LEXIS-NEXIS® Academic Universe-Document

LEXIS-NEXIS® Academic

January 12, 1999, Tuesday

SECTION: WORLD TRADE; Pg. 3A

LENGTH: 506 words

HEADLINE: Commerce blasts Congress over new export rules

BYLINE: BY MICHAEL S. LELYVELD

BODY:

In a release, Commerce's undersecretary for export administration, William Reinsch, said a 1997 law that imposed the controls on sales of faster computers has ""already been overtaken by technology.''

COMPUTER INSPECTIONS

Congress placed the reporting and inspection requirements on exports of the computers to 50 countries regarded as nuclear risks in the wake of reports that both Russia and China had diverted civilian supercomputers to military uses.

The rules require Commerce to account for each sale of a computer that runs at speeds faster than 2,000 million theoretical operations per second (MTOPS) and to verify its end use with an on-site inspection. ""The resultant burden of on-site visits to each computer is an example of good intentions leading to wasteful government expense and no improvement to national security,'' Mr. Reinsch said.

In submitting its report to Congress, Commerce said that sales of high- performance computers to the affected countries climbed 40 percent in the past year, to 390 from 279 the year before. China accounted for 191 of the sales in 1998.

The agency conducted 104 inspections in countries that include Israel, India and Pakistan.

As a result of an agreement on inspections last June, Commerce's Bureau of Export Administration has conducted three on-site visits in China so far. Although it did not say whether any evidence of diversions was found, Commerce said that more than half the computers were being used by utilities, communications and financial industries.

RULES CALLED INEFFECTIVE

Mr. Reinsch blasted the inspection rules as ineffective.

""We spend too much time and money disrupting the legitimate business activities of banks, insurance companies, telephone service providers and U.S. subsidiaries. Congress should let us target our enforcement resources where they will do the most good,'' he said.

The complaint against the computer rules may be a prelude to a conflict over the yet-to-be-released recommendations of a House committee that recently completed a classified report on all U.S. technology exports to China.

The panel chaired by Rep. Christopher Cox, R-Calif., found that U.S. export policy has harmed national security.

ADMINISTRATION GETS IT

The 700-page report with its 38 recommendations was sent to the administration last week. A declassified version is likely to be released next month.

Friction with Commerce may result because the agency has tried to promote U. S. export interests while administering export controls on goods with potential military applications.

The Cox committee began its investigation following reports that China gained technology for its missile program as a result of U.S. cooperation on commercial satellite launches.

Commerce said Friday that it will not release its report on high- performance computer exports in its entirety because it contains sensitive business information.

A Commerce press official said Monday that there are no plans to publish any further details.

LOAD-DATE: January 12, 1999