LEXIS-NEXIS® Academic Universe-Document

LEXIS-NEXIS® Academic

November 7, 2000, Tuesday METROPOLITAN EDITION

SECTION: TUESDAY BUSINESS; Pg. D16

LENGTH: 882 words

HEADLINE: Finding a delicate balance in export control system

BYLINE: LORIE WHITAKER; Guest Columnist

BODY:
The U.S. export control system has received a great deal of
attention from Congress and the American public in the past few
years. Yet much of the discussion has overlooked the nature and
complexity of the system as a whole.

A more in-depth analysis of the U.S. export control system
reveals the legitimate national security and foreign policy
rationales for license requirements. It also reveals the balancing of
those rationales against economic and competitiveness concerns, and
the "living" nature of export controls as they are changed in
response to changes in technology and global politics. Perhaps the best way to understand the national security and
foreign policy rationales of the export control laws is to review
some recent enforcement actions brought against companies that
violated the laws.

One of the companies mentioned in a recent Associated Press
article published in The Kansas City Star engaged in a transaction
whereby computers were exported to the closed Russian nuclear city
Arzamas-16, which, as the company knew, is a military end user that
engages in nuclear explosive activities. The rationale for the
license requirement that was violated here is clear - the United
States does not wish to support Russian nuclear explosive activities.

Another company mentioned in the same article exported a mask
aligner and related parts to the Bhaba Atomic Research Center, a
division of the Department of Atomic Energy of the government of
India. The company made the export knowing that it was illegal. Again
the obvious national interest here is that the United States does not
support India's efforts to develop nuclear weapons.

Yet even the most powerful national security and foreign policy
rationales must be balanced against whether controls are effective
and how U.S. business is affected by controls. The difficulty of this
proposition is demonstrated by the fact that although the Export
Administration Act expired in 1994 and dual-use Commerce Department
controls have been implemented through emergency legislation for over
five years, the U.S. Congress continues to argue over how the export
control laws ought to be rewritten in the wake of the Cold War.

The one thing most legislators do agree on is that violations of
export control laws should carry heavy penalties. Indeed, several
bills have been introduced this year that would dramatically increase
penalties. Several of these bills are structured so they may be
implemented whether or not a comprehensive new statute is passed.

In fact, the Export Administration Act permits export controls to
be imposed for only three reasons: national security, foreign policy
or short supply. Moreover, the law requires the U.S. government to
maximize the effectiveness of the controls by either relaxing
controls on national security items that are easily available from
foreign sources, or cooperating with these other countries to control
the items.

In addition to the national security rationale for export
controls and the difficulty in balancing it against our strong desire
to keep American business competitive, there is a further layer of
complexity added by rapidly changing technology and global politics.
Computers are a good example. As the capacity and availability of
computers has increased exponentially, export control regulations
have changed to keep pace. This year alone, there have been at least
three liberalizations to the rules governing various computers and
computer equipment.

Further, the changes in export controls on items exported to
Serbia are a prime example of regulatory changes caused by global
political change. The United States and Europe implemented a
comprehensive embargo against Serbia for the past few years, but
recently announced that those controls will be relaxed in the wake of
new democratic reforms in that country.

These changes based on technological and political events are
sensible and desirable, but also can make it difficult for businesses
to maintain an up-to-date compliance program and marketing strategy.
Even when a liberalization of controls relaxes a license requirement,
companies still have to update their compliance program.

Clearly, there is constant tension between the Bureau of Export
Administration's laudable effort to impose license requirements on as
few items as possible and to keep up with changing technology and
global politics, while at the same time ensuring that national
security and foreign policy concerns are addressed. Yet the constant
regulatory changes and uncertain future direction of export controls,
while entirely reasonable in the context of the past decade of
dramatic technological and political change, make it undeniably
difficult for businesses to comply with the laws.

Lorie Whitaker was a senior lawyer with the Office of Chief
Counsel for Export Administration at the Department of Commerce for
six years. As director of export compliance affairs for the Global
Trade Compliance division of iLink Global, Whitaker provides
consulting service on export compliance matters for companies in the
Kansas City area and around the country.

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