Will Congress Restore US Technology Security? Export Controls’ Imminent Moment Of Truth

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Within the past week the congressional Joint Economic Committee and the House Government Operations Committee have held important hearings on the Commerce Department’s role in approving the transfer of an array of highly sensitive technologies to Iraq. The welcome intervention of these committees — which have not, until now, involved themselves in the vitally needed oversight of export administration matters — has revealed three serious problems:

  • The present U.S. system for controlling sensitive exports lacks the checks and balances needed to ensure that the Commerce Department will not permit militarily relevant technologies to flow into the hands of potentially hostile governments.

  • The two committees of Congress formally charged with jurisdiction for export administration issues are House Foreign Affairs and Senate Banking and Urban Affairs. Particularly, the former committee’s Subcommittee on International Economic Policy and Trade has become, in effect, a rubber stamp for the Commerce Department and elements of the U.S. export industry.

  • Worse yet, members of these committees may actually aggravate the present situation and, in the process, further weaken U.S. technology security. They are preparing to meet in conference committee to reconcile differences in the two chambers’ versions of H.R. 4653, the "Export Facilitation Act of 1990." This legislation would amend and reauthorize the Export Administration Act which currently governs technology transfers.


Insufficient Checks and Balances

Just-completed congressional hearings have highlighted one recent and particularly egregious example of the deficiencies of the present system for administering export controls. In the period immediately preceding Iraq’s invasion of Kuwait, the Commerce Department — with the support of officials at the Department of State — sought to permit a $10 million sale of high-temperature industrial furnaces to Iraq despite a Defense Department assessment that such equipment would be used by Baghdad in connection with its nuclear weapons program. Approval for this transfer was withdrawn just twelve hours before the furnaces were to be shipped to Iraq — and only as a result of the extraordinary intervention of non-governmental experts.

Regrettably, this episode is hardly unique. From 1985 until the Iraqi invasion of Kuwait in August, the Commerce Department granted 486 licenses for shipments of sensitive technology to Iraq. Bush Administration officials have been obliged to acknowledge that, of these sales, as many as fourteen involved technologies that directly contributed to Baghdad’s development of nuclear, chemical, and ballistic missile capabilities.

The latter included transfers to Iraq of, among other things, the following: equipment for infra-red imaging enhancement with obvious military applications; a hybrid analog computer system used in missile wind tunnel experiments — a device that happens to be identical to that used at the U.S. Army’s missile range in White Sands, New Mexico; and extremely sensitive electronic test and measuring equipment now being used at the Iraqi Sa’ad 16 desert missile center.

In some of these cases, Commerce approved the technology transfers involved despite strong opposition from the Defense Department. In many others, however, Defense was simply not informed of the disposition of these licenses until after the fact.

The astounding Commerce Department behavior that contributed so directly to Saddam Hussein’s military build-up, unfortunately, represents more than just a misguided policy toward Iraq. Instead, it is a symptom of a dangerous shortcoming in the statutes governing U.S. export controls — the extremely circumscribed role accorded DoD’s technology security experts in export administration matters. This is the direct result of major rewrites of the Export Administration Act in 1985 and 1988, by which Congress awarded the Commerce Department exclusive responsibility in a number of relevant areas.

For example, in matters such as export license applications and foreign availability assessments, Commerce is only required to consult with the Defense Department, rather than obtain DoD concurrence. As a consequence, Commerce is at liberty to make most licensing and wholesale decontrol decisions irrespective of objections by the national security community.

Congressional Oversight

The congressional committees responsible for imposing these severe limitations on the Defense Department’s role in technology security naturally deserve no small measure of the blame for the resulting fiascos concerning sensitive exports to Iraq. Perhaps that explains the evident and remarkable lack of interest on the part of the committees of jurisdiction in this scandal.

For example, the Subcommittee on Economic Policy and Trade of the House Foreign Affairs Committee — which has, under the chairmanship of Rep. Sam Gedjenson (D-CT), forcefully advocated a radical weakening of the existing export control regime — has yet to make any inquiries, much less conduct hearings, into this matter. In fact, were it not for the hearings recently undertaken by the Joint Economic and the House Government Operations Committees, it appears that there would be no effort made by the Congress to assign blame or to consider corrective legislation.

Making Matters Worse

Worse yet, conferees from the House Foreign Affairs Committee and the Senate Banking Committee are now considering still another major rewrite of the Export Administration Act which is due to expire on 30 September 1990. Far from correcting any of the serious problems with current U.S. technology security so evident in the aftermath of the reckless exports of strategically sensitive equipment to Iraq, the House legislation (H.R. 4653) would compound them. It would do so principally by further expanding the Commerce Department’s authority to make unilateral export control decisions, further diluting the Defense Department’s current role.

Among the ill-advised provisions now being considered by the conferees on H.R. 4653 are the following:

  • Both House and Senate language would require that technologies with chemical, biological, ballistic missile and nuclear applications be restricted through foreign policy controls rather than national security controls. This would, as a practical matter, make it much more difficult to constrain the transfers of such technologies.

  • Such an outcome would be assured by both House and Senate proposals stipulating that foreign policy controls could be imposed only after the President considers five criteria: the foreign availability of the good or technology in question; the compatibility of controls with other U.S. foreign policy objectives involving the would-be recipient nation; the expected reaction of third countries; the effect of the imposition of foreign policy controls on U.S. exporters and their reputations as reliable suppliers; and the United States’ ability to enforce the controls effectively.

  • The House would also confine DoD review of export licenses largely to certain exports to the Soviet Union and those Eastern European countries not qualifying for favorable licensing treatment. Fortunately, the Senate adopted a countervailing amendment offered by Sen. Jesse Helms (R-NC) which would authorize the Defense Department to review export licenses for Iran, Iraq, Syria, and Libya and any other countries judged to be involved in the acquisition of chemical, biological, nuclear or ballistic missile technology.

  • The House version also directs that, within one year, no export licenses will be required for U.S. shipments to COCOM(1) of any militarily critical good or technology. No exceptions would be in order for even the most sensitive of technologies.

  • Given the abysmal performance of some allies (notably Germany) in preventing the illegal transfers of sensitive technologies, such an arrangement invites a serious hemorrhage of strategic goods and know-how. What is more, the reunification of Germany presents special export control problems, given that the Chairman of the Volkskammer Commission to Control the Dissolution of the Stasi (East German KGB operatives and secret police) reported yesterday that at least half of the 2,448 Stasi officers sent into German firms and institutions remain undetected.


  • The House would further direct that no security safeguards are required for the export of supercomputers to any destination as long as they have performance capabilities at or below 25% of the average of the two most powerful supercomputers commercially available. Such an arrangement would be of enormous assistance to countries whose efforts to acquire nuclear weapons require competent — but not necessarily state-of-the-art — supercomputing capabilities.

  • The House bill would virtually prohibit reexport controls, an important check on the transfer of sensitive technologies to undesirable third-parties.

  • The House version would require the U.S. government to propose to its COCOM partners that all goods and technologies be decontrolled up to the China "Green Line," a quantum liberalization in a variety of sensitive areas.

  • The House would also have the government propose to COCOM that exports of state-of-the-art telecommunications equipment for civil end-use be allowed to any country.

  • Under the House version, national security controls on all products and for all destinations are removed in two years. During the interim period, it will be up to the Secretary of Commerce (not the Secretary of Defense) to determine what goods and technologies should be controlled for national security purposes. Furthermore, each item must be justified in writing and published in the Federal Register.

  • The House would permit the export of sensitive technologies even to controlled countries for the purpose of "trade shows," irrespective of their military criticality.

  • The House version would allow the Commerce Department to encroach on other U.S. government agencies engaged in overseas investigations.

  • The House bill contains an important provision added as a floor amendment at the initiative of Rep. Richard Durbin (D-IL) and approved by an overwhelming majority. It was intended to deny the Soviet Union the benefits of H.R. 4653’s liberalized export control regime until the USSR entered into good faith negotiations with Lithuania and halted its economic embargo.

  • The House conferees, however, are attempting to interpret the Durbin amendment as pertaining only to such liberalization efforts as may occur in the future with respect to technologies still controlled once the 1990 EAA amendments are enacted. Such an interpretation transparently contradicts the intention of the full House of Representatives and would effectively gut the Durbin amendment.


  • While important penalties are mandated by the Senate bill for persons involved in trafficking in technologies related to chemical, biological, and ballistic missile weapons, the sanctions would only apply to violations actually occurring after the legislation becomes law. Thus, companies currently under investigation for earlier transgressions whose convictions might take place after the enactment of the law, would not be subject to such measures. According to testimony before the Government Operations Committee yesterday, 40 U.S. companies are currently under investigation for such sales to Iraq.



Recent news accounts and congressional hearings have clearly revealed that the present export administration regime is sorely deficient. Unless the proper lessons are drawn from the technology transfer dimensions of the Iraq crisis, however, pending legislation threatens greatly to exacerbate the present situation.

Consequently, the Center for Security Policy heartily welcomes the conclusion drawn by Rep. Doug Barnard (D-GA), chairman of the House Government Operations Subcommittee on Commerce, Consumer, and Monetary Affairs at the end of yesterday’s hearing concerning exports to Iraq and H.R. 4653. He said:


I am sure I voted for the extension of the Export Administration Act, probably innocently though. The fact is that maybe we were being a little bit too liberal in what we were doing in that regard. So I certainly would admonish the conference, especially because of the information which has developed since the bills were passed, to look at this conference very, very carefully. I would also — if I was President of the United States, take a new look at it myself as far as the veto is concerned.


The Center urges the conferees to drop all provisions of H.R. 4653 that would further dilute the Defense Department’s ability to prevent dangerous technology transfers or otherwise facilitate potential adversaries’ efforts to acquire sensitive goods and know-how from Western sources. Should that not be the result of the conference, the Center would join Rep. Barnard in urging a

1. COCOM countries include those comprising NATO plus Japan and Australia, minus Iceland.

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