FAS | Government Secrecy | January 2001 News ||| Index | Search | Join FAS


Office of the Press Secretary
January 10, 2001


The President today announced the sixth revision to U.S. export controls on high performance computers (HPC) since 1993. The President's action will promote our national security, enhance the effectiveness of our export control system and ease unnecessary regulatory burdens on both government and industry.

Review of Alternative Control Measures. In 1995, the President announced a new policy for controlling the export of HPCs. The new policy focused on two complementary objectives: (1) limiting the acquisition of computational capabilities by potential adversaries and countries of proliferation concern, and (2) ensuring that U.S. domestic industries supporting computing capabilities important for national security could compete in markets of limited security or proliferation risks.

The new policy controlled hardware and software products and technology. The Administration recognized that the controls would need periodic adjustment to ensure effectiveness, given the ever-increasing availability of commodity products, such as workstations and servers, of which millions are manufactured and sold worldwide every year. Until recently, the 1995 policy has been able to keep pace with this growth by adjusting hardware controls periodically to ensure that controls were only placed on computers that could be effectively controlled. Control levels have been based on a metric of performance that was well suited to the computer architectures of the mid-1990's -- that is, measuring performance in millions of theoretical operations per second (MTOPS) through a fixed formula.

In mid-1999, it became apparent that the growth in widely available computer hardware capabilities was outpacing the ability of export control policy to keep up. President Clinton announced in July 1999 that hardware controls would be adjusted more frequently and that the Administration would seek a more effective way to control the export of computational capabilities important for security and proliferation interests. The review, which began in the fall of 1999 and involved all relevant security and nonproliferation agencies and private sector experts, sought to address the realities of the computer hardware market, including the continuing growth in single processor performance that can be aggregated relatively easily into multiple processor machines, and the advancements in interconnection capabilities that allow end-users to network large clusters of computers. The latter element has, in particular, become the single most important challenge to the ability to effectively control computer hardware.

The Administration has concluded that there are no meaningful or effective control measures for computer hardware that address the technological and marketplace challenges identified during the review. The review found that the ability to control the acquisition of computational capabilities by controlling computer hardware is becoming ineffective and will be increasingly so within a very short time. This conclusion reflects our understanding of the level of hardware capabilities needed to address problems of national security and nonproliferation concern. Nevertheless, the review did find that there is merit in continuing to control national security and proliferation-related software.

Given these conclusions about the inability to effectively control computer hardware, the Administration would prefer to remove most controls on computer hardware exports, including the existing controls on exports to Tier 3 countries. However, it recognizes that the new Administration needs an opportunity to examine such a proposal, and, that as a legal matter, the FY 1998 National Defense Authorization Act (NDAA, P.L. 105-85) requires continued use of MTOPS to control computer exports to Tier 3 and Tier 4 destinations. The President has decided, therefore, based on the advice of national security agencies, to revise the current HPC control policy in the short term consistent with legal requirements, and at the same time to propose a longer term strategy for the consideration of the next Administration.

The Revised Controls. The Administration will change the four tiered country group structure created in 1995 to a three tiered system as follows:

Tier 1 (encompassing Western Europe, Japan, Canada, Mexico, Australia, New Zealand, Hungary, Poland, the Czech Republic and Brazil) and what was formerly Tier 2 (South and Central America, South Korea, ASEAN, Slovenia and most of Africa) will be combined into a single Tier 1. Exports without an individual license will be permitted for all computers (i.e., there is no prior government review) destined for end-users/end-uses in this combined Tier 1. Lithuania will be moved from Tier 3 to the new Tier 1. P.L. 105-85 requires a 120-day congressional notification before this move becomes effective.

Tier 3 (India, Pakistan, all Middle East/Maghreb, the former Soviet Union, China, Vietnam and Central Europe). Based on President Clinton's August 2000 decision, effective February 26, 2001, exports will be permitted under general license up to 28,000 MTOPS and individual licenses are required for exports to all end-uses and end-users above that figure.

The Administration will implement a new level, 85,000 MTOPS, above which individual licenses will be required for all end-users in Tier 3 countries. This new level will become effective at the same time as the new NDAA notification level.

NDAA Notification. P.L. 105-85 imposed a requirement for companies to provide the Commerce Department with prior notice of exports for systems above a certain 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 August 2000 decision raised the NDAA notification level to 28,000 MTOPS; that decision will become effective on February 26, 2001.

The NDAA notification level will be raised from 28,000 MTOPS to 85,000 MTOPS. The President will advise the appropriate Congressional committees of his decision to raise the NDAA notification level. By law, Congress has sixty days to review this decision, after which the change will become effective.

Tier 4 (Iraq, Iran, Libya, North Korea, Cuba, Sudan and Syria). There are no planned changes for Tier 4 countries, current policies continue to apply (i.e., the United States will maintain a virtual embargo on computer hardware and technology exports to these destinations).

For all these tiers, re-export and retransfer provisions continue to apply, and we will continue the policy of individual license review under 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 (e.g., foreign nuclear weapons design laboratories). Criminal and civil penalties apply to EPCI violators.

The revised controls will become effective when they are implemented in formal Commerce Department regulations. In addition, the Commerce Department 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 Commerce Department if they have any concern with the identity or activities of the end-users, and the Department 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.

Enhanced Controls on Critical Applications Software. In addition to these short term changes, the President has directed agencies to undertake a six-month effort to increase the awareness within industry and the government of the already strong export controls that exist on software for national security applications (e.g., codes for the design, development and operation of weapon systems), and to identify and invest in additional measures for the protection of critical national security software codes.

Legislative Proposal. Given the Administration's conclusions about the lack of controllability of computer hardware, the inadequacy of MTOPS as a control measure, and the lack of appropriate substitutes, the President also proposes that Congress repeal the provisions of P.L. 105-85 that require notification of certain proposed computer hardware exports, waiting periods for adjustments in controls and post-shipment visits.

Multilateral Coordination. The Administration has consulted with other nations, including members of the Wassenaar Arrangement, 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 remain 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. The United States will also continue to implement reporting requirements on computer exports as appropriate to fulfill U.S. obligations under the Wassenaar Arrangement.

Source: White House

FAS | Government Secrecy | January 2001 News ||| Index | Search | Join FAS