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Controls over standard integrated circuits have also been greatly reduced. All DRAM memory chips are decontrolled as are most standard 32-bit microprocessors used in personal computers. Controls on integrated circuit manufacturing equipment and silicon materials are likewise liberalized. Finally, all civil television recorders which meet certain international standards are decontrolled.
As a final note regarding our COCOM controls, I would like to address the issue of telecommunications systems and technology. We technical and policy experts have worked long and hard to find ways that will allow US companies, as well as our allies, to install modern phone systems in the Soviet Union and Eastern Europe. We risk serious compromise of our security interests, however, if we export to the USSR for internal use top-of-the-line telecommunications equipment and technologies. Until the situation in the Soviet Union settles into a more predictable and promising pattern, we simply must hold the line on approvals to ship high-speed microwave and fiber-optics systems that could dramatically enhance Soviet strategic capabilities.
There is also good news on telecommunications. Controls have been relaxed to permit digital switching and allow the Soviets to build public digital voice and data networks with features and functionality equivalent to those installed in the West right now. The Soviets will be able to acquire such services as facsimile, cellular telephone, electronic mail, and voice mail with all the features currently enjoyed by users in the West.
With regard to international links, COCOM agreed to allow 156 megabit/64 qam (quadrature amplitude modulation) microwave systems to be exported at national discretion to any country for use in connection with international gateways. In the same vein, agreement was reached to permit the export under the favorable consideration procedure (which means presumption of approval) of fiber-optic lines to any country up to its international border at 565 megabits (mbps)/1550 nanometers laser wave length for international traffic.
Taken together, these changes will allow vast improvement in communications between the USSR and the West, thus fostering growth in business as well as personal ties, and also permit the Soviet Union to acquire a telecommunications system comparable to Western standards of the early-to-middle-1980s.
For all destinations but the Soviet Union and North Korea, the core list will also allow the export, again under the favorable consideration procedure, of microwave links at 156 mbps/64 qam for internal use (that is, not restricted to international traffic) and, at national discretion, fiber-optic links at 45 mbps/1370 nanometers.
Finally, in a major liberalization for Poland, Hungary, and Czechoslovakia, COCOM countries agreed that all telecommunications equipment except encryption devices can be exported at national discretion.
We believe that these liberalizations are consistent with our shared interests, while allowing for significant commercial activities.
The COCOM partners also discussed the question of removing Poland, Hungary, and Czechoslovakia from the list of proscribed destinations. We determined that decisive progress in this vein would depend upon these countries enforcing controls as effectively as do member countries, both on goods imported from member countries and on indigenously produced goods. In addition, each country must have a sound legal basis for implementing its export control system in order for it to be removed from the proscribed destination list. For the time being, Poland, Hungary, and Czechoslovakia will be subject to a "special procedure" that establishes a presumption of approval for all but the most sensitive equipment to those three countries. The message that we are sending is that the US and its COCOM allies are committed to aiding these three countries in their efforts to modernize their economies through transformation to a market-based system.
Relaxation of export controls cannot be achieved without a concomitant effort to improve levels of enforcement. These are the higher fences that must be built around fewer goods. At the High Level Meeting it was agreed that the Common Standard Level of Effective Protection would enter into force by January 1, 1992. The common standard establishes the criteria for an effective enforcement regime for controlling goods and technologies against diversion to unauthorized uses and destinations. Application of the common standard will permit further progress in easing East-West licensing by allowing additional items to be included in the intra-COCOM license-free-trade zone.
Rapid technological advances that make equipment obsolete in only a few years and the emergence of proliferation of weapons of mass destruction as a key issue were important factors in our thinking relative to redefining the COCOM core list. But President Bush and senior advisers in the Administration also recognized that export controls have a critical bearing on our economic study. If supplier countries do not apply and enforce controls in an even manner, than those controls not only are ineffective but also adversely affect our balance of trade and economic competitiveness. Such a potential threat to our economic security is just as much a national security matter as more traditional concerns about strategic arms balance, regional conflicts, or weapons development.
The National Academy of Sciences' recently released study "Finding Common Ground" concluded that export controls should not be discarded in the glow of the moment but neither should we return to the rigidity of the past. The initiatives taken by the Administration in the areas of non-proliferation and COCOM have, I believe, met that challenge. While perhaps not meeting the expectations of all interested parties, the changes announced at the recent COCOM High Level Meeting are a major step forward in finding the balance between increased trade and maintaining a strong national security posture. We want to adjust our export control system to the new realities in formerly communist countries and changes in the Soviet Union. At the same time, we want to do so in a way, and at a pace, that continues to safeguard our national security against both old and new dangers.
Where do we go next? Now that the core list exercise is completed, I believe industry needs to know what kind of export control system to expect. I cannot give you a detailed guide, but I can shaer some insight into the Administration's thinking.
The core list does not establish a red line. We will continue to approve the export of items on the core list if they are demonstrably for civilian end use and are suited therefor. We and our COCOM allies in 1990 approved almost 1,600 licenses, worth about $1.7 billion for civilian end-users in the Soviet Union. For example, we approved the export of high-speed computers for Soviet nuclear power plant safety as well as the sale of the most modern commercial aircraft available on the market today. Further, the President made a commitment to the Soviets, as well as to industry, that we would consider favorably shipments of goods and technology but would upgrade the Soviet energy production sector, particularly oil and gas exploration and development. Over the past year, we have approved approximately 95% of all general exceptions cases, and even greater percentages have been approved for Poland, Hungary, and Czechoslovakia. Under the new "special procedure," there will be a presumption of approval for most exports to those three countries. Clearly, the ability to export does not rest entirely on the question of whether or not an item is controlled.
The Soviet market is not the only potential new arena for business. Poland, Hungary, and Czechoslovakia, in particular, are moving toward full integration into the Western economic system. Surprising as it may seem, it is the US that has taken the lead in pressing for major liberalization of the controls on exports to these countries.
COCOM remains an effective and important instrument of national security because we have been able to adapt it to changing circumstances. We will continue to do so, for we recognize we can do no less and retain support from our allis and from industry. In completing the core list, we have created a new international industrial list that controls only the most critical goods and technologies needed to maintain the existing technological lead between Western and Soviet-based military systems, a lead which was cleary visible during Operation Desert Storm. The Department of Commerce estimates that the new list represents a 65% reduction in the number of controlled goods over the pre-June 1990 control list. We estimate that there will be a 70% reductioni in license applications for computer exports alone.
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The future is full of both promise and risk. Changes in Eastern Europe and, we hope, in the Soviet Union hold the promise for further liberalization of export controls and additional business opportunities for US firms. We remain committed to striking a balance between national security and removal of barries to trade. We intend to rely on the history of COCOM and on the cooperation of industry, our allies, and partners in finding that balance.
COPYRIGHT 1991 U.S. Government Printing Office
COPYRIGHT 2004 Gale Group
