Fastener Quality Act; (2) Field office strength to meet new export enforcement Our request continues to be approximately 1% of the Department's budget. It also represents almost 25 percent fewer positions than Congress authorized in our peak year of FY 1991. The intersection of national security, nonproliferation, export growth, and high technology. Our challenge is to combat the proliferation of weapons of mass destruction while furthering the growth of U.S. exports, which are critical to maintaining our leadership in an increasingly competitive global economy. BXA's activities include: Implementing programs of technical cooperation with Ukraine, Kazakstan, Belarus, Russia and other newly emerging countries designed to enhance national export control capabilities. The effectiveness of U.S. export controls can be severely undercut if other supplier nations are not capable of controlling sensitive goods and technology or preventing diversion of our exports. Administering the export licensing system for dual-use items authorized by the Export Administration Act to fight proliferation and to pursue other national security, short supply, and foreign policy goals, such as combating terrorism. Enforcing the export control and antiboycott provisions of the EAA through a strong prevention program, as well as the imposition of administrative, civil, and criminal sanctions on violators. Analyzing and protecting the defense industrial and technology base, pursuant to the Defense Production Act and other laws. As the Defense Department increases its reliance on dual use high technology goods as part of its cost-cutting efforts, ensuring that we remain competitive in those sectors and sub-sectors is critical to our national security. Specifically we are assisting U.S. defense companies in winning defense contracts overseas and identifying alternative applications for their defense technology in both defense and dual-use commercial markets. Ensuring compliance with treaties that impose requirements on U.S. industry. The most important is the Chemical Weapons Convention, which when ratified will give BXA new enforcement and outreach responsibilities. BXA's two principal operating units, Export Administration and Export Enforcement, as well as its Office of Administration, have undergone significant reorganization and downsizing in recent years in order to meet the President's streamlining goals, as recommended by the National Performance Review (NPR). BXA is also an NPR Reinvention Laboratory. ACCOMPLISHMENTS These last few years have been busy ones for BXA. The Administration realized early on that rapid technological change and economic globalization compelled comprehensive reform of our national export control system and strengthening of the international export control infrastructure; reforms which balance the need to keep sensitive goods, technologies and projects of concern out of the hands of rogue regime countries without imposing unnecessary or ineffective constraints on U.S. business. That is precisely why we reformed outdated controls, streamlined our existing export control system, enhanced our enforcement programs, and worked to strengthen multilateral regimes and the national export control capabilities of cooperating countries. In the last three years, we have: Made arrangements to host bilateral export control seminars with China based on an agreement at the eleventh annual meeting of the Joint Commission on Commerce and Trade in October 1997. The first seminar will take place in April 1998 in Washington, D.C. These seminars will provide opportunities to discuss issues of concern, promote mutual understanding of the respective export control systems, and enhance future cooperation. Through multilateral efforts, liberalized export controls for oscilloscopes and certain transient recorders, substantially reducing the paperwork burden for exporters by decreasing the number of license applications required for these items. Page - 4 Substantially liberalized controls on high performance computers, semiconductors and semiconductor manufacturing equipment, Beta-test software, telecommunications equipment, and chemical mixtures, among others; Clarified and simplified the Export Administration Regulations through a comprehensive revision and reorganization, making them more user-friendly; Continued to implement the President's commercial encryption policy to promote the growth of electronic commerce and secure communications worldwide while protecting the public safety and national security. These efforts include the development of the rationale and the new regulatory framework for the transfer of jurisdiction for licensing commercial encryption products from State to Commerce, liberalized treatment for recoverable products, and implementation of a new program involving review and oversight of commitments by encryption manufacturers to build and market key recovery products. Implemented guidelines issued by the National Security Council to streamline the export licensing review process for entities of concern. The development of a list of entities through the "Is Informed" process arose from the Enhanced Proliferation Control Initiative (EPCI) begun in 1990 to stem the spread of missile technology as well as nuclear, chemical and biological weapons. Signed an agreement with Hong Kong establishing regular discussions on export controls with the first meeting held in January 1998. The agreement also reaffirms the United States' commitment to maintain its export control policy for Hong Kong. Hong Kong authorities have committed to continue to adhere to various multilateral export control regimes and to maintain an effective export control system. Published a rule to implement the Wassenaar Arrangement, including a revised Commerce Control List and new reporting requirements. The Arrangement is now fully operational and has begunn to play an important role in combating the risks associated with the destabilizing accumulation of armaments and sensitive dual-use items, which may undermine international and regional security. Published revised Export Management System (EMS) Guidelines, an optional program that companies may implement as good business practice to ensure compliance with the Export Administration Regulations (EAR) and to reduce the risk of inadvertently exporting to a prohibited end-use or end-user. Working in close cooperation with industry, we revised the guidelines to assist companies with the establishment of internal procedures for screening exports. Completed three major industrial base projects and initiated two new research projects. The three completed projects are assessments of the U.S. semiconductor processing materials industry, conducted at the request of the semiconductor industry, the U.S. emergency aircraft ejection seat industry, a study sponsored by the U.S. Air Force, and a ball and roller bearing statistical handbook, a joint effort with the domestic bearings trade association. New research efforts have been initiated to study the optoelectronics industry, a study requested by that industry's trade association, and the high performance energetic materials industry, a project sponsored by the U.S. Navy. A private consultant under contract continues research for an ongoing study on Chinese technology transfer policies. Opened the Commerce Department satellite center of the Best Manufacturing Practices (BMP) program, one of the six Navy satellite centers nationwide. The purpose of the center is to provide government agencies and industry with information about how the BMP's resources can be used to improve the manufacturing competitiveness of U.S. companies. Improved the license process by broadening agency review opportunities while limiting the time for those reviews, providing orderly procedures to resolve disputes, and establishing more accountability throughout the interagency process. Page - 6 |