EXPORT ADMINISTRATION ACT REVEWAL OPTIONS PAPER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP10M02313R000100910002-8
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: March 12, 2012
• Sequence Number: 2
• Publication Date: February 28, 1983
• Content Type: MISC

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28 Feb 1983
EXPORT ADMINISTRATION ACT RENEWAL
OPTIONS PAPER
1. National Security Controls
A. Foreign Availability (Section 5(f))
Issue 1: Should foreign availability be-eliminated
as a criterion for decontrol of items on
the Commodity Control Last (CCL)? (ACEP).
Present Law: When the Secretary of Commerce
determines that goods, and technology con-
trolled for national security purposes are
available from foreign sources, he must
decontrol the items and issue an export
license, unless the President decides that
removing controls would be detrimental to the
national security.
Pro: Foreign availability is often difficult
to determine accurately. Therefore, in the
national security area, this should not be a
criterion for decontrol. Even if foreign
availability could be accurately determined,
national security concerns should still
preclude decontrol of these items.
Con: For the United States to control items
available from foreign sources would be
ineffective and unnecessarily harmful to U:S.
businesses. Moreover, there is no need to
eliminate-foreign availability as a criterion
for decontrol, because the Presidential over-
ride can be invoked as necessary to maintain
export controls on a given item..'
Approve Disapprove'
z
Issue 2: Should the current mandatory license
approval standard on the basis of foreign
availability be changed to a discre-
tionary standard for up to one year while
negotiating to eliminate the foreign
availability? (The provision for over-
ride for national security reasons would
remained unchanged; the mandatory
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approval standard would apply after the
one year period.) (ACED)
Present L'aw: Barring a Presidential override
for national security reasons, the Secretary
must approve a license foreign
availability is found to exist.
Pro: As a.practical matter, the override
provision already gives the Secretary of
Co,,mmerce discretion to deny a license despite
foreign availability. This proposal empha-
sizes the need to negotiate with our allies
and other nations to remove the availability
of- items and technology to the-Warsaw Pact
from foreign sources. Moreover, withholding
of licenses may strengthen the U.S. negotia-
ting posture.
Con: For the United States to deny licenses
on items available from foreign sources would
be ineffective and unnecessarily harmful to
U.S. businesses. Withholding of licenses may
in fact weaken the U.S. negotiating posture.
Delay of license issuance for one year may be
tantamount in many cases to a denial.
Approve - Disapprove
Issue 3. -Should the current definition-of -
foreign availability be made more
specific as follows: "For purposes of
this Act, assessment of comparable
quantity and quality shall include, but
not be limited to, the following factors:
cost, reliability, the availability and
reliability of spare parts, and cost of
quality thereof, maintenance programs,
technological data packages, back-up
packages, long-term durability scale of
production, ease with which machinery
will be integrated in the mode of
production, and spoilages and tolerance
factors for end products produced by the
machinery?" (ACEP)
Present Law: Foreign availability is defined
as a goo or technology available from foreign
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sources that can be obtained in sufficient
quantity and is of 'sufficient quality so that
U.S. export controls are rendered ineffective.
Pro: The change from "sufficient" to
"comparable" clarifies the foreign avail-
ability assessment'. Moreover, the listing of
various factors involved in the foreign avail-
ability assessment ensures increased accuracy,
thereby enhancing the national security
control system.
Con: Foreign availability should be defined
by regulation, not inflexibly by statute. The EFE~
meaning and application of certain components ?n~Act
of this definition are not clear. CL,,rI o,4
Approve Disapprove
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P. COCOP7 (Section 5(i))
Issue 1: Should the United*States uni-I.aterally
control items it submits for inclusion on
t! _e COCOM list pending a COCOM list
decision? .(DOD)
Present Law: There is no requirement that
restrictions or controls be placed on goods or
technology that the U.S. recommends to COCOM
for multilateral export control.
Pro: Such control would demonstrate our
seriousness about the proposed list item with
our COCOM partners. This proposal could,
arguably, improve our negotiating posture.
Con: This power already exists in a discre-
tionary form under current law.' 'Mandatory
unilateral controls on U.S. items during the
sometimes protracted COCOM review process
would prejudice U.S. businesses. The COCOM?
process would. also suffer because the current
practice of submitting list proposals in
exploratory, tentative form could not
continue.
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Issue 2: Should the EAA require the President to
attempt,to formalize the COCOM organiza-
tion, seek establishment of-a military
subcommittee, and provide additional
funding for COCOM? (ACEP) -
Present Law: COCOM is a purely voluntary
organization not established by treaty or by
formal international agreement. The current
law does not address COCOM funding or provide
for a military subcommittee.
'Pro: COCOI4's current informal, voluntary
status has-kept the organiation from main-
taining effective multilateral-controls.
Formalization of COCOM could, lead to higher
ranking representation, adequate funding and
more effective controls.
Con: An attempt to formalize COCOM may force
some members to be less cooperative or to
withdraw because members would often not be in
a position to agree to certain controls if
those controls were to be the subject of
formal governmental review. Moreover, a
statutory mandate for COCOM formalization
might be counterproductive to our efforts to
seek increased formalization or to enhance
COCOM's under its current
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Approve Disapprove L LkN(r0
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Issue 3: Should the EAA provide sanctions against
COCOM members who violate COCOM agree-
ments? (DOD)
Present Law: There are currently no sanction
provisions in the EAA.
Pro: Such sanctions would make multilateral
controls through COCOM more effective.
Con: This proposal would jeopardize continued
participation in COCOM by certain member
states.- Any provision for sanctions should
result from agreement among the COCOM members
rather than by unilateral U.S. statutory
mandate. This proposal would invite retali-
ation against the U.S.
Approve Disapprove -~
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C. Militarily Critical Technology List (MCTL)
(Section 5(d))
Issue 1: Should the EAA be amended to provide:
"The establishment of adequate export
controls for militarily critical
technology and keystone equipment shall
be accompanied by suitable reductions in
the controls over the products of that
technology and equipment?" (Business)
Present Law: No statutory distinctions
currently exist between the export controls
over militarily critical technology and
keystone equipment and the products of that
technology and equipment.
Pro: The need for control is on the under-
lying technology, not the resulting product.
The burden of acquiring licenses would be -
reduced.
Con: Reverse engineering of the decontrolled
a::d available products could jeopardize U.S.
national security. ])Ef~1C
Approve Disapprove
Issue 2: Should the definition of the NCTL be
expanded to include: "goods and
technology (i)'that would extend,
complete, maintain or modernize process
lines employed in the application of the
militarily critical technology, (ii) the
analysis of which would reveal or give
insight into a United States military
system and would thereby facilitate
either the design and manufacture of that
system or the development-of counter-
measures against that system, or (iii)
which will contribute to strengthening-
Soviet military capabilities or enabling
defense priority industries, including:
microelectronics, computers,
communications, shipbuilding, aerospace
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and aviation, including instrumentation,
in the' Soviet Union and the Warsaw Pact
or other proscribed nations-to produce
items controlled for national security
reasons to the detriment of the United
States?" (DOD)
Present Law: The MCTL is not defined, though
reference is made in the MCTL section to goods
and technology that would significantly
advance the military system of a country to
which exports are controlled. No MCTL has
ever been finalized.
Pro: Explicitly defining the MCTL would
clarify its scope -and would ensure a more
accurate assessment of militarily critical
technologies.
Con: An NCTL definition should not be
included in the statute because more
flexibility an be retained by defining it
administratively by regulation. This defi-
nition is broader than necessary to adequately
protect national security. Opening up this
definition to Congressional debate runs the
risk of an unfavorable ultimate result.
Approve - Disapprove __I/
D. Exports to Embassies (Amend Section 5(b))
Issue 1: Should a validated license and DOD review
be required for proposed "exports" of any
goods or technology on the CCL to
proscribed country embassies. in the
United States and to all international
organizations in the United States?
(DOD)
Present Law: There are no provisions
explicitly authorizing restrictions on
domestic sales of goods or technology to
embassies of proscribed countries located in
the United States or to international
organizations in the United States.
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Pro: Transfer of controlled items to these
e ::bassies and international org ninations is a
major loophole in the current e.:port control
system.
Con: This proposal would be virtually
unenforceable. Retaliation against U.S.
embassies.abroad could be expected. The
.proposal would not alleviate the problem of
covert operators, since those individuals
would not apply for a license in the first
instance.
Approve / Disapprove
E. Multilateral vs. Unilateral
Issue 1: Should r: specified notice and comment
period for Congress and the private
sector be required prior to the impo-
sition of unilateral controls?
(Business)
Present Law: The Secretary of Commerce is not
required to consult with the Congress or the
private sector before unilaterally imposing
export controls-for national security
purposes.
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Pro: The proposal gives the private sector
the opportunity to inform the Administration
of the economic effect of, and alteratives-to,
contemplated controls. Congress would also be,
assured of the opportunity to express its
concerns prior to the imposition of controls.
Con: The need for secrecy in the'national
security area makes such a provision
impractical., The provision also reduces
Presidential flexibility and authority.
Approve
Disapprove
F. DOD Role (See Organizational Change Section)
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G. Find=.nas and Policy Declarations
Issue 1:. Should section 2(3) he amended to read:
"A high priority should be placed on
exports [ACEP: export policy],-consistent
With the economic, secur-ity, and foreign
policy objectives of the United States?"
(State/ACEP)_
Present Law: Current Section 2(3) calls for
high priority on exports but makes no
reference to the national security interests
of the United States.
Pro: This change would demonstrate the
Administration's heightened concern regarding
the adverse impact of security-sensitive
exports on our national security, and would
state -a better balance between the economic
and security objectives of the Act.
Con: This p::oposal is redundant with other
parts. of the Act.
-Approve / Disapprove'
Is:;ue 2: Should section 2(5) be deleted and
language similar to the following substi-
tuted: "The transfer of critical
commodities and technical data has made a
significant contribution to the military
potential of other countries which has been
detrimental to the security of the United
States, its allies, and other friendly
nations, and has necessitated increases
in the defense budgets of these nations?"
(State)
Present Law: Current section 2(5) provides:
"Exports of goods or technology without regard
to whether they make a significant contribu-
tion to the. military potential of individual
countries or combinations of countries may
adversely affect the national security of the
United States."-
Pro: This change would demonstrate the
Administration's heightened concern regarding
the adverse impact of security-sensitive
exports on our national security, and would
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state a better balance between the economic
and security objectives of the Act.
Approve /
Con: Arguably there may not be empirical
evidence to support this finding.
Disapprove
Issue 3: Should a finding and policy declaration
be proposed asserting that export
controls should be used to seek to.
prevent the U.S. and its allies from
excessive energy and other critical
resource dependence on potential
adversaries? (ACEP) '
Present La~.w: There are no findings or policy.
decal ions that relate to the desirability
of avoiding becoming dependent on others for
critical resources, in general, or for energy
resources, in particular.
Pro: This fin :~iiig and pplicy declaration
would reflect U.S. policy, and would ensure
that the national security significance of
resource dependence is recognized in the
Export Administration Act. The Act is the
most appropriate statute for such recognition.
Con: The provision-is unnecessary because
export controls on energy-related items are
already within the policy purview of the Act.
The provision singles out one of many possible
reasons for the imposition of export controls.
Following so soon after the pipeline sanc-
tions, this provision would unnecessarily lvE
.alienate members of Congress, the business G~
Approve Disapprove
H. Negotiations-with Neutral and Non-aligned Countries
(Amend Sections 3(9) and 5(f)(4))
Issue 1: Should the President be authorized to
community and our allies. - F01Z
ptCJs/ON
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.negotiate (and encouraged to do so
through a policy declaration) with
neutral and non-aligned countries with
whom we have common ra interests
to restrict re-export of U.S. goods and
technology? (DOD)
Present Law: The Act states that is the
policy of the U.S. to cooperate with other
countries with whom we have defense treaty
commitments to restrict exports contributing
to the military potential of another country
to the detriment of the United States. The
Secretary of State is responsible for conduc-
ting negotiations to carry out-this policy.
Also, whenever the President. exercises his
override of foreign availability for national
securty reasons, he is required to negotiate
to el_oinate this foreign availability. Under
the Case Act, all agreements must be reported
to the Congress, although classified
agreements n: y be sent to selected committees
only. These committees may not distribute
these agreements without Presidential
approval.*
Pro: Providing this authority to the Presi-
dent would reflect the increased emphasis that
this Administration has given to guarding
against diversion of U.S. technology and goods
through these countries. The provision would
highlight the need for State Department
attention in this area.
Con: Neutral and non-aligned countries might
be reluctant to conclude cooperative agree-
ments with the U.S. if these agreements were
characterized as evidence that they had common
strategic interests with the United States.
Moreover, if these agreements were transmitted
to Congress, there would be a high risk that
their content would become public.
Approve Disapprove
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Indexing Provision (Section 5(g))
Issue 1: Should indexing be eliminated from the
national security section of the EAA?
(DOD)
Present Law: The statute provides that the
Secretary.of Commerce may, when appropriate,
.provide by regulation for annual increases in
the performance levels of goods or technology
subject to licensing requirements. Any good
or technology no longer meeting the perfor-
mance requirement-is automatically removed
from national security ccntrol unless any
agency objects and the Secretary thereafter
determines that the.item should remain under
control.
Pro: The indexing provision is unnecessary
because the EAA already calls for periodic.
list review. Pre-set standards for decontrol-
ling items cannot currently anticipate the
rapidly changing development of technology.
Con: Because no items should be unnecessarily
controlled, the performance level of con-
trolled items should be reviewed frequently.
The indexing provision is necessary because
review of multilaterally controlled items
otherwise-occurs only once every three years.
The indexing provision ensures timely
decontrol.
Approve
Disapprove
.II. Foreign Policy Controls
A. Extraterritoriality (Section 6(a))
Issue 1: Should the-extraterritorial application
of controls be restricted by:
(A) eliminating them altogether
(Business);
Approve Disapprove
(B) eliminating such controls except in.
the case of a declared national emergency
(USTR);
. Approve Disapprove
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(C) inserting a finding which states
"when -imposing new foreign policy
controls, in-~pact on pre-exiting
contracts and on business activities in
allied or other friendly countries should
be minimized to the extent consistent
with the underlying purpose of the
controls". (.State)
Approve
Disapprove
Present Law: The statute does not address who
is included in the operative phrase "persons
subject to-the jurisdiction of the United
States"; by regulation, the Commerce -
Depart-:ent has, on occasion,, defined this term
to include foreign subsidiaries and licensees
of U.S. corporations.
Pro: The current extraterritorial reach of
these controls has caused major international
relations pr.,:.blems, particularly with our
allies. Arguably, extraterritoriality may
violate international law and interfere with
principles of sovereignty.
Con: Extraterritorial application of the
statute is necessary to implement foreign
policy controls-effectively.
B. Sanctity of Contract and Licenses (Non-retroactivity)
Issue 1: Should contracts and export licenses be
protected from later imposition of
controls for at. least a specified period
of time by:
(A)-totally insulating such contracts and
licenses? (Business);
Approve Disapprove
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(B) insulating such contracts and
licenses except in the case of a declared
national emergency? (USTIR
);
Approve Disapprove
(C) inserting 'a policy declaration that
"when imposing new foreign policy
controls, impact on pre-existing
contracts and on business activities in
allied or other friendly countries should
be minimized to the extent consistent
with the underlying purpose of the
controls?" (State)
Approve Disapprove
Present Law: The President may invoke export
controls that affect existing export controls.
and outstanding export licenses. Note,
hcwever, that the President recently signed a
la? that provides contract sanctity for agri-
cultural exports for a?period of 270 days
after imposition.of the controls.
Pro: The imposition of export controls on
pre-existing contracts and licenses makes U.S.
exporters unreliable suppliers and forces them
to incur unexpected economic losses.
Con: he President's foreign policy powers
would be significantly impaired by such
provisions; less so, by the proposed policy
declaration.
C. Insurance or Compensation
Issue 1: Should insurance or compensation be
provided for business losses caused by
the imposition of foreign policy
controls? (USTR/Business)
Present Law: There are no provisions to
insure or compensate businesses that incur
economic loss caused by the imposition of
foreign policy controls. (Compensation is
provided for agricultural products under
separate statute.)
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Pro: The government should reimburse
EusiIiesses for losses caused by its actions.
Con: This proposal might he very costly.
Also the extent of injury in many cases would
be difficult to determine. Would create a
potentially undesirable precedent with regard
to compensating citizens for losses incurred
by the exercise of other foreign policy
authorities. Without regard to the proposed
compensation, U.S. suppliers would still be
dee;ed unreliable.
Approve Disapprove
D. Restrictions on Imposition of Controls
Issue 1: Should the President's authority to
impose foreign policy controls be limited
by:
.(A) allowing foreign policy controls only
under the International Economic
Emergency Powers Act (IEEPA) standard
which requires a "national emergency"
declaration by the President? (Business);
Approve - Disapprove
(B) requiring the President to meet
(rather than just consider) the current
six criteria for imposition of controls?
(Business);
Approve
Disapprove
(C) strengthening the requirement to
complete an economic impact analysis
before the imposition of any control?-
(Business);
Approve Disapprove
(D) requiring congressional approval
before controls may be imposed?
(Business);
Approve Disapprove
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(E) granting Congress the right to veto
any control? '(Business)
Approve Disapprove
(F) requiring a mandatory Congressional
and private sector notice and
consultation period before a control
becomes effective? (USTR/Business).
Approve _ Disapprove
Present Law: The-President may impose export
controls to the extent necessary to further
significantly the foreign policy of the United
States or to fulfill its international
obligations. Before imposing foreign policy
export controls, the President must first
consider six statutory criteria and later
report to Congress on his conclusions. The
President is not bound to make a decision that
conforms to the result of his consideration.
One of the six criteria that the President
must consider is the effect of the controls on
the competitive position. of the U.S. in the
international economy, on the reputation of
the U.S. as a reliable supplier, and on
individual U.S..companies and their employees
and communities. Also, before imposing
foreign policy controls, the Secretary of
Commerce shall consult with affected
industries as he considers appropriate and
also consult in every possible instance" with
the Congress. Congressional approval is not
required before foreign policy controls may be
instituted. Congress does not have the
authority to veto any non-agricultural export
control, although the Congress can pass a new
.law that would have the effect of overturning
an export control.
Pro: All of these proposals, in varying
degrees, impose necessary safeguards against
misuse of foreign policy controls that can
dramatically affect U.S. businesses. The
current virtually unrestricted use of foreign
policy controls has damaged U.S. national and
business-interests both domestically and
internationally. These controls should only
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be used in limited circumstances following
ccnsideration of Congressional and private
sector views.
Con: The President's power to impose foreign
policy controls would be diminished by all of
these proposals. Current law already requires
the President to consider and report to-
Congress on his findings for each-of the six
criteria listed in the statute. 'These
criteria already require him to consider the
economic impact of proposed controls as well
as the availability of goods from foreign
sources. The President should retain the
power, in situations shoat of a "national
emergency", to impose foreign policy controls.
The time delay caused by a mandatory notice
and comnLent period would impair the effective-
ness o_f any controls and conceivably would
allow businesses to undercut the controls by
completing contracts during this interim
period. In addition, the marshaling of
political forces against the President during
this time period would make imposition of
controls more difficult. The Congressional
veto proposal may well be unconstitutional.
Duration
Issue 1: Should foreign policy' controls require
renewal in a period shorter than one
year? (Business)
Present Law: Foreign policy controls expire
one year after imposition, unless extended by
the President for a period of not. more than
one year.
Pro: Because of the impact of foreign policy
controls and the fluid nature of world condi-
tions, the controls should be reassessed more
often than once a year.
Con: This proposal weakens the impact of the
control and diminishes the President's foreign
policy authority by requiring him to report to
Congress more often. Export controls can
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currently. be modified or removed in a shorter
period if circumstahces warrant.
Approve Disapprove
VX
F. Import Controls
Issue 1: Should import controls be imposed on a
country whenever export controls are
imposed on that country, subject to such
exceptions?as the President may
prescribe? -(Heinz)
Present Law: There are no provisions which
mandate imposition of import controls whenever
export controls are imposed.
Pro: If U.S. exporters are required to incur.
economic loss, than the businesses in the
awfected countries should also share the
economic burden of U.S. foreign policy
controls. The proposal gives the President an
additional tool for implementing U.S. foreign
policy.
Con: Political pressure may be brought to
bear upon the President to impose import
controls or take stronger measures than he
feels desirable. Serious foreign relations
problems would likely ensue from this
proposal.
Approve Disapprove'
G. Multilateral vs. Unilateral
Issue 1:' Should all unilateral controls be
eliminated? (Business)
Present Law: The President has the authority
to impose foreign-policy controls without .
regard to whether these controls are adopted
by any other government.
Pro: Unilateral controls are ineffective and
U.S. businesses should not be required to
incur economic losses from such controls.
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Con: U.S. foreign policy should not be
entirely depen&_nt on the foreign policy
objectives of other countries.
Approve Disapprove
III. Short Supply Controls
A. ;oaklev Amendment (Section 7(e))
Issue 1: Should this provision be deleted which
requires a license authorizing the export
of refined petroleum product9? (ACEP) -
Present Law: The Moakley Amendment requires
that no refined petroleum product be exported
except-pursuant to a license and following a
30-day notice to Congress of intent to issue
such license.
Pro: The provision is no longer necessary
because refined petroleum products are not in
short supply. Deleting this provision would
allow U.S. refiners to compete more
effectively in the world market. Should
petroleum products once again become in short
supply, the Moakley Amendment is not needed to
reimpose export controls.
Con: The present world oil situation could
suddenly change, and deletion-of the Moakley
Amendment could then jeopardize domestic U.S.
supply of refined petroleum products.- The
Northeast region of the country would strenu-
ously oppose this provision.
Approve _ Disapprove
B. Alaskan Crude Oil Provision
Issue 1: Should the prohibition on exporting
Alaskan crude oil be deleted or modified,
thus permitting exports of Alaskan crude
oil to Japan?
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Present Law: The provisions relating to crude
oil of *ectively prohibit the export of
Alaskan-produced crude oil.
Pro: The U.S. oil industry and Alaska would
prosper from exporting crude to Japan; U.S.
national security interests could be served by
shifting Japanese energy dependence away from
the Soviet Union and to the United States.
The proposal would not result in doi:.estic
shortfalls because of abundance of worldwide
and domestic crude oil supply.
Con: No position should be taken on this
issue now because it is currently under study
in the International energy Security Group
(IESG) and the SIG-IEP. Deletion of this
provision would harm west coast refiners,
shippers, and maritime employees.-
Approve C Disapprove _
IV. Organizational Changes
A. DOD Review (Section 10'(g))
Issue 1: Should DOD review be expanded to include
all goods or technology controlled for
national security purposes to any desti-
nation (not just proscribed countries)?
(DOD)
Present Law: The Secretary of Defense is
- currently authorized to review any proposed
export to any proscribed country (i.e., not
free world).
Pro: DOD review as well as DOC review is
necessary to insure adequate scrutiny of
proposed security-sensitive exports. .
Con: The DOD"Review would simply duplicate
tie DOC"review and would lengthen the
licensing process. Certain key cases
requested by DOD are referred to it by DOC for
comment.. Desired changes in this area are
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better addressed administratively by MOU or
regulations-rather than by statute.
Approve ? Disapprove
Issue 2: Should DOD be authorized to review all
applications for distribution licenses?
(DOD)
Present Law: The statute does not expressly
grant the Secretary of Defense the authority
'to review applications for distribution
licenses. -(Distribution licenses are not used
for proscribed countries:)
Pro: DOD review is necessary to assess
potential abuse of distribution licenses which
might lead to diversion of sensitive items to
proscribed countries.
Con: DOD review would simply duplicate the
DOC review and would lengthen the licensing
process. Desired changes in this area are
.better addressed administratively by I'IOU or
regulations rather than by statute. Adminis-
trative changes are, in fact, under review
now. -
Approve Disapprove V
Issue 3: Should DOD be given the right to veto
export of any goods or technology if DOD
determines "that the export of any goods
or technology will contribute to
strengthening Soviet military capabili-
ties or enable defense priority indus-
tries in the Soviet Union and the Warsaw
Pact to produce items controlled for
national security reasons to the
detriment of the United States?" (DOD)
Present Law: Whenever the Secretary of
Defense determines that exporting an item
would significantly contribute to the military
potential of another country and would create
a risk to our national security, he may
recommend to the President that he disapprove
the export license. If the President
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overrules. the Secretary of Defense, he must so
report to the Congress.
Pro: The proposed DOD review and veto power
is necessary to protect fully the national
security interests of the United States.
Con: The.President should not be deprived of
H current right to be the ultimate
decisionmaker with regard to export-control
matters. This provision is also too broad and
would give DOD veto power over exports to all _
countries and not-just review power over
exports to proscribed country destinations.
The proposal would delay the licensing
process.
Approve Disapprove V/
Custcros Role
Issue 1: Should all enforcement functions be
transferred to Customs? (Nunn and Heinz)
Present Law: Enforcement powers are vested in
the head of any department or agency exer-
cising any function under the Act. Accor-
dingly, the Secret-ry of Commerce enforces the
EAA, although he has, by regulations,
authorized the Customs Service to assist with
this enforcement.
Pro: Customs has the expertise, manpower and
budget to.enforce more effectively than
Commerce the export control laws.
Con: Enforcement functions should remain in
.Commerce because enforcement is more effective
when combined in the same agency with the
licensing functions. The Office of Export
Enforcement (Commerce), unlike the Customs
Service, has a single mission enforcement
role. The Commerce Department has recently
devoted-substantial resources to improving its
Office of Export Enforcement.
Approve _ Disapprove
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22
C. Office of Strategic Trade
Issue 1:. Should a new Office of Strategic Trade
(OST) be created? (This would be an
independent executive agency whose -
director would be a memo-r of the N.C.S.
The.OST would be responsible for
administering and enforcing export-
control laws under the EAA and the Arms
Export Control Act.) (Garn)
Present Law: Export trade controls that are
the subject of the Export Administration Act
are generally vested in the Secretary of
Commerce. The authority-to control trade in.
munitions is the responsibility of the Depart-
ment of State.
Pro: he OST would,not be subject to the
pro-export bias of the Department of Commerce.
Creating a separate agency, and placing its
director on :.he NSC, reflects the importance
of export controls to the Administration.
Because of its visibility, the OST would be
able to attract better qualified personnel.
Con: This new bureaucracy is unnecessary and
would be costly% The current interagency
review process works well and provides the
necessary balance among the competing purposes
of the EAA.
Approve Disapprove
V. Miscellaneous
A. Judicial Review
Issue 1: Should the EAA be amended to provide for
judicial review of licensing and control
decisions. (Business)
Present Law: Persons claiming harm from
licensing and control-actions taken under the
Act may not resort to the courts to obtain
judicial review of these actions.
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Pro: There is currently no impartial review
of actions taken under the Act. Judicial
review is necessary to ensure that the
provisions of the Act are fully and properly
administered.
Con: Judicial review would encounter severe
business confidentiality and classification
.problems. The licensing process would be
slowed considerably due to litigation involve-
ment of licensing personnel. The provision
would not be very effective because courts are.
reluctant to ques-tion foreign policy and
national security decisions of the Executive.
Eoreover, it may not be desirable to have the
courts reviewing Executive decisions in these
areas.
Approve Disapprove
Licensing
Issue 1: Should the EA eliminate the license
requirement 'for shipments of non-MCTL
goods and technology from the U.S. to
COCOM countries, Australia and New
Zealand? (Business)
Present Law: These named countries receive no
special statutory treatment except for
exemption from provisions relating to export
of crime control and detection instruments;
Pro: This provision would eliminate delays
and loss of profits caused by West-West
licensing. The damage to U.S. competitiveness
resulting from U.S. licensing of non-MCTL
"West-West" trade, outweighs the' minimal value
to U.S. national security of such licensing.
To detect diversion, less stringent
certification procedures could be devided.
Con: This provision would eliminate the paper
trail necessary to detect diversion. The
proposed chan a can be made administrativel
g
. Y
by regulation. OvCIL
Approve Disapprove L gy o
A11
E0
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Issue 2: Should a new special license be created
for shipments of goods and technology
intra-company (Parent-sub, sub-sub)?
(Eusiness)
Present Law: The Secretary carrently has the
authority to require (and so establish) any
special license that will assist in the effec-
tive implementation of the Act. No special
license now exists for intra-company exports.
Pro: Internal company transfers should be
'subject to minimal regulations. A new less
restrictive license would still provide a
pauer trail of items traiisferred,*but would -
minimize delays and loss of profits caused by
the present system.
Con: This proposal, if desirable, can be done
administratively under the current statute.
Foreign subsidiaries often operate
independently of their parent companies, and
may be located in countries whose foreign
policy objectives are different from those of
the U.S.
Approve Disapprove V
C. Anti Boycott
D. Enforcement and Violations Sections
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