Where Industry and Security Intersect
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The United States maintains controls on high performance computers (HPCs), including related software and technology, in recognition of the strategic and proliferation significance of HPCs. Such controls are adjusted from time to time to reflect advances in computer technology and expanding worldwide availability. The Export Administration Regulations (EAR) set forth special provisions for exports and reexports of HPCs and related software and technology controlled for ‘Computer’ (“XP”) control reasons.
For computer items listed on the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR) for which XP reasons for control are specified, the XP controls supplement those that apply to the specified computer items for other reasons. Specifically, the Wassenaar Arrangement multilateral control applied until December 2005 to computers operating at 190,000 MTOPS (millions of theoretical operations per second) or greater. In the December 2005 Wassenaar Arrangement Plenary meeting, the Wassenaar Arrangement adopted the new adjusted peak performance formula for measuring in Weighted TeraFLOPS the performance of computers for export control purposes. HPCs are controlled on the CCL for National Security (NS) reasons. The United States also unilaterally controls computers operating at from 6-190,000 MTOPS for Anti-Terrorism (AT) reasons. Pursuant to Section 1211 of the National Defense Authorization Act for FY 1998 (Pub. L. 105-85), as amended, the President must notify Congress of his intention to adjust the performance level for computers that may be exported or reexported without a license to "Tier 3" countries (see 15 CFR 740.7(d) for a list of Tier 3 countries) 60 days before such new level takes effect.
XP controls vary according to destination, end-user, and end-use, and apply unless a License Exception is available. A license is required for XP reasons for exports and reexports of HPCs, including electronic assemblies and specially designed components, to Computer Tier 3 (“Tier 3”) countries. There is no XP licensing requirement for exports or reexports of computers to countries in “Tier 1”, or for exports or reexports of computers with CTP not exceeding 190,000 millions of theoretical operations per second (MTOPS) to any destination. The countries that comprise Computer Tiers 1 and 3 are listed in section 740.7 of the EAR.
At current control levels, digital computers with composite theoretical performance (CTP) not exceeding 190,000 MTOPS may be exported and reexported No License Required (NLR) except to embargoed and sanctioned destinations (Country Group E:1 – see Supplement No.1 to Part 740 of the EAR). The Department of Commerce continues to authorize exports and reexports of HPCs (i.e., computers exceeding 190,000 MTOPS) to Computer Tier 1 destinations under License Exception CTP (section 740.7 of the EAR).
The Department also requires a license for anti-terrorism (AT) reasons for exports and reexports of computers having a CTP equal to or greater than 6 MTOPS to Computer Tier 4 (“Tier 4”) countries. The Tier 4 countries are Cuba, Iran, Libya, North Korea, Sudan, and Syria, as listed in section 742.12 of the EAR. See Chapters 4 and 5 of this report for additional foreign policy controls that apply to exports of computers to Tier 4 countries.
Recognizing the strategic and proliferation significance of HPCs, the purpose of “XP” controls is to prevent the transfer or diversion of HPCs to end-users that may use the computers in an unauthorized manner detrimental to U.S. foreign policy and national security interests.
1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has determined that computer export controls achieve the intended foreign policy purpose, notwithstanding other factors, including the availability of high performance computer items from other countries; and that the foreign policy purpose cannot solely be achieved through the Wassenaar Arrangement (WA), or otherwise through alternative means. However, the widespread availability of the components, the technical know-how, and the manufacturing means needed to build HPCs, along with the rapid pace with which computer technology continues to evolve, pose significant challenges to U.S. controls’ objectives. U.S. controls for HPCs are intended to permit the government to calibrate control levels and licensing conditions depending on the national security or proliferation risks raised by specific factors such as end-use, end-user, and destination. Furthermore, U.S. computer export control policy seeks to enhance U.S. national security and preserve the technological lead of U.S. industry by ensuring that controls on computers are effective and do not unnecessarily impede legitimate computer exports.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these controls are compatible with U.S. foreign policy objectives, and that the extension of these controls will not have any significant adverse foreign policy consequences. The controls are consistent with the U.S. foreign policy goals of preventing U.S. exports that might contribute to destabilizing military capabilities and preventing the proliferation of weapons of mass destruction (WMD) and missiles. Since HPCs can be used in development of such weapons, U.S. export controls, in concert with those of our allies, permit denial of HPCs to potential proliferators. Extensive U.S. participation in various multilateral export control groups, specifically the WA, demonstrates the U.S. commitment to this objective.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to these evolving controls is not likely to render the controls ineffective, nor will any adverse reaction by other countries be counterproductive to U.S. foreign policy interests. Since many of the countries that have the capacity to produce HPCs share U.S. opposition to the proliferation of WMD, there is a high degree of cooperation between the United States and its partners in multilateral export control regimes on the matter. Technical and policy discussions between U.S. and other key strategic partners indicate an awareness of the need for comprehensive and relevant computer export controls.
4. Economic Impact on U.S. Industry. The Secretary has determined that any adverse effect of these controls on the U.S. economy, including on the competitive position of the United States in the international economy, does not exceed the benefit to U.S. foreign policy objectives. Timely revisions to HPC control thresholds enable U.S. industry to remain competitive in the world market and ensure that U.S. national security interests are maintained by keeping sensitive computers controlled.
In Fiscal Year 2005, the Department of Commerce approved 13 license applications for export of computers listed under Export Control Classification Number (ECCN) 4A003, with a total value of nearly $4.4 million. In Fiscal Year 2005, there were no denials of HPCs to Computer Tier 3, nor were there any denials of other computer items to other destinations based on issues specific to computer policy. In Fiscal Year 2005, the total export of all computers from the United States was worth approximately $46.5 billion. Those computers that require a license for XP reasons represented about 0.01 percent of that total.
5. Effective Enforcement of Controls. The Secretary has determined the U.S. Government has the ability to effectively enforce these controls. HPC controls focus on the most advanced systems, which few countries manufacture and which are not in large supply. Therefore, there are no particular enforcement concerns. However, as technology continues to evolve and begins to outpace the control levels, it will become difficult to enforce controls on items that are manufactured for the mass market.
Industry has repeatedly urged the U.S. Government to take into account improvements in performance and the widespread ability to cluster uncontrolled, low-level computers to achieve high performance computing when adjusting export control policy. The U.S. Government does take these factors into account when reviewing computer controls. The Department of Commerce, through its Information Systems Technical Advisory Committee (ISTAC) and computer-related industry associations, holds ongoing discussions with the private sector on HPCs with regard to their associated export controls.
The Composite Theoretical Performance (CTP) formula, as expressed in MTOPS, has been used to measure computer performance for export control purposes for more than a decade. However, because of remarkable changes in computer architecture and semiconductor technology, CTP is difficult to calculate and has significant shortcomings in the ranking of computers. Past attempts to develop a more appropriate alternative failed to produce any new metric that would be easy to use and could adequately address all contemporary computer architectures.
Since 1999, a number of alternatives to CTP have been suggested. These ranged from dispensing with a “formula” and simply counting the number of processors in a computer to more rigorous metrics such as incorporating memory and/or interconnect bandwidth. All of these encountered definitional problems or required even more vendor proprietary data than is currently necessary for calculations under the current approach. Following an extensive search, technical experts from government and industry have identified a new formula – Adjusted Peak Performance (APP), as measured in units of Weighted TeraFLOPS (WT) – as the most promising replacement methodology in measuring computer performance.
In an October 13, 2005, Federal Register notice (70 FR 59678), the Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign policy-based export controls. Comments were solicited from all six of the Department’s Technical Advisory Committees, as well as from the President’s Export Council Subcommittee on Export Administration. Comments also were solicited from the public via the BIS website. The comment period closed on November 14, 2005, and four comments were received. A detailed review of all comments received can be found in Appendix I.
The United States actively consults with its allies, its Wassenaar Arrangement (WA) partners, and other potential supplier nations to ensure that they understand the basis for computer export controls. The United States and Japan share an especially close relationship, which includes technical and export control policy discussions regarding HPCs. In addition, during this reporting period, the United States conducted bilateral discussions with several key WA member delegations regarding a joint 2005 U.S./Japan proposal to replace the CTP formula (based on MTOPS) with APP (based on WT), for measuring the performance of HPCs for export control purposes. In accordance with the April 2005 Wassenaar Arrangement Experts Group (EG) mandate, the WA established a Technical Working Group (TWG) on Super Computers, which, in September 2005, recommended to the EG that the Wassenaar Arrangement apply the WT metric to computer hardware, software, and technology items controlled by the WA dual-use list. In the December 2005 Wassenaar Arrangement Plenary meeting, the Wassenaar Arrangement participating states agreed to the joint U.S. and Japanese proposal to replace the existing MTOPS computer performance metric with the new Weighted TeraFLOPS (WT) metric.
Government and industry experts from the United States and other HPC-producing countries have determined that APP is a most effective replacement for MTOPS in measuring computer performance. APP corrects, to different degrees, the problems associated with CTP as expressed in MTOPS. It greatly simplifies the calculation for multi-processor systems and does a much better job of differentiating those high performance computers that are capable of computationally intensive operations having national security implications from less capable systems.
The United States will continue to use diplomatic efforts to discourage other nations from acquiring HPCs for military uses that threaten U.S. interests. The United States also works closely with other supplier countries, most of which are members of the Wassenaar Arrangement, to increase the effectiveness of multilateral controls. However, these efforts can only supplement, not replace, the effectiveness of countries’ actual export controls.
End-users of potential national security and proliferation risk can achieve high performance computing capability by clustering together lower-level components that are readily available from non-U.S. sources. This foreign availability of high performance computing – including that from outside of the Wassenaar Arrangement participating states – is a factor in determining the appropriate export control level for HPCs.
This ability to cluster computers together using commercial off-the-shelf components to achieve high performance computing power has become increasingly widespread, and such clustered systems are increasingly suitable alternatives to a pre-configured HPC system. The U.S. Government’s ongoing consultations with its WA partners to develop practicable export controls for modern HPCs reflects the U.S. Government’s efforts to obtain international cooperation in controlling foreign availability of computers of national security significance.