DECEMBER 2 NSC MEETING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R000400500003-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 21, 2016
• Document Release Date: June 3, 2008
• Sequence Number: 3
• Publication Date: December 1, 1983
• Content Type: MEMO

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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
December 2 NSC Meeting
FROM:
EXTENSION
NO. NIC #8677-83
Maurice C. Ernst
NIO/Economics
DATE
1 December 1983
TO: (Officer designation, room number, and
building)
DATE
OFFICER'S
COMMENTS (Number each comment to show from whom
RECEIVED
FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
VC/NIC (C.W.)
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DCI
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FORM 610 USEDPREVIOSUS
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SECRET
THE DIRECTOR OF CENTRAL INTELLIGENCE
National Intelligence Council
NIC #8677-83
1 December 1983
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
FROM: Maurice C. Ernst, NIO for Economics
SUBJECT: December 2 NSC Meeting
1. Two niipctinnc will hP nresented for decision at the December 2 NSC
1
(2) whether to change the basis for unilateral controls on
exports of oil and gas equipment and technology to the USSR from foreign
policy to national security.
All portions Secret SECRET
DCI
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US Controls on Exports of Oil and Gas Equipment to the USSR
5. The US has proposed for COCOM control a list of 21 items of oil
and gas equipment and technology. The justification for COCOM controls is
that these items have significant actual or potential military uses by the
USSR. The proposal has been under review by the ad hoc committee of COCOM,
which will meet again in January. The COCOM review process will take at
least several more months.
6. The items proposed for COCOM control are currently under
unilateral US national policy controls. Some applications for licenses of
controlled items have been approved. DOD would like to put these items
under unilateral national security controls, at least pending a final
decision in COCOM. The issues in this case are more bureaucratic than
substantive, but feelings are running high. There are all kinds of cross-
currents, some of which are difficult to fathom.
7. The attached memo on the issue, prepared by Commerce, gives useful
background, but does not present the arguments for or against the proposed
change in unilateral controls in a coherent manner. As I understand it,
the main issues are the following:
(1) Whether the change to national security controls would increase
or reduce the chances of COCOM approval of the items? -- It would
probably made little difference. The proposed change would
underline the seriousness of the US proposals, and would make US
unilateral criteria more consistent with our COCOM
presentation. Some in State argue, however, that our Allies
would react adversely because of concern that denial of US
licenses would lead to new extraterritorial hassles.
(2) Whether the proposed change would enhance or reduce US
flexibility in its own trade policy vis-a-vis the USSR? --
Foreign policy controls are almost certainly more flexible, but
they are also less well understood, and consequently are more
subject to misunderstandings.
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(3) Whether or not the proposed change would adversely affect US
business interests to the advantage of our Allies? -- It seems
clear that the shift to national security controls would mean the
denial of most license applications for these categories at least
until the COCOM review process is completed. This would hurt US
firms, although perhaps not much if items not approved by COCOM
and readily available outside the US were subsequently dropped
from the list.
My personal impression is that what matters most is what kind of
signal the US Government tries to give about its trade policy vis-a-vis the
USSR and the way this will involve our Allies.
8. Besides these substantive issues, there is great concern over who
controls the export control decisions (whether DOD or State) and much heat
over the way the 13 September ACEP meeting, chaired by Larry Brady, was
run. At that meeting, Defense, Energy, and State representatives agreed on
a change to national security controls. Subsequently, State strongly
reversed its stand, and accused Brady of "railroading" the proposal.
9. The list of items in question is the result of a serious attempt
by analysts from CIA, Commerce, and DOD, to identify items with substantial
military uses. Close relations of many of the items (e.g., navigational
and acoustic equipment, deep submersible pumps) already are on the COCOM
list. Other items (drilling rigs, well logging equipment) have less direct
and obvious military uses, and may be harder for COCOM to accept. Earlier
attempts to present a much larger list, which required economic as well as
military criteria, were rejected by other COCOM countries, who insisted on
using established COCOM criteria. There is no question that imports of
Western oil equipment and technology will be of increasing importance to
Soviet oil development of the next decade and beyond, especially in deep
off-shore areas. Unfortunately, our Allies have shown no sign whatever of
being willing to use this potential lever of influence.
10. You should also be aware that the NSC has asked the DDI to
prepare a study on Soviet imports of strategic oil and gas equipment. SOVA
expects to complete this study by December 16th.
Attachments,
As stated
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