COORDINATING COMMITTEE RECORD OF DISCUSSION ON REVIEW OF THE STRATEGIC EXPORT CONTROLS - EXCEPTIONS PROCEDURES FEBRUARY 9TH AND 16TH,1959
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February 2`3rcl 1959 COCOM Document No. 2a69.83
COORDINATING COMMITTEE
RECORD OF DISCUSSION
ON
REVIEW OF THE STRATEGIC EXPORT CONTROLS - EXCEPTIONS PROCEDURES
February 9th and 16th, 1.959
Prsent: Belgium(tuxembourg), Denmark, France, Germany, Italy., Japan,
Netherlands) United Kingdom, United States.
References: CH/1547, COCOM 471 (Revised), 1347, 1473, 2869.5, 2869.13,
2869.55, 2869.62, 2869.75, 2869.77, 2869.79, 2869.81, 3230,
3338, Secretariat Paper No. 104.
1. The CHAIRMAN recalled that at the last meeting all Delegations had
undertaken to consider the joint proposal submitted by the Belgian, United
Kingdom and United States Delegations and slightly amended in the Committee,
for the revision,of the COCOM 471 procedure (COCOM 2869.81, paragraph 1)
together with his own proposal concerning the revision of the do minimis
procedure (COCOM 2869.81, paragraph 17).
2. The UNITED KINGDOM Delegate stated that his authorities were in full
approval of the joint proposal for revising the COCOM 471 procedure. They
hoped that all other Delegations would be able to accept this text. Turning
than to the "do minimis" procedure he said that both the German suggestion
(COCOM 2869.81, paragraph 2) and the Chairman's proposal had been carefully
considered but his authorities still felt that there was no need for any
substantial changes in Annex A to COCOM 1473. In 1953, when "do minimis"
cases were first discussed, the Committee wore concerned in seeking a
solution for "nuisance" cases; this was the beginning of a very useful
procedure. The Delegate referred the Committee to the understanding
reached in September 1953 that "in this context the term 'minimum shipments,
is understood to mean shipments having a minimal security significance in
that diversion to any strategic use would be either impracticable, unlikely
or of no consequence from the strategic point of view" (COCOM 1347,
paragraph 17 (b)). Part only of this concept had been retained in Annex
A to COCOM 1473, i.e. the part dealing with diversion to any strategic
use being impracticable etc. Except in the context of marking the point
above which cases should be brought to the Committee there was no
roferenco to monetary value in the Annex to COCOM 1473.
3. The Delegate said that in his opinion this proved that from the
beginning the Committee had had minimal security significance in mind as
the most important factor. He suggested that the Committee should now
return to first principles, leaving the wording of Annex A to COCOM
1473 unchanged but reaffirming that the term "minimum shipments" should
be understood to mean having a minimal security significance. It should
then be su 'fioient to state that value or quantity were no bar to the
consideration of a particular case under the provisions of the procedure.
Finally, confident that the good sense of Member Countries would prevent
the abuse of the procedure, the United Kingdom authorities were sure that
this problem could be solved quickly and satisfactorily.
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4. The UNITED STATES Delegate said that he was much interested in
the past history of the procedure which had been mentuoned by the United
Kingdom Delegate. He agreed that COCOM 1347 seemed to provide the basis
for the provisions of COCOM 1473 and, subject to further study, he
thought paragraph 17(b) was the proper statement of the intent of Annex
A to COCOM 1473. He then made the following statement:
ttAfter thorough consideration of all of the views expressed in the
Committee during its recent discussions of Exceptions Procedures, my
authorities have instructed me to say they believe that the purposes of
all member governments should be adequately met by the following (leaving
aside less basic questions of revision of the exceptions procedures):
(1) Adoption of the "tripartite proposal" for revision of COLON
471, revised to substitute "situation" for "well-being", as shown
in paragraph 1 of COCOM 2869.81. bonding overall reorganisation
of the exceptions procedures into a single new document (embracing
also Administrative Principles), this language would replace the
first paragraph ("General Principles") of COCOM 471._
(2) a. Adoption of the United States proposal for revision
of the minimum shipment procedure as shown in paragraph III 2
of COCOM 2869.5 ("Exceptions may be made for do rinimis shipments
whore the quantity of the item in relation to its strategic
potential, the end-use cited, and the likelihood of diversion to
a strategic end-use, indicate that the risk of strategic use is
of no consequence from the security point of view.") [Pending
the overall reorganization of exceptions procedures cited above,
this language would replace the existing introductory paragraph
to Annex A of the Attachment to COCOM 14732 or,
b. Alternatively, leaving the existing procedure unchanged.
(3) Adoption of the following United States proposal relating
to "ad hoc" exceptions as stated originally in paragraph II f of
COCOM 2869.5:
"Undor special and unusual circumstances, requests for
exceptions not falling under the specific typos described
below will be examined by the Committee on the merits of
the individual case, taking into account such considerations
as the exporting country may wish to put forth including
the requirements of its basic economy.11
5. "With respect to minimum shipments, the fact that all cases
above a certain value ($100 i4 the past, and the United States agrees
to $150 in the future) must be submitted to the Committee for prior
consultation is itself an indication of the historical and, in the
United States view, proper concept of minimum shipments. The United
States has in the past, as a rough "rule of thumb", thought of
$1,000 as the approximate value above which cases would normally no
longer be "minimal". This had not, as the Committee knows, prevented
the United States from considering cases of a higher value submitted
under this procedure, or approving them under another procedure or as
"ad hoc" cases where circumstances seemed to warrant.
6. "(1) The United States authorities have carefully reviewed
their policy with respect to minimum shipments in the light of the
recent discussions in this Committee. In the light of this review,
I am authorized to say the following: wo are prepared to consider
under the "do minimis" procedure certain exceptions of more than a
minimal value ar quantity; we do not propose to set a limit, in value
or quantity, to cases that may be submitted under this procedure; the
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basis of consideration of minimum shipment proposals as well as other
exceptions should be evaluation of strategic impact of the proposed
export; obviously quantity or value will nevertheless be an important
guide to evaluation of strategic impact.
(2) Further, the United States door not believe that hero is a
need to fill a "gaplt botweon "minimum shipments" and COCOM 471 cases.
We see no merit or justification in revising the former procedure so
as to cover both minimal shipments and shipments which are more than
minimal. We do consider, however, that member governments should be
free to submit cases of more than a minimal value or quantity under
the minimum shipments procedure provided that the exporting country
believes it can demonstrate to the satisfaction of the other member
governments that the proposed export is of no consequence from a
strategic point of view. Obviously the reactions of other member
governments will be governed by the adequacy of such demonstrations.
7, rtl'To believe that the proposals made in paragraph 4, above, will
permit COCOM consideration of all exceptions requests involving valid
considerations (1) rolating to [damage to the economic, political. or
social situation of a mombor-country, (2) serving to show that shipments
are of no consequence from a strate Eic point of view, and (3) justifying
shipments which can qualify under neither the revised 0000M 471 procedure
nor the de minimis procedure (as it stands or as the United States would
revise it) but with respect to which there are very special circumstances
justifying their approval as ad hoc cases.
8. "Finally, the Committee is well aware of the recent sharp
reduction in the embargo lists, The United States has made important
concessions in the 1958 List Review and since. We believe that
modernization and clarification of the exceptions procedures are
warranted but that broadening of the exceptions procedures, and thereby
further relaxing the control system, would be inconsistent with the
purpose of this Committee."
9. The GERMAN Delegate said that he had listened with great interest
to the statements made by the United Kingdom and United States Delegates.
The German authorities could agree to the Chairman's ccanpromiso proposal
as stated in paragraph 17 of COCOM 2869.81, although they still thought
it would have boon useful to have had a more explicit written reference.
The views of the United States authorities were identical with those of his
own authorities on the question of substance that the cases should be
judged in the light of their strategic importance rather than on grounds
of value or quantity. He did not contest the point made by the United
Status Delegate that the strategic value of an item was sometimes linked
with its value or quantity but this was another problem and not a
question of principle. The German authorities maintained that no sub-
mission should be refused on purely procedural grounds. As the United
States Delegate had made it clear that each case would be considorod on
its morits (paragraph 6 above), he thought that this would probably take
care of his authoritiost own concern. His Government maintained that the
full burden of proof should rest with the country submitting the request
and he was glad to note that the United States did not insist on setting
an upper limit for submissions under the minimum shipments procedure. He
also noted that the United States still thought there was a place for the
ad hoc procedure in cases whore there wore very special circumstances. He
appreciated that in their ad hoc proposal the United States had come back
to the quid pro quo clement. The Gorman authorities would not refuse to
consider this clement in ad hoc cases and would even consider it under the
COCOM 471 procedure. Summing up, the Delegate said that his authorities
would have preferred to have a clear procedural understanding, but it
seemed that agroomont could not be reached in this direction and they
were therefore satisfied with the understanding that any Delegation was
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free to submit cases under the minimum shipments procedure which would be
considered on their merits and not rejected on grounds of procedure alone.
10. The FRENCH Delegate stated that his authorities could accept both
the joint proposal for the revision of the COC0M 471 procedure and also
the Chairman's proposal on the de minimis procedure. The latter they
wished to see incorporated As a note to the procedure. He expressed his
thanks to the United Kingdom Delegate for having recalled the understanding
recorded in COCOM 1347 as to the importance of the security significance
of an item as opposed simply to its monetary value, He felt that it was
necessary to be clear on the ad hoc procedure and he felt that the quid
ro uo cleinont should be considered as an additional optional element
of appreciation. The German Delegate had said that his authorities wore
willing to consider the gEidUrp,quo element in oasow submitted under the
COCOM 471 procedure but he wished to point out in this context that his
authorities deemed the judgement of the exporting country to be sovereign
in such cases.
11. The JAPANESE Delegate recalled that his authorities had already
accepted the joint proposal for the revision of the COCOM 471 procedure.
Referring then to the COCOM 1473 procedure, he pointed out that his
Delegation had from the beginning supported the United Kingdom proposal
to leave the procedure unchanged with the exception of an adjustment in
the cut-off figures. This was still the Japanese position. The Japanese
authorities, however, disagreed with the United Kingdom suggestion that
there should be a reaffirmation that value or quantity wore no bar to
the consideration of a particular case, since, in their view, such was
not a reaffirmation but a broadening of the existing procedure. It
had boon understood by most, if not all, Delegations that both strategic
and monetary considerations decided the cases. He referred to the
discussion which had taken place in July 1956 (COCOM 2238 and 2243) on
a proposal to revise the do minimis procedure to refer to strategic
considerations only. At that time the Belgian, Canadian, Netherlands
and United States Delegations had stated that the procedure covered
cases of small monetary value as well as those of small strategic
significance. The discussion had boon adjourned sine die without
agreement to change the procedure. It was the Delegate's own under-
standing that most Delegations in fact interpreted the procedure to
cover both considerations. He reminded the Committee of the fact that
there wore a few instances in the past when the United Kingdom had
objected to exception requests simply on their face value, stating that
the monetary value was too high to be considered under the do minimis
piwcoduro. In view of the positions they had adopted at the previous
discussion in 1956, he would be much interested to hear the present
vio5s of the Belgian, Canadian and Netherlands Delegations. Finally the
Delegate said that both the Gorman suggestion and the Chairman's proposal
for revising the COCOM 1473 procedure wore still under study by his
authorities and he had no final instructions on those points.
12. Thd BELGIAN Delegate reaffirmed that his authorities could
accept the joint proposal for the revision of the C000M 471 procedure.
As for the COCOM 1473 procedure, they thought that the reduction which
had boon made in the International Lists in 1958 should moan that
there would be fewor exceptions submissions and they therefore felt
that it was unnecessary to change the provisions of COCOM 1473, as
those basic principles seemed sufficient to take care of the present
situation and it was already possible to submit cases above a fixed
minimum value. In addition, the United States Delegate had reminded
the Committee that an ad hoc submission could always be made where
exceptional circumstances outside the framework of the COCOM 1473
procedure were concerned. The Delegate said that he could support
the Chairman's proposal for a note to be added to COCOM 1473, although
he doubted that it would make very much difference in the judgement of
exceptions eases because, in his opinion, past cases had boon examined
primarily in the context of their strategic importance.
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13. The ITALIAN Delegate stated that he could accept both the joint
proposal for the COCOM 471 procedure and the Chairman's proposal for the
COCOM 1473 procedure ad referendum. He felt that the Chairman's proposal
embodied the main area of agreement in the Committee, namely that no case
should be refused on procedural grounds alone. He did not think it was
necessary to reaffirm the principle stated in COCOM 1347 as had boon
suggested by the United Kingdom Delegate: Finally he stressed the need
for the unification of the exceptions procedures in simplified foiln in
one document.
14. The DANISH Delegate said that his position was similar to that
of the Japanese Delegate in that he supported the original United
Kingdom proposal to leave COMM 1473 unchanged except for raising cut-
off figures. He did not fool that reference to COCOM 1347 was very
relevant at this point because during the last five years the Committee had
used the COCOE 1473 procedure in a different way and he did not wish to
alter the present interpretation of COCOI;1 1473 as it had evolved during
those years.
15. The NETHERLANDS Delegate said that he could accept both the
proposal concerning the COCOM 471 procedure and that concerning the
COCOM 1473 procedure ad .
16. The UNITED KINGDOM Delegate commented on his Japanese
colleague's reference to COCOM 2243. His reasons for referring to
discussions in 1953 were to support the German proposal for the
intermediate range of cases. The United Kingdom authorities were in
agreement with the Gorman reasoning that all typos of cases should be
covered by the Committee's procedures and they had therefore pointed
out that the word "minimum" referred to strategic importance. The
value cut-offs wore a convenient way to establish the point at which
the Committee should be consulted. This did not moan that the value
or quantity factors should not be taken into consideration at all.
17. The UNITED STATES Delegate said that he subscribed to much of
what had boon said by his United Kingdom colleague, and also the general
philosophy of the Japanese Delegate's statement. A gap had always
existed between the COCOM 471 and COCOM 1473 procedures but, particularly
in view of the 1958 reduction in the Lists, the United States did not
consider that this gap had to be filled. He agreed that the minimum
shipments procedure had boon developed to take care of "nuisance" cases,
such as that cited by the United Kingdom Delegate in paragraph 2 above,
when denial would have brought the control system into disrepute. If
there were specific cases in the so-called "intermediate" area that
Member Countries were convinced could qualify as of no strategic
importance, the United States authorities were certainly willing to
consider thorn. The Delegate concluded that he was becoming somewhat
pessimistic on the possibility of reaching written agreement on this
matter and suggested that the most appropriate course of action might
be simply to see what kinds of cases were submitted to the Committee
and what decisions wore reached on them and later to return to the
question of a written agreement if it was still felt necessary in the
light of further experience.
18. The FRENCH Delegate emphasised that there wc,s a dofintto connection
between quantity and value on one hand and strategic importance on the other.
One gram of uranium 235, for example, would, probably be of very small
strategic importance whereas the export of 10 kilos of the same material
could be strategically dangerous to the West.
19. The GERMAN Delegate then commented on the statement which had boon
made by the United States Delegate. He noted that the United States
authorities were prepared to consider certain exceptions of more than a
minimal value or quantity and that they considered Member Countries free
to submit such cases provided the exporting country could demonstrate that
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the proposed export was of no consequence from the strategic point of
view (paragraph 6 above). He fully agreed with this point of view since
the German Delegation had always maintained that the burden of proof should
rest with the applicant. He did not think that his authorities would have
any objection to the new codified proposal on ad hoc exceptions (paragraph
74(3)_above) although he was not sure t hat his own authorities' understanding
on this point was the same as that of the United States: the German
authorities thought that this would close all gaps but the'-Ur' ?:ed States
said that they were satisfied that a gap should remain. As to the minimum
shipments procedure, the intention of the German authorities was merely
to have a new procedural framework, not to change the strategic appreciation
of the do minimis procedure. In conclusion, the Delegate said that his
authorities could accept the Chairman's proposal for a note to COCOM 1473
and he was glad to note that the United Kingdom also agreed to it. He
found it difficult to understand why the United States could not accept
this proposal also.
20. After further discussion, the JAPANESE Delegate gave his personal
opinion that there was a possibility of his authorities' accepting a note
to COCOM 1473 along the lines of that proposed by the Chairman. He would
in any case report the present discussion-fully to his authorities.
21. The CHAIRMAN summed up the discussion by saying that he felt the
Committee was close to agreement. There was virtually unanimous acceptance
of the jofnt proposal concerning the statement of general principles
applying to the COCOM 471 procedure. As far as minimum shipments were
concerned, in addition to value and quantity, each case had various
particular features which together formed the basis for the evaluation
of the security risk and tho Committee seemed ready to give due
consideration to those other elements.
22. The COMMITTEE agreed that the Secretariat would draw up a single
draft document (Secretariat Paper No. 104) embodying the existing exceptions
procedures as contained in COCOM 471 (Revised) and COCOM 1473 and as amended
by the points already tentatively agreed upon in the earlier rounds of the
discussion together with notes to the section on minimum shipments which would
state, along the lines of the Chairman's proposal, that exceptions of more than
minimal value or quantity might be submitted to the Committee under that
procedure. It was further decided that the Chairman should collaborate
informally with the United States Delegation in drawing up these notes.
23. On February 16th the CANADIAN Delegate informed the Committee that
his authorities could accept the Chairman's proposal (COCOM 2869.81,
paragraph 17) for a note to COCOM 1473.
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