Where Industry and Security Intersect
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OPEN SESSION:
1. The ISTAC meeting opened with introduction and solicitation of comments from the public. There were no comments from the public.
2. Bernie Kritzer provided a summary of BIS activities. Key points were:
-Personnel changes, including the nomination of Chris Padilla as Assistant Secretary of Commerce for Export Administration and Catherine (Randy) Pratt as the Director for the Information Technology Controls Division.
-Wassenaar proposals for possible consideration in 2007 should be submitted to BIS by August 31, 2006 . Proposals should be as complete as possible, but need not be in the exact final version.
-In 2007, there will be a Wassenaar Arrangement (WA) Assessment, in addition to the annual list review. The WA has agreed to conduct a regime assessment every seven year.
-A summary of BIS performance and licensing statistics was provided. Notable was the observation that licensing activity is up 20-25% this year over the same period in the last fiscal year, and that this increased activity is evenly distributed across all ECCNs.
-Regarding the withdrawal of the proposed deemed export rule, Bernie commented that comments from the public contained many focused arguments from both the legal and regulatory standpoints and also contained many specific practical examples describing the impact of the proposed regulation from both commercial and administrative standpoints.
-Regarding the China rule, an argument was made regarding foreign availability: it seems pointless to control a technology to a destination when the country has indigenous production capability for the controlled technology. Therefore, BIS would entertain the foreign availability argument in revising the list of items subject to AT control (new Supplement No. 2 to Part 744 – List of items Susject to the Military End-Use Lilcense Requirement of §744.21). In submitting specific foreign availability examples, , Bernie suggested that arguments for Foreign Availability should contain as much documentary evidence as possible of such things as: evidence that the foreign products are or are not of US-origin technology; and, the specs and performance of the foreign products relative to US-origin products.
3. Mike Turner, Director of the Office of Export Enforcement, BIS made a presentation on export enforcement. Key points made were:
-OEE has a role in deemed export enforcement, and will have a role in enforcement of the draft China military regulation when/if is enacted.
-OEE has a program to review higher-risk deemed export to ensure compliance with license conditions and to ensure that a Technology Transfer Control Plan is in place.
-For FY05 to-date, there have been 31 criminal convictions and 69 administrative cases.
-For the Information Technology sector, there is relatively little enforcement action at the criminal or administrative level. Rather, OEE typically is issuing warning letters, particularly for exporters who have failed to obtain the necessary one-time reviews for encryption products.
-The overall level of non-compliance in the Information Technology sector is much lower than in other technology sectors (i.e., for other CCL categories).
-The principal focus of OEE is diversion to WMD proliferation activities, diversion to terrorism, and diversion to unauthorized military end use.
-Mike recommends that interested members of the exporting community should read the Major Cases List, http://www.bis.doc.gov/complianceandenforcement/Majorcaselist.pdf
-With the renewal of the Patriot Act, there are upcoming changes to the fines and penalties for EAR violations, and there will be corresponding changes to how BIS will count the number of individual violations within a transaction. These changes will be published in a Federal Register notice.
-There was a question from the audience as to whether there is a process whereby an exporter may ask BIS for their advice about a specific end user. Bernie suggested that the exporter speak to him, Mike Turner or Steve Goldman, and to perhaps seek an advisory opinion. An audience member suggested speaking to the OEE office in San Jose , saying that in his experience that office has been very helpful and cooperative in giving informal opinions on specific end users.
4. Scott Kramer of SEMATECH made a presentation on productivity in the semiconductor manufacturing process, specifically in reference to the question of the technical vs the economic role of cluster tools. The technology measure of productivity is transistors/area, but the economic measure is cost/area. Going forwards in semiconductor manufacturing, productivity is a major issue for fabs, and intense effort is being made to improve productivity. Topics under evaluation for improved productivity include fab layout, sequencing and inventory management, and wafer size.
Specific to cluster tools, the three motivators are productivity, throughput, and efficiency. It was noted that the handling and sequencing for operation of cluster tools can be complex.
The ISTAC made no decision regarding further action on a possible Wassenaar proposal for cluster tools. Further action on this will be led by Jeff Rogers of Applied Materials and Maggie Hershey of SEMI. In connection with that Brian Baker made some suggestions to Jeff and Maggie.
5. John Stratton of Agilent made a presentation on Synthetic Instruments. The motivation for Synthetic Instruments is that DoD spends a large amount of money to maintain one-of-a-kind test systems and automated test systems. The goal of Synthetic Instruments is to align COTS lifecycles and military system lifecycles through software. The instrument architecture is changed to focus on the instrument subsystems (downconverter and digitizer on that analysis side, and arbitrary waveform generator and upconverter on the source side). The subsystems are modular and standards-based for interchangeability, and are linked together by software to provide the necessary test functionality.
6. Jon Huppenthal of SRC Computers made a presentation on reconfigurable processor architecture based on FPGAs. The value of the processor architecture is that is easily reconfigurable using high-level languages. It is 2-3 orders of magnitude more powerful than typical desktop workstations. And, it is about 1% of the size of a workstation cluster having comparable performance. It is especially useful for applications that are parallelizable. Key attributes of the SRC product are high-speed data movement, unique data processing and ease of programming through a software development environment.
In a subsequent meeting, the ISTAC will hold a discussion to explore the export control implications of computers having this reconfigurable architecture.
7. Roz Thompsen explained a concern with the draft China military regulation, specifically with regard to ECCN 5D992. This ECCN is one of the 47 that would be controlled by this proposed regulation. Other ECCNs that would be controlled are 3D991 and 5D991. Roz explained that software that would otherwise be 3D991/5D991 will become 5D002/5D992 if cryptographic functionality is added. But, the draft regulation exempts certain 5D992 software, and the likely situation is that 3D991/5D991 software that becomes 5D992 would then be exempted. Thus, there is the peculiar and probably unintended situation that software having principal functionality of 3D991/5D991, which is subject to the proposed regulation, is released by the addition of non-substantive cryptographic functionality. This point was discussed in further detail in the closed session.
8. Jonathan Wise of Agilent presented two possible WA proposals, relaxation of instrumentation amplifiers in 3A1b4c and Cat 5 Part 1 cleanup. The goal of the 3A1b4c proposal is to provide some relaxation for instrumentation amplifiers up to 43.5 GHz, to align with the fact that all other microwave instruments have are uncontrolled in some form up to 43.5 GHz. The goal of the Cat 5 Part 1 cleanup is to remove ambiguity that arises by references to “Cat 5 Part 1” within Cat 5 Part 1 to define the scope of control. Brian Baker suggested some additional information that would strengthen the 3A1b4c proposal, and also suggested that the Cat 5 Part 1 cleanup be written as a white paper rather than as a proposal. Jonathan agreed to these suggestions.
The meeting was then adjourned.