the State Department and other interagency referral partners. State currently has limited access to ECASS to review dual-use license applications. With a redesigned ECASS, State will have greater access to license application information as well as supporting documentation. BXA plans to include interagency users as part of the overall development effort to ensure that differences in operating environments and technical architectures do not become stumbling blocks to successful implementation of the redesigned ECASS. Our plans are to develop a system that is accessible via a web browser. We cannot provide specific information as to the sufficiency of State Department ECASS resources. Steel Trade QUESTION: Your budget includes a $10 million rescission of the guaranteed loans to the steel industry. Can you assure this subcommittee that these funds would not be helpful to the steel industry at this time? ANSWER: Based on our experience with the steel program to date, the Emergency Loan Guarantee Board estimates the maximum amount of total loan guarantees that will actually be approved and issued by the December 31, 2001 termination date will not exceed $925 million. The Emergency Steel Loan Guarantee Program Act (P.L. 106-51) provided $140 million in funding for the subsidy to support a $1 billion loan guarantee program as authorized in the statute. Reducing the subsidy by the proposed $10 million rescission will leave $130 million remaining to support an estimated $929 million in loan guarantees. Of the 13 loan guarantee applications received by the Board during the first application window that closed February 28, 2000, the Board approved seven applications for loan guarantees totaling $550.525 million. However, only one of the seven proposed loans a loan of $110 million by Citicorp to Geneva Steel LLC has actually been closed by the lender and guaranteed by the Board. The deteriorating changes in the steel market have caused many lenders to back away from making loans to the steel industry, even with an 85 percent guarantee. The Board opened a second window last November for steel loan guarantee applications, which will close on August 31, 2001. To date, no applications have been filed. However, a number of steel companies and their potential lenders are in active discussions with the staff of the Board and have indicated that they intend to file applications. There are also restrictions in the statute that may limit the amount of loan guarantees that the Board is able to issue. The most important of these restrictions is the requirement that the loan maturity date cannot extend beyond December 31, 2005, which makes it virtually impossible for a loan to be substantially amortized within this maturity period. This factor discourages lenders from lending to a steel company in today's very difficult market conditions even with a partial guarantee. It would be highly speculative at this point to estimate which of these applications might actually be filed by August 31, 2001, and of those how many may be approved by the Board and may actually close. QUESTION: What steps is the Department of Commerce taking to help the U.S. steel industry compete in foreign markets? ANSWER: The Department's International Trade Administration (ITA) bureau works to ensure that all U.S. exporters compete on a level playing field in foreign markets. Whenever a company feels they are receiving unfair treatment in their exports they can contact the Trade Compliance Center for expert assistance. All trade agreements involving non-agricultural products - including steel, autos, telecommunications and services - are monitored by country, industry or compliance specialists who can work directly with the company to resolve their exporting problems. Through the U.S.-China Residential Building Council, we are working with the steel industry to help the Chinese housing sector adopt steel framing to meet China's massive housing requirements. This should provide a market for our exports of steel framing. We are also working with the steel industry to identify potential markets for exports of steel framing to Latin America. Recently, the Commerce Department provided to industry market reports on three countries in Latin America, and we are awaiting their response. Importation of Slave Labor Produced Goods On February 28, 2001 a Chinese company Allied International Manufacturing Stationary Co. Ltd. (AIMCO) plead guilty to a charge of importing forced labor made goods to the United States. Setting a remarkable precedent, this case was the first time that there has been a criminal conviction of a Chinese company for importation of forced labor products. The investigation of prison-made binder clips being imported into the U.S. was initiated by Mr. Peter Levy, President of Labelon/Noesting, an office supply company located in New York. Rumors of such activity in his industry aroused Mr. Levy's attention and in 1996 he decided to make his own investigation. While on a business trip to China, Mr. Levy made a special trip to Nanjing, where he had heard that the company Officemate International was manufacturing binder clips for Importation to the U.S. While in Nanjing, through the assistance of a translator and other various associates, Mr. Levy was able to follow trucks leaving from the headquarters of AIMCO Nanjing carrying unassembled binder clips. Mr. Levy filmed the trucks going to the Nanjing Women's Detention and Reform Camp. Later the same trucks emerged from the prison, now carrying fully assembled binder clips. After completing his investigation, Mr. Levy contacted the Laogai Research Foundation and the Customs Service. In May of 1997, Mr. Levy testified before the U.S. Senate regarding his investigation and a federal investigation ensued, culminating in the verdict announced on February 28, 2001. Between August of 1995 and June of 1887, investigators documented that 134 million of these binder clips entered the U.S. After the Customs Service began its invetigation, a further 24 million binder clips were seized and destroyed upon arrival at U.S. ports in Newark, Chicago, Savannah, and Los Angeles. As a result of the investigation into AIMCO imports, the factory in Nnajing was closed. This factory is believed to have been the largest binder clip factory in the world. In resolution of the case, AIMCO paid a fine of $50,000, and Officemate $500,00. Mr. Chen also faces jail time for tax evasion.. Question: What can the Department of Commerce (DOC) do to prevent the importation of Chinese prison or slave-made products from being sold in the United States? We have heard estimates that there may be as many as 3,000 front companies operating in the U.S. Answer: The DOC does not have jurisdiction over this issue. This matter might be more appropriately handled by the U.S. Customs Service within the Department of Transportation. However, if the Commerce Department obtained information about products produced by prison or slave-labor, we would work with Customs and Treasury on appropriate action. The Under Secretary of Commerce for International Trade is a member of the Congressional-Executive Commission on China, which was established upon the signing of the PNTR bill in October, 2000. The Commission will hold its first hearing on February 7, 2002. The subject of the first hearing is Human Rights in the Context of the Rule of Law. The subject of slave and prison labor may come up within the deliberations of the Commission. Question: Has the DOC undertaken any research of studies into products that are assembled in Laogai camps and then marketed by legitimate companies such as occurred in the OIC/AIMCO case? Answer: The DOC does not have jurisdiction over this issue and thus has not conducted a study. This matter is more appropriately handled by the U.S.Customs Service within the DOT. Again, if the Department of Commerce did have information regarding illegal imports of prison or slave-made products from these or any other camps, we would provide that information to the appropriate authorities at Customs and Treasury. QUESTIONS SUBMITTED BY CONGRESSMAN JOSE E. SERRANO Critical Infrastructure Protection QUESTION: Your testimony mentions that there are three Department of Commerce agencies involved in the critical infrastructure protection program Bureau of Export Administration (BXA), National Institute of Standards and Technology (NIST), and the National Oceanic and Atmospheric Administration (NOAA). Please provide for the record the funding requested for critical infrastructure protection in each of these agencies for fiscal year 2002, as well as a funding history of this activity in each of these agencies since the original Presidential decision directive was signed. Also, please provide a summary of the role of each Commerce Department agency in the overall critical infrastructure protection mission. ANSWER: The following table provides the funding history of the Critical Infrastructure Critical Infrastructure Protection Program Funding History The Critical Infrastructure Assurance Office (CIAO) is responsible for developing and coordinating national critical infrastructure protection policy in three key areas. I. CIAO is responsible for promoting national outreach and awareness initiatives. These initiatives are designed to inform business leaders across industry sectors of the need to manage the risks associated with relying on information systems. A. B. CIAO helped establish the partnership for Critical infrastructure and over 150 companies to identify and address issues of mutual CIAO also works closely with the auditing community and materials, and providing guidance for corporate boards on managing II. CIAO coordinates analyses of the U.S. Government's own dependencies on critical infrastructures. III. A. Last year, CIAO launched an initiative - labeled "Project Matrix" - to fulfill this requirement. B. C. D. Under this program, CIAO assists Federal agencies in identifying the assets, networks, and associated infrastructure dependencies that are required to deliver services vital to our national and economic security. Five Federal agencies currently participate in Project Matrix, including the Departments of Commerce, Energy, Health and Human Services, Treasury, and the Social Security Administration. Five more are expected to begin the program in the next few weeks. CIAO also coordinates the preparation of a national critical infrastructure assurance plan. A. B. The Bush Administration intends to publish its own national plan later this year. The purpose of the plan will be to present an integrated public-private strategy for government and industry to chart a common course toward achieving the overall goal of national critical infrastructure assurance. The National Institute of Standards and Technology (NIST) develops standards, measurements, and testing methodologies needed to protect information technology (IT). In addition, NIST has specific statutory responsibilities for the development of standards and guidelines for the protection of Federal sensitive (unclassified) systems and works very closely with relevant Federal agencies in addressing these |