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EXPORT CONTROL POLICY |
Recent Policy |
The Clinton Administration has had a strong effect on US policy concerning techonology exportation. Clinton has been in office during a time of explosion in computer technology as well as in the debate over how relevant that technology is to defense. He has made strong use of the International Emergency Economic Powers Act (IEEPA) of 1977 and the now-expired Export Administration Act (EAA) of 1979. Since no important laws specific to high-tech exportation have come out of Congress (several have been active in the last few years and are discussed here [link]), the president's policy has been the most effecting. Relaxation of Computer Export Controls in 1995 In 1995, after meeting with computer industry executives, Clinton relaxed control on computer exports. He decided that sales could be decided by US companies to certain foreign buyers without needing federal approval. This follows Clinton's 1993 approval to sell an $8 million Cray supercomputer to China to be used in weather research. Previous to this Clinton policy, exportation of supercomputers was severely restricted, since supercomputers were considered defense-related and could help in the design and testing of nuclear weapons. The Clinton action created four "tiers" into which the world's nations fall for supercomputer exports. Close allies such as Western European countries, Japan, and Canada make up "tier-1," which has almost no sales restrictions. "Tier 4," is the list of "terrorist" nations, currently at seven, including Iran, Iraq, Libya, and North Korea, which is at total prohibition. The area of debate and concern is in "tier 3," which includes former Soviet-bloc and Middle East nations, as well as China, India, and Pakistan. For these nations, computers capable of 2,000 to 7,000 MTOPS (millions of theoretical operations per second) can be exported to them without federal license. An Intel Pentium II 300 megahertz chip is capable of 400-500 MTOPS. Computers that can perform over 7,000 MTOPS or any computers being sold to military-related organizations must get federal approval. Whether a buyer is military-related is up to the US company, not the government. Presidential Executive Order in 1996, "Administration of Export Controls On Encryption Products" This order was considered more of a streamlining of existing policy. Before this order all encryption software was on the US Munitions List, and thus under control of the Department of State. After the order, all non-military-developed encryption was moved to the responsibility of the Department of Commerce and the Export Control Regulations (EAR). This follows under the organizations and laws set up since 1940. Subsequently, the EAR was revised to include encryption. General-purpose encryption, which was defined as keys 56-bits in length and under, was relatively easy to be exported with federal approval. All strong encryption, defined as keys greater than 56-bits in length, were heavily restricted for export. By July 1997, Microsoft, Netscape, and other companies that used strong encryption in their Internet software had gained approval to export their strong encryption-based software to specific foreign finance companies, such as banks. The restrictions were still considered detrimental to the competitiveness of American software companies in the international market. This is discussed in consideration of the current global situation here [link]. Read Clinton's Executive Order The Wassenaar Arrangement To bring some conformity to all the export rules between "friends" of the United States, the Wassenaar Arrangement was created in July 1996 and took effect on September 1996. "The purpose of the Wassenaar Arrangement is to contribute to regional and
international security and stability, by promoting transparency and greater responsibility
in transfers of conventional arms and dual-use goods and technologies, thus preventing
destabilizing accumulations" Countries included in the Wassenaar Arrangement must uphold certain non-proliferation policies and effectively control exports. Current members include the United States, UK, Russian Federation, Japan, France, and Germany among many others. The Arrangement succeeds the abolishment of a cold-war institution, the Coordinating Committee on Multilateral Export Controls (COCOM), which was created in 1949. Under COCOM the Western allies agreed to maintain very strict export controls on the export of any technology, high or low, that might be useful to the Communists. By 1994, when COCOM was dismantled, the need for such a broad and discerning attitude was gone. Supercomputer Policy Update for EAR, 1998 The Bureau of Export Administration (BXA) in the Commerce Department changed the current rules of unrestricted export of computers that perform between 2,000 and 7,000 MTOPS to "tier-3" nations. The Department now requires American companies to notify the Department of sales, which can continue unrestricted if there is no objection within ten days from the Departments of Defense, Energy, or State. Exporters must also provide written reports on the end-users to the BXA within 30 days of the shipment. This update was done to appease movements in Congress to severely tighten export procedures after questions about China and Russia involving American supercomputers (described here [link]). This update was finalized February, 1998. Encryption Policy Update for EAR, 1998 In a reevaluating movement that started with an economic report on the damage caused by
encryption exportation controls, 1998 saw an update of the EAR by the BXA
to relax controls. The BXA made a list of 46 countries eligible to be
sold applications by US companies that use general-purpose encryption without restriction.
The organizations that benefit from this relaxation in restrictions are insurance
companies, health and medical instutions, and financial institutions. The update in policy
also eased restrictions on US companies sharing source code that involves strong
encryption with their own foreign subsidiaries. Other software that companies want to
export is examined in a case-by-case basis for approval, with a preference to software
that can be key-recovered [link] by the government.
This update was finalized December, 1998. |
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