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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release August 3, 2000

FACT SHEET

EXPORT CONTROLS ON COMPUTERS

President Clinton today announced an update of U.S. export controls on computers that will promote our national security, enhance the effectiveness of our export control system, and ease unnecessary regulatory burdens on both government and industry. Today's announcement is the fifth revision to U.S. export control parameters since 1993. This action reflects the Clinton Administration's efforts to ensure effective controls on militarily sensitive technology while taking into account the increased availability of commodity products, such as servers and workstations, of which millions are manufactured and sold worldwide every year.

The Administration's computer export controls are designed to permit the government to calibrate control levels and licensing conditions depending upon the national security or proliferation risk posed at a specific destination, to enhance U.S. national security by ensuring controls on computer exports are effective, and to minimize impediments to legitimate computer exports, which will help preserve the technological lead of the U.S. computer industrial base.

As directed by the President in February 2000, the Administration has again reviewed U.S. computer export controls, taking into account recent advancements in computing technology, and our security, nonproliferation and other national security interests.

This review found that advancements continue in the power and capabilities of widely available computing systems, reflecting the exponential growth in individual microprocessor speeds that has occurred since 1995. The speed of the general purpose microprocessor used in standard personal computers and business applications today has increased by a factor of sixteen since the Administration's 1995 decision took effect. This growth will continue- U.S. companies plan commercial sales of individual "chips" rated over 5000 Million Theoretical Operations Per Second (MTOPS) by late 2000. Moreover, while there are military The term "military" encompasses nuclear, chemical, biological, missile or conventional military end-users/uses. applications across a range of MTOPS levels, the national security agencies have reaffirmed their previous conclusion that there is no definitive line that separates levels of computing power on the basis of their usefulness for military applications. In light of this finding, the advances in basic computing technologies, and the problems inherent in trying to control commodity level items, the Administration has determined that widespread commercial availability of computers with performance capabilities up to 28,000 MTOPS makes that a realistic and enforceable control level for them next six months.

The Revised Controls

The revised controls announced today maintain the four country groups announced in 1995, but amend the countries in Tiers 1 and 2, and control levels for Tiers 2 and 3 as follows:

Tier I (Western Europe, Japan, Canada, Mexico, Australia, New Zealand, Hungary, Poland, the Czech Republic and Brazil): Exports without an individual license are permitted for all computers (i.e. there is no prior government review).

Argentina will be moved from Tier 2 to Tier 1.

Tier II (South and Central America, South Korea, most of ASEAN, Slovenia, most of Africa): Exports without an individual license are permitted up to 33,000 MTOPS with record-keeping and reporting as directed; individual licenses (requiring prior government review) are needed above 33,000 MTOPS.

The Tier 2 individual licensing level will be changed from 33,000 MTOPS to 45,000 MTOPS immediately.
Estonia will be moved from Tier 3 to Tier 2. As required by the National Defense Authorization Act of 1998, this decision requires a 120-day congressional notification before it becomes effective.

Tier III (India, Pakistan, all Middle East/Maghreb, the former Soviet Union, China, Vietnam, Central Europe): Based on President Clinton's February 2000 decision, exports are permitted under license exception up to 12,500 MTOPS and individual licenses are required for exports to military end-uses and end-users above that figure. Exports under license exception are permitted for civil end-users between 12,500 MTOPS and 20,000 MTOPS, with exporter record keeping and reporting as directed. Individual licenses are required for all end-users above 20,000 MTOPS.

The Administration will implement a single level, 28,000 MTOPS, above which individual licenses will be required for all end-uses in Tier 3 countries. The Administration is removing the civilian and military end-user distinction in Tier 3 because the national security agencies have determined that the previous distinction (based on the judgment that there is a difference in the availability and ease of upgrade/assembly between four and eight processor systems) is no longer valid. Agencies now judge that this distinction no longer exists due to improvements in, and worldwide availability of, single processors, boards, chipsets, and operating systems.

The 1998 National Defense Authorization Act (NDAA), P.L. 105-85, imposed a requirement for companies to provide the Commerce Department with prior notice of exports for systems above a specified level to all Tier 3 end-users. U.S. export control agencies have 10 days to inform the company if it must apply for a license. The President's February 2000 decision raised the NDAA notification level to 12,500 MTOPS; that decision will become effective on August 14, 2000 (the end of the 180-day Congressional notification period.)

The NDAA notification level will be raised from 12,500 MTOPS to 28,000 MTOPS. The President will advise the appropriate Congressional committees of his decision to raise the NDAA notification level. By law, Congress has six months to review this decision, after which the change to NDAA notification level will go into effect.
The Administration will continue to review advances in computer technology to determine if additional changes to licensing levels and the NDAA notification level are warranted. The Administration will complete its next review by November 2000.

Tier IV (Iraq, Iran, Libya, North Korea, Cuba, Sudan, and Syria). There are no planned changes for Tier IV, current policies continue to apply (i.e. the United States will maintain a virtual embargo on computer exports).

For all these groups, reexport and retransfer provisions continue to apply. The revised controls will become effective when they are implemented in formal Commerce Department regulations. We will continue to implement the Enhanced Proliferation Control Initiative (EPCI), which provides authority for the government to block exports of computers of any level in cases involving exports to end-uses or end-users of proliferation concern or risks of diversion to proliferation activities. Criminal and civil penalties apply to EPCI violators.

In addition, the Department of Commerce will continue to review its list of published entities of concern as a means of informing exporters of potential proliferation and other security risks. The Department will remind exporters of their duty to check suspicious circumstances and inquire about end-uses and end-users. Exporters are advised to contact the Department of Commerce if they have any concern with the identity or activities of the end-users. The Commerce Department also will work to expand its efforts -- through public seminars and consultations with companies -- to keep industry regularly informed regarding problem end-users and programs of proliferation concern.

Legislative Proposal. The National Defense Authorization Act of 1998 requires a six-month Congressional notice period if the President decides to raise the level that triggers the 10-day pre-export notification requirement for Tier 3 countries, and a four-month notice if the President decides to move a country out of Tier 3. The six-month notice period in particular limits our ability to respond quickly to rapid changes in technology. The Administration has sought to change both waiting periods to one month, and the Congress is considering legislation that would change the six-month notice period to two months. We will continue to work with Congress to make these waiting periods more realistic in light of the pace of technological change.

New Control Methodology. On a longer-term basis, we will work with Congress to adopt an approach that permits us to adjust our export controls in a predictable and timely manner when we are faced with the continuingchallenges of controlling items so widely available that they amount to commodity items, like computers and microprocessors, which are sold by the hundreds of thousands and even millions. The national security agencies are reviewing various approaches.

Multilateral Coordination. The Administration is consulting with other nations in the context of our common controls on high performance computers, and with the members of the Wassenaar Arrangement -- the multilateral successor to COCOM, to ensure that they understand the basis for today's changes in controls. We are committed to working closely with them to adjust multilateral controls to reflect technological advances and collective security concerns. Our controls are consistent with the purposes of the Wassenaar Arrangement -- to deny arms and sensitive dual-use technologies to countries of concern, and to develop mechanisms for information sharing among the partners as a way to harmonize our export control practices and policies.

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