Copyright 2000
Federal News Service, Inc.
Federal News Service
February 28, 2000, Monday
SECTION: PREPARED TESTIMONY
LENGTH: 4190 words
HEADLINE: PREPARED TESTIMONY OF HAROLD J. JOHNSON ASSOCIATE DIRECTOR INTERNATIONAL
RELATIONS AND TRADE ISSUES NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION
BEFORE THE
SENATE COMMITTEE ON ARMED SERVICES
BODY:
Mr. Chairman and Members of the Committee:
I am pleased to be here today to discuss export controls for high performance
computers. My testimony is based on work that we have conducted over the past 3
years, particularly the reports we issued in 1998 and 1999.1
U.S. policy with respect to the export of sensitive technology, including
computers, is to seek a balance between the U.S. economic interest in promoting
exports with its national security interests in both maintaining a military
advantage over potential adversaries and denying the spread of technologies
used in developing weapons of mass destruction. The United States has long
controlled the export of high performance computers 2 to sensitive
destinations, such as Russia and China. These computers have both civilian
(dual use) and military applications and technological advancements in
computing power have been rapid. The Department of Commerce has primary
responsibility
for managing the licensing of these dual-use items and weighing the promotion
of commercial interests in exporting items against the protection of national
security interests. For the past several years, there has been continuing
congressional concern about and debate over whether our national security is
being harmed by relaxing export controls on high performance computers and over
the rationale for subsequent revised controls.
Today, I will discuss our observations about how the executive branch (1)
assesses the national security risks associated with the export of high
performance computers going to countries of concern and (2) determines when the
exports of computers at existing performance levels can no longer be controlled.
RESULTS IN BRIEF
The executive branch has not yet clearly articulated the specific national
security interests to be protected in controlling the export of computers at
various performance levels, nor has it stated how countries of military concern
could benefit from using such computers. Without a clear statement of these
interests, it is unclear how the executive branch determines what are
militarily critical applications that may affect U.S. national security. In
addition, the executive branch has revised export controls on computers because
it believes that these machines, at the previously approved levels, had
become so widely available in the market that their export is uncontrollable.
However, we could not assess the justification for the July 1999 export control
levels because the terms
"widely available" and
"uncontrollable" used to explain the policy change are not clearly defined and are not found in
law or regulation.
BACKGROUND
The U.S. export control system is about managing risk; exports to some
countries involve less risk than to other countries and exports of some items
involve less risk than do other items.
Under U.S. law, the President has the authority to control and require licenses
for the export of items that may pose a national security risk or foreign
policy concern. The President also has the authority to remove or revise those
controls as U.S. concerns and interests change. The U.S. export control system
is administered by two agencies. The Commerce Department, through its Bureau of
Export Administration,
licenses sensitive dual-use items (items with both civil and military uses)
under the Export Administration Act of 1979, as amended (P.L. 96-72).3 The
State Department, through its Office of Defense Trade Controls, licenses
munitions items under the Arms Export Control Act (P.L. 90-629). Since the end
of the Cold War, the number of items subject to export controls has been
significantly reduced. For example, while 10 years ago, the Commerce Department
reviewed about 100,000 license applications annually, today that figure is down
to about 12,000 applications per year.
The U.S. government controls the export of high performance computers to
certain countries based on foreign policy and/or national security concerns.
High performance computers and related components (such as, processors) are
controlled under the Export Administration Act, as continued by
executive order, and the Export Administration Regulations. Executive Order
12981 authorizes the Departments of State, Energy, and Defense to review export
applications and to consider export control policy.
Since 1993, the President has revised U.S. export control requirements for high
performance computers four times, including a revision announced in February
2000. A revised export control policy implemented in January 1996 removed
license requirements for most exports of computers with performance levels up
to 2,000 millions of theoretical operations per second (MTOPS) 4 (an increase
from 1,500 MTOPS). The policy also organized countries into four computer
"tiers," with each tier after tier 1 representing a successively higher level of
concern related to U.S. national security interests. 5 A dual control system
was established
for the 50 tier 3 countries, including China, Russia, India, and Israel: a
license for potential military end-users is required at a lower MTOPS threshold
than the threshold for civilian end-users. High performance computer exports to
countries in tier 4 (for example, Iran, Iraq, and Libya) were essentially
prohibited because of national security and foreign policy concerns about these
countries.
The Fiscal Year 1998 National Defense Authorization Act (P.L. 105-85) modified
the policy for determining whether an individual export license is needed and
required exporters to notify the Commerce Department of any planned sales of
computers with performance levels greater than 2,000 MTOPS to tier 3 countries.
This level subsequently was increased to 6,500 MTOPS effective January 2000. If
the Department of Commerce, Defense, State, or Energy, each of which
reviews these notifications, objects to the export within 10 days, the exporter
must then submit a license application.6
In addition, the act required the President to submit a report to Congress
justifying any changes to the control levels for the notification process for
the export of high performance computers to tier 3 countries. The act requires
the report, at a minimum, to (1) address the extent to which high performance
computers with capabilities between the established level and the new proposed
level of performance are available from other countries, (2) address all
potential uses of military significance to which high performance computers at
the new levels could be applied, and (3) assess the impact of potential
military uses on U.S. national security interests. We reviewed the report
submitted by the President on July 27, 1999, proposing changes to the current
export
control levels for high performance computers. We reported in November 1999
that the report did not fully satisfy the reporting requirements of the act.7
In particular, it did not assess the impact of the military uses of high
performance computers on U.S. national security concerns.
On February 1, 2000, the President announced changes to the current export
control levels for high performance computers.
These changes included raising the performance threshold for computer exports
that require a license for (1) tier 2 countries from 20,000 MTOPS to 33,000
MTOPS and (2) tier 3 countries from 6,500 MTOPS to 12,500 MTOPS for military
end-users and from 12,300 MTOPS to 20,000 MTOPS for civilian end-users. The
announcement indicated that the changes for tier 3 military end-users are to
become effective
in 6 months, while the changes for tier 3 civilian end-users become effectively
immediately. The changes also raised the performance threshold for computer
exports that require a notification to Commerce for tier 3 countries from 6,500
MTOPS to 12,500 MTOPS. By law, Congress has 6 months to review this decision,
after which the change in notification levels will go into effect.
ASSESSING NATIONAL SECURITY RISKS FOR COMPUTER EXPORTS
Under U.S. export control policy, an analysis of establishing or revising
controls on computers and other sensitive commodities generally is made in the
context of the U.S.desire to limit the spread of technologies useful in both
developing weapons of mass destruction and protecting the military capabilities
of the United States and its allies. In many ways, the threat posed by an
export is
a relative one; that is, the threat depends on the U.S. capability to respond
to enhancements the export would bring to the potential adversary's military
capabilities. In order to maintain military superiority, the United States
needs not only to control the spread of militarily sensitive technologies, but
also to invest in leading edge technologies. However, this investment leads to
the leading technologies of today becoming the
"mass market" items in the future. Therefore, the United States must also quickly
incorporate existing technologies into current and next generation weapon
systems and manage the release of technology into the world market to
"stay ahead of the curve."
While there appears to be general consensus that controlling high performance
computers at some level is important to maintaining U.S. national security, DOD
and the executive branch have not clearly articulated the specific national
security interests to be protected in controlling the export of computers at
various performance levels. In addition, they have not stated how countries of
concern could benefit from using such computers. Without a clear analysis and
explanation of the national security interest in controlling the export of high
performance computers, the U.S. government cannot determine (1) what militarily
critical computer applications need to be controlled or (2) the most effective
way of implementing
computer export controls. If such an analysis were made, it might also lead to a conclusion that the
current reliance on MTOPS as the sole measure of a computer's sensitivity would
no longer be appropriate. Indeed, with the rapid changes in computer
architectures and the growth of what is called
"distributed" computing,8 new approaches may be necessary to protect the national security
interests in limiting potential adversaries' use of such machines in their
research and development programs and their deployed weapon systems.
To illustrate the importance of
identifying potential national security risks of computer exports, let me
briefly highlight for you some of the military applications of high performance
computers that have been identified in some Commerce- and Defense Department-
sponsored studies. These studies were conducted in 1995 and 1998 to support
decisions on revising export controls over these computers.9
- The Joint Strike Fighter has been designed using computers with 4,000 to
6,000 MTOPS of capability. Computers in this range now can be exported to
military endusers in Russia or China without a license. Licenses for military
end-users in these countries are required only for computers with performance
levels above 6,500 MTOPs.
- Computers at 8,000 to 9,000 MTOPs are used for algorithm development for
shipboard infrared search and track systems and modeling of submarine bottom
designs for shallow
water operations. While these computers currently require a license for export
to military end-users in tier 3 countries, they would not be controlled under
newly revised controls announced by the President on February 1 of this year.
Under these new controls, only computers with more than 12,500 MTOPs that are
to be exported to military end-users in countries like Russia and China would
require a license.
- Designing submarines involves simulations of transmitting sounds through
structures and in water, which are conducted at computer performance levels
that are only slightly greater than the thresholds for which tier 3 countries
may receive computer exports without a license. A Commerce- and Defense
Department-sponsored study identified the use of a 21,000 MTOPS machine for
this purpose. Some other related applications, such as acoustic sensor
development and associated acoustic modeling, are executed on computers with
performance only slightly greater than 20,000 MTOPS.
More generally, the 1995 Commerce- and Defense-sponsored study stated that
there are research, development, test and evaluation applications at or above
the 20,000 MTOPS level of great national security significance, the
proliferation of which should be strictly controlled. With the executive
branch's February export control change, high performance computers up to
20,000 MTOPS will be available to countries like Russia and China without a
license. The appendix provides additional information on selected military
applications for high performance computers.
DETERMINING WHEN COMPUTER EXPORTS CAN NO LONGER BE CONTROLLED
The previous examples illustrate the basis of our 1998 report's conclusion that
the executive branch should clearly articulate the specific national security
interests in imiting computer exports to potential adversaries when revising
controls on high performance computers. In this regard, our September 1998
report 10 recommended that the Secretary of Defense assess and report on the
national security threat and proliferation impact of U.S. exports of high
performance computers to countries of national security and proliferation
concern. We specified that, at a minimum, the assessment should address (1) how
and at what performance levels countries of concern use these computers for
military modernization and proliferation activities, (2) the threat of such
uses to U.S. national security interests, and (3) the extent to which the
export of such machines is controllable. The President's July 1999 report
justifying changes to the control levels for computers did report that
computers at all computing levels are important from the lowest performance
levels to the highest. This conclusion, however, is general and was not
supported by the level of analysis we recommended in our report, and does not
address the serious concerns about the
growing availability of high performance computers raised in the Commerce- and
Defense Department-sponsored study issued in November 1995.
Although the examples just provided use MTOPS, this should not be construed to
mean that MTOPS is the benchmark that should be used. Such a measure does not
take into account advances in computer architectures that now allow the
development of a largescale, massively parallel computing resource from a
cluster of commodity computing and networking components. In essence, by
combining a number of readily available computers and networking components
that would not require an export license, an organization can produce a very
high powered computing resource. The operating system software that is
necessary to utilize this resource is readily available from the Internet.
However, a high performance computer by itself does not convey the ability to
solve complex problems because application software is also
necessary to conduct the proper analyses.
The task I have just described for the executive branch is not an easy one. It
involves addressing difficult issues in an area of rapid technological change.
Questions about the use of technology, the computer market, and DOD's own
acquisition programs must be answered. Some key questions include the
following: Does U.S. national security interest include maintaining a relative
computing power advantage in deployed weapon systems (for example, air defense
radar or command and control systems)? Are different strategies necessary to
respond to the threats posed by the use of high performance computers in
research and development and in deployed weapon systems? Will the availability
of high performance computers help other countries develop and deploy new
weapons or allow them to counter U.S. superiority
in certain military applications? Does the growth of distributed computing make
the use of MTOPS obsolete as an export control measure by which to restrict
computer exports?
Before leaving this topic, I want to point out that a critical analysis of
national security applications of concern may lead to conclusions that are very
different regarding export control levels than are currently in place or being
proposed by the executive branch. Indeed, DOD may conclude that significant
national security concerns involve computer performance levels that are higher
than current control levels.
While the executive branch has not clearly articulated the national security
interests in controlling high performance computers, it has developed a general
explanation for its export decontrol decisions. In short, these decisions are
based on conclusions that these computers are becoming widely available and,
therefore, are uncontrollable.
It is
important to note that the President's 1999 report to Congress concluded that
there are militarily significant applications in the new control range, and, if
not for their widespread availability, these applications would need to be
controlled. These applications include advanced aircraft design, antisubmarine
warfare sensor development, and radar applications. Consequently, the new
control levels were not based on an assessment that these higher computing
performance levels do not involve national security applications but rather
that computers in this performance range are so widely available that they are
uncontrollable.
Our November 1999 review of the changes in export control levels indicated that
the administration's conclusions that the capabilities of high performance
computers and related components, from both domestic and foreign sources, are
generally increasing were supported because the United States does not
generally control the export of computer processors and components. However,
most sources of this supply are U.S. companies. Our earlier 1998
review reported that subsidiaries of U.S. computer manufacturers dominate the
overseas high performance computer market and they must comply with U.S.
controls. The 1998 study sponsored by DOD and Commerce 11 similarly found that
the United States dominates the international computer market, at least in the
mid- and high-range performance categories. Under current regulations, computer
processors that perform up to 3,500 MTOPS can be directly exported to civilian
end-users in many tier 3 countries including China and Russia. Exports of
processors to such users in many other tier 3 countries, such as Israel and
Saudi Arabia, are not subject to any MTOPS limit that requires a license.
Exports of other key components for computer systems with four and eight
processors are also not generally controlled; these parts can be shipped to
tier 3
countries for civilian end-users, which could then use them to support the
assembly of computers.
The administration's latest changes in the control levels for high performance
computers were based on a determination that high performance computing
capability is becoming increasingly available. For example, the 1999 changes in
control levels were based on the conclusion that these capabilities are widely
available and are therefore uncontrollable. The President's July 1999 report to
Congress explaining these changes stated that due to the rapid advances in
processor speeds and related technologies, foreign countries can obtain high
performance computers directly or indirectly from a vendor, a reseller, or
another third party or assemble such a computer using U.S. processors and
components. According to administration officials, the specific export control
levels announced in July 1999, and that went into effect in January 2000 for
tier 3 military endusers, were based on the expected performance levels of
computers using four and eight Intel Pentium processors that are projected to
be on the market in July 2000.
While we found evidence to support the report's conclusion that computers with
greater capabilities and related components are becoming increasingly
available, we could not assess the administration's determination that
computers rated below the new control levels are so widely available that they
are effectively uncontrollable. An assessment of controllability involves
critical evaluations of when and in what quantities an item should be
considered so widely available as to be uncontrollable, and is dependent upon
the resources applied by government and industry to control such exports.
However,
"widely available" and
"uncontrollable" are terms not defined in current export control laws or regulations. Defense
and Commerce Department officials stated that the analysis they prepared in
support of the President's report relied on
definitions that were developed in 1995 and 1998 studies they jointly
sponsored. However, the discussion of the terms in these studies is general and
without measurable criteria. Further, there is no mention in the President's
1999 report to Congress justifying the announced computer control revisions
that defines how these concepts have been applied in setting the new export
control levels. Thus, except to agree with the general conclusion in the
President's report that the availability of computing power in the commercial
marketplace is increasing, we could not determine if the executive branch is
correct in concluding that export controls had to be relaxed for high
performance computers. Consequently, our 1999 report recommended that the
administration develop specific criteria defining both
"widely available" and
"controllability."
This discussion brings me to one final point. The Senate bill (S. 1712) to
establish a new Export Administration Act uses the term
"mass market status" as
one determinant for relaxing export controls. This term is defined very
similarly to how the administration appears to use the term
"widely available" as it relates to high performance computers. Both terms imply that an item is
so commercially available that it cannot be controlled, but without providing
the quantifiable measures necessary to make such an analysis. S. 1712 does
provide a number of general criteria that might be helpful in making decisions
about controlling the export of high performance computers. However, in
developing the implementing regulations, Commerce may wish to provide more
objective and empirical criteria to use in making these decisions. If it does
not, then when this rather subjective standard is applied in the future to
items controlled under the act, it will be difficult to assess whether this
standard was applied appropriately.
Mr. Chairman, this concludes my prepared testimony.
I would be happy to respond to any questions you or other members may have.
FOOTNOTES:
1 Export Controls: Information on the Decision to Revise High Performance
Computer Controls (GAO/NSIAD-98-196, Sept. 16, 1998) and Export Controls:
Statutory Reporting Requirements for Computers Not Fully Addressed
(GAO/NSIAD-00-45, Nov. 5, 1999)
2 The Commerce Department considers a high performance computer to be one that
exceeds a defined performance threshold, thus requiring an export license.
3 The Export Administration Act terminated on August 20, 1994. Pursuant to
Executive Order 12924, issued on August 19, 1994 (59 Fed. Reg. 43437) the
President, to the extent permitted by law, extended the application of the act
indefinitely. In addition, the Nuclear Regulatory Commission licenses exports
of nuclear
reactors. Dual-use nuclear exports are licensed by Commerce in consultation
with a number of Other agencies.
4 High performance computers are regulated based on their composite theoretical
performance as measured by MTOPS.
5 The policy placed no license requirements on tier 1 countries, primarily
those in Western Europe and Japan. Exports of high performance computers above
10,000 MTOPS to tier 2 countries in Asia, Africa, Latin America, and Central
and Eastern Europe continued to require licenses.
6 In addition to reviewing notifications, State, Defense, and Energy also
review export license applications that are submitted directly to Commerce.
7 Export Controls: Statutory Reporting Requirements for Computers Not Fully
Addressed (GAO/NSIAD-00-45, Nov. 5, 1999)
8
"Distributed" or
"parallel processing" means
breaking computational problems into many separate parts and having a large
number of processors tackle those parts simultaneously. Greatly increased
processing speed is achieved largely through the sheer number of processors
operating simultaneously, rather than through any exceptional power in each
processor.
9 Building on the Basics: An Examination of High-Performance Computing Export
Control Policy in the 1990s (1995) and High-Performance Computing, National
Security Applications, and Export Control Policy at the Close of the 20th
Century (1998).
10 Export Controls: Information on the Decision to Revise High Performance
Computer Controls (GAO/NSIAD-98-196, Sept. 16, 1998).
11 High-Performance Computing, National Security Applications, and Export
Control Policy at the Close of the 20th Century (1998).
END
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