U.S. OIL AND GAS EXPORT CONTROLS USSR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R000400500007-9
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 21, 2016
• Document Release Date: June 3, 2008
• Sequence Number: 7
• Publication Date: November 30, 1983
• Content Type: REPORT

Approved For Release 2008/06/04: CIA-RDP85M00364R000400500007-9
Approved For Release 2008/06/04: CIA-RDP85M00364R000400500007-9
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Approved For Release 2008/06/04: CIA-RDP85M00364R000400500007-9
U.S. Oil and Gas Export Controls
USSR
Issue
Should'the United States now impose national security controls, gnilaterally,
=` on oil and gas equipment exports to the Soviet Union; or 4hould we continue
existing foreign policy controls pending the outcome of U.S. efforts with the
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Classified by: W. T. Arche
Declassify on:
SECRET
(roughly $125 million), most for oil exploration and production equipment,
such as deep submersible pumps, offshore oil drilling rigs, etc. (C)
Background
The Assistant Secretary-level Advisory Comittee on Export Policy (ACEP)
recommended the application of natiunal security controls for oil and gas
equipment exports to the USSR, at a meeting on September 13. (S)
.A number of licenses are pending for oil and gas equipment exports to the USSR
The historical evolution of oil and gas export controls toward the Soviet
Union began in 1978 under the Carter Administration when validated licenses
were first imposed for foreign policy reasons on oil and gas production and
exploration equipment. Human rights violations, stemming from the Scharansky
trail were the basis for this regulatory change.. The Administration response
to the invasion of Afghanistan in December 1979 was a change in licensing
policy from a presumption of approval to a revocation of outstanding licenses
and a suspension of licensing oil and gas equipment. This policy was later
revised and oil and gas items were reviewed with a presumption of approval. (U)
President Reagan in late December 1981, in response to the declaration of
martial law in Poland expanded foreign policy controls against the oil and gas
sector in the USSR, e.g. Siberia-West European gas pipeline. Licensing
controls were expanded to cover oil and gas refining and transmission
eeqquipment in addition to production and exploration equipment.- Licensing of
ail products was suspended. Our allies opposed this action. (C)
In November 1982, the President removed controls against the USSR for oil and
gas transmission and refining equipment so that controls reverted to the
status of those in existence prior to December 1981. In return for this
action, our European allies and friends agreed to undertake a number of
multilateral cooperative studies designed to explore opportunities for
increased Western economic and energy security. We also obtained agreement to
consider new controls on oil and gas equipment and technology within COCON. (U)
Not referred to DOC. Waiver
applies.
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In early 1983, the allies agreed with us that COCOM would establish an Ad Hoc
Group to identify and consider (emphasis added) the case for controlling other
h4Ith + hnn-Tnnv Ttorsc pnT ulnnwent. materials. and technical data), including
those with, oil and gas applications, not now controlled. (G1
This COCON group became known as the Ad Hoc Group on Other High Technologies,
including Oil and Gas. The United States originally proposed a list of
l Meetin
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4. seventeep.oil and gas items for control in April 1983. A H
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(Under Secretary level) of COCOM representatives in late April reaffirme
their government's commitment to the work of the Ad Hoc Group and agreed
regarding oil and gas items that, 'the primary objective is to identify In
order to correct deficiencies and loopholes in the international lists.* (C)
The U.S. proposal was subsequently refined and now covers twenty-one items
deemed to meet the COCOM strategic criteria. An index of the oil and gas
Items included in the U.S. COCOM proposal for control is attached. This list
was tabled at a meeting in July but we agreed internationally not to discuss
it until January 1984. (C)
Bilateral discussions on the U.S. proposal were held in late October with most
of our COCON partners. These bilaterals were prepatory tQ the fourth meeting
(January 9-12) of the Ad Hoc Group. Most countries agreed with the U.S. view
that the work of the Ad Hoc Group is nearly complete and that the Group should
refer the U.S. proposal for multilateral oil and gas equipment and technology
controls to the full Committee for review and consideration for inclusion on
the embargo list. The European nations visited were unanimous that before
they agreed to such controls the items must meet the COCOM strategic criteria.
(C)
The Europeans do not yet seen completely persuaded by the United States
proposals and are, therefore, unlikely to agree to control all the items.
Although items such as oil and gas equipment were multilaterally controlled in
the early years of COCOM, the organization's strategic criteria is now
interpreted to apply to items with only significant and direct applications In
military systems. (C)
Arguments For National Security Controls (S)
o Demonstrates to allies in concrete way strong U.S, belief
that such equipment is, in fact, strategic within COCON
meaning, reinforcing U.S. arguments against Soviet oil and
gas development.
Insures consistency between U.S. COCOM proposal fqr national
security control on oil and gas equipment and U.S. export
control policy.
q - Anticipates future large-scale Soviet development efforts
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