Export Control Blog

These OFAC risk matrices (pdf) and audit criteria (pdf) are primarily geared for banks, but that doesn't mean that there aren't lessons to be learned by the rest of us about what OFAC considers risky and what sort of internal controls it considers effective.

Bloomberg News is reporting the most details and context yet on the Bush Administration's plans to tighten export controls on China, a topic we've discussed before here at ECB:

The U.S. Commerce Department plans to issue new rules by year's end imposing stricter limits on the export of civilian technology that can be exploited for military use, such as aircraft parts, computer chips and machine tools, said Peter Lichtenbaum, the department's acting undersecretary for industry and security. The rules would expand the number of items that must be licensed by the government before being sold to China....

The new export rules would expand restrictions on so-called sensitive items, Lichtenbaum said. Items include semiconductors made by Intel; chip-making equipment sold by Advanced Micro Devices Inc.; airplanes made by Boeing; aircraft parts from Honeywell International Inc.; and machine tools made by companies such as Gleason Corp., according to Commerce Department documents....

The Commerce Department is already denying applications to export high-end composite materials used for aircraft if those items "could be diverted to military end-users,'' Lichtenbaum told the congressionally appointed U.S.-China Economic and Security Review Commission on June 23. The new rules will likely have the most impact on aircraft and avionics, Reinsch said.

Read the whole thing.  This is shaping up to be the export control battle of the year.

Ordinarily, any email with the word "pump" in the subject line ends up in my junk mail folder, but fortunately I took a moment to open the message I received yesterday afternoon from Washington attorney Eric McClafferty.  I say fortunately because Eric pointed me to a thorough summary of US export controls on chemicals and related equipment he recently wrote for Flow Control magazine, a publication you probably won't find on your neighborhood newsstand.

From a disconcerting, if not really surprising report (pdf) by the Department of Homeland Security's inspector general:

CBP does not consistently enforce federal export licensing laws and regulations at all U.S. ports of exit. CBP’s ability to effectively and efficiently control exports licensed by State and Commerce is limited by inadequate information and staff resources.

CBP does not consistently document the location of State Licenses in its Automated Export System. Exporters physically lodge State licenses with CBP at the port where shipments are expected primarily to occur; however, exports may be made through any authorized U.S. port of exit. Such license information is necessary to determine whether an individual shipment is being made in compliance with the associated license conditions. When a port receives notification of an export to be shipped against a license lodged at another port, enforcement personnel must locate the port of lodging and verify the authenticity of the export information to the original license. However, CBP is not required to document the location of State licenses in the Automated Export System, which makes it difficult for enforcement personnel at the port of shipping to readily obtain license information. As a result, CBP’s ability to enforce State licensed exports in a timely and efficient manner is reduced.

Also, CBP needs to improve its enforcement of license requirements for shipments that have been processed against Commerce licenses.

We recommended that the Commissioner of CBP evaluate the Outbound program, including information requirements, staffing needs, and consistency of enforcement practices, and make adjustments necessary to ensure that all of CBP’s enforcement responsibilities are accomplished.

The DHS IG, whose report is obviously heavily abridged for public consumption, focused his attention on biological and chemical controls, but there is every reason to think that the passage quoted above applies to all exports licensed by the State Department's Directorate of Defense Trade Controls.

Inventor of Pretty Good Privacy and hardened veteran of the 90s crypto wars, Phil Zimmerman, is back with some new ideas for encrypting VOIP communications, reports Wired.  That sound you hear in the distance is the faint groaning of NSA.

Nearly everything you might want to know about the Export Administration Act from the taxpayer-funded Congressional Research Service via the Center for Democracy & Technology's immensely valuable (and unfortunately necessary) Open CRS Project.  The EAA, which is currently in lapse, gives the president the power to implement export controls and lays down the basic mechanisms for such controls.

Anne Applebaum, one of the smartest international affairs writers around, takes direct aim at some big US technology exporters in last week's Washington Post column, specifically shaming Cisco, Microsoft, and Yahoo for their collaboration with Chinese Government's censorship efforts. Quoting a Cisco spokesman defending his employer with the always dubious justification "we're not doing anything illegal", Applebaum continues:

If this isn't illegal, maybe it should be. After the Tiananmen Square massacre in 1989, the United States passed a law prohibiting U.S. firms from selling "crime control and detection" equipment to the Chinese. But in 1989, the definition of police equipment ran to truncheons, handcuffs and riot gear. Has it been updated? We may soon find out: A few days ago, Rep. Dan Burton of the House Foreign Relations Committee wrote a letter to the Commerce Department asking exactly that. In any case, it's time to have this debate again. There could be other solutions -- such as flooding the Chinese Internet with filter-breaking technology.

Beyond legality, of course, there's morality. And here the judgment of history will prove more important than whatever Congress does or does not do today. Sixty years after the end of World War II, IBM is still battling lawsuits from plaintiffs who accuse the company of providing the "enabling technologies" that facilitated the Holocaust. Sixty years from now, will Microsoft, Cisco and Yahoo be doing the same?

I cannot locate a copy of Burton's letter (if you do, let me know), but if it is as Applebaum describes then the answer back from Commerce is likely to be "Yes, we have updated the list of crime control and detection equipment over the last 16 years, but not to include the kind of technology you mention."

The current definition of crime control and detection equipment, as interpreted by the Commerce Department's Bureau of Industry and Security, does not encompass the sort of Cisco technology Applebaum describes. However, the definition does go beyond the "truncheons, handcuffs, and riot gear" she lists, to include not just thumbscrews, torture implements, and fingerprinting supplies, but somewhat more advanced technologies like voice analysis instruments, polygraphs, fingerprint analysis computers and software, infrared viewers, and mobile crime scene labs.  Congress never explicitly identified any of these items as requiring control in its post-Tiananmen reaction or the Export Administration Act (pdf, p.2).  The Secretary of Commerce decides which specific things should be put on the control list to comply with the broad mandate set down by Congress.

So Cisco filtering technology is not controlled for export at the moment, but there is nothing to stop the Bush Administration from proposing to prohibit its export to China tomorrow, should it choose to do so (except for the platoon of Cisco and other tech industry lobbyists who will descend on Capitol Hill at the first sign of such a move).

The situation is more ambiguous when it comes to Microsoft and Yahoo, who Applebaum criticizes for acquiescing to Chinese Internet filtering demands on their Chinese-language blogging and search sites, respectively.  Microsoft and Yahoo might argue that, unlike Cisco, there is no export here at all, just a consumer web service provided on a free and anonymous basis to anyone who can understand Chinese.  While a legalistic approach might shield these companies from regulation under the EAA, it certainly will not insulate them from some well-deserved criticism.

Secretary of State Rice on trade with Syria last Friday:

...[G]ood neighbors don’t close their borders to their neighbors and it is a very serious situation on the Lebanese border where Lebanese trade is being strangled. The best outcome would be for there to be free flow of commerce between Syria and Lebanon and we would hope that that would be restored very, very soon.

Her boss on May 11, 2003 in his Executive Order 13338, reflecting a rather different approach to trade with Syria:

[T]he Secretary of Commerce shall not permit the exportation or reexportation to Syria of any item...with the exception of food and medicine [and] [n]o other agency of the United States Government shall permit the exportation or reexportation to Syria of any product of the United States...

So, to recap the administration's position -- Lebanese exports to Syria very, very good.  American exports to Syria very, very bad.

The excellent Daily Star of Beirut has some details on just what's happening on the Lebanon-Syria border.

This could be significant in light of the ongoing EU3 negotiations with Iran over its nuclear program:

French President Jacques Chirac has told Haaretz that if European negotiations with Iran fail to eliminate the threat of nuclear proliferation, then the issue will have to be moved to the UN Security Council.

Chirac's statements regarding the possibility of imposing sanctions on Iran, which, according to observers, is the first time he has taken such a firm position in the matter, came in an interview with Haaretz on the eve of Prime Minister Ariel Sharon's state visit to France Wednesday.

"I hope that [the European negotiations with Iran] will succeed and eliminate the danger of the proliferation of nuclear weapons," Chirac said. "If this does not prove to be the case, it will, of course, be necessary to transfer the handling [of the Iranian problem] to the UN Security Council."

Of course, Chirac was speaking with an Israeli newspaper so it's possible he was playing to an audience rather predisposed to a hard line on the mullahs.  And threatening to haul Iran before the Security Council isn't the same thing as actually doing it, but for people who think that Americans and Europeans must work together on Iran to achieve a satisfactory outcome, Chirac's comments should be welcome.

UPDATE: Paul Kerr points out that Chirac was just reiterating the EU3's previous statements of policy.

It is unfortunate that this morning's headlines from Secretary of State Condoleezza Rice's trip to Sudan focus on how her delegation and its accompanying American reporters were roughed up by Sudanese Government thugs.  As distasteful as that is, it shouldn't distract from the real issue -- the humanitarian disaster zone that is Sudan.  When it comes to the sanctions which are now, in part, a response to the situation in Darfur, NPR reporter Jackie Northam interviewed Rice earlier today in Darfur:

MS. NORTHAM: One last question. I understand that they were interested in things like motor parts, like airlines and that sort of thing. Is that a system where you could ensure that this going to go forward, the carrot and the stick?

SECRETARY RICE: Well, we haven't decided about the issues with sanctions that (inaudible.) The case that they made is a logistical problem for getting assistance into areas like this (inaudible) the south. I'll go back and assess that argument.

QUESTION: But would that be option, is there --

SECRETARY RICE: Well, I think --

QUESTION: (Inaudible) not popularize anything?

SECRETARY RICE: Yeah, I think we had a good look at the argument that's going to be an issue for humanitarian reasons. And obviously, you know, if there is a case (inaudible) management, the humanitarian side, that we'd be willing to look at it. But I have to go and have people that I know -- actually, make that a (inaudible) (Laughter.)

And there's this from an earlier briefing while Rice was en route to Africa:

QUESTION: Are you also looking to the day when you can revisit the sanctions issue and what would what steps, what are the thresholds or the markers that they would have to meet?

SECRETARY RICE: Well, the sanctions issues will eventually be revisited. There is a terrorism list issue that still has to be addressed and, of course, we continue to have concerns about Darfur. I think that we’re proceeding on two tracks here in parallel that we think will help each other. On the one hand, the Comprehensive Peace Agreement and getting the government set up and getting a government that can respond as a whole to the situation in Sudan is very important. And so you do need to support that process to the degree that you can and the Congress has appropriated some funding to be able to do that.

On the other hand, we still have to hold the Sudanese Government accountable for what is going on in Darfur and the UN Security Council Resolution, if you remember, holds out the prospects of further sanctions if we can’t get movement on Darfur. So, these tracks are in parallel and I’ll admit that it’s not the easiest thing to manage between the two tracks, but they really are very much related. And to the degree that the Comprehensive Agreement gets firmly embedded and you get a new government, I think it will be easier to deal with the Darfur situation.

I read all this as meaning that there's little chance of any significant loosening of US sanctions on Sudan anytime soon.  There might be some minor adjustments to enable genuine humanitarian activities, but that's all.

Just past February the US Government made it easier for USAID and organizations operating under its auspices to carry out their work by permitting them to temporarily export things like computers, cell phones, and GPS receivers to Sudan without prior government authorization.  And since the adoption of the Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 agricultural commodities, medicines, and medical devices have been eligible for an expedited licensing procedure (pdf).

One last thing.  While I do not ordinarily participate in the media criticism that is the stock-in-trade of many blogs, I could not overlook the egregiously afactual rantings of Bev Smith, a guest on Thursday's NPR program News & Notes with Ed Gordon.  Among other topics, Gordon's guests discussed Rice's visit to Sudan.

I will begin by stipulating that the Bush Administration's efforts on Darfur have been woefully inadequate.  There is much more that the president could have done and could still do.  If Samantha Powers ever writes a second edition of her Pulitzer Prize-winning account of US inaction in the face of genocide, A Problem from Hell, I fully expect a chapter on this administration's shortcomings in Darfur disturbingly similar to her account of the Clinton Administration's failure to act on Rwanda.  But on the more positive side, Bush is the first US president in history to use the word "genocide" while in office.  His administration specifically calls the atrocities in Darfur genocide, despite the UN's unwillingness to do so, and has pursued (rather ineffective) action in the Security Council.  Still, you only get so much credit for word choice and UN jawboning.  US leadership has been severely lacking in Darfur and Bush's legacy will reflect it.

But none of these criticisms lead to Smith's absurd conclusions, which you can listed to for yourself here.  This is my transcript (starting from about 16:10 in the audio):

Well, I really think that we need to examine the relationship the United States has had with Sudan.  We are quiet and have been quiet until Tony Blair raised the issue.  And I think that there are strained relationships between the puppets that we have put in place in government and the like.  If we allow those questions to be answered then we would have to ask what role the United States played in...when it was silent about all the atrocities and I think that may be some of the feelings that we have that we want to find out more and we're not going to find out more in a press conference in a country as their guest.  We are going to have to leave the president's palace and go somewhere else to get the real answers and it might be to the president here in the United States.

Smith makes three main assertions:

1. The US has been "quiet" on the subject of Darfur and is a johnny come lately to Tony Blair's leadership: You can accuse the US of many things when it comes to Darfur, but being quiet is not one of them.  In fact, sometimes it seems like all the administration has done on this issue is talk about it.  And while the US officially declared that the situation in Darfur was genocide on September 9, 2004, as far as I can tell the UK has never made a similar, formal statement.
2. The Sudanese Government is a "puppet" of the US: Huh?  Is there any evidence of this at all?  Sudanese President Omar Hasan Ahmad al-Bashir took power in a coup and shortly thereafter remade Sudan as an Islamist regime.  Sudan sheltered Osama bin Laden before he fled to Afghanistan.  President Clinton ordered crippling economic sanctions against Sudan in 1997, not to mention a cruise missile strike on a pharmaceutical plant in Khartoum the following year.  The sanctions remain firmly in place under the Bushies.  Is this any way to treat a puppet?
3. President Bush bears more responsibility for the Darfur genocide than the Sudanese Government: As ridiculous as it sounds, that is the unavoidable implication of Smith's statement that to get to the bottom of the genocide "We are going to have to leave the [Sudanese] president's palace and go somewhere else to get the real answers and it might be to the president here in the United States."  As far as Smith is concerned, primary accountability for Darfur belongs not to the Sudanese officials who ordered endless atrocities against civilians, but to George W. Bush.

What should the US be doing to stop what's happening in Darfur?  For that, I'll direct you to an interview with Samantha Powers herself.