THE WHITE HOUSE

Office of the Press Secretary

                  TEXT OF A LETTER FROM THE PRESIDENT
                TO THE CHAIRMEN OF THE HOUSE AND SENATE
                COMMITTEES ON ARMED SERVICES, THE SENATE
           COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,
           AND THE HOUSE COMMITTEE ON INTERNATIONAL RELATIONS

July 23, 1999

Dear Mr. Chairman:

In accordance with the provisions of section 1211(d) of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85) (the "Act"), I hereby notify you of my decision to establish a new level for the notification procedure for digital computers set forth in section 1211(a) of the Act. The new level will be 6,500 millions of theoretical operations per second (MTOPS). I have taken this action based on the recommendation of the Departments of Defense, Commerce, State, and Energy. The attached report provides the rationale supporting this decision and fulfills the requirements of section 1211(d) of the Act.

Section 1211(d) provides that any adjustment to the control level described in section 1211(a) cannot take effect until 180 days after receipt of this report by the Congress. Section 1211(e) provides that any deletion of a country from the Tier 3 group cannot take effect until 120 days after the Congress is notified. Given the rapid pace of technological change in the information technology industry, these time periods are too lengthy. I hope that we can work together to reduce both notification periods to 30 days. Such changes will permit implementation of my current decision and future changes in a more timely fashion.

I have directed the Secretary of Commerce to adjust the level at which an individual license is required for computer exports to Tier 3 countries. For sales to military entities, the level will be raised from 2,000 MTOPS to 6,500 MTOPS. For sales to civilian end users, the new level will be raised from 7,000 MTOPS to 12,300 MTOPS. The Secretaries of Commerce and Defense will review these levels, as well as the level described in section 1211(a), in 6 months to determine whether further adjustments will be necessary at that time. They will conduct additional such reviews at regular 6-month periods thereafter.

Such action will complement other actions that I am taking with respect to the export and reexport of computers. I have directed the Secretary of Commerce to adjust the level at which an individual license is required for computer exports to Tier 2 countries from 10,000 MTOPS to 20,000 MTOPS. I have also asked the Secretaries of Commerce and Defense to assess whether further adjustments to 32,000-36,000 MTOPS will be required in 6 months. They will conduct additional reviews at 6-month intervals thereafter. Additionally, I have directed the Secretary of Commerce to move the Czech Republic, Hungary, Poland, and Brazil from Tier 2 to Tier 1. It is likely that additional countries will be moved from Tier 2 to Tier 1 in the coming months.

All these adjustments will take place immediately, with the exception of the change to the individual licensing level for military end users in Tier 3, which will coincide with the change for the notification provisions of section 1211(a) of the Act. Both these changes will become effective at the end of the 180-day notification period, unless the Congress provides for a shorter period.

I also want to inform you of my support for section 1407(c) of S. 1059, or similar legislative language that would permit me to adjust the level of computer exports above which the Department of Commerce is required to perform post-shipment verifications in Tier 3 countries. Failure to adjust this level will result in the expenditure of scarce enforcement resources for questionable benefits to our shared national security concerns.

I look forward to working cooperatively with the Congress on these issues.

Sincerely,

WILLIAM J. CLINTON

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