Where Industry and Security Intersect
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(These remarks were prepared prior to September 11, 2001. A modified version of these remarks, taking into account the events of September 11, was delivered at the conference by Deputy Under Secretary T. Scott Bunton in Mr. Juster’s absence.)
It is a pleasure to be here and to join all of you for this important conference. I would like to extend my sincere appreciation to Her Majesty's Government for allowing us, once again, to convene in the United Kingdom for this event. I also want to thank my colleagues at the U.S. Department of State for sponsoring and managing this conference.
As you have heard, I was recently appointed by President Bush to serve as the Under Secretary of Commerce for Export Administration. My agency is responsible for administering and enforcing U.S. export controls on dual-use items and technologies, which are those that have both commercial and military uses. This conference is my first opportunity to meet most of you and begin a dialogue on how to improve our cooperative efforts on export controls. Such efforts are essential for there to be a truly effective multilateral export control system.
Many of you have been laboring in this field for many years, and have valuable experience and insight to share as we explore important issues over the next few days. For example, how can we effectively enforce restrictions on the intangible transfer of technology? How can we work cooperatively with our business communities to ensure that they understand and comply with their export obligations? And how can we effectively implement what are known as "end use" or "catch-all" controls, where we seek to prevent items that are normally not controlled from being exported to entities involved in proliferation or other activities of concern?
We are looking forward to fruitful discussions on each of these topics, as well as many others, during the course of this conference. Such discussions, hopefully, can reinforce and build upon the technical assistance programs already offered by many of the countries represented at this conference. As you know, the United States devotes significant time and resources to programs designed to strengthen national export controls in key countries throughout the world. This includes both countries that possess critical items and technologies and those that are transit or transshipment points in the international marketplace. We encourage others to offer such assistance programs as well, and we hope to work together in the future to coordinate our efforts more closely. Increased coordination will help us achieve our common goal of facilitating legitimate trade in high-technology goods, while keeping critical items and technologies out of the hands of proliferators and countries of concern.
In addition to strengthening national export control regimes, it is essential that we enhance cooperation in the multilateral regimes. Multilateral commitments are only effective when the countries making them have the legal basis, administrative structures, resources, and political will for implementing and enforcing those commitments. It is a priority of the U.S. government to strengthen and deepen multilateral cooperation on export controls. As a result of the increasing globalization of the world economy, dual-use items and technologies that contribute to the development of conventional weapons and weapons of mass destruction simply cannot be controlled effectively unless there is broad cooperation among exporting and transit countries. Without such cooperation, foreign purchasers denied a critical item by one country often are able to obtain the same item from another country that does not control its exports as stringently. In order to put in place effective export controls, supplier and transit countries must work together.
I realize that some of you here represent countries that are not members of one or another of the existing multilateral export control regimes. Nonetheless, I believe that we all share the common goals of stemming proliferation of weapons of mass destruction and preventing destabilizing accumulations of conventional weapons in areas and countries of concern. In light of our common goals, I would like to share with all of you some of my thoughts on how we can improve the effectiveness of the existing multilateral regimes, and thus work toward improving multilateral export control cooperation generally.
Many of you might say that the multilateral export control regimes already are effective in stemming proliferation and preventing destabilizing accumulations. But I think that we can do better. Indeed, given the new challenges arising from rapid technological innovation, we must do better. It is the hope of my government that in the coming months we will be able to improve multilateral cooperation in three principal areas -- denial notification procedures, end-use oriented controls, and timely and accurate reporting of information -- so that we can more effectively achieve transparency and responsibility in the transfer of dual-use items.
First, the United States supports expanding to all multilateral regimes the use of formal denial notification procedures prior to a proposed export. A denial notification procedure allows for bilateral consultations prior to a proposed export in situations where another regime member already has denied a license for essentially an identical export. Simply put, we do not want to let would-be proliferators "shop around" until they can find a regime member that is willing to allow the export of items that other regime members will not. If we agree to control an item multilaterally, then those who have agreed to maintain these controls should be vigilant to ensure that such an item is exported only for legitimate purposes. Anything less than a united front with respect to multilaterally-based export controls undermines their effectiveness.
Second, the United States supports expanding end-use oriented controls, such as "catch-all" or "catch-more" controls. These types of controls generally impose an export licensing requirement based on the known or suspected end-use of an item, rather than its identification on a control list. Controls can, therefore, be targeted directly at end-users involved in proliferation or other activities of concern. For example, the U.S. "catch all" controls impose a licensing requirement for the export of any item if the exporter knows or has reason to know that the item will be used in certain nuclear, chemical, biological, or missile end uses. We believe that end-use oriented controls strengthen the effectiveness of an export control regime by requiring countries to license the export of items that may fall just outside of control list parameters, but that still would make a material contribution to a weapons program or proliferation activities.
Third, the United States believes that timely, accurate, and complete reporting of export licensing information is critical to the effective functioning of the multilateral regimes. Timely reporting of information on license denials is necessary to support the effective operation of a denial notification procedure. In addition, the sharing of accurate and complete information on certain types of export transactions facilitates cooperation among countries and provides a basis for detecting, evaluating, and preventing problematic transactions or trends. We are looking into various methods to facilitate effective, yet not unduly burdensome, reporting of important export licensing information.
With modifications such as the three just mentioned, we believe that the effectiveness of the multilateral export control regimes can be strengthened without interfering needlessly with legitimate international economic transactions.
Finally, no export control system will be effective without the knowledgeable and willing cooperation of exporting industries and businesses. I have met with some industry representatives and business leaders in the United States who view almost any enhancement of export controls as a threat to their livelihood. I suspect the same is true in many of your countries. It is critical, therefore, that we educate our domestic industries as to why an effective system of multilaterally-based export controls is in their own best interest.
By helping to ensure and protect international security and stable foreign markets, export controls can actually contribute to increased trade and its accompanying benefits. Two significant threats to stable export markets are arms races and the proliferation of weapons of mass destruction. Arms races between rival countries lead to the threat of conflict, with its accompanying economic and political instability. And the proliferation of weapons of mass destruction creates instability because of the disproportionate impact of those having such weapons on regional and global affairs.
Among the principal purposes of the multilateral export control regimes is stemming weapons proliferation. This is accomplished by supplier countries working in concert to prevent the items and technologies required for advanced conventional arms or weapons of mass destruction from getting into the hands of entities or countries of concern. Although export controls may result in the denial of a particular transaction, effective controls facilitate open markets by preventing arms races and proliferation. And open, stable markets are a prerequisite for increased trade, export growth, and, ultimately, increased economic prosperity. Indeed, when governments and exporting companies are confident that effective controls are in place and technology will be protected, the readiness and willingness to engage in commercial ventures is greatly enhanced.
In recent months, the U.S. government has been criticized -- unfairly in my view -- for allegedly engaging in a unilateral and isolationist foreign policy. This simply is not the case. The United States strongly supports effective multilateral cooperation on export controls that establishes rules which are enforceable and which will be enforced equally. We are convinced that such cooperative efforts will have the long-term effect of enhancing global security and thereby spurring greater trade and prosperity.
Let me conclude by again expressing my sincere appreciation to Her Majesty's Government for hosting this important event. I also would like to express my gratitude to many of the export officials in the United Kingdom for their continuing cooperation in the export control assistance area. Our countries have worked closely on many important issues, and our work together in this area is a model for cooperative ventures. We truly appreciate the United Kingdom’s continued participation in and support of programs such as this conference.
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.