 

 

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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2009 Report on Foreign Policy-Based Export Controls 

The first stage addresses possible revisions to the Commerce Control List (CCL) that 

simply update the current list. In the second stage, BIS intends to address more complex 

CCL matters such as whether, and to what extent, additional items (e.g., biometric 

measuring devices, integrated data systems, targeting simulators (for training law 

enforcement or paramilitary in hostage or crowd control situations), and communications 

equipment) should be listed on the CCL, as well as more general policy considerations, 

such as whether the range of destinations for which a license is required should be 

modified. 

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. 

China

Following the 1989 military assault on demonstrators by the People’s Republic of China 

(PRC) 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 Act 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. 
Chapter 2 Crime Control/Human Rights 

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2009 Report on Foreign Policy-Based Export Controls 

NATO

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

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

Atlantic Treaty Organization (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 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 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 (ECCNs). 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 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 
Chapter 2 Crime Control/Human Rights 

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2009 Report on Foreign Policy-Based Export Controls 

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, China, 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 

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. 
Chapter 2 Crime Control/Human Rights 

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2009 Report on Foreign Policy-Based Export Controls 

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. 

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 2008, the Department of 

Commerce approved 4,146 export license applications valued at over $753 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 2008. 

Table 1: Crime Control Applications Approved (FY 2008)
Chapter 2 Crime Control/Human Rights 

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2009 Report on Foreign Policy-Based Export Controls 

ECCN Items Controlled Applications 

Approved

$ Value

0A978 Saps 0 $0 

0A979 Police helmets and shields 129 $16,639,409 

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

shackles, handcuffs 

389 $42,237,564 

0A983 Specially designed implements 

of torture 

0 $0 

 

0A984 Shotguns 727 $42,520,654 

0A985 Discharge type arms (stun guns, 

shock batons, etc.) 

241 $185,801,484 

0A986 Shotgun shells 215 $19,980,455 

0A987 Optical sighting devices 1224 $177,054,473 

0E982 Technology for items under 

0A982/0A985 

2 $10,100 

0E984 Technology for items under 

0A984 

0 $0 

1A984 Chemical agents including tear 

gas containing 1% or less of CS 

or CN 

84 $5,642,714 

1A985 Fingerprinting powders, dyes, 

and inks 

261 $60,758,938 

 

3A980 Voice print identification and 

analysis equipment 

11 $2,173,455 

3A981 Polygraphs, fingerprint 

analyzers, cameras, and 

equipment 

416 $158,544,686 

3D980 Software for items under 3A980 

and 3A981 

413 $35,667,986 

3E980 Technology for items under 

3A980 and 3A981 

16 $1,455,737 

4A003* Digital computers for 

computerized fingerprint 

equipment only 

0 $0 

4A980 Computers for fingerprint 

equipment 

4 $1,776,607 

4D001* Software for items under 4A003 

only 

0 $0 
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2009 Report on Foreign Policy-Based Export Controls 

ECCN Items Controlled Applications 

Approved

$ Value

4D980 Software for items under 4A980 8 $1,306,602 

4E001* Technology for items under 

4A003 and 4D001 only 

0 $0 

4E980 Technology for items under 

4A980 

2 $2 

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 

4 $1,845,662 

TOTAL 4,146 $753,416,528 

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 2008, the Department of Commerce denied 18 applications for crime 

control items with a total value of $6,821,439. 
Chapter 2 Crime Control/Human Rights 

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2009 Report on Foreign Policy-Based Export Controls 

Table 2: Crime Control Applications Denied (FY 2008) 

ECCN Description Applications Denied $ Value

0A979 Police helmets and shields 4 $814,084 

0A984 Shotguns 4 $606,106 

0A985 Discharge type arms (stun 

guns, shock batons, etc.) 

2 $5,383,750 

0A986 Shotgun shells 2 $150 

0A987 Optical sighting devices 3 $4,599 

1A985 Fingerprinting powders, dyes, 

and inks 

1 $2,400 

 

3A981 Polygraphs, fingerprint 

analyzers, cameras, and 

equipment 

1 $10,000 

4A003 Computers for fingerprint 

equipment 

1 $350 

TOTAL 18 $6,821,439 

In fiscal year 2008, the Department of Commerce approved 2,166 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 

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2009 Report on Foreign Policy-Based Export Controls 

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

Approved (FY 2008) 

ECCN Items Controlled Applications 

Approved

$ Value 

0A984 Shotguns and buckshot 

shotgun shells 

727 $42,520,654

0A986 Other shotgun shells 215 $19,980,455

0A987 Optical sighting 

devices for firearms 

1,224 $177,054,473

TOTAL* 2,166 $239,555,582

* NOTE: Items in 0A986 are controlled only for Firearms Convention reasons. Items in 

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

Control reasons. The statistics in this table for 0A984 and 0A987 are a subset of the 

Crime Control statistics provided in Table 1 of this Chapter. 

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 2008. For example: 

Export of Rifle Scopes — On July 24, 2008, Euro Optics, Inc., was sentenced to a 

$10,000 corporate fine, $800 special assessment, and five years of corporate probation. 

On March 17, 2008, Euro Optics Inc. pleaded guilty to violating the International 

Emergency Economic Powers Act (IEEPA) and the International Traffic in Arms 

Regulations (ITAR) related to exports of Department of Commerce- and Department of 

State-controlled rifle scopes to various countries without the required licenses. This case 
Chapter 2 Crime Control/Human Rights 

16 

2009 Report on Foreign Policy-Based Export Controls 

was a joint investigation conducted by BIS and Immigrations and Customs Enforcement 

(ICE) at the Department of Homeland Security. 

Exports to Various Locations — On January 22, 2008, Green Supply, Inc., was 

sentenced to two years probation, a $17,500 fine, and $800 special assessment for 

violations of export controls. On November 2, 2007, Green Supply pleaded guilty to one 

count of violating the IEEPA and one count of violating the ITAR. The charges are the 

result of an investigation that identified approximately 66 illegal exports in violation of 

IEEPA and eight illegal exports in violation of the ITAR between 2002 and 2006. The 

items shipped included shotgun barrels and parts, restraint devices, and firearm scopes 

and sights controlled for reasons of crime control and the Firearms Convention. Green 

Supply is a wholesale distributor of hunting and camping equipment which includes 

restraint devices, shotgun barrels, global positioning systems, firearm scopes and sights, 

and other items controlled for export. This case was a joint investigation conducted by 

BIS and ICE. 

C. Consultation with Industry

The Department of Commerce consults with the Regulations and Procedures Technical 

Advisory Committee (RPTAC), one of six technical advisory committees that advise the 

Bureau of Industry and Security (BIS), in preparation for publication of major regulatory 

changes affecting crime control. 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. The Department 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 Act 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 not meet 

this requirement. The U.S. Government does, however, use diplomatic efforts, sanctions, 
Chapter 2 Crime Control/Human Rights 

17 

2009 Report on Foreign Policy-Based Export Controls 

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 Act.2

 Congress 

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

Government policy on human rights issues, foreign availability notwithstanding.

 

2 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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2009 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. 

Licensing Policy 

Section 742.6 of the EAR requires a license for RS reasons 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. The U.S. Government reviews all license applications for these items on a caseby-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. 

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

RS reasons to export explosive detection equipment and related software and technology, 

military-related items (e.g., 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 significantly affect regional stability. 

In addition, there are regional stability controls in place for certain items when exported 

to Iraq (or transferred within Iraq). These items are covered under the following Export 

Control Classification Numbers (ECCNs): 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 
Chapter 3 Regional Stability 

19 

2009 Report on Foreign Policy-Based Export Controls 

Security Council Resolution 1483 (UNSCR 1483). These controls are discussed in more 

detail in Chapter 5 of this report. 

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, in light of other factors, including foreign availability, and that the foreign 

policy purpose cannot fully be achieved through negotiations or other alternative means. 

The Secretary has also determined 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. 

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 
Chapter 3 Regional Stability 

20 

2009 Report on Foreign Policy-Based Export Controls 

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. While 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. 

Certain RS-controlled items, including those controlled concurrently for missile 

technology reasons and cameras controlled under ECCN 6A003, however, 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. The Secretary will continue to monitor the economic impact of these 

controls over the coming year to decide whether a change in foreign policy controls for 

ECCN 6A003 cameras items is warranted. 

In fiscal year 2008, the Department of Commerce approved 2,767 license applications for 

items controlled for RS reasons, with a total value of $939 million. Seven applications 

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

license application for military trainer aircraft and related equipment controlled under 

ECCN 9A018), with a total value of $791,638. 

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

fiscal year 2007, during which the Department approved 3,066 license applications. This 

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

6A003, which fell from 2,198 to 1,899. The value of RS-related licenses increased from 

$681 million in fiscal year 2007 to $939 million in fiscal year 2008, due to a significant 

increase in the value of exports of military trainers controlled under ECCN 9A018. 

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 2008: 
Chapter 3 Regional Stability 

21 

2009 Report on Foreign Policy-Based Export Controls 

Table 1: Regional Stability Applications Approved (FY 2008)

ECCN Description Number of 

Applications

Dollar Value 

0A918 Power control searchlights and 

bayonets 

4 $11,162

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 

2 $326,998

1B999* Specific processing equipment 

such as electrolytic cells for 

fluorine production, et al. 

0 $0

1C992* Commercial charges containing 

energetic materials, n.e.s. 

3 $24,845,160

1C995* Certain mixtures and testing kits 6 $274,519

1C997* Ammonium nitrate 0 $0

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

2A983 Explosives detection equipment 237 $166,371,398

2B018 Equipment on the International 

Munitions List 

0 $0

2D983 Software for equipment in 

2A983 

31 $4,469,031

2E983 Technology for equipment in 

2A983 

23 $149,054

6A002.a.1, 

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

Optical detectors and direct 

view imaging equipment 

incorporating image intensifier 

tube or focal plane arrays 

12 $3,983,600

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

image intensifiers or focal plan 

arrays 

1,899 $184,155,676

6A008.j.1 Space-qualified LIDAR 

equipment 

0 $0
Chapter 3 Regional Stability 

22 

2009 Report on Foreign Policy-Based Export Controls 

6A992* Optical sensors not controlled 

under 6A002 (gravity meters) 

2 $273,000

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 

4 $13

6E002 Technology for the production 

of RS-controlled items in 

6A002, 6A003, and 6A008 

7 $1,650

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 

5 $10,003

7E001 Technology for the development 

of items in 7A, 7B, or 7D 

33 $9,048

7E002 Technology for the production 

of items in 7A or 7B 

2 $1

7E101 Technology for the use of items 

in 7A, 7B, or 7D 

65 $386,581

8A918 Marine boilers 0 $0

9A018.a,b Military trainer aircraft and 

vehicles designed or modified 

for military use 

403 $551,587,427

9E018 Technology for the development 

of items in 9A018.a.,b 

29 $2,633,512

TOTAL 2,767 $939,487,833

* Regional Stability controls apply to exports to Iraq only, as do statistics. 

NOTE: For ECCNs for which only a portion is subject to RS controls, the total number 

of licenses and dollar value for the complete ECCN are given. In most cases, the 
Chapter 3 Regional Stability 

23 

2009 Report on Foreign Policy-Based Export Controls 

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 

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

U.S. concerns, and gathering leads on activities of concern. Given the enhanced antiterrorism efforts of the U.S. Government, it is expected that industry will continue to 

support enforcement efforts. The following is an example of an enforcement action 

conducted by BIS during fiscal year 2008. 

Cameras to China — On August 25, 2008, Evan Zhang pleaded guilty in the Central 

District of California to one felony count of violating the International Emergency 

Economic Powers Act (IEEPA) and the EAR. Zhang agreed to plead guilty for his 

involvement with Zhi Yong Gou in relation to the export of thermal-imaging cameras to 

the PRC without the required Department of Commerce export license. 

On July 17, 2008, Tah Wei Chao pleaded guilty in U.S. District Court in the Central 

District of California to conspiracy and violating the IEEPA. Chao was indicted, along 

with codefendant Zhi Yong Gou, for conspiracy to export, exporting, and attempting to 

export the thermal-imaging cameras to the PRC. Chao purchased three thermal-imaging 

cameras last fall and, through a printing company located in California, arranged to have 

the devices shipped to the PRC without the required licenses. In March 2008, Chao 

ordered 10 more cameras from a domestic producer. Both Chao and Guo were arrested at 

the Los Angeles International Airport in April after authorities recovered the 10 cameras 

hidden in their suitcases. 

C. Consultation with Industry 

In a September 8, 2008, Federal Register notice (73 FR 52006), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased 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. 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 

24 

2009 Report on Foreign Policy-Based Export Controls 

The comment period on the Federal Register notice closed on October 8, 2008. A 

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

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 2008, 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. 

These overlapping controls support U.S. efforts to enhance regional stability by limiting 

foreign availability. 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. 

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 
Chapter 3 Regional Stability 

25 

2009 Report on Foreign Policy-Based Export Controls 

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 

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.
Chapter 4 Anti-Terrorism Controls 

26 

2009 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 (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. 

On October 11, 2008, the designation of North Korea was terminated. Additionally, the 

United States maintains broader controls, and in some cases comprehensive embargoes, 

on exports and reexports to Cuba, Iran, North Korea, 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. 

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 anti-terrorism 

(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 
Chapter 4 Anti-Terrorism Controls 

27 

2009 Report on Foreign Policy-Based Export Controls 

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 

Department of Commerce and the Department of 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 Act, 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 

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

maintained for AT reasons pursuant to either Section 6(j) or Section 6(a) continues in 

force. 

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

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 certain very limited exceptions. The 

Department of Commerce continues to maintain AT controls with respect to these 
Chapter 4 Anti-Terrorism Controls 

28 

2009 Report on Foreign Policy-Based Export Controls 

countries, though such controls and the related licensing policies are secondary to the 

comprehensive embargoes in place. 

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 

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. 
Chapter 4 Anti-Terrorism Controls 

29 

2009 Report on Foreign Policy-Based Export Controls 

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, North 

Korea, 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 2008. For example: 

Telecommunications Equipment and Technology to Iran — On July 28, 2008, Allied 

Telesis Labs, formerly Allied Telesyn Networks, was sentenced to a $500,000 criminal 

fine and two years of probation. On March 18, 2008, Allied Telesis Labs pleaded guilty 

to conspiracy to export to Iran. Allied Telesis Labs designs and develops various highspeed fiberoptic telecommunications devices and a series of multi-service access 

platforms (iMAP). The iMAPs combine numerous functions, services, access 

technologies, and protocols in one network element, and are one of the latest additions to 
Chapter 4 Anti-Terrorism Controls 

30 

2009 Report on Foreign Policy-Based Export Controls 

high-speed communications. The high-speed telecommunication equipment was to be 

manufactured in Singapore using U.S.-origin software technology and shipped from 

Singapore to Iran via the United Arab Emirates (UAE) without U.S. Government 

authorization. 

Cryogenic Submersible Pumps to Iran — On July 17, 2008, Cryostar SAS, formerly 

known as Cryostar France (Cryostar), was sentenced to a $500,000 criminal fine and two 

years of probation for its involvement in a conspiracy to illegally export U.S.-origin 

cryogenic submersible pumps to Iran. The conspirators, Cryostar France, Ebara 

International Corporation, and another French company, developed a plan to conceal the 

export of cryogenic pumps to Iran. The plan was that Ebara would sell and export the 

pumps to Cryostar France, which would then resell the pumps to another French 

company, with the ultimate and intended destination being the 9th and 10th Olefin 

Petrochemical Complexes in Iran. Ebara and its former president pleaded guilty and 

were sentenced in 2004. 

Gun Parts to Sudan — On June 6, 2008, Khalid Abdelgadir Ahmed and Entisar 

Hagosman were sentenced for charges related to the smuggling of gun parts to Sudan. 

Ahmed was sentenced to five months imprisonment, five months community 

confinement, a $1,500 fine, and three years supervised release. Hagosman was sentenced 

to time served and two years supervised probation. On March 13, 2008, Hagosman 

pleaded guilty to making false statements relating to her activity, and Ahmed pleaded 

guilty to illegal smuggling from the United States. 

Computers to Iran — On May 15, 2008, Afshin Rezaei was sentenced to six months 

imprisonment (credit for time served) and agreed to forfeit $50,000 within six months in 

lieu of having his residence seized. On April 24, 2008, Rezaei pleaded guilty to violating 

the IEEPA for the unlicensed export of computers to Iran via the United Arab Emirates 

(UAE). The computers were controlled for anti-terrorism reasons. 

Computer Equipment to Iran — On April 28, 2008, Mohammad Mayssami was 

sentenced to two years probation, a $10,000 criminal fine, and 160 hours of community 

service at a charity of his choosing for his part in financing unlawful export transactions. 

On December 17, 2007, Mayssami pleaded guilty to failing to report a suspicious 

transaction for his part in financing export transactions conducted by SuperMicro 

Computer Inc. (SuperMicro). Mayssami was involved in the money transfer network that 

facilitated the transfer of funds for the illegal exports by SuperMicro. On September 18, 

2006, SuperMicro pleaded guilty to illegally exporting motherboards controlled for 

national security (NS) reasons to Iran and was sentenced to pay a criminal fine of 

$150,000. SuperMicro also agreed to pay an administrative fine of $125,400 to settle 

charges for related transactions with BIS. On April 13, 2007, a SuperMicro employee 

agreed to pay an administrative fine of $60,000 to settle charges for related transactions 

with BIS. 
Chapter 4 Anti-Terrorism Controls 

31 

2009 Report on Foreign Policy-Based Export Controls 

Engineering Software to Iran - On April 24, 2008, James C. Angeher and John N. 

Fowler, owners of Engineering Dynamics, Inc. (EDI), pleaded guilty to conspiracy to 

violate the IEEPA and the Iranian Transactions Regulations. EDI agreed to pay an 

administrative fine of $132,791 to settle charges that between March 1995 and February 

2007 it conspired to export a U.S.-origin engineering software program, which is 

controlled for anti-terrorism reasons, to Iran via Brazil without the required U.S. 

Government authorization. EDI and its co-conspirators devised and employed a scheme 

to market, sell, and service the engineering software program to Iranian clients through a 

Brazilian co-conspirator. 

C. Consultation with Industry 

In a September 8, 2008, Federal Register notice (73 FR 52006), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased 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 this report. In particular, the 

Department has engaged in an ongoing dialog with the Regulations and Policy Technical 

Advisory Committee (RPTAC) concerning the relevance of 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, 2008. 

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 
Chapter 4 Anti-Terrorism Controls 

32 

2009 Report on Foreign Policy-Based Export Controls 

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

List. 

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 Act3

. Congress specifically excluded 

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). 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. 

 

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 99-64, section 108(g)(2), 

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.
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2009 Report on Foreign Policy-Based Export Controls 

Chapter 5 

Embargoes and Other Special Controls 

(Sections 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 Security Council Resolutions. Specifically, the U.S. 

Government maintains 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 2008 Changes: 

Burma 

On October 24, 2007, the Department published in the Federal Register an amendment to 

the EAR imposing licensing requirements on items subject to the EAR for certain persons 

designated in or pursuant to Executive Orders 13310 (68 FR 44853) and 13448 (72 FR 

60248). 

On January 8, 2009, the Department published in the Federal Register an amendment to 

the EAR extending licensing requirements to persons whose property and interests in 

property are blocked by Executive Order 13464 of April 30, 2008. (74 FR 770) 

Cuba

On June 13, 2008, the Department published in the Federal Register an amendment to the 

EAR to allow the export of mobile phones and related software and equipment as gifts 

sent by individuals to eligible recipients in Cuba (73 FR 33671). The terms of License 

Exception Gift Parcels and Humanitarian Donations (GFT) were revised to allow the 

inclusion of those items in gift parcels. 
Chapter 5 Embargoes and Other Special Controls 

34 

2009 Report on Foreign Policy-Based Export Controls 

Iran

On September 22, 2008, the Department published in the Federal Register an amendment 

to the EAR to add twenty-four Iranian entities to the Entity List (73 FR 54499). The 

persons have been determined by the U.S. Government to be acting contrary to the 

national security or foreign policy interests of the United States. 

On January 15, 2009, the Department published in the Federal Register an amendment to 

the EAR extending licensing requirements for reexports of items classified under ten 

ECCNs that previously did not require a license for reexport to Iran, although the export 

of these items from the United States directly to Iran required a license. It also made 

items controlled under these ECCNs “controlled U.S. content” subject to the EAR. 

Further, it imposed license requirements on parties who have been listed as proliferators 

of weapons of mass destruction or as supporters of such proliferators pursuant to 

Executive Order 13382. (74 FR 2355)

Mayrow General Trading and Related Entities 

On September 22, 2008, the Department published in the Federal Register a rule to move 

33 persons previously listed in General Order No. 3 to Part 736 of the EAR to the Entity 

List (73 FR 54499). Pursuant to General Order No. 3, a license had been required for the 

export and reexport of all items subject to the EAR destined to Mayrow General Trading, 

a United Arab Emirates (UAE) company, or certain affiliated companies identified in 

General Order No. 3 and related amendments. The Department published the General 

Order on the basis of information that the U.S. Government possessed regarding the 

acquisition or attempted acquisition of electronic components and devices 

(“commodities”) capable of being used in the construction of Improvised Explosive 

Devices (“IEDs”). These commodities have been, and may continue to be employed in 

IEDs or other explosive devices used against Coalition Forces in Iraq and Afghanistan. 

The September 2008 rule also removed and reserved the General Order. In addition to 

moving the 33 persons from the General Order, the September 2008 rule added 75 

persons to the Entity List who are of concern to the U.S. Government for the same 

reasons as persons previously listed in the General Order. Exports and reexports for all 

items subject to the EAR involving parties identified on the Entity List require a 

Commerce license, and are subject to a general policy of denial. The Entity List is 

discussed further in Chapter 13 of this report. 

North Korea 

On October 11, 2008, the Secretary of State rescinded North Korea’s designation as a 

state sponsor of terrorism. As a result of this rescission, BIS intends to publish an 

amendment to the EAR (15 C.F.R. Part 730 et seq.) that will remove North Korea from 

Country Group E:1 (Supplement No. 1 to Part 740 of the EAR). The rescission does not 

impact other sanctions imposed on North Korea based on its detonation of a nuclear 

explosive device on October 9, 2006, proliferation activities, and human rights violations, 
Chapter 5 Embargoes and Other Special Controls 

35 

2009 Report on Foreign Policy-Based Export Controls 

which will continue to apply on the basis of other relevant laws and regulations. In 

particular, consistent with United Nations Security Council Resolution 1718 (UNSCR 

1718) and as set forth in Section 746.4 of the EAR, BIS will continue to require a license 

for the export or reexport of all items subject to the EAR and destined for North Korea, 

except food and medicines classified as EAR99. 

Sudan 

On February 28, 2008, BIS updated the “tools of trade” provision in License Exception 

TMP to reflect technical advances and the increased development efforts of nongovernmental organizations in Sudan. This exception authorizes certain registered 

organizations to export or reexport specified items without a BIS license to Sudan for use 

in humanitarian and development activities and activities supporting the Darfur Peace 

Agreement and Comprehensive Agreement. 

Licensing Requirements and Licensing Policy 

Burma 

In response to the Government of Burma’s repression of the democratic opposition in that 

country, the United States enacted: an arms embargo against Burma in 1993; a ban on 

new investments in Burma in 1997 (Executive Order 13047); and a ban on the import of 

goods from Burma, a ban on the export of financial services to Burma, and the blocking 

of certain Burmese property in 2003 (Executive Order 13310). 

In 2007, the President expanded the sanctions by issuing Executive Order 13448 

(October 18, 2007). Executive Order 13448 listed certain additional persons in the 

Annex and set forth criteria for the Department of the Treasury’s Office of Foreign 

Assets Control (OFAC) to use when designating additional persons of concern. On 

October 24, 2007, the Department published in the Federal Register an amendment to the 

EAR imposing licensing requirements on items subject to the EAR for certain persons 

designated in or pursuant to Executive Order 13448 (72 FR 60248). The amendment also 

moved Burma from Country Group B to Country Group D:1, and from Computer Tier 1 

to Tier 3. 

On April 30, 2008, in light of the Government of Burma’s continued repression of the 

democratic opposition in Burma and unwillingness to respond to the Burmese people’s 

calls for a genuine dialogue leading to a democratic transition, the President issued 

Executive Order 13464 (73 FR 24489, May 2, 2008). The Annex to Executive Order 

13464 lists the Myanmar Gem Enterprise (a.k.a. Myanmar Gem Enterprise, MGE) of 

Yangon, the Myanmar Timber Enterprise (a.k.a. Myanmar Timber Enterprise, MTE) of 

Yangon, and the Myanmar Pearl Enterprise (a.k.a. Myanmar Pearl Enterprise, MPE) of 

Naypyitaw. 
Chapter 5 Embargoes and Other Special Controls 

36 

2009 Report on Foreign Policy-Based Export Controls 

Consistent with Executive Order 13464, on January 8, 2009, the Department published in 

the Federal Register an amendment to the EAR extending licensing requirements to 

persons whose property and interests in property are blocked by the President’s order. 

 (74 FR 770). 

As a result, U.S. and non-U.S. persons must seek authorization from BIS for the export, 

reexport, or transfer to a person designated in or pursuant to Executive Orders 13310, 

13448 or 13464 of any item subject to the EAR but not subject to the OFAC regulations. 

BIS does not, however, require a license for the export to Burma of agricultural 

commodities, medicines not on the Commerce Control List (CCL), or medical devices 

classified as EAR99. 

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; and 

• gift parcels, including medicine, medical supplies and devices, receive-only radio 

equipment, and batteries for such equipment and food (including vitamins), and 

certain mobile phones and related software and equipment provided that the value of 

non-food items does not exceed $400.4

The Department 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 of telecommunications equipment, to the extent permitted as part of a 

telecommunications project approved by the Federal Communications Commission, 

necessary to provide for telecommunications services between the United States and 

Cuba; 

 

4

 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 

37 

2009 Report on Foreign Policy-Based Export Controls 

• exports of business and office equipment destined to human rights organizations or to 

individuals and non-governmental organizations that promote independent activity; 

• 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 

• certain vessels and aircraft on temporary sojourn to Cuba. 

The Department 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 Act 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 the use of License Exception AGR for U.S. exports and 

certain reexports of agricultural commodities to Cuba, pursuant to section 906(a)(1) of 

the Trade Sanctions Reform and Export Enhancement Act of 2000 (Title IX of Public 

Law 106-387), as amended (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 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 the ultimate recipient is not involved in promoting international terrorism. 

Exports of medicines and medical devices to Cuba are not eligible for License Exception 

AGR and continue to be subject to the license application and review requirements of 

Section 6004 of the Cuban Democracy Act of 1992. 

On June 13, 2008, the Department published in the Federal Register an amendment to the 

EAR to allow the export of mobile phones and related software and equipment as gifts 

sent by individuals to eligible recipients in Cuba (73 FR 33671). The terms of License 

Exception GFT were revised to allow the inclusion of these items in gift parcels. This 
Chapter 5 Embargoes and Other Special Controls 

38 

2009 Report on Foreign Policy-Based Export Controls 

action was taken to provide support to democracy-building efforts in Cuba by enabling 

the free exchange of information among Cuban citizens and with persons in other 

countries. 

Iran

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers 

the U.S. Government’s comprehensive trade and investment embargo against Iran. No 

person may export or reexport items subject to both the EAR and OFAC’s Iranian 

Transactions Regulations without prior OFAC authorization. 

The U.S. Government has a general policy of denial for: all items controlled for 

chemical, biological, missile, and nuclear proliferation reasons; military-related items 

controlled for national security or regional stability reasons (ECCNs ending in the 

number 18); and all other items controlled for national security or foreign policy reasons 

for all end-users in Iran.5 Pursuant to Executive Order 12959 of May 6, 1995, Executive 

Order 13059 of August 19, 1997, and the Iran-Iraq Arms Non-Proliferation Act of 1992 

(as amended), the Department of the Treasury maintains comprehensive trade restrictions 

on exports and reexports of CCL items to Iran and is responsible for licensing: (1) 

exports from the United States to Iran; (2) exports and reexports by U.S. persons to Iran, 

including agricultural and medical items classified as EAR99 (items not on the CCL but 

subject to the EAR) under the provisions of TSRA; and (3) reexports of CCL items by 

any person to Iran. The Department of Commerce has licensing responsibility for 

reexports of EAR99 items to Iran by non-U.S. persons for instances where there is a 

proliferation or terrorism concern, and for the deemed export of technology subject to the 

EAR to Iranian nationals in the United States. To reinforce controls administered by the 

Department of the Treasury, it is also a violation of the EAR to export or reexport to Iran 

any item that is subject to OFAC regulations, and also subject to the EAR, without 

OFAC’s authorization. 

On September 22, 2008, the Department published in the Federal Register an amendment 

to the EAR to add twenty-four Iranian entities to the Entity List (73 FR 54499). Four 

Iranian persons named on the Entity List were previously named on General Order No. 3 

prior to the publication of this rule and were moved to the Entity List by the publication 

of this rule. The U.S. government possesses information on these persons regarding the 

acquisition or attempted acquisition of electronic components and devices 

(“commodities”) capable of being used in the construction of Improvised Explosive 

Devices (IEDs). These commodities have been, and may continue to be, employed in 

IEDs or other explosive devices used against Coalition Forces in Iraq and Afghanistan. 

 

5 The general policy of denial stated in the EAR is superseded by a policy of denial 

pursuant to the Iran-Iraq Arms Nonproliferation Act of 1992. 
Chapter 5 Embargoes and Other Special Controls 

39 

2009 Report on Foreign Policy-Based Export Controls 

The remaining twenty Iranian entities added to the Entity List with this rule were not 

previously listed on the general order, but are of concern to the U.S. Government for the 

same reasons as the entities listed in the previous general order. Exports and reexports 

for all items subject to the EAR involving parties identified on the Entity List require a 

Commerce license and are subject to a general policy of denial. 

On January 15, 2009, the Department 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, although the export of these items from the United States directly to 

Iran required a license. The new rule made items controlled under these ECCNs 

“controlled U.S. content” subject to the EAR. It also imposed license requirements on 

parties who are listed as proliferators of weapons of mass destruction, or supporters of 

such proliferators, pursuant to Executive Order 13382. (74 FR 2355) 

The Department made these changes to clarify BIS’s role in the implementation of U.S. 

export control policy for Iran. BIS license requirements apply in addition to any 

requirements imposed by the Department of the Treasury, Office of Foreign Assets 

Control (OFAC). OFAC maintains a comprehensive embargo against Iran, as described 

in the Iranian Transactions Regulations (31 CFR Part 560). For transactions requiring 

authorization from both OFAC and BIS, authorization from OFAC will suffice to meet 

BIS license requirements. However, for exports and reexports involving listed parties, if 

OFAC authorization is not required and the item being exported or reexported is subject 

to the EAR, a BIS license must be obtained.] 

Iraq

Pursuant to controls related to UNSCR 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. 
Chapter 5 Embargoes and Other Special Controls 

40 

2009 Report on Foreign Policy-Based Export Controls 

The Department 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. 

North Korea

On October 11, 2008, the Secretary of State rescinded North Korea’s designation as a 

state sponsor of terrorism. As a result of this rescission, BIS intends to publish an 

amendment to the EAR that will remove North Korea from Country Group E:1 

(Supplement No. 1 to Part 740 of the EAR). Other conforming changes will be required, 

including an alteration of the threshold de minimis value for determining whether 

foreign-produced items with incorporated U.S. controlled content will be considered 

subject to the EAR. 

The rescission does not impact other sanctions imposed on North Korea based on its 

detonation of a nuclear explosive device on October 9, 2006, proliferation activities, and 

human rights violations, which will continue to apply on the basis of other relevant laws 

and regulations. Consistent with UNSCR 1718 and as set forth in Section 746.4 of the 

EAR, BIS will continue to require a license for the export or reexport of all items subject 

to the EAR and destined for North Korea, except food and medicines classified as 

EAR99. 
Chapter 5 Embargoes and Other Special Controls 

41 

2009 Report on Foreign Policy-Based Export Controls 

Generally, UNSCR 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 WMD programs. 

Consistent with UNSCR 1718, on January 26, 2007, the Department of Commerce 

published in the Federal Register an amendment to the EAR implementing 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). 

Although subject to change, items requiring a license for export or reexport to North 

Korea are subject to case-by-case review, except as follows: 

• luxury goods (e.g., luxury automobiles, yachts, jewelry, designer clothing, luxury 

watches, electronic entertainment software and equipment, recreational sports 

equipment, tobacco, alcoholic beverages, musical instruments, art, antiques, and 

collectibles) are subject to a general policy of denial; 

• arms and related materiel are subject to a general policy of denial; 

• most items listed on the CCL are subject to a general policy of denial; and 

• humanitarian items (e.g., blankets, basic footwear, heating oil, and other items 

meeting subsistence needs) intended for the benefit of the North Korean people are 

subject to a general policy of approval. 

Persons Sanctioned for Proliferation-related Activities 

Pursuant to Section 744.20 of the EAR, and the Iran, North Korea, and Syria 

Nonproliferation Act, the Department prohibits the export and reexport of items requiring 

a license to certain entities determined to have transferred equipment and/or technology 

controlled under the multilateral export control lists (the Missile Technology Control 

Regime (MTCR), Australia Group, the Chemical Weapons Convention (CWC), Nuclear 

Suppliers’ Group (NSG), and the Wassenaar Arrangement) or otherwise having the 

potential to make a material contribution to the development of WMD or cruise or 

ballistic missile systems to inappropriate end-users in Iran, North Korea, and Syria. The 

latter category of items includes: (a) items of the same kind as those on multilateral lists 

but falling below the control list parameters when it is determined that such items have 

the potential of making a material contribution to WMD or cruise or ballistic missile 

systems; (b) other items with the potential of making such a material contribution when 

added through case-by-case decisions: and (c) items on U.S. national control lists for 

WMD or missile reasons that are not on the multilateral lists. 
Chapter 5 Embargoes and Other Special Controls 

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2009 Report on Foreign Policy-Based Export Controls 

Sudan

The export and reexport of items controlled on the CCL to Sudan may require a license 

from both the Department of Commerce and the Department of the Treasury. License 

applications may be submitted to both agencies concurrently. 

The U.S. Government requires a license for the export of all items on the CCL to Sudan, 

and for most reexports. The Department 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 are reviewed on a case-by-case 

basis for non-military end-users or end-uses. 

On February 28, 2008, BIS updated the “tools of trade” provision in License Exception 

TMP to reflect technical advances and the changing roles of non-governmental 

organizations in Sudan. This exception authorizes certain registered organizations to 

export or reexport specified items without a BIS license to Sudan for use in humanitarian 

and development activities and activities supporting the Darfur Peace Agreement and 

Comprehensive Agreement. 

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 

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). 
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2009 Report on Foreign Policy-Based Export Controls 

The Department of Commerce requires a license for 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 some civil aircraft reexported to Syria; 

• food; and 

• medicine classified as EAR99. 

The Department 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; 

• telecommunications equipment and associated computers, software, and 

technology; and 

• items in support of United Nations operations in Syria. 

Designated Terrorist Persons and Groups

The Department of Commerce requires a license for the export from the United States or 

by U.S. persons of all items subject to the EAR to Specially Designated Global Terrorists 

(SDGTs), Specially Designated Terrorists (SDTs), and Foreign Terrorist Organizations 

(FTOs). The Department also requires a license for the reexport by non-U.S. persons of 

items on the CCL to such SDGTs, SDTs, or FTOs and a general policy of denial applies 

to all applications. SDGTs, SDTs, and FTOs are identified on a list of designated persons 

maintained by the Department of the Treasury in Appendix A to 31 CFR Chapter V. 

United Nations Security Council Arms Embargoes 

Rwanda

On July 10, 2008, the United Nations Security Council adopted Resolution 1823, which 

terminated the remaining prohibitions on the sale or supply of arms and arms-related 

materiel to Rwanda. As a result, on September 25, 2008, the Department of State 
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2009 Report on Foreign Policy-Based Export Controls 

removed Rwanda from its regulations on prohibited exports and sales subject to the 

ITAR. In fiscal year 2009, the Department of Commerce expects to amend its 

regulations in accordance with UNSCR 1823 to remove embargo-specific prohibitions on 

exports to Rwanda of arms and related material. Rwanda will remain subject to 

Department of Commerce licensing jurisdiction for items controlled for crime control 

reasons. 

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. Such countries include the Democratic Republic of Congo, Côte d'Ivoire, 

Lebanon, Liberia, Sierra Leone, and Somalia. The Department 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 Act

A. The Purpose of the Controls

Burma 

The purpose of the controls is to restrict exports of items that would aid the Government 

of Burma’s continued repression of the democratic opposition in that country, and to 

address U.S. foreign policy concerns with the Burmese regime. 

Cuba

The United States imposed an embargo 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, as a result of Cuba’s support for insurgent groups that engaged in terrorism, 

the Secretary of State designated it as a state sponsor of terrorism under Section 6(j) of 

the Act. 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 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. In the 

Department of State’s Country Reports on Terrorism 2007, dated April 2008, Iran is 
Chapter 5 Embargoes and Other Special Controls 

45 

2009 Report on Foreign Policy-Based Export Controls 

identified as the most active state sponsor of terrorism. Iran maintains a high-profile role 

in encouraging anti-Israel activity, and continues to be unwilling to bring to justice 

detained al-Qa’ida figures. The U.S. Government also has grave concerns regarding 

Iran’s pursuit of a nuclear weapons capability and incomplete, poor, and its intermittent 

cooperation with the International Atomic Energy Agency (IAEA). The United States 

led an effort at the United Nations Security Council to adopt two resolutions (1737 and 

1747) that require all UN Member States to restrict trade in certain nuclear and missile 

items useful to proliferation-sensitive nuclear activities (defined as uranium enrichmentrelated, reprocessing, and heavy water-related activities) and the development of a 

nuclear weapon delivery system to Iran. U.S. export controls remain in place due to both 

our terrorism concerns and Iran’s pursuit of a nuclear weapons capability. 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 weapons of mass 

destruction. 

Persons Sanctioned for Proliferation-related Activities 

The purpose of the controls is to restrict exports to individuals and entities engaged in 

proliferation-related activities. The individuals and entities designated under these 

controls have diverted items that may be used in WMD programs in violation of U.S. 

export control laws. These controls demonstrate the United States’ opposition to such 

transfers as well as its resolve to actively work against such diversions. 

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 
Chapter 5 Embargoes and Other Special Controls 

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2009 Report on Foreign Policy-Based Export Controls 

satisfactorily addressed. The controls maintained by BIS pursuant to the EAR support 

the broader embargo maintained by OFAC pursuant to several Executive Orders and 

consistent with other applicable laws. 

Syria 

The Syrian Government continues to provide political and material support to a number 

of Palestinian groups that have committed terrorist acts. Syria also provides political and 

material support to Hezbollah and other terrorist organizations in Lebanon, and allows 

Iran to re-supply Hezbollah through Syrian territory. Additionally, the U.S. Government 

continues to have concerns about Syria’s interference in Lebanon, its provision of a safe 

haven for terrorist organizations, and its 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. Controls maintained against Syria are 

also consistent with the requirements of the Syria Accountability and Lebanese 

Sovereignty Restoration Act of 2003. 

Designated Terrorist Persons and Groups

The purpose of controls on designated terrorist persons and groups is to restrict exports of 

items that would be useful in enhancing the capability of SDGTs, SDTs, and FTOs to 

undertake terrorist acts, and to further the general policy of the United States to prevent 

supporters of terrorism and terrorist elements from acquiring technology that might 

enhance terrorist capabilities. The controls enable the Department of Commerce to use 

its licensing and enforcement resources to support U.S. counterterrorism efforts by 

monitoring and investigating unlicensed exports, reexports, and diversions of items 

subject to the EAR to parties designated as terrorists by the U.S. Government. 

United Nations Security Council Arms Embargoes

The controls on arms-related items to the Democratic Republic of Congo, Côte d’Ivoire, 

Liberia, Lebanon, Sierra Leone, and Somalia 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 these controls 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 
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2009 Report on Foreign Policy-Based Export Controls 

Chapter, the Secretary has determined that such restrictions have denied the targeted 

persons and nations certain trade relations with the United States and in some cases other 

nations. The controls described in this Chapter seek to have the targeted persons or 

governments modify their actions. In addition, the applicable controls may serve to 

reduce the potential for conflict. 

Burma 

The Secretary has determined that the imposition of foreign policy controls will 

demonstrate the U.S. opposition to the Government of Burma’s repressive measures 

directed against the democratic opposition in that country and deny it resources to sustain 

and/or enhance such measures. 

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 thwart any resumption of 

WMD activities fostered by the former Iraqi regime and restrict the ability of terrorists 

and insurgent groups to obtain and use U.S.-origin items to attack U.S. and Coalition 

forces in Iraq and 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 and other weapons of mass destruction and ballistic 

missiles. 

Persons Sanctioned for Proliferation-related Activities 

The Secretary has determined that foreign policy controls will thwart the access that these 

persons have had to U.S.-origin items that could advance efforts by state actors and 

terrorist groups to acquire WMD. 

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 
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2009 Report on Foreign Policy-Based Export Controls 

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. 

Designated Terrorist Persons and Groups

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. 

United Nations Security Council Arms Embargoes

The Secretary has determined that embargoes on exports of arms-related items to the 

Democratic Republic of Congo, Côte d’Ivoire, Liberia, Lebanon, Sierra Leone, and 

Somalia will meet U.S obligations under relevant UN Security Council resolutions. 

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. 
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2009 Report on Foreign Policy-Based Export Controls 

Burma 

Other countries share U.S. concerns regarding the Government of Burma’s repression of 

the democratic opposition in that country. Several Western countries have imposed their 

own economic sanctions and pursued a policy of supporting democratic activists within 

Burma. The United States continues to work within the UN Security Council and with 

like-minded countries to maximize international support for the Burmese people’s efforts 

to restore democracy and respect for human rights in Burma. 

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, particularly Canada, Mexico, and the members of the European 

Union, opposed the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 

(Helms-Burton) and continue to oppose controls on trade between the U.S. 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. 

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 concerns with Iran’s intentions vis-à-vis its nuclear program have led to the 

unanimous adoption of two UN Security Council resolutions imposing Chapter VII 

sanctions on Iran. The member states of the G8, the European Union, the members of the 

NSG, 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 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 Coalition Forces or the Iraqi Government in Iraq in 

parallel 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. On October 

14, 2006, as a result of North Korea’s July 2006 missile tests and October 2006 nuclear 
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2009 Report on Foreign Policy-Based Export Controls 

test, the United Nations Security Council adopted UNSCR 1718 imposing sanctions on 

North Korea. The Department has implemented the requirements of that Security 

Council resolution. The rescission of North Korea’s designation as a state sponsor of 

terrorism on October 11, 2008, did not impact other sanctions imposed on North Korea 

based on its detonation of a nuclear explosive device on October 9, 2006, proliferation 

activities, and human rights violations. These sanctions will continue to apply on the 

basis of other relevant laws and regulations. 

Persons Sanctioned for Proliferation-related Activities 

Although other countries share U.S. concerns regarding the diversion of goods for use in 

proliferation-related programs, few countries maintain controls similar to those 

implemented by the United States. 

Sudan 

In 1997, the United States imposed an embargo in response to credible evidence that 

Sudan assisted international terrorist groups, destabilized neighboring governments, and 

violated human rights. Although Sudan’s cooperation in the war on terrorism since 2001 

has been significant and sustained, regularization of relations is contingent on, among 

other things, Sudan’s acceptance of an effective peacekeeping force in Darfur, as 

mandated by UNSCRs 1706 and 1769. The United States remains in consultation with 

other countries regarding the humanitarian crisis in Darfur.

Syria 

The United States maintains controls in response to Syria’s lack of concrete steps to end 

its support for the terrorist groups that maintain a presence in Syria and continued 

interference in Lebanon, including Syrian support of Hezbollah. Although many other 

countries concur that Syria’s regional activities are destabilizing, few countries maintain 

controls similar to those implemented by the United States. 

Designated Terrorist Persons and Groups

Many countries support U.S. efforts to fight terrorism through blocking designated 

terrorist groups and individuals from acquiring commodities that could assist these 

groups in committing future acts of violence. Although some countries are considering 

restrictive legislation, very few maintain export controls similar to those implemented by 

the United States. 

United Nations Security Council Arms Embargoes

The arms embargoes on the Democratic Republic of Congo, Côte d’Ivoire, Liberia, 

Lebanon, Rwanda, Sierra Leone and Somalia will be consistent with UN objectives. The 

U.S. Government has received no significant objections to these UN Security Councilmandated controls. 
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2009 Report on Foreign Policy-Based Export 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. 

Burma 

Unilateral U.S. export sanctions on Burma have a minimal impact on U.S. industry. 

According to Census Bureau statistics, in 2007 U.S. exports to Burma were valued at 

$8.7 million and primarily consisted of animal feed, food, and other household goods. In 

fiscal year 2008, the Department of Commerce received only two license applications for 

Burma, valued at $285,760. Both applications, one for telecommunications equipment 

and one for a mass spectrometer for use by agencies of the Government of Burma, were 

denied.

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 all U.S.-origin 

commodities, technology, and software subject to the EAR. The number of license 

applications and notices that the Department of Commerce has approved to Cuba 

increased significantly from 1998 through 2002, but has declined since 2003. 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 since 2003 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 has continued to decline since 2003, the dollar value of the exports licensed has 

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 only a small percentage of U.S.-origin commodities authorized for export, perhaps as 

low as 10 percent of agricultural commodities, is actually exported. 

In fiscal year 2008, the Department of Commerce approved 203 license applications 

valued at over $960 million for Cuba. There has been a decline in the number of license 

applications in fiscal year 2008 in comparison with fiscal years 2006 and 2007. In fiscal 
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2009 Report on Foreign Policy-Based Export Controls 

year 2008, the Department returned without action 118 license applications, valued at 

$593 million, and rejected 9 license applications, valued at $2.7 million. The Department 

did not revoke any previously valid licenses during this period. Also during fiscal year 

2008, the Department authorized 145 notifications valued at $3.5 billion under License 

Exception AGR. The Department of Commerce and reviewing agencies had no 

objections to these notifications. 

Table 1: Approved Commerce Export License Applications and License Exception 

AGR Notifications Authorized for Cuba (FY 1996-2007) 

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 

TOTAL 4,324 $25,260,942,905 

 * Notifications under License Exception AGR first became available in 2001. 

The majority of export licenses approved for Cuba in fiscal year 2008 were for items 

classified as EAR99, including: medicines; medical supplies, instruments, and 

equipment; and gift parcels. 

Other countries have not imposed restrictions on their exports to Cuba comparable to the 

U.S. embargo. According to the CIA’s World Factbook 2008, Cuba imported an 

estimated $10.01 billion in commodities in 2007 (the most recent year for which statistics 

are available), up slightly from $9.51 billion the year before. Leading Cuban imports 

included petroleum, food, machinery and equipment, and chemicals. Cuba’s leading 
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2009 Report on Foreign Policy-Based Export Controls 

suppliers were Venezuela (28 percent), China (13.2 percent), Spain (9.8 percent), Canada 

(5.6 percent), Italy (5.5 percent), the United States (4.8 percent), and Brazil (4.6 percent). 

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 NonProliferation 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 1993 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 5 percent of Iran’s total imports and less than 1 percent of overall U.S. 

exports. As a result of the denial policy mandated by the National Defense Authorization 

Act of Fiscal Year 1993 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 2007, total U.S. exports to Iran were valued at $145.6 million. The top U.S. 

commodities exported to Iran were corn, medicines, wood pulp, plastics, and 

pharmaceuticals 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 2008, the 

Department of Commerce approved 49 deemed export licenses for Iranian nationals. 
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Table 2: Approved Commerce Export License Applications to Iran (FY 1991-2008) 

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

2001 19 $32

2002 10 $23

2003 16 $36

2004 31 $173

2005 31 $60

2006 38 $172

2007 53 $286

2008 49 $376

TOTAL 534 $708,349,671

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. In 2007, Iran imported an estimated $53.7 billion worth of 

industrial raw materials and intermediate goods, capital goods, foodstuffs and other 

consumer goods, and technical services. Iran’s leading suppliers were China (14.2 
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2009 Report on Foreign Policy-Based Export Controls 

percent), Germany (9.7 percent), the UAE (9.2 percent), South Korea (5.8 percent), 

Russia (5.3 percent) and Italy (5 percent). 

Table 3: Top U.S. Exports to Iran, 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 insurgents 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 2007, according to the most recent U.S. Census Bureau statistics available, U.S. 

exports to Iraq were worth $1.6 billion. In addition to foodstuffs, other strong categories 

of U.S. exports to Iraq included parts for military-type goods, passenger motor vehicles, 

drilling equipment, special-purpose vehicles (e.g., ballistic-protected cars), and 

telecommunications equipment. 

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. In particular, the rule 

advances the goal of ensuring that exports and reexports of controlled items destined to 
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2009 Report on Foreign Policy-Based Export Controls 

civil infrastructure rebuilding are processed in a timely manner. At the same time, in 

furtherance of applicable UNSCRs and U.S. foreign policy interests, the rule revised 

section 746.3 of the EAR and retains substantial restrictions on exports to Iraq destined 

for inappropriate end-users or end-uses. 

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. The 

Department expects that the number and diversity of applications will increase as more 

U.S. companies extend operations into Iraqi civil activities. 

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 

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 estimates that North Korean imports totaled 

$2.88 billion in 2006 (the most recent year for which figures are available) with primary 

imports including petroleum, coking coal, machinery and equipment, textiles, and grain. 

North Korea’s leading sources of imports in 2006 were China (27 percent), South Korea 

(16 percent), and Thailand (9 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 exports have again dropped substantially 

in recent years. In 2006, according to Census Bureau statistics, exports to North Korea 

dropped to the lowest level in the past decade, with only $3,000 in books and printed 

matter shipped. Exports have risen from this low mark to $1.7 million in 2007 and then 

to $23.7 million in the first seven months of 2008, comprised of mostly agricultural 

products for both years. Agricultural products are exempt from the licensing 

requirements for North Korea. 

Table 4: U.S. Exports to North Korea (U.S. millions) 

2000 2001 2002 2003 2004 2005 2006 2007 

$2.7 $0.6 $25.0 $8.0 $23.8 $5.8 $.003 $1.7 

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 six licenses in fiscal year 1994 to an annual average of 38 licenses in fiscal years 
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1995-1999 (see Table 5). However, from fiscal years 2000-2007, the Department 

approved fewer than ten licenses per year. 

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 since 

fiscal year 2000. 

However, license applications for exports to North Korea increased in 2007 and 2008 as 

the U.S. Government imposed additional licensing requirements on North Korea 

following that country’s test of a nuclear device in 2006. Overall dollar value, however, 

remains low as most license applications are 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 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). 
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Table 5: Export License Applications Commerce 

Approved for North Korea (Fiscal Year 1994-2008) 

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 

TOTAL 247 $1,568,857,788 

In fiscal year 2008, the Department returned without action seven license applications, 

valued at $88 million, and rejected two license applications, valued at $387,000. 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 donated 

vitamins valued at $86 million for which no license was required. 

Persons Sanctioned for Proliferation-related Activities 

The impact on U.S. industry of these controls is minimal as they target one entity at this 

time, Tula Instrument Design Bureau. In 2008, the Department did not receive any 

license applications involving Tula Instrument Design Bureau. 

Sudan

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. According to Census Bureau 

statistics, in 2007, U.S. exports to Sudan were valued at $66.9 million, and consisted 
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primarily of agricultural exports. The CIA estimates that Sudan’s total imports from all 

sources were valued at $7.7 billion in 2007. Leading suppliers to Sudan were China, 

Saudi Arabia, the UAE, Egypt, Japan, and India. Leading imports were foodstuffs, 

manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, 

and wheat. 

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 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. 

The Department of Commerce approved 103 license applications for Sudan in fiscal year 

2008 valued at $58 million. During the same time, 37 applications valued at $22 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 2008, the Department of 

Commerce denied eight license applications valued at $4 million. 
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Table 6: Approved Licenses for Sudan (FY 1992 to FY 2008)

Fiscal Year Total Applications Approved 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

TOTAL 263 $169,415,426

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 approval based on the Presidential waiver exercised when the SAA was 

implemented. 
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Table 7: Approved Commerce Export License Applications for Syria

(FY 1991-2008)

Fiscal Year Total Applications 

Approved

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

TOTAL 2,205 $3,224,526,221

The number of 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. However, the number of licenses and their dollar values has 

shifted back toward typical values in fiscal year 2008. 

In fiscal year 2008, the Department returned without action 87 license applications, 

valued at $76 million, and rejected four license applications, valued at $14,000. 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’s World Factbook 2008, Syria imported an estimated $12.4 billion in commodities 

in 2007, an 88% increase over 2006. Leading Syrian imports include machinery and 

transport equipment, food and livestock, metal and metal products, chemicals and 

chemical products, plastics, yarn, and paper. Syria’s leading suppliers were Saudi Arabia 

(12.1 percent), China (9.1 percent), and Egypt (6.2 percent). 

Designated Terrorist Persons and Groups

The Department of Commerce did not review any license applications for SDGTs, SDTs, 

or FTOs in fiscal year 2008. 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, which the Department of 

Commerce’s controls augment. 

United Nations Security Council Arms Embargoes 

Rwanda

The arms embargo on Rwanda has had little impact on U.S. industry. Total Rwanda 

imports were estimated to be valued at approximately $585 million in 2007 (the most 

recent year for which statistics are available). Leading imports for Rwanda were 

foodstuffs, machinery, steel, petroleum, cement, and construction material. Leading 

sources of Rwandan imports were Kenya, Germany, Uganda, and China. In 2007, U.S. 

exports to Rwanda were valued at $16.1 million, and were primarily comprised of 

foodstuffs, donated items, medicines, and telecommunications equipment. The 

Department of Commerce did not receive any license applications for arms-related items 

to Rwanda in fiscal year 2008. 

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, developing new strategies to 

limit reexport violations, strengthening the cooperative relationship with other law 

enforcement agencies in the United States and overseas, and maintaining 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. 

BIS conducted a number of enforcement actions regarding noncompliance with these 

export controls during fiscal year 2008. For example: 
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Gas Valve Parts to Iran - On June 9, 2008, CVC Services was sentenced in U.S. District 

Court for the Central District of California to a $51,000 criminal fine and an $800 special 

assessment for violating IEEPA. CVC Services sold oil and gas valve parts to Italy with 

knowledge that the parts were destined for Iran. On February 4, 2008, CVC Services 

pleaded guilty to aiding and abetting, as well as to violations of the IEEPA and the 

Iranian Transactions Regulations. 

Radiographic Equipment to Iran - On May 14, 2008, Behram “Ben” Meghazehe pleaded 

guilty in U.S. District Court in the Southern District of New York to one count of False 

Statements in connection with the illegal shipment of radiographic equipment to Iran. On 

August 14, 2007, Meghazehe and his associate Jeff Weiss were arrested pursuant to this 

shipment. 

Computers to Syria - On February 14, 2008, Mazen Ghashim, a resident of Houston, 

Texas, was sentenced in U.S. District Court for the Southern District of Texas in Houston 

to three years probation and ordered to pay a special assessment fee of $200 for two 

counts of violating IEEPA, Title 50 U.S.C. 1705 (b), Attempted Export Without an 

Export License. He was also ordered to forfeit computers and related equipment valued 

at $32,000. The violations occurred in February 2003 when Ghashim and his company, 

KZ Results, exported computers and related equipment to Syria without a BIS export 

license. On September 12, 2006, a Final Order was issued by BIS resolving 

administrative charges against Ghashim and KZ Results. The total administrative fine 

imposed against Ghashim and all his companies was $2,222,000. All but $71,000 was 

suspended. In addition, Ghashim and his companies were denied export privileges for 20 

years. 

Textile Goods to Iran - On February 8, 2008, in the U.S. District Court for the District of 

Columbia, California resident Mojtada Maleki-Gomi was sentenced to 18 months 

imprisonment and to pay a $200,000 criminal fine for violating the U.S. embargo against 

Iran. Maleki-Gomi pleaded guilty to knowingly and willfully exporting textile goods to 

Iran without the required export licenses. Also on February 8, 2008, in the U.S. District 

Court for the District of Columbia, Babek Maleki was sentenced to 12 months probation 

for making false statements related to the same export. BIS and ICE jointly conducted 

this investigation. 

C. Consultation with Industry

In a September 8, 2008, Federal Register notice (73 FR 52006), the Department of 

Commerce solicited comments from industry on the effectiveness of U.S. foreign policybased 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 
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on October 8, 2008. 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. 

Burma 

The United States consults frequently with other countries, the Association of Southeast 

Asian Nations (ASEAN), and the United Nations regarding the Government of Burma’s 

repression of the democratic opposition in that country. Additionally, the United States 

has vigorously communicated its concerns to the Government of Burma directly. 

Cuba

The Administration 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 with members of the United Nations Security Council, the IAEA Board of 

Governors, and the European Union. The United States continues to work with other 

states to prevent Iran’s acquisition of a nuclear weapons capability and to increase the 

pressure on Iran to change its current confrontational course to one of accepting 

negotiations on the basis of compliance with its international obligations. To that end, 

the United States is also working with the IAEA to ensure that it has the capabilities it 

needs to provide information to the international community about Iran’s nuclear 

program, to verify Iranian declarations with respect to that program, and to execute UN 

Security Council requests to verify/monitor Iranian suspension of its proliferation 

sensitive nuclear activities, as required in UNSCRs 1737 and 1747. 

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 
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has continued discussions with many other countries on both a bilateral and multilateral 

basis. 

North Korea

The United States continues to seek the verifiable denuclearization of North Korea 

through the Six-Party Talks, which include China, North Korea, Japan, the Republic of 

Korea (South Korea), and Russia. The February 13, 2007, Initial Actions for the 

Implementation of the Joint Statement provided for the establishment of five working 

groups to carry out the initial actions and for the purpose of full implementation of the 

Joint Statement. These are the Working Groups on: Denuclearization of the Korean 

Peninsula; Normalization of Democratic People’s Republic of Korea (DPRK)-U.S. 

Relations; Normalization of DPRK-Japan Relations; Economy and Energy Cooperation; 

and Northeast Asia Peace and Security Mechanism. 

On October 3, 2007, the six parties issued the Second-Phase Actions for the 

Implementation of the Joint Statement, in which the DPRK agreed to provide a complete 

and correct declaration of all its nuclear programs and to disable all existing nuclear 

facilities subject to the Joint Statement and the February 13, 2007, Initial Actions

agreement by the end of 2007. The IAEA confirmed on July 18, 2007, that all North 

Korean nuclear facilities at Yongbyon had been shut down. 

North Korea submitted a declaration of its activities on June 26, 2008. On October 11, 

2008, the Secretary of State rescinded North Korea’s designation as a state sponsor of 

terrorism. The U.S. will continue to work within the Six Party Talks toward a complete 

and verifiable denuclearization of the Korean peninsula. 

Persons Sanctioned for Proliferation-related Activities 

The United States consulted with the Government of Russia prior to the imposition of 

sanctions on the Russian entity. Additionally, the United States consults on a regular 

basis with other countries on proliferation and trafficking-related issues. 

Sudan

The United States continues to consult with other countries regarding the internal conflict 

in Sudan and the humanitarian needs of the population. Many of these consultations have 

occurred within the United Nations as well as the Intergovernmental Authority on 

Development (IGAD), which is the entity that sponsored the peace talks between the 

Government of Sudan and the Sudan People’s Liberation Movement/Army. 

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 
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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. 

Designated Terrorist Persons and Groups 

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. 

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) 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. 
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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)6

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.7

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. 

 

6 Chapter 7 of this report addresses U.S. biological controls.

7 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 14 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 

use, 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 use 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 terroristsupporting countries. 

The U.S. Government also controls all items subject to the EAR because of chemical or 

biological end-use 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 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, 
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production, stockpiling, or use of chemical weapons in, or by, any country or 

destination worldwide. 

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 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. 

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 the chemical warfare agents deemed to have military application, which by their 

ordinary and direct chemical action produce a powerful physiological effect. 

License Requirements and Licensing Policy for CWC Controls

The export restrictions and licensing requirements for chemicals imposed to fulfill CWC 

treaty obligations are as follows: 

A. CWC Schedule 1 chemical exports, subject to Department of Commerce 

jurisdiction, are banned for export to countries that have not ratified or acceded to the 

CWC (States not Party to the CWC). The United States requires a license and prior 
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notification of a planned export of Schedule 1 chemicals to all CWC States Parties, 

including Canada. A license is also required for the export or reexport of Schedule 2 

chemicals to States not Party to the CWC. Schedule 3 chemicals destined to States not 

Party to the CWC require a license and require the government of the importer to provide 

end-use certificates for the imports. 

B. The U.S. Government reviews export license applications for Schedule 1 

chemicals to CWC States Parties on a case-by-case basis. The Department of Commerce 

approves exports only to States Parties and only for purposes not prohibited by the treaty. 

The U.S. Government has a policy of denial for the export of Schedule 1 chemicals to 

States not Party to the CWC. 

The U.S. Government has a general policy of denial for applications to export Schedule 2 

chemicals to States not Party to the CWC. 

The U.S. Government also will generally deny applications to export Schedule 3 

chemicals to States not Party to the CWC, unless the importing country provides an enduse 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 2008 Changes 

On July 8, 2008, the Department of Commerce published a final rule in the Federal 

Register implementing changes made to the CCL resulting from understandings reached 

at the April 2008 AG Plenary meeting (73 FR 38908). Among other changes, the rule 

amended the list of countries that currently are States Parties to the CWC by adding 

“Congo (Republic of the)” and “Guinea Bissau.” 

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 Enhanced Proliferation Control Initiative (EPCI) announced on 

December 13, 1990. In so doing, the controls provide the U.S. Government with the 

authority to regulate the export of any item from the United States when there is a 

significant risk that it will be used for chemical weapons proliferation purposes. 
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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 States not Party to the CWC 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 

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 
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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 2008, the Department of Commerce approved 2,876 license applications, 

valued at $1,452,367,890, for the export or reexport of chemical precursors and 

equipment. The majority of the value of these approvals (74.2 percent) were for 

precursor chemicals controlled under ECCN 1C350, which are chemicals that have many 

commercial uses. Almost all of the remaining value of these approvals (25.5 percent) 

were for chemical equipment controlled under ECCN 2B350, which is equipment with 

many commercial uses. The Department denied 4 license applications valued at 

$368,943 and returned without action 294 license applications valued at $183,028,690. 

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 

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 
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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. The Department 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 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, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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

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. 
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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. The CWC also 

prohibits the direct or indirect transfer of chemical weapons, restricts trade in 

certain chemicals to States not 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. 

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. 
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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 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)8

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).9 

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 if the transaction is 

essentially identical. 

 

8 Chapter 6 of this report addresses U.S. chemical controls. 

9 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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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 CCL that are subject to biological controls. 

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 of the Commerce Country Chart, Supplement No. 1 to 

Part 738 of the 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, 
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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 

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. 

Summary of 2008 Changes 

On July 8, 2008, the Department of Commerce published a rule in the Federal Register 

(73 FR 38908) to conform our regulations to agreements reached at the April 2008 

Australia Group plenary. The rule revised the CCL entry that controls animal pathogens 

on the AG “Control List of Biological Agents” by revising the listing for avian influenza 

viruses. The rule replaced the description of highly pathogenic avian influenza (HPAI) 

with new language that is based on the definition currently used by the World 

Organization for Animal Health (OIE). 

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). 
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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 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 2008, the Department of Commerce approved 1,235 license applications, 

valued at $24,852,182, for the export or reexport of biological agents and equipment. 

The majority of the value of these approvals (84 percent) was for biological processing 

and handling equipment controlled under ECCN 2B352. The Department denied 8 

license applications valued at $73,714 and returned without action 62 license applications 

valued at $1,499,385. 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 
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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. 

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, Technical Advisory Committees (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, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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. 
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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. 

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 
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the difficulties related to effectively controlling these items, 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.
Chapter 8 Missile Technology Controls 

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2009 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 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. 

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. 

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 CCL are subject to missile technology controls. 

Category I items are subject to a strong presumption of denial regardless of purpose, and 
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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 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 EAR are as follows: 

A. 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. 

B. 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. 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. 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. 

Summary of 2008 Changes: 

On June 16, 2008, the Department published in the Federal Register an amendment to the 

EAR to implement changes to the MTCR Annex that member countries agreed to at the 

October 2007 Plenary in Athens, Greece (73 FR 33882). The payload definition of 

“other UAVs” was amended in two areas to include the munitions support and 

deployment structure as part of the definition. A new entry (4.C.4.b.5.) for 

Hexanitrohexaazaisowurtzitane (CL-20) was added; CL-20 is an oxidizer substance 

usable in solid propellant rocket motors. The control text for two polymeric substances 

(HTPB and CTPB) was clarified (4.C.5.a. and 4.C.5.b.). New text clarifying vibration 

test modes (15.B.1.a.), closing a loophole, and strengthening the controls for 

environmental chambers (15.B.4.) were adopted. An Index, provided for reference as a 

separate document from the Annex, was created and will be updated consequent to each 

update of the Annex. 
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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 

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 
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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 few 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 2008, the Department of Commerce approved 993 applications, valued at 

$1.5 billion dollars, for the export or reexport of missile-technology controlled items. In 

addition, the Department rejected 12 applications valued at $8.6 million and returned 

without action 116 applications valued at $160 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); 

and (2) most of the applications involve exports to countries, and for end-uses, that do not 

pose missile proliferation concerns. Under the missile EPCI control, the Department of 

Commerce approved 20 applications, valued at $12.1 million, denied 12 licenses valued 

at $8.5 million, and returned without action 25 applications valued at $2.3 million where 

missile EPCI concerns were the basis for review. 

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

States has the ability to effectively enforce these controls. 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 by 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 missile-related 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 
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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 seventh Enforcement Experts meeting at the MTCR Plenary in Athens, 

Greece, in November 2007. 

Among other enforcement activities, the Department of Commerce ensured that penalties 

were assessed against a number of individuals who committed acts in violation of U.S. 

missile-technology export controls. 

• On October 4, 2006, William Kovacs, president of Elatec Technology Corporation, 

was sentenced to 12 months and one day imprisonment, three years supervised 

release, and 300 hours community service in connection with the export of an 

industrial furnace to a proliferation entity of concern in China. On May 28, 2004, 

Kovacs and Elatec pleaded guilty to charges that they conspired to violate U.S. export 

licensing requirements in connection with this export. Elatec’s export license 

application for this transaction had previously been denied by BIS due to missile 

technology concerns. An associate, Stephen Midgley, separately pleaded guilty on 

January 10, 2005, to falsely stating in export documents that the furnace did not 

require an export license when the goods were shipped to China. Midgley was 

sentenced to one year probation, 120 hours community service, and a $1,500 criminal 

fine. BIS assessed Midgley a $5,000 ($4,000 suspended) administrative penalty as 

part of an agreement with Midgley to settle charges related to this unlicensed export. 

BIS 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 

(TransTAC), and other relevant 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, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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

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 shares information about 

activities of concern with other countries and seeks to prevent or stop certain transactions 

of missile proliferation concern. The United States also shares denial information with its 

MTCR partners, who honor the “no-undercut” commitment. 

MTCR member countries seek to foster the cooperation of non-member countries in 

limiting the spread of delivery systems for WMD, and have focused such efforts in a 

MTCR-sponsored series of workshops and seminars. This effort—begun in 1996—

allows MTCR members and invited non-members to explore different approaches to 

improve export controls and prevent 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 (EAA) provide for the imposition of 

export, import, and procurement sanctions on foreign entities engaged 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 and apply 

MTCR-type controls. The United States continues to approach other nations that produce 
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MTCR Annex-controlled items to secure their cooperation in controlling the foreign 

availability of these items and to urge their vigilance in applying MTCR Guidelines to 

help prevent missile proliferation. The U.S. Government has imposed sanctions on 

entities in a number of countries when those entities have not altered their proliferation 

behavior.
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CHAPTER 9 

Encryption 

(Section 742.15)

Export Control Program Description and Licensing Policy 

To protect and preserve foreign policy and national security 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 

law enforcement, and U.S. foreign policy and national security 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 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 ENC after review by 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 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 to governments, or to Internet and telecommunications 

service providers for the provision of services specific to governments, are favorably 

considered for civil uses. EI-controlled items are also eligible for Encryption Licensing 

Arrangements (ELAs), which authorize exports and reexports of unlimited quantities of 

encryption items to certain end-users and/or destinations. 

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 
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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 encryption 

export controls. These controls are consistent with Executive Order 13026, which was 

issued on November 15, 1996, and the Presidential Memorandum of the same date. 

 

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

has determined that, consistent with Executive Order 13026 and the Presidential 

Memorandum, both of November 15, 1996, U.S. encryption export controls 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 fully be 

achieved through negotiations with the participating states of the Wassenaar Arrangement 

or through alternative means. This determination will continually be reviewed 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 destabilizing military capabilities or 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 those capable of producing 

highly sophisticated encryption products, recognize the need to control exports of such 

products for national security and law enforcement reasons. The U.S. Government and 

its key trading and security partners recognize the desirability of securing critical 

infrastructures, developing new technologies and standards, preventing cyber-crime, and 

promoting electronic commerce, while restricting goods that could compromise national 

security and foreign policy interests. 

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

continued implementation of encryption regulations will allow U.S. industry to maintain 

a leadership position in the global market for encryption as well as other IT products, 

while ensuring that essential protections for U.S. national security and foreign policy 

interests, as well as the public safety, are upheld. The Secretary has determined that any 
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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 benefit to 

U.S. foreign policy objectives. 

Except for a limited range of encryption items (such as high-end “network infrastructure” 

products, commercial encryption source code items, and products for which the 

cryptography has been customized or tailored for government end-users or end-uses) for 

which a license is required to certain government end-users outside the European Union’s 

“license-free zone,” dual-use encryption products may be exported and reexported to any 

destination outside Country Group E:1 after a one-time technical review has been 

conducted pursuant to either the License Exception ENC (15 C.F.R. § 740.17) or the 

“mass market” encryption provisions of the EAR (15 C.F.R. § 742.15(b)). Encryption 

items that have been determined to be “mass market” are controlled for anti-terrorism 

(AT) reasons,10 and are not controlled for EI reasons. 

In fiscal year 2008, 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 3,396 review 

requests, including 627 mass market 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 51 percent of the 6,630 commodity classifications 

conducted by the Department in fiscal year 2008. 

Additionally, during fiscal year 2008, the Department approved 2,322 license 

applications for “restricted” encryption items (such as high-end routers and other network 

infrastructure equipment) and technology (excluding so-called “deemed exports” that are 

generally eligible for release under License Exception ENC). In fiscal year 2008, there 

were no denials of encryption commodities based on issues specific to encryption-related 

licensing policy. 

On October 3, 2008, Bulgaria, Canada, Iceland, Romania, and Turkey were added to the 

list of countries in Supplement No. 3 to part 740 of the EAR. Exports of “restricted” 

encryption items to government end-users in Supplement No. 3 countries are eligible for 

License Exception ENC. The addition of Canada is simply for clarity, as licenses are not 

required for the export of encryption items to Canada. This revision will reduce the 

number of license applications submitted to BIS for the export or reexport of encryption 

products to government end-users in Bulgaria, Romania, Turkey and Iceland by 

approximately 95 percent (approximately $37 million in export and reexports for 

calendar year 2007). 

 

10 Chapter 6 of this report addresses anti-terrorism controls. 
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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. 

C. Consultation with Industry

In a September 8, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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. 

In reviewing and examining U.S. encryption policy during FY 2008, the Department of 

Commerce worked closely with the Regulations and Procedures Technical Advisory 

Committee (RPTAC) and the Information Systems Technical Advisory Committee 

(ISTAC), and industry groups such as the American Electronics Association and the 

Alliance for Network Security (ANS). In discussions leading to the development of a 

regulation to simplify the encryption provisions of the EAR, which was published on 

October 3, 2008 (73 FR 57495), U.S. industry provided valuable input. 

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 
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Cryptography Note provides for release from national security controls “mass market” 

encryption items otherwise covered by the Wassenaar control list. 

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 unfettered 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 

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 

through negotiations on export controls with the participating states of the Wassenaar 

Arrangement. 
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2009 Report on Foreign Policy-Based Export Controls 

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 2008, the Department of Commerce approved 176 

licenses for technology controlled under ECCN 9E003. Most of the 176 licenses 

approved involved the export of “hot section” technology, but 73 of those 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 $24.7 million in fiscal year 2008. There was one license application rejected 

involving the deemed export of engine “hot section” technology in fiscal year 2008. In 

addition, 37 applications involving items valued at a total of $2,784 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. 

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. 
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2009 Report on Foreign Policy-Based Export Controls 

In a September 8, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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 

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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2009 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. Although these controls are primarily based on 

the NNPA, and therefore not subject to this report, BIS has included information on the 

controls because they usually are grouped with other nonproliferation controls referenced 

in this report. Controls based on nuclear end-uses and end-users are maintained under the 

authority of Section 6 of the Export Administration Act of 1979 (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. In addition, the Entity List maintained in Supplement 

No. 4 to Part 744 of the EAR is discussed in Chapter 13 of this report. 

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 

CCL); and 

• 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 
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2009 Report on Foreign Policy-Based Export Controls 

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 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. 

The Department of Commerce regularly solicits industry and public comment on these 

controls. In a September 8, 2008, Federal Register notice (73 FR 52006), the 

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

foreign policy-based export controls. The comment period closed on October 8, 2008. 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 and are not specific to this report. 

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. 

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 45 members, sets forth export control guidelines applicable to a list of nuclearrelated 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 

 

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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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 to 

coordinate export controls for nuclear nonproliferation purposes as well. 

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 2008, there were no additions or updates to the 

NRL.

BIS enforcement actions regarding noncompliance with these controls occurred during 

fiscal year 2008 are detailed below: 

Omission of Nuclear End-Use in Submission of License Applications to the Department 

— On March 12, 2008, MTS Systems Corporation of Eden Prairie, Minnesota, pleaded 

guilty to false certification or writing, in connection with the submission of two license 

applications to the Department of Commerce. In March 2003, MTS submitted a license 

application to the Department to export seismic testing equipment valued at $525,000 to 

the Electrical Research and Development Association in Makarpura, India. The stated 

end-use was “for seismic vibration testing facility to test motors and other electronic 

equipment under earthquake conditions.” The end-use statement did not reflect the 

corporate knowledge that the system would be used in a nuclear power plant. In 

November 2003, MTS submitted a second license application for approximately $3 

million of seismic testing equipment that would be used at the Structural Engineering 

Research Center (SERC) in Chennai, India. In filing this license application, MTS did 

not include information that SERC was receiving funding from India’s Department of 

Atomic Energy for this transaction and the end-use of this system would involve seismic 

testing for Indian nuclear facilities. As part of this plea agreement, MTS was fined 

$400,000, placed on probation for two years, and ordered to provide an export 

compliance seminar. As part of a global settlement, MTS was administratively fined 

$400,000 by the Department of Commerce for these two violations. 

In 2006, MTS was also administratively fined $36,000 for having exported a thermal 

fatigue testing machine to India which was ultimately destined for the Indira Gandhi 

Center for Atomic Research. Six Indian parties involved in this earlier export and 

diversion were also denied export privileges ranging from 10 to 15 years for each party. 

Nickel Powder to Taiwan — On October 11, 2007, Theresa Chang was sentenced to 

three years probation and to pay a $5,000 criminal fine. On June 21, 2007, Chang 

pleaded guilty to one count of making false statements related to the export of nickel 

powder controlled for nuclear proliferation reasons to Taiwan without an export license. 
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Graphite Products to the United Arab Emirates — On October 4, 2007, a District Court 

Judge in the Western District of Pennsylvania imposed a $40,000 criminal fine against 

Spares Global, Inc. On July 3, 2007, Spares Global, Inc., represented by President and 

empowered official, Mr. Om Sharma, pleaded guilty to conspiracy to commit several 

federal violations related to the shipment of graphite products to the United Arab 

Emirates (UAE) with potential nuclear and military applications. Spares Global 

conspired to falsify documents related to the graphite shipment and then attempted to 

mislead federal investigators when questioned about the shipment and the documents. 
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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 

EAR to impose foreign policy controls on exports of devices primarily used 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 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 

Control and Safe Streets Act of 1968, as amended, that are enforced by the U.S. 

Department of Justice. 
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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 

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 
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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 WMD 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 2008, the Department of Commerce approved 3 applications, valued at 

$619,595, for the export or reexport of surreptitious listening (SL) controlled items. In 

addition, the Department returned without action four applications for items valued at 

$12,119,000. No applications were rejected. 

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. 

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 
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affecting foreign policy controls. BIS did consult with the RPTAC prior to the 

publication of this rule. 

In a September 8, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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 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 

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 adapted export controls that focus on individual customers or 

entities and has taken steps to provide additional information to the public about entities 

of concern. The Entity List (Supplement No. 4 to Part 744 of the EAR) provides notice 

to the public that certain exports and reexports to the companies and individuals 

identified on the Entity List require a license from 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, 744.6, 744.10, 744.11, and 744.20 of the EAR, unless specifically 

authorized by BIS. 

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. 

Sections 744.2, 744.3, and 744.4 of the EAR prohibit exports and reexports of items 

subject to the EAR for use in defined nuclear, missile, chemical and biological activities. 

Section 744.6 prohibits certain activities by U.S. persons in support of certain nuclear, 

missile, chemical and biological end-uses regardless of whether that support involves the 

export or reexport of items subject to the EAR. Section 744.10 prohibits exports and 

reexports of any item subject to the EAR to certain Russian entities. Pursuant to Section 

744.11 of the EAR, BIS may impose export and reexport license requirements, and set 

licensing policy with respect to entities for which there is reasonable cause to believe, 
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2009 Report on Foreign Policy-Based Export Controls 

based on specific and articulable facts, that the entity has acted contrary to the national 

security or foreign policy interests of the United States. Pursuant to Section 744.20 of the 

EAR, BIS 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. 

Summary of 2008 Changes 

On August 21, 2008, BIS published a final rule expanding the scope of criteria for the 

addition of parties to the Entity List to include entities partaking in activities contrary to 

the national security or foreign policy interests of the United States. This rule listed, as 

illustrative examples, five types of conduct that the ERC could determine are contrary to 

U.S. national security or foreign policy interests: 

 

(i) supporting persons engaged in acts of terror; 

(ii) acting in ways that could enhance the military capability of, or the ability to 

support terrorism of governments that have been designated by the Secretary 

of State as having repeatedly provided support for acts of international 

terrorism; 

(iii) transferring, developing, servicing, repairing, or producing conventional 

weapons in a manner that is contrary to United States national security or 

foreign policy interests or enabling such transfer, development, service, repair,

or production by supplying parts, components, technology, or financing for 

such activity; 

(iv) preventing accomplishment of an end-use check conducted by or on behalf of 

BIS or the Directorate of Defense Trade Controls of the Department of State 

by: precluding access to; refusing to provide information about; or providing 

false or misleading information about parties to the transaction or the item to 

be checked; and 

(v) Engaging in conduct that poses a risk of violating the EAR when such conduct 

raises sufficient concern that the ERC believes that prior review of exports or 

reexports involving the party and the possible imposition of license conditions 

or license denial enhances BIS’s ability to prevent violations of the EAR. 

The final rule also codified the ERC as the decision-making body for the Entity List, and 

set forth that additions to the list shall be by majority vote, while removals or 

modifications of entries on the list shall be by unanimous vote. Finally, the rule set forth 

the procedures for listed entities to request that their names be removed from the List or 

that their entries on the List be modified. 

On September 22, 2008, BIS published a final rule adding 108 entities to the Entity List. 

Of the 108 entities added, 33 were entities previously listed in General Order No. 3 to 

Part 736 of the EAR, and the remaining 75 entities were published for the first time. 

Eight of the entities in this rule are listed twice on the Entity List because the list is 

divided by country, and the entities have addresses in multiple countries. All of these 
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entities were added to the Entity List on the basis of information that the U.S. 

Government possessed regarding the acquisition or attempted acquisition of electronic 

components and devices (“commodities”) capable of being used in the construction of 

Improvised Explosive Devices (“IEDs”). These commodities have been, and may 

continue to be, employed in IEDs or other explosive devices used against Coalition 

Forces in Iraq and Afghanistan. All 108 of the entities were listed with a licensing policy 

of general policy of denial for all items subject to the EAR. 

On December 5, 2008, BIS published a final rule adding 15 entities to the Entity List. All 

15 entities were added to the Entity List because of their involvement in the procurement 

of electronic components used in IEDs and the diversion of items to Iran. All of the 

entities were listed with a licensing policy of general policy of denial for all items subject 

to 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 

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, 744.6, 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. 
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2009 Report on Foreign Policy-Based Export Controls 

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 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 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 are 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. 
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2009 Report on Foreign Policy-Based Export Controls 

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, 2008, Federal Register notice (73 FR 52006), 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, 2008. 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 

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. 
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2009 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, 2008 (73 FR 52006). 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. 

Specifically in reference to the Entity List, BIS requested comments on the specific 

entities listed and the licensing policies and requirements assigned to each as well as on 

the List’s usefulness and format. 

The comment period closed on October 8, 2008. BIS received three comments from the 

following organizations: the Industry Coalition on Technology Transfer (ICOTT); Sun 

Microsystems, Inc.; and the Wisconsin Project on Nuclear Arms Control. 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 6, 2008, the Industry Coalition on Technology Transfer (ICOTT) submitted 

comments stating that because foreign policy-based export controls are unilateral in 

nature, they are largely ineffective. For that reason, ICOTT recommends that the United 

States impose unilateral controls only where it can justify the resulting injury to 

American workers and businesses against the “symbolic character” of the controls. 

ICOTT also recommends that unilateral controls be of limited duration. 

Additionally, ICOTT urges the removal of foreign policy controls that do not prevent 

target countries from gaining access to the controlled items, and recommends that where 

such controls are imposed for Anti-Terrorism (AT) reasons, License Exception RPL 

(servicing and replacement of parts and equipment) should be available for emergency 
Appendix I Summary of Public Comments on Foreign Policy-Based Export Controls 

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2009 Report on Foreign Policy-Based Export Controls 

services, including one-for-one replacement of parts, for use on commercial aircraft that 

are located in, owned by, or registered in sanctioned countries. 

ICOTT’s comments also expressed concerns about the Entity List process for listing 

entities acting contrary to the national security or foreign policy interests of the United 

States (§744.11(b) of the EAR). Specifically, ICOTT suggests that the open-ended 

character of the criteria for listing these types of entities, and the lack of a time period for 

acting on requests for removal from the List, raises due process issues. 

On October 7, 2008, Sun Microsystems, Inc., submitted comments stating that export 

controls imposed for foreign policy reasons should have a defined objective; be 

consistent, predictable, and flexible; and work. The comments from Sun note that foreign 

policy controls have historically been weak in applying these principles. In particular, 

Sun believes that residual controls on cryptographic software that is publicly available, 

and the inclusion of entities without addresses or other reference data on the embargoed 

entities list, have produced unnecessary and unintended competitive damage to U.S. 

companies without a commensurate policy or control benefit. 

Sun also noted the challenges of screening parties to export transactions. Sun provided a 

number of examples of the challenges, including that many of the nearly 3,000 names on 

the combined U.S. embargoed/sanctioned lists are common to their respective countries, 

but are listed without addresses or geographic identifiers, leading to a high number of 

“false positives” during the screening process. Sun suggests that agencies should 

eliminate names for which further identifying data is not available from the lists, and that 

new names should not be added if further identifying data is not available. 

On October 8, 2008, the Wisconsin Project on Nuclear Arms Control submitted 

comments stating that BIS should use criteria found in Section 744.11 of the EAR to add 

entities that have been targeted for nonproliferation reasons by other U.S. and foreign 

government agencies to the Entity List, in cases where other sections of Part 744 do not 

already allow inclusion of such entities on the List. They also suggest that BIS consider a 

more systematic use of Section 744.20, suggesting that entities should be added to the 

Entity List after being sanctioned by the State Department, and should remain on the List 

until the entity is determined no longer a risk. 

The Project also provided the following suggestions to help improve the Entity List and 

related procedures: exporters should receive effective notice of each entity on the List; 

primary names should clearly identify the entity, its aliases and addresses, and its 

corporate identity; each entry should clearly identify which of the entity’s addresses and 

locations are included in the designation; special attention should be paid to duplicate 

entries and to avoiding listing entities by type; BIS should provide guidance on the 

treatment of subordinate entities; and BIS should include additional information on why 

an entity has been included on the Entity List. Additionally, the Project suggests that BIS 

adopt the policy that all entities that are majority-owned or controlled-in-fact by a listed 

entity are considered listed and subject to the same licensing requirement, and that BIS 
Appendix I Summary of Public Comments on Foreign Policy-Based Export Controls 

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2009 Report on Foreign Policy-Based Export Controls 

should list all subordinates with their addresses on the List. The Project also suggests 

that BIS should augment the List with the names of listed entities in their original 

alphabets. 

Regarding the End-User Review Committee (ERC), the Project suggests that BIS ensure 

that sufficient, quality intelligence information and analysis is available to the ERC by 

changing the composition of the Committee to include intelligence community 

representatives and by enabling input from industry and the public. Finally, the Project 

suggests that the process be amended to require the ERC Chairman to circulate member 

agencies’ proposed changes to the List to the ERC within 10 days of receipt. 
Appendix II Multilateral Export Control Regimes in 2007 

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2009 Report on Foreign Policy-Based Export Controls 

APPENDIX II 

Multilateral Export Control Regimes in 2008

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 

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 

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
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2009 Report on Foreign Policy-Based Export Controls 

APPENDIX III 

Selected Rules Published by the Department of Commerce in 2008

Publication Date Federal Register

Citation

Rule

10/02/07 72 FR 56010 Authorization Validated End User: Addition of India as an 

Eligible Destination 

10/19/07 72 FR 58757 Approved End Users and Respective Eligible Items for the 

People’s Republic of China (PRC) Under Authorization End User 

(VEU) 

10/19/07 72 FR 592316 Mandatory Electronic Filing of Export and Reexport License 

Applications, Classification Requests, Encryption Review 

Requests, and License Exception AGR Notifications 

10/24/07 72 FR 60248 Burma: Revision of the Export Administration Regulations 

10/31/07 72 FR 61512 Approved End Users and Respective Eligible Items for the 

People’s Republic of China (PRC) Under Authorization End User 

(VEU); [ECCNs for Nat’l Semi] 

11/05/07 72 FR 62524 December 2006 Wassennar Agreement Implementation: 

Categories 1, 2, 3, 5, Part I, 6, 7 and 9 of the CCL; Wassennar 

Reporting Requirements; Definitions; and Statement of 

Understanding on Source Code 

11/07/07 72 FR 62768 Expanded Licensing Jurisdiction for QRS11 Micromachined 

Angular Rate Sensors. 

01/02/08 72 FR 32 Revisions and Technical Correction to the Export Administration 

Regulations and the Defense Priorities and Allocations System 

Reegulation 

02/05/08 73 FR 6603 December 2006 Wassennar Agreement Plenary, Agreement 

Implementation: Categories 1, 3, 6, and 7 of the CCL; Wassennar 

Reporting Requirements; 

02/28/08 73 FR 10668 Expanded Authorization for Temporary Exports and Reexports of 

Tools of Trade to Sudan 

06/13/08 73 FR 33671 Expansion of the Gift Parcel License Exception Regarding Cuba to 

Authorize Mobile Phones and Related Software Equipment. 

06/16/08 73 FR 33884 Revisions to the EAR based on the 2007 MTCR Plenary 

Agreements. 

07/08/08 73 FR 38908 Implementation of the Understanding Reached at the April 2008 

Australia Group (AG) Plenary Meeting; Additions to the List of 

States Parties to the Chemical Weapons Convention (CWC) 

08/21/08 73 FR 49311 Authorization to Impose License Requirements for Exports or 

Reexports to Entities Acting Contrary to the National Security or 

Foreign Policy Interests of the United States. 

08/21/08 73 FR 49323 Mandatory Electronic Filing of Export and Reexport License 

Applications, Classification Requests, Encryption Review 

Requests, and License Exception AGR Notifications 

09/02/08 73 FR 51217 Addition of Kosovo in the Export Administration Regulations 

09/05/08 73 FR 51718 Clarification of Crew Protection Kits on the Commerce Control 

List 

09/08/08 73 FR 52006 Effects of Foreign Policy-Based Export Controls 

09/22/08 73 FR 54499 Addition of Certain Persons to the Entity List; Removal of General 

Order From the Export Administration Regulations (EAR) 
Appendix II Multilateral Export Control Regimes in 2007 

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2009 Report on Foreign Policy-Based Export Controls 

Publication Date Federal Register

Citation

Rule

10/03/08 73 FR 57495 Encryption Simplification 

10/06/08 73 FR 58033 Revisions to the Export Administration Regulations Based Upon A 

Systematic Review of the CCL 

10/14/08 73 FR 60910 Wassennar Arrangement Plenary Agreements Implementation: 

(December 2007) Categories 1, 2, 3 5 Parts I and II, 6, 7, and 9 of 

the Commerce Control List, Definitions; December 2006 Solar 

Cells 

11/18/08 73 FR 68321 Conforming Changes to Certain End User/End Use-Based Controls 

in the EAR; Clarification of the Term "Transfer" and Related 

Terms as Used in the EAR. 

12/05/08 73 FR 73999 Additions of Certain Persons to the Entity List: Persons Acting 

Contrary to the National Security or Foreign Policy Interests of the 

United States. 

12/15/08 73 FR 75942 Export Administration Regulations: Authority Citations Updates 

and Technical Corrections. 

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) 

01/15/09 74 FR 2355 License Requirements Policy for Iran and for Certain Weapons of 

Mass Destruction Proliferators