Where Industry and Security Intersect
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Chairman Akaka and Members of the Subcommittee:
Thank you for the opportunity to testify at this hearing. For several years, the Department of Commerce (Commerce) has played a significant role in the U.S. government's international nonproliferation programs in the independent states of the former Soviet Union (FSU) and elsewhere. My testimony will give an overview of Commerce's role and then address the specific questions in Chairman Akaka's invitation letter.
Since the end of the Soviet Union, Commerce has participated in the U.S. Government's nonproliferation programs in the FSU countries. Commerce's role in these programs has been to work closely with the Departments of State, Defense, and Energy and the Customs Service of the Department of the Treasury to design and implement programs to enhance, and in some cases establish, export control systems in these countries. The Bureau of Export Administration (BXA) and the Office of Chief Counsel for Export Administration are the units responsible for Commerce's work in this export control cooperation program. Commerce strongly believes that bilateral and multilateral export control cooperation is an important part of the U.S. Government's effort to stem the proliferation of weapons of mass destruction and conventional arms. Experience has shown that export controls are most effective when producing, consuming and transit countries all cooperate and maintain similar export controls.
The overarching objective of the U.S. export control cooperation program is to assist countries in: 1) controlling the export, reexport, and transit of all items on the lists of the four multilateral export control regimes (the Wassenaar Arrangement, the Nuclear Suppliers Group, the Australia Group, and the Missile Technology Control Regime); 2) implementing catch-all controls to ensure less significant items do not support weapons of mass destruction programs; and 3) controlling activities, such as brokering and financing, that would contribute to the proliferation of weapons of mass destruction and conventional arms. This is the goal not only for the FSU countries, but for all countries with which the United States has export control cooperation programs, including the Central European and Baltic countries, transit countries and others.
Commerce's export control cooperation efforts consist primarily of bilateral technical workshops on specific export control issues, multilateral conferences, and seminars targeted specifically at key exporting companies in certain FSU countries. The technical workshops are designed to assist countries in developing and enhancing the elements essential for an effective export control system. These workshops cover legal authorities, control lists, licensing procedures, enforcement, and industry outreach. The multilateral conferences are designed to encourage neighboring countries to cooperate with each other on export controls. The seminars, targeted at foreign exporting companies, train them to establish internal control programs, and provide them a software tool to assist them, so the companies can comply with their own government's export control requirements. Over the past several years, Commerce has conducted over 200 workshops and seminars with personnel of virtually all of the FSU countries.
Commerce's efforts have made a significant contribution to the major strides taken by a number of the FSU and other countries in establishing effective national export control systems. Notable accomplishments in the FSU countries include:
In addition, BXA's enforcement arm now has an export control attache posted in the U.S. Embassy in Moscow. This attache works cooperatively with Russian officials in implementing enforcement procedures designed to halt the diversion of U.S. and Russian strategic items to countries of concern. The attache is also responsible for confirming the reliability of Russian end-users for products exported from the United States for internal Russian consumption.
Thus, the export control cooperation program plays an important role in the U.S. government's overall nonproliferation efforts.
I will now address the specific questions posed by Chairman Akaka in the letter inviting Commerce to testify at this hearing.
Commerce's Bureau of Export Administration is responsible for implementing U.S. national controls over the export of dual-use items (goods, software, and technology with civilian and military applications) covered by the four multilateral export control regimes. Commerce reviews approximately 7,500 export license applications for items controlled pursuant to these regimes. In addition, Commerce works closely with the Departments of State, Defense, and Energy to formulate proposals for the regimes and positions on proposals made by other regime members. For example, at the initiative of Commerce, the Wassenaar Arrangement adopted a "best practices" standard for effective enforcement of export controls at its December 2000 plenary session. This was the first time that a multilateral nonproliferation regime had adopted enforcement standards. Enforcement is an essential element of any export control system and adoption of this standard will enhance the effectiveness of the Wassenaar Arrangement.
Commerce also participates in efforts by the regimes to get non-member states to adopt nonproliferation policies and practices. For example, Commerce has participated in Missile Technology Control Regime (MTCR) outreach programs to key transhipment countries. Commerce has used this MTCR outreach program as the basis for the ongoing interagency effort to have these countries develop and implement effective transshipment controls, especially enforcement mechanisms. The initial step was the adoption of effective transshipment practices (modeled on those adopted by the Wassenaar Arrangement). Commerce is involved in ongoing efforts (both bilateral and regional) to strengthen export, reexport, and transit controls in these countries.
In addition to regime-based efforts, Commerce has involved other nations principally some of our major allies (the United Kingdom, Germany, Japan, Sweden) in the technical workshops it conducts with the FSU countries. This involvement has included cooperating countries sending officials to participate as members of the workshop "faculty" and having officials of those countries make presentations in multilateral conference programs.
The export control cooperation program includes constructive interaction with U.S. commercial interests in two regards. First, Commerce's programs frequently include representatives of U.S. exporting companies. Participation by these company experts is particularly important in the exchanges focused on industry outreach and compliance. These experts can speak authoritatively about their companies' compliance with U.S. export control requirements. They also can credibly describe how government consultation with exporters helps create an effective, workable export control system that best serves both national security and economic objectives. Second, Commerce also works with U.S. companies involved in nonproliferation assistance programs to ensure their exports conform with U.S. export control requirements.
Such a committee - the Proliferation Strategy Policy Coordinating Committee - already exists. Commerce participates in this committee when it addresses export control issues. Commerce also participates on a regular basis in a standing interagency working group on export control cooperation programs. This working group coordinates substantive programs and is the vehicle for U.S. government agencies to seek funding for such programs from the Department of State. Consequently, Commerce does not believe requiring a committee by statute would change the effectiveness of the U.S. export control cooperation programs.
Once again, thank you for the opportunity to testify on this important subject. I would be happy to answer any questions you may have for me.
In April of 2002 the Bureau of Export Administration (BXA) changed its name to the Bureau of Industry and Security(BIS). For historical purposes we have not changed the references to BXA in the legacy documents found in the Archived Press and Public Information.