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International Business-Government Counsellors, Inc.
818 Connecticut Avenue, N.W., 12th Floor, Washington, D.C. 20006
NATIONAL SECURITY
AND
FOREIGN POLICY EXPORT CONTROLS
PRESENTED TO
NATIONAL ACADEMY OF SCIENCES
PREPARED BY
INTERNATIONAL BUSINESS-GOVERNMENT COUNSELLORS, INC. (IBC)
AUGUST 2, 1990
Telephone (202) 872-8181 · Fax: (202) 872-8696 · Telex: 440511 IBGC UI
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I. THE DISTINCTION
A. Definitions and Purposes
The United States regulates exports both to protect the national
security of the United States and its allies and to promote US
foreign policy objectives. These two types of export controls --
"national security" controls and "foreign policy" controls -- are
treated in law, regulation and discourse as quite distinct.
National security Controls are authorized to prevent the export of
products or technology that could significantly contribute to the
military potential of other countries which would be adverse to US
security. In practice, these national security "controlled"
countries have been limited to communist countries.
Foreign Policy Controls are controls justified and carried out for
the purpose of more general international relations goals, usually
to express displeasure with the policies or actions of other
countries which the US finds abhorrent.
The purpose of this paper is to consider the validity of the
distinction between controls based on national security concerns
and those based on foreign policy concerns. Have there been
occasions where export controls have been used inappropriately as
instruments of foreign policy? Can export controls function as
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effective instruments of unilateral foreign policy control without
affecting multilateral national security objectives?
B Legislative and Regulatory Foundations
.
Ever since the enactment of the Export Control Act of 1949, US law
has authorized export controls for three basic reasons: security,
foreign policy, and short supply. The 1949 Act, amended and
extended from time to time, remained in effect for 20 years.
Subsequent Acts of 1969 and 1979 reaffirmed these three 1949
objectives; but the 1979 Act added many conditions limiting the
authority to impose foreign policy controls. These conditions have
not been substantially revised since 1979.
National Security Controls
a. History - Post World War II
National security controls in the post World War II period
responded to concerns about the military threat that the Soviet
Union and Eastern Europe posed. The US placed controls on goods
that could potentially aid the Soviet Union -- either directly or
indirectly -- in its military quests around the world. The Export
Control Act of 1949 gave the President broad authority unilaterally
to control "any articles, materials, or supplies, including
technical date I' to achieve the objectives of the Act. Under this
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Act virtually all trade with communist countries was restricted.
A separate Act, the Mutual Defense Assistance Control Act of 1951,
known as the Battle Act, authorized multilateral controls and
threatened the cut off of aid to countries not cooperating. The
US recognized that controls designed to protect the US militarily
in the postwar period would not be effective if the commodities
were controlled only by the US and were freely available from other
sources. From discussions with allies in the post war period, the
Coordinating Committee (COCOM) was set up in 1949 to carry out the
embargo policy developed by its members.
In the 1960s, national policies began to shift, so that national
security controls became focused on those goods and commodities
which could contribute to the military potential of another country
to the detriment of US security. A recognition emerged that
Communist countries varied in the degree to which they represented
a threat to US security and that noncommunist nations could also
constitute a threat. The Export Administration Amendments of 1977
directed US policy on national security controls to be developed
not only with respect to whether a country is communist or
noncommunist, but also in its present and potential relationship
with the US and its ability and willingness to control the reexport
of US exports. However, no noncommunist country has ever been
designated as a controlled country for security export control
purposes.
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In 1979, the Battle Act was repealed, and the 1979 Export
Administration Act picked up the authority for multilateral
controls. COCOA today acts as an informal, voluntary, non-treaty
organization. Working through its members' governments, COCOM
controls the exports by its members of strategic goods and
technologies to controlled or proscribed countries.
The 1979 Act called for the development of a "Militarily Critical
Technologies List" (MCTL) to further focus on controls for military
security. The MCTL lists in detail development, production, and
utilization technologies which the Department of Defense (DOD) has
determined to be vital to the military capabilities of the US and
which could be valuable to potential adversaries. The development
of this list was mandated by Congress in 1979.
b. Export Administration Act
Exports with national security implications are currently regulated
by the Export Administration Act of 1979, (EAA) as reauthorized and
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amended in 1985. Sec. 3(2) authorizes the use of such controls,
stating that the US seeks:
"... to restrict the export of goods and
-technology which would make a significant
contribution to the military potential of any
other country or combination of countries
which would prove detrimental to the national
security of the United States;..'
5
National security controls are defined by identification of
threatening countries and of products which could aid these
countries.
The President is required under Section 5(b) of the BAA of 1979 to
establish a list of countries controlled for national security
purposes, and he has discretionary authority to add or remove
countries. This decision must be based on several factors,
including: (1) the extent to which that country's policies are
adverse to the national security interests of the US; (2) its
communist or noncommunist status; (3) its present and potential
bilateral relationship with the US and its present and potential
bilateral relationship with countries friendly or hostile to the
US; (4) its nuclear weapons capability and the country's compliance
record with respect to multilateral nuclear weapons agreements to
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which the US is a party; and (5) other factors the President may
deem appropriate.
Today, national security controls are directed at the People's
Republic of China, the USSR and Eastern Europe, and the embargoed
countries of North Korea, Vietnam, Cambodia, and Cuba.
Section 5 of the Act allows the President to place controls "on any
goods or technology subject to the jurisdiction of the United
States or exported by any person subject to the jurisdiction of the
United States". The Act also provides that such controls may not
be placed on exports to COCOM or 5(k)1 countries with the exception
of supercomputers, goods or technologies for sensitive nuclear
uses, devices for surreptitious interception of wire or oral
communications, and goods or technology whose end user is specified
by regulation.
c. Export Administration Regulations (EAR)
The regulations implementing national security controls are found
in the Export Administration Regulations (EAR) published annually
by the Department of Commerce. The EAR lists commodities that are
controlled to specified destinations for national security reasons
~ 5(k) countries are those countries with which the US has
concluded an agreement with on export control regimes. 5tk)
countries today include Switzerland, Austria, Sweden, Singapore and
Finland. (See Amendment ] )
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and also provides guidelines on the likelihood of obtaining a
license for products to controlled countries. Guidance includes
differentiation between China and other proscribed countries.
2. Foreign Policy Controls
a. History
The United States has historically regarded denial of trade with
communist countries through export controls as a fundamental tool
of its Cold War policy. Foreign policy controls originated in the
Export Control Act of 1949. The aim was to channel exports to
countries where the foreign policy interests of the US would be
best served in the Post War period. Subsequent acts reaffirmed
this policy but with an emphasis toward controlling exports to
certain noncommunist and Communist countries to articulate further
US foreign policy and to assist the US in fulfilling international
responsibilities not necessarily directly related to the East-West
power struggle. Under the authorization of the Export
Administration Act of 1969, restrictions were placed on the exports
of commodities and technical data for use in the development or
testing of nuclear weapons, explosive devices, and maritime nuclear
propulsion projects.
The 1979 Act continued controls for foreign policy reasons but
added criteria and a requirement for annual renewal. The Export
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Administration Amendments Act of 1985 continued foreign policy
controls but curtailed the authority of the President to impose new
ones, particularly to authorize embargoes on agricultural exports.
These limitations were added primarily in response to the grain
embargo of the Carter Administration and President Reagan's
pipeline sanctions. The Amendments Act added requirements for
consultations with industry and Congress prior to the imposition
of foreign policy controls, because industry and Congress were
concerned that the US was "shooting itself in the foot" by cutting
off exports for unattainable foreign policy goals while other
trading nations supplied former US markets. Foreign availability
of similar products was now to be considered in decisions to
extend, expand, or impose export controls. Also under this Act,
Presidential discretion was limited -- but not eliminated -- on new
foreign policy controls imposed on exports subject to existing
sales contracts.
b. Export Administration Act {EAA)
Sections 3 and 6 of the Export Administration Act of 1979, as
amended, is the authority for todays foreign policy controls.
The Act allows controls, under Section 3, "... to restrict the
export of goods and technology where necessary to further
significantly the foreign policy of the United States or to fulfill
its declared international obligations...' Section 3 also provides
for controls to discourage terrorist activities.
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9
Section 6 allows controls on any product to further the foreign
policy of the US or support its obligations internationally.
Controls are maintained to promote US foreign policy interests
abroad. Controls are directed at both products and individual
countries relating to human rights, anti-terrorism, regional
stability, and chemical and biological warfare issues. Under the
regulations, specific countries are targeted for such controls
including Libya, Cambodia, Cuba, North Korea, Vietnam, and South
Africa. Controls are also placed on certain commodities and
technical data in order to limit the proliferation of missiles
capable of delivering nuclear weapons, to increase regional
stability, and to further the US nuclear non-proliferation policy.
Unlike national security controls, multilateral cooperation is not
required for implementation of foreign policy controls. However,
there is some cooperation for some of the nuclear, missile and
chemical or biological warfare (CBW) controls.
Mixed Purpose Controls
a. Munitions Controls
The US controls, in the interests of both national defense and
foreign policy, arms exports and imports, ammunition, and
implements of war. The current authority for regulating commercial
arms sales is found in section 38 of the Arms Export Control Act
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30
missile technology, and chemical and biological warfare controls,
which are aimed at many noncommunist countries, are called "foreign
policy"; but they have a security objective and are intended to be
effective in stopping exports, i.e., not just to be symbolic.
Nuclear non-proliferation controls are unique in being labelled
both security and foreign policy under the Export Administration
Act.
4. Duration
There is also a duration distinction. Security controls have
continued decade after decade whereas many foreign policy controls
have been of relatively short duration (thus qualifying for George
Shuts label of 'light-switch diplomacy". However, the foreign
policy embargoes of North Korea and Cuba have been in effect for
40 years and 30 years respectively.
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31
C. Inappropriate Use of Security Controls as Instruments of
Foreign Policy
1. Before 1979
Before enactment of the Export Administration Act of 1979, security
controls and foreig~policy controls were not separately identified
on the control list. Items not controlled for security purposes
required a validated license for export to noncontrolled countries
to deter diversion, as is still the case today. However, before
1979, a foreign policy control could be piggybacked onto the
security controls to noncontrolled countries without public notice.
In other words, an export to a noncommunist country which an
exporter had reason to believe would be approved in the absence of
evidence of risk of diversion could be denied because of a new,
unannounced foreign policy concern regarding exports to that
noncommunist country for which there was no perceived risk of
· ~
diversion.
The Congress considered this to be an inappropriate use of security
controls for foreign policy purposes. Partly for this reason, the
1979 Act required that foreign policy controls be separately
identified on the control list and that they be rejustified each
year. The House bill would even have provided for a Congressional
veto of any new foreign policy control. The Conference Report
stated that, in agreeing to eliminate this House provision,
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the conferees emphasized their expectation that the
executive branch would consult fully with congress prior
to employing any such controls, and agreed to give
further consideration to a Congressional veto mechanism
in subsequent legislation in the event prior consultation
on foreign policy controls proved inadequate under the
provisions of this act.
32
Congressional ire in 1979 concerning foreign policy controls was
prompted primarily by 1978 imposition of broad controls on exports
to police and military entities in South Africa and on exports of
oil and gas exploration and production equipment and technology to
the Soviet Union which, for the most part, did not overlap security
controls. But it was also prompted in part by 1978 piggybacking
of security controls on exports to noncommunist countries designed
to discourage human rights abuses. The 1979 EAA (and section 502B
of the Foreign Assistance Act) limited the EAA-controlled items
subject to denial for human rights purposes to crime control
equipment.
Anti-terrorism controls in 1978 also piggybacked security controls.
However, in this case, the Congress was stimulating controls rather
than trying to restrain them.
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2. After 1979
-
33
Despite the statutory restraints on foreign policy controls enacted
in 1979, immediately after the passage of the EAA of 1979 more
foreign policy controls were imposed than had been for decades
before. This was occasioned principally by the Soviet invasion of
Afghanistan and Iranian hostage-taking of American Embassy
personnel. One of the actions taken in response to Afghanistan was
construed by some to be an inappropriate use of security controls
for foreign policy purposes.
The United States was unsuccessful in persuading its Allies to join
it in embargoing grain, fertilizer, a steel mill, an aluminum
smelter, or exports relating to the Moscow Olympics in 1980. The
only success story was the ''no exceptions" policy.
"No exceptions" was a clear example of a foreign policy use of a
security control. Its continuation after the Soviet troop
withdrawal was certainly regarded as inappropriate; but its
imposition in 1980 was not considered sufficiently inappropriate
to give rise to criticism at that time.
The United States imposed a unilateral policy of no exceptions to
Poland after the imposition of martial law in 1981 and thought that
Allied acquiescence had been obtained through bilateral
discussions. However, the Allies were critical of US objections
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34
in COCOM to Polish cases which they regarded as unjustified by
COCOM strategic criteria.
D. Effect of Unilateral Foreign Policy Controls on the
Multilateral Security Control Framework
During the entire history of COCOM, US unilateral controls which
other COCOM members considered to be unjustified under the COCOM
strategic criteria have created problems in COCOM. Disruption in
COCOM contributes to a weakening of the multilateral security
control framework which COCOM supports. However, not all
unilateral foreign policy controls have adversely affected
multilateral security controls.
I. Exceptions
At COCOM ' s inception, agreement was reached to control, without
exceptions, not only items contributing to military potential but
also items contributing to economic potential. However, soon
thereafter, the Allies refused to engage in what they regarded as
economic warfare. US insistence on continued control of such items
was regarded as a unilateral foreign policy matter rather than a
multilateral security matter. A compromise was reached whereby
many of the questionable items remained on the list. However, the
United States agreement to approve exceptions has continued to the
present, even though items contributing to economic, rather than
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35
military, potential were largely removed from the COCOM list in the
l950s. Thus unilateral US controls led directly to a considerable
weakening of the practical effect of the COCOM-agreed control list,
and subsequently a weakening of multilateral security efforts.
2. China Differential
From 1950 to 1957 COCON controlled many more items to China than
to the Soviet Union. From 1953, after the Korean armistice, to
1957, the United States vetoed proposals by other COCOM members to
remove this differential. In 1957, the United Kingdom announced
unilaterally that it would no longer control exports to China for
items which were not on the control list for the Soviet Union.
Other COCOM members immediately followed the British lead. Even
the United States had to recognize the demise of the COCOM China
differential, although the United States continued to maintain its
unilateral total embargo on exports to China for 15 more years,
until 1972.
Thus, US unilateral controls forced a weakening of the COCOM rule
of unanimity. Indeed, the Europeans in 1990 might cite the British
action in 1957 as a precedent for overcoming US resistance to
removing a reverse China differential (they want to delete items
on the list for control to the Soviet Union which are not now
controlled to China).
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3. (;as Pipeline
36
In 1981 and 1982 the United States imposed extraterritorial foreign
policy controls on equipment for compressor stations for a natural
gas pipeline from the Soviet Union to Western Europe in reaction
to the imposition of martial law in Poland. Ironically, the few
affected security items qualified as exceptions to be no-exceptions
policy under the rubric of facilitating access to Soviet supplies.
Firms in the United Kingdom, Germany, France, and Italy, with the
encouragement of their governments, violated the US controls. The
United States thereupon denied future exports to the offending
firms. Even though, in November 1982, the United States removed
the controls and discontinued the sanctions against its Allies,
this experience detracted from the atmosphere of voluntary
cooperation on which an effective COCOM -- and an effective
security regime -- depends.
4. Reexport Controls
In the 1960's, the United States assured the United Kingdom that
it would not use reexport controls to override agreements reached
in COCOM that various products could be shipped at national
discretion. However, the United States did not honor that
commitment. As a result of this history plus the pipeline
experience, 25 years later, in 1985, when the United States wanted
to expedite China cases then backed up in COCOM, other COCOM
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5. Adverse Effects of Unilateral Controls Not Inevitable
37
members insisted that, as a condition for agreeing on national
discretion to China, the United States must formally discontinue
controls on reexport of such items to China. This the United
States did. The result is that US controls are more liberal on
reexports-to China than on reexports to friendly countries in the
West.
Each COCOM member controls at least a few items unilaterally. Such
unilateral controls have not created any problems for COCOM.
Indeed, some unilateral US controls have not adversely affected
COCOM (such as human rights controls on crime control equipment).
But the extraterritorial reach of other US controls has invariably
caused problems as have US efforts to use COCOM to further
obj ectives going beyond agreed COCOM strategic criteria.
6. Is the distinction valid today?
Some might argue that political and military changes in the Soviet
Union make it less of a threat to US security than aberrant states
in the third world, such as Libya or Iraq, especially if such
states were to achieve a nuclear weapons and a nuclear weapon
delivery system capability or a chemical or biological warfare
(CBW) capability. In this connection, some multilateral
cooperation already exists concerning nuclear' missile J and CBW
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38
exports, so that US controls are not completely unilateral and
therefore are not merely symbolic.
If nuclear, missile, and CBW controls to the third world are
considered to be at least as important to US security as COCOM
controls to communist countries and if the former are, or could
become, at least as effective as the latter, then it would make no
sense to continue to give a higher priority to measures to prevent
foreign availability to communist countries than to third world
countries. Indeed, it would then make sense to include communist
countries in cooperative programs to deny nuclear, missile and CBW
items to the third world.
Thus the distinction between foreign policy controls and national
security controls continues to blur. The security controls
directed at Eastern Europe and the Soviet Union begin to take a
back seat to foreign policy controls directed at those countries
who pose a security threat to the US through terrorism or CBW. The
previous perception that national security controls were more
effective than foreign policy becomes irrelevant as the balance in
Eastern Europe shifts. The distinctions and definitions of the
past forty years are in need of reevaluation.
OCR for page 171
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the conferees emphasized their expectation that the
executive branch would consult fully with congress prior
to employing any such controls, and agreed to give
further consideration to a Congressional veto mechanism
in subsequent legislation in the event prior consultation
on foreign policy controls proved inadequate under the
provisions of this act.
32
Congressional ire in 1979 concerning foreign policy controls was
prompted primarily by 1978 imposition of broad controls on exports
to police and military entities in South Africa and on exports of
oil and gas exploration and production equipment and technology to
the Soviet Union which, for the most part, did not overlap security
controls. But it was also prompted in part by 1978 piggybacking
of security controls on exports to noncommunist countries designed
to discourage human rights abuses. The 1979 EAA (and section 502B
of the Foreign Assistance Act) limited the EAA-controlled items
subject to denial for human rights purposes to crime control
equipment.
Anti-terrorism controls in 1978 also piggybacked security controls.
However, in this case, the Congress was stimulating controls rather
than trying to restrain them.
Representative terms from entire chapter:
policy controls
