[国会记录：2008年5月22日（参议院）] [Page S4782-S4787]出口管制系统哈卡先生。主席先生，我希望今天讨论美国出口管制系统官僚机构及其对国家利益的影响。最近，我担任听证会监督参议院国土安全和政府事务委员会的政府管理小组委员会的监督，题为“无法控制：改革出口许可机构，以获得国家安全和经济利益的出口许可机构。”听证会上探讨的一些问题是：金博宝正规网址修改出口管制的多边协调和执法方面;解决协调和批准许可证的间歇性过程中的缺点;审查替代官僚机构或流程，以消除我们的出口管制系统中的可利用接缝;并确保有足够的合格许可人员审查有效的许可申请。来自国家部门政治军事局，商务部的工商局和安全部的见证人，国防部的国防科技安全管理局回应了政府问责办公室的几年分析，建议，报告和证词的几年的分析，建议，报告和证词ReportsReports，高。该小组的高位见证了美国出口管制制度众多低效率和无效的情况，包括较差的战略管理，不足的间际协调，人力短缺，长期问题的短期修复，以及信息系统不足。虽然原子能机构证人承认解决这些缺点的进展，但他们还阐述了更深入的需求，以应对21世纪全球化的挑战。 I would go one step further then the administration witnesses. The U.S. export control system is a relic of the Cold War and does not effectively meet our national and economic security needs. Recent examples demonstrate the challenges of controlling sensitive exports. Dual-use technology has been diverted through Britain and the United Arab Emirates, UAE, to Iran. A recent attempt by two men to smuggle sensitive thermal imaging equipment to China shows that Iran is not alone in [[Page S4783]] its desire for sensitive technology. However, the effort to control the flow of dual-use technology goes beyond our borders. Working with the international community is critical as technologies which were once only produced in the U.S. are now being produced elsewhere. The second group of witnesses, representing many decades of government and private sector experience with export controls, identified recommendations that could begin to modernize this system: eliminating the distinction between weapons and dual-use technology; reducing the total number of items on control lists; implementing project licenses that cover a multitude of items instead of relying on an item-by-item licensing process; passing an updated Export Administration Act; focusing on multilateral export controls and harmonizing them with our allies; and reestablishing high-level policy management of both dual-use and munitions exports at the White House. Mr. President, I would like to ask to have printed in the Record, following my remarks, a CRS memorandum providing an excellent overview of U.S export controls. An opportunity to revise our ineffective and inefficient export control system will accompany the arrival of the new administration in January. I urge my colleagues to consider these recommendations for improving the management and bureaucracy of the export control system as the Congress debates and updates relevant legislation. Mr. President, I ask unanimous consent to have the two CRS memoranda to which I referred printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows: Congressional Research Service, Washington, DC, April 21, 2008. Memorandum Re: Background for Hearing on U.S. Export Controls. To: Senate Homeland Security and Government Affairs Committee; Subcommittee on Oversight of Government Management; the Federal Workforce; and the District of Columbia. From: Ian F. Fergusson, Specialist in International Trade and Finance; Richard F. Grimmett, Specialist in National Defense, Foreign Affairs, Defense, and Trade Division. This memorandum responds to your request for background information in support of your upcoming hearing on the U.S. export control system. The memo discusses the legislative authority, structure, and function of U.S. dual-use and defense export controls. It also discusses current issues related to the administration of those controls. If you have any questions concerning the material in this memorandum, please contact Ian Fergusson at 7-4997 or Richard Grimmett at 7-7675. Overview of the U.S. Export Control System The United States restricts the export of defense items or munitions, so-called ``dual-use'' goods and technology, certain nuclear materials and technology, and items that would assist in the proliferation of nuclear, chemical and biological weapons or the missile technology to deliver them. Defense items are defined by regulation as those ``specifically designed, developed, or configured, adapted, or modified for a military application, has neither predominant civilian application nor performance equivalent to an item used for civilian application, or has significant military or intelligence application ``such that control is necessary.'' Dual-use goods are commodities, software, or technologies that have both civilian and military applications. U.S. export controls are also utilized to restrict exports to certain countries in which the United States imposes economic sanctions. Through the Export Administration Act (EAA), the Arms Export Control Act (AECA), and other authorities, Congress has delegated to the executive branch its express constitutional authority to regulate foreign commerce by controlling exports. In its administration of this authority, the executive branch has created a diffuse system by which exports are controlled by differing agencies under different regulations. This section describes the characteristics of the dual-use, munitions, and nuclear controls. The information contained in the section also appears in chart form in Appendix 1. Various aspects of this system have long been criticized by exporters, non-proliferation advocates and other stakeholders as being too rigorous, insufficiently rigorous, lax, cumbersome, too stringent, or any combination of these descriptions. In January 2007, the Government Accountability Office (GAO) designated government programs designed to protect critical technologies, including the U.S. export control system, as a `high-risk area' ``that warrants a strategic re-examination of existing programs to identify needed changes.'' The report cited poor coordination among export control agencies, disagreements over commodity jurisdiction between State and Commerce, unnecessary delays and inefficiencies in the license application process, and a lack of systematic evaluative mechanisms to determine the effectiveness of export controls. The Dual-Use System The Export Administration Act (EAA). The EAA of 1979 (P.L. 96-72) is the underlying statutory authority for dual-use export controls. The EAA, which is currently expired, periodically has been reauthorized for short periods of time. The last incremental extension expired in August 2001. At other times and currently, the export licensing system created under the authority of EAA has been continued by the invocation of the International Emergency Economic Powers Act (IEEPA) (P.L. 95-223). EAA confers upon the President the power to control exports for national security, foreign policy or short supply purposes. It also authorizes the President to establish export licensing mechanisms for items detailed on the Commerce Control List (see below), and it provides some guidance and places certain limits on that authority. Several attempts to rewrite or reauthorize the EAA have occurred over the years. The last comprehensive effort took place during the 107th Congress. The Senate adopted legislation, S. 149, in September 2001, and a competing House version, H.R. 2581, was developed by the then House International Relations Committee, and the House Armed Services Committee. The full House did not act on this legislation. More modest attempts to update the penalty structure and enforcement mechanisms in context of renewing the 1979 Act for a period of 5 years has been introduced in the 110th Congress as the Export Enforcement Act of 2007 (S. 2000). The EAA, which was written and amended during the Cold War, was based on strategic relationships, threats to U.S. national security, international business practices, and commercial technologies many of which have changed dramatically in the last 25 years. Some Members of Congress and most U.S. business representatives see a need to liberalize U.S. export regulations to allow American companies to engage more fully in international competition for sales of high-technology goods. Other Members and some national security analysts contend that liberalization of export controls over the last decade has contributed to foreign threats to U.S. national security, that some controls should be tightened, and that Congress should weigh further liberalization carefully. Administration. The Bureau of Industry and Security in the Department of Commerce administers the dual-use export control system. The export licensing and enforcement functions that now form the agency mission of BIS were detached from the International Trade Administration in 1980 in order to separate it from the export promotion functions of the Department of Commerce. In FY2006, BIS processed 18,941 licenses with a value of approximately $36 billion. During the same fiscal year, BIS approved 15,982 applications, denied 189, and returned 2,763 (usually because a license was not necessary), for an approval rate of 98.8%, disregarding the returned licenses. BIS was appropriated $72.9 million in FY2008 with budget authority for 365 positions. The President's FY2009 request for BIS is $83.7 million, a 14.8% increase from FY2008, with budget authority for 396 positions. In addition to its export licensing and enforcement functions, BIS also enforces U.S. anti-boycott regulations concerning the Arab League boycott against Israel. Implementing Regulations. The EAA is implemented by the Export Administration Regulations (EAR) (15 CFR 730 et seq). As noted above, the EAR is continued under the authority of the International Economic Emergency Powers Act (IEEPA) in times when the EAA is expired. The EAR sets forth licensing policy for goods and destinations, the applications process used by exporters, and the Commerce Control List (CCL). The CCL is the list of specific goods, technology, and software that are controlled by the EAR. The CCL is composed of ten categories of items: Nuclear materials, facilities, and equipment; materials, organisms, microorganisms, and toxins; materials processing; electronics; computers; telecommunications and information security; lasers and sensors; navigation and avionics; marine; and propulsion systems, space vehicles, and related equipment. Each of these categories is further divided into functional groups: Equipment, assemblies, and components; test, inspection, and production equipment; materials; software; and technology. Each controlled item has an export control classification number (ECCN) based on the above categories and functional group. Each ECCN is accompanied by a description of the item and the reason for control. In addition to discrete items on the CCL, nearly all U.S. origin commodities are ``subject to the EAR.'' This means that any product ``subject to the EAR'' may be restricted to a destination based on the end-use or end-user of the product. For example, a commodity that is not on the CCL may be denied if the good is destined for a military end-use, or to an entity known to be engaged in proliferation. Licensing Policy. The EAR sets out the licensing policy for dual-use commodities. Items are controlled for reasons of national security, foreign policy, or short-supply. National security controls are based on a common multilateral control list, however the [[Page S4784]] countries to which we apply those controls are based on U.S. policy. Foreign Policy controls may be unilateral or multilateral in nature. Items are controlled unilaterally for anti-terrorism, regional stability, or crime control purposes. Anti-terrorism controls proscribe nearly all exports to the 5 state sponsors of terrorism. Foreign policy- based controls are also based on adherence to multilateral non-proliferation control regimes such the Nuclear Suppliers' Group, the Australia Group (chemical and biological precursors), and the Missile Technology Control Regime. The EAR sets out timelines for the consideration of dual- use licenses and the process for resolving interagency disputes. Within 9 days from receipt, Commerce must refer the license to other agencies (State, Defense, or NRC as appropriate), grant the license, deny it, seek additional information, or return it. If the license is referred to other agencies, the agency to which it is referred must recommend the application be approved or denied within thirty days. The EAR provides a dispute resolution process for a dissenting agency to appeal an adverse decision. The interagency dispute resolution process is designed to be completed within 90 days. This process is depicted graphically in Appendix 2. Enforcement and Penalties. Because of the expiration of the EAA, current penalties for export control violations are based on those contained in the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.). For criminal penalties, IEEPA sanctions individuals up to $1 million or up to 20 years imprisonment, or both, per violation [50 U.S.C. 1705(b)]. Civil penalties under IEEPA are set at $250,000 per violation. IEEPA penalties were recently raised to the current levels by the International Emergency Economic Powers Enhancement Act (P.L. 110-96), which was signed by President Bush on October 16, 2007. Enforcement is carried out by the Office of Export Enforcement (OEE) at BIS. OEE has a staff of approximately 164 in Washington and eight domestic field offices. OEE is authorized to carry out investigations domestically and works with Department of Homeland Security (DHS) to conduct investigations overseas. OEE also conducts pre-license and post-shipment verification along with in-country U.S. embassy officials overseas. The Export Enforcement Act of 2007. One of the persistent concerns about the administration of the dual-use system is that it operates under the emergency authority of the International Economic Emergency Powers Act (IEEPA), the underlying EAA having last expired in 2001. On August 3, 2007, the administration-supported Export Enforcement Act of 2007 (S. 2000) was introduced by Senator Dodd. The draft bill would reauthorize the Export Administration Act for five years and amend the penalty and enforcement provisions of the Act. The proposed legislation would revise the penalty structure and increase penalties for export control violations. The bill would raise criminal penalties for individuals up to $1 million and raise the term of potential imprisonment to ten years for each violation. For firms, it would raise penalties to the greater of $5 million or 10 times the value of the export. Under the 1979 FAA, the base penalty was the greater of $50,000 or 5 times the value of the export, or five years imprisonment. It would expand the list of statutory violations that could result in a denial of export privileges, and it extends the term of such denial from not more than 10 years to not more than 25 years. The enforcement provisions of the Administration proposal would expand the authority of the Department of Commerce to investigate potential violations of EAA overseas. It provides for enforcement authority at other places at home and abroad with the concurrence of the Department of Homeland Security. The proposed draft legislation would restate the enforcement provisions of the EAA to account for the current structure of Customs and Border Security and the Immigration and Customs Enforcement in the Department of Homeland Security. It would also direct the Secretary of Commerce to publish and update best practices guidelines for effective export control compliance programs. It also would expand the confidentiality provisions beyond licenses and licensing activity to include classification requests, enforcement activities, or information obtained or supplied concerning U.S. multilateral commitments. The bill included new language governing the use of funds for undercover investigations and operations and establishes audit and reporting requirements for such investigations. It also authorized wiretaps in enforcement of the act. Some in the industry community have criticized the legislation for focusing on penalties and enforcement without addressing business concerns such as streamlining the license process. While the Administration favors the 5 year renewal period of the current EAA as a period in which a new export control system may be devised, the length of the extension may also serve to take the pressure off such reform efforts. Military Export Controls Arms Export Control Act of 1976 (AECA). The AECA provides the statutory authority for the control of defense articles and services. It sets out foreign and national policy objectives for international defense cooperation and military export controls. Section 3(a) of the Arms Export Control Act (AECA) sets forth the general criteria for countries or international organizations to be eligible to receive United States defense articles and defense services provided under the act. It also sets express conditions on the uses to which these defense items maybe put. Section 4 of the Arms Export Control Act states that U.S. defense articles and defense services shall be sold to friendly countries ``solely'' for use in ``internal security,'' for use in ``legitimate self- defense,'' to enable the recipient to participate in ``regional or collective arrangements or measures consistent with the Charter of the United Nations,'' to enable the recipient to participate in ``collective measures requested by the United Nations for the purpose of maintaining or restoring international peace and security,'' and to enable the foreign military forces ``in less developed countries to construct public works and to engage in other activities helpful to the economic and social development of such friendly countries.'' The AECA also contains the statutory authority for the Foreign Military Sales program, under which the U.S. government sells U.S. defense equipment, services, and training on a government-to-government basis. Licensing Policy. The International Traffic in Arms Regulations (ITAR) sets out licensing policy for exports (and some temporary imports) of U.S. Munitions List (USML) items. A license is required for the export of nearly all items on the USML. Canada has a limited exemption as it is considered part of the U.S. defense industrial base. In addition, the United States has recently signed treaties with the United Kingdom and Australia to exempt certain defense articles from licensing obligations to approved end-users in those countries. These treaties must be ratified by the Senate. Unlike some Commerce controls, licensing requirements are based on the nature of the article and not the end-use or end-user of the item. The United States prohibits munitions exports to countries either unilaterally or based on adherence to United Nations arms embargoes. In addition, any firm engaged in manufacturing, exporting, or brokering any item on the USML must register with DDTC and pay a yearly fee, currently $1,750, whether it seeks to export or not during the year. Congressional Requirements. A prominent feature of the AECA is the requirement of congressional consideration of foreign arms sales proposed by the President. This procedure includes consideration of proposals to sell major defense equipment, defense articles and services, or the re-transfer to other nations of such military items. The procedure is triggered by a formal report to Congress under Sections 36 of the Arms Export Control Act (AECA). In general, the executive branch, after complying with the terms of applicable section of U.S. law, usually those contained in the Arms Export Control Act, is free to proceed with an arms sales proposal unless Congress passes legislation prohibiting or modifying the proposed sale. The traditional sequence of events for the congressional review of an arms sale proposal has been the submission by the Defense Department (on behalf of the President) of a preliminary or ``informal'' classified notification of a prospective major arms sale 20 calendar-days before the executive branch takes further formal action. This ``informal'' notification is submitted to the Speaker of the House (who traditionally has referred it to the House Foreign Affairs Committee), and to the Chairman of the Senate Foreign Relations Committee. This practice stems from a February 18, 1976, letter of the Defense Department making a nonstatutory commitment to give Congress these preliminary classified notifications. It has been the practice for such ``informal'' notifications to be made for arms sales cases that would have to be formally notified to Congress under the provisions of Section 36(b) of the Arms Export Control Act (AECA). These ``informal'' notifications always precede the submission of the required statutory notifications, but the time period between the submission of the ``informal'' notification and the statutory notification is not fixed. It is determined by the President. He has the obligation under the law to submit the arms sale proposal to Congress, but only after he has determined that he is prepared to proceed with any such notifiable arms sales transaction. Under Section 36(b) of the Arms Export Control Act, Congress must be formally notified 30 calendar-days before the Administration can take the final steps to conclude a government-to-government foreign military sale of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states, NATO, Japan, Australia, or New Zealand, Congress must be formally notified 15 calendar-days before the Administration can proceed with the sale. However, the prior notice thresholds are higher for NATO members, Australia, Japan or New Zealand. These higher thresholds are: $25,000,000 for the sale, enhancement or upgrading of major defense equipment; $100,000,000 for the sale, enhancement or upgrading of defense articles and defense services; and $300,000,000 for the sale, enhancement or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of nations. Commercially licensed arms sales also must be formally notified to Congress 30 calendar-days before the export license is issued if they involve the sale of major defense [[Page S4785]] equipment valued at $14 million or more, or defense articles or services valued at $50 million or more (Section 36(c) AECA). In the case of such sales to NATO member states, NATO, Japan, Australia, or New Zealand, Congress must be formally notified 15 calendar-days before the Administration can proceed with such a sale. However, the prior notice thresholds are higher for sales to NATO members, Australia, Japan or New Zealand specifically: $25,000,000 for the sale, enhancement or upgrading of major defense equipment; $100,000,000 for the sale, enhancement or upgrading of defense articles and defense services, and $300,000,000 for the sale, enhancement or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of nations. It has not been the general practice for the Administration to provide a 20-day ``informal'' notification to Congress of arms sales proposals that would be made through the granting of commercial licenses. A congressional recess or adjournment does not stop the 30 calendar-day statutory review period. It should be emphasized that after Congress receives a statutory notification required under Sections 36(b) or 36(c) of the Arms Export Control Act, for example, and 30 calendar-days elapse without Congress having blocked the sale, the executive branch is free to proceed with the sales process. This fact does not mean necessarily that the executive branch and the prospective arms purchaser will sign a sales contract and that the items will be transferred on the 31st day after the statutory notification of the proposal has been made. It would, however, be legal to do so at that time. Administration. Exports of defense goods and services are administered by the Directorate of Defense Trade Controls (DDTC) at the Department of State. DDTC is a component of the Bureau of Political-Military Affairs and consists of four offices: Management, Policy, Licensing, and Compliance. In FY2008, DDTC was funded at a level of $12.7 million and had a staff of 78 ($6.6 million for licensing activities, 44 licensing officers). In the 12 months ending March 2008, DDTC completed action on 83,886 export license applications, and its FY2009 budget request reported that license application volumes have increased by 8% a year. DDTC's FY2009 budget request, however, did not ask for additional staffing and its budget request called for an increase of $0.4 million to $13.1 million ($6.9 million for licensing activities). On March 24, 2008, 19 Members of Congress wrote to the Chairwoman and Ranking Member of the House State and Foreign Operations Appropriations Subcommittee to request a funding level of $26 million, including $8 million collected yearly from registration fees. Senator Biden, in his Foreign Relations Views and Estimates letter to the Senate Budget Committee also described DDTC as ``seriously understaffed'' and suggested ``a doubling of that figure ($6.9 million for licensing) is warranted. Critics of the defense trade system have long decried the delays and backlogs in processing license applications at DDTC. The new National Security Presidential Directive (NSPD- 56), signed by President Bush on January 22, 2008, directed that the review and adjudication of defense trade licenses submitted under ITAR are to be completed within 60 days, except where certain national security exemptions apply. Previously, except for the Congressional notification procedures discussed above, DDTC had no defined time-line for the application process. DDTC's backlog of open cases, which had reached 10,000 by the end of 2006, has been reduced to 3,458 by March 2008. During this period, average processing time of munitions license applications have also trended downward from 33 days to 15 days. However, GAO reported in November 2007 that DDTC was using ``extraordinary measures--such as extending work hours, canceling staff training, meeting, and industry outreach, and pulling available staff from other duties in order to process cases'' to reduce the license backlog, measures that it described as unsustainable. Enforcement and Penalties. The AECA provides for criminal penalties of $1 million or ten years for each violation, or both. AECA also authorizes civil penalties of up to $500,000 and debarment from future exports. DDTC has a small enforcement staff (18 in the Office of Defense Trade Compliance) and works with the Defense Security Service and the Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) units at the Department of Homeland Security (DHS). DDTC assists the DHS and the Department of Justice in pursuing criminal investigations and prosecutions. DDTC also coordinates the Blue Lantern end-use monitoring program, in which U.S. embassy officials in-country conduct pre-license checks and post-shipment verifications. In FY2006, DDTC completed 489 end-use cases, 94 (19%) of which were determined to be unfavorable. Nuclear A subset of the abovementioned dual-use and military controls are controls on nuclear items and technology. Controls on nuclear goods and technology are derived from the Atomic Energy Act as well as from the EAA and the AECA. Controls on nuclear exports are divided between several agencies based on the product or service being exported. The Nuclear Regulatory Commission regulates exports of nuclear facilities and material, including core reactors. The NRC licensing policy and control list is located at 10 C.F.R. 110. BIS licenses ``outside the core'' civilian power plant equipment and maintains the Nuclear Referral List as part of the CCL. The Department of Energy controls the export of nuclear technology. DDTC exercises licensing authority over nuclear items in defense articles under the ITAR. Defense Technology Security Administration (DTSA) DTSA is located in the Department of Defense, Office of the Under Secretary of Defense for Policy under the Assistant Secretary of Defense for Global Security Affairs. DTSA coordinates the technical and national security review of direct commercial sales export licenses and commodity jurisdiction requests received from the Departments of Commerce and State. It develops the recommendation of the DOD on these referred export licenses or commodity jurisdictions based on input provided by the various DOD departments and agencies and represents DOD in the interagency dispute resolution process. In calendar year 2007, DTSA completed 41,689 license referrals. Not all licenses from DDTC or BIS are referred to DTSA; memorandums of understanding govern the types of licenses referred from each agency. DTSA coordinates the DOD position with regard to proposed changes to the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). It also represents the DOD in interagency fora responsible for compliance with multinational export control regimes. For FY2008, DTSA had a staff of 187 civilian and active duty military employees and received funding of $23.3 million. APPENDIX 1: BASIC EXPORT CONTROL CHARACTERISTICS ---------------------------------------------------------------------------------------------------------------- Characteristic Dual-Use Munitions Nuclear ---------------------------------------------------------------------------------------------------------------- Legislative Authority................ Export Administration Arms Export Control Act Atomic Energy Act of Act (EAA) of 1979 of 1976 (AECA). 1954. (expired); International Emergency Economic Powers Act of 1977 (IEEPA). Agency of Jurisdiction............... Bureau of Industry and Directorate of Defense Nuclear Regulatory Security (BIS) Trade Controls (DDTC) Commission (NRC) (Commerce). (State). (facilities and material); Department of Energy (DOE) (technology); BIS (`outside the core' civilian power plant equipment); DDTC (nuclear items in defense articles). Implementing Regulations............. Export Administration International Traffic 10 C.F.R. 110--Export Regulations (EAR). in arms Regulations and Import of Nuclear (ITAR). Material and Equipment (NRC); 10 C.F.R. 810-- Assistance to Foreign Atomic energy Activities (DOE). Control List......................... Commerce Control List Munitions List (USML).. List of Nuclear (CCL). Facilities and Equipment; List of Nuclear Materials (NRC); Nuclear Referral List (CCL); USML; Activities Requiring Specific Authorization (DOE). Relation to Multilateral Controls.... Wassenaar Arrangement Wassennaar Arrangement Nuclear Suppliers' (Dual-Use); Missile (munitions); MTCR. Group; International Technology Control Atomic Energy Agency. Regime (MTCR); Australia Group (CBW); Nuclear Suppliers' Group. Licensing Policy..................... Based on item, country, Most Munitions; License General/Specific or both. Anti- items require Licenses (NRC); terrorism controls licenses; 21 General/Specific proscribe exports to 5 proscribed countries. Authorizations (DOE). countries for nearly all CCL listings. Licensing Application Timeline....... initial referral within 60 days with national No timeframe for 9 days; agency must security exceptions; license applications. approve/deny within 30 Congressional days; 90 appeal notification period process. (See Appendix for significant 2). military equipment. [[Page S4786]] Penalties............................ Criminal: $1 million or Criminal: $1 million/10 Criminal: Individual-- 20 years; Civil: years prison; Civil: $250,000/12 years to $250,000/Denial of $500,000/forfeiture of life; Firm--$500,000 export privileges. goods, conveyance; (For NRC and DOE); (IEEPA). Denial of Export Civil: $100,000 per Privileges for either. violation (For NRC). ---------------------------------------------------------------------------------------------------------------- Congressional Research Service; Washington, DC, April 21, 2008. Memorandum Re: United Arab Emirates: Political Background and Export Control Issues. To: Senate Homeland Security and Government Affairs Committee; Subcommittee on Oversight of Government Management; the Federal Workforce, and the District of Columbia. From: Kenneth Katzman; Specialist in Middle Eastern Affairs; Ian F. Fergusson; Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division. This memorandum responds to your request for background on the United Arab Emirates and concerns about that country's export control law and practices. If you have any requests concerning this material, please contact Kenneth Katzman (7- 7612) or Ian Fergusson (7-4997). Political and Economic Background The UAE is a federation of seven emirates (principalities): Abu Dhabi, the oil-rich capital of the federation; Dubai, its free-trading commercial hub; and the five smaller and less wealthy emirates of Sharjah; Ajman; Fujayrah; Umm al-Qawayn; and Ras al-Khaymah. The UAE federation is led by the ruler of Abu Dhabi, Khalifa bin Zayid al-Nuhayyan, now about 60 years old. The ruler of Dubai traditionally serves concurrently as Vice President and Prime Minister of the UAE; that position has been held by Mohammad bin Rashid Al Maktum, architect of Dubai's modernization drive, since the death of his elder brother Maktum bin Rashid Al Maktum on January 5, 2006. In part because of its small size--its population is about 4.4 million, of which only about 900,000 are citizens--the UAE is one of the wealthiest of the Gulf states, with a gross domestic product (GDP) per capita of about $55,000 per year in terms of purchasing power parity. Islamist movements in UAE, including those linked to the Muslim Brotherhood, are generally non-violent and perform social and relief work. However, the UAE is surrounded by several powers that dwarf it in size and strategic capabilities, including Iran, Iraq, and Saudi Arabia, which has a close relationship with the UAE but views itself as the leader of the Gulf monarchies. The UAE has long lagged behind the other Persian Gulf states in political reform, but the federation, and several individual emirates, have begun to move forward. The most significant reform, to date, took place in December 2006, when limited elections were held for half of the 40-seat Federal National Council (FNC); the other 20 seats continue to be appointed. Previously, all 40 members of the FNC were appointed by all seven emirates, weighted in favor of Abu Dhabi and Dubai (eight seats each). UAE citizens are able to express their concerns directly to the leadership through traditional consultative mechanisms, such as the open majlis (council) held by many UAE leaders. The UAE's social problems are likely a result of its open economy, particularly in Dubai. The Trafficking in Persons report for 2007 again placed the UAE on ``Tier 2/Watch List'' (up from Tier 3 in 2005) because it does not comply with the minimum standards for the elimination of trafficking but is making significant efforts to do so. The UAE is considered a ``destination country'' for women trafficked from Asia and the former Soviet Union. Defense Relations With the United States and Concerns About Iran. Following the 1991 Gulf war to oust Iraqi forces from Kuwait, the UAE, whose armed forces number about 61,000, determined that it wanted a closer relationship with the United States, in part to deter and to counter Iranian naval power. UAE fears escalated in April 1992, when Iran asserted complete control of the largely uninhabited Persian Gulf island of Abu Musa, which it and the UAE shared under a 1971 bilateral agreement. (In 1971, Iran, then ruled by the U.S.- backed Shah, seized two other islands, Greater and Lesser Tunb, from the emirate of Ras al-Khaymah, as well as part of Abu Musa from the emirate of Sharjah.) The UAE wants to refer the dispute to the International Court of Justice (ICJ), but Iran insists on resolving the issue bilaterally. The United States is concerned about Iran's military control over the islands and supports UAE proposals, but the United States takes no position on sovereignty of the islands. The UAE, particularly Abu Dhabi, has long feared that the large Iranian-origin community in Dubai emirate (est. 400,000 persons) could pose a ``fifth column'' threat to UAE stability. Illustrating the UAE's attempts to avoid antagonizing Iran, in May 2007, Iranian President Mahmoud Ahmadinejad was permitted to hold a rally for Iranian expatriates in Dubai when he made the first high level visit to UAE since UAE independence in 1971. The framework for U.S.-UAE defense cooperation is a July 25, 1994, bilateral defense pact, the text of which is classified, including a ``status of forces agreement'' (SOFA). Under the pact, during the years of U.S. ``containment'' of Iraq (1991-2003), the UAE allowed U.S. equipment pre-positioning and U.S. warship visits at its large Jebel Ali port, capable of handling aircraft carriers, and it permitted the upgrading of airfields in the UAE that were used for U.S. combat support flights, during Operation Iraqi Freedom (OIF). About 1,800 U.S. forces, mostly Air Force, are in UAE; they use Al Dhafra air base (mostly KC-10 refueling) and naval facilities at Fujairah to support U.S. operations in Iraq and Afghanistan. The UAE, a member of the World Trade Organization (WTO), has developed a free market economy. On November 15, 2004, the Administration notified Congress it had begun negotiating a free trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007 expiration of Administration ``trade promotion authority,'' but progress had been halting, mainly because UAE may feel it does not need the FTA enough to warrant making major labor and other reforms. Despite diversification, oil exports still account for one-third of the UAE's federal budget. Abu Dhabi has 80% of the federation's proven oil reserves of about 100 billion barrels, enough for over 100 years of exports at the current production rate of 2.2 million barrels per day (mbd). Of that amount, about 2.1 mbd are exported, but negligible amounts go to the United States. The UAE does not have ample supplies of natural gas, and it has entered into a deal with neighboring gas exporter Qatar to construct pipeline that will bring Qatari gas to UAE (Dolphin project). UAE is also taking a leading role among the Gulf states in pressing consideration of alternative energies, including nuclear energy, to maintain Gulf energy dominance. Export Control Issues Cooperation Against Terrorism. The relatively open society of the UAE--along with UAE policy to engage rather than confront its powerful neighbors--has also caused differences with the United States on the presence of terrorists and their financial networks. However, the UAE has been consistently credited by U.S. officials with attempting to rectify problems identified by the United States. The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) to have recognized the Taliban during 1996-2001 as the government of Afghanistan. During Taliban rule, the UAE allowed Ariana Afghan airlines to operate direct service, and Al Qaeda activists reportedly spent time there. Two of the September 11 hijackers were UAE nationals, and they reportedly used UAE-based financial networks in the plot. Since then, the UAE has been credited in U.S. reports (State Department ``Country Reports on Terrorism: 2006, released April 30, 2007'') and statements with: assisting in the 2002 arrest of senior Al Qaeda operative in the Gulf, Abd al-Rahim al-Nashiri; denouncing terror attacks; improving border security; prescribing guidance for Friday prayer leaders; investigating suspect financial transactions; and strengthening its bureaucracy and legal framework to combat terrorism. In December 2004, the United States and Dubai signed a Container Security Initiative Statement of Principles, aimed at screening U.S.-bound containerized cargo transiting Dubai ports. Under the agreement, U.S. Customs officers are co-located with the Dubai Customs Intelligence Unit at Port Rashid in Dubai. On a ``spot check'' basis, containers are screened at that and other UAE ports for weaponry, explosives, and other illicit cargo. The UAE has long been under scrutiny as a transhipment point for exports to Iran and other proliferators. In connection with revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea by Pakistan's nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for Khan's shipments of nuclear components. Two Dubai-based companies were apparently involved in trans- shipping components: SMB Computers and Gulf Technical Industries. On April 7, 2004, the Administration sanctioned a UAE firm, Elmstone Service and Trading (FZE), for allegedly selling weapons of mass destruction- related technology to Iran, under the Iran-Syria Non-Proliferation Act (P.L. 106- 178). More recently, in June 2006, the Bureau of Industry and Security (BIS) released a general order imposing a license requirement on Mayrow General Trading Company and related enterprises in the UAE. This was done after Mayrow was implicated in the transhipment of electronic components and devices capable of being used to construct improvised explosive devices (IED) used in Iraq and Afghanistan. Current Controls. The UAE is not subject to any blanket prohibitions regarding dual- use Commerce exports. In general, the UAE faces many of the same license requirements [[Page S4787]] as other non-NATO countries. In the Export Administration Regulations (15 CFR 730 et seq.), the UAE is designated on Country Group D and thus is not eligible for certain license exceptions for items controlled for chemical biological and missile technology reasons. Reexports of U.S. origin goods from one foreign country to another subject to EAR are also controlled, and may require the reexporter regardless to nationality to obtain a license for reexport from BIS. The Treasury Department's Office of Foreign Assets Control maintains a comprehensive embargo on the export, re-export, sale or supply of any good, service or technology to Iran by persons of U.S. origin, including to persons in third countries with the knowledge that such goods are intended specifically for the supply, transhipment or re-exportation to Iran (Iranian Transaction Regulations, 31 CFR 560.204). Re-exportation of goods, technology and services by non-U.S. persons are also prohibited if undertaken with the knowledge or reason to know that the re-exportation is intended specifically for Iran. (31 CFR 560.205). In addition, BIS also maintains controls on exports and reexports for items on the Commerce Control List (EAR, 15 CFR 746.7). The lack of an effective export control system in the UAE and the use of the emirates' ports as transhipment centers has been a concern to U.S. policymakers. To that end, BIS released an advanced notice of proposed rule-making on February 26, 2007 that would have created a new control designation: ``Country Group C: Destinations of Diversion Control.'' This designation would have established license requirements on exports and re-exports to countries that represent a diversion or transhipment risk for goods subject to the Export Administration Regulations. According to BIS, the Country C designation was designed ``to strengthen the trade compliance and export control system of countries that are transhipment hubs.'' Designation on the Country Group C list could lead to tightened licensing requirements for designees. Although no countries were mentioned in the notice, it was widely considered to be directed at the United Arab Emirates. Perhaps as a response to the possibility of becoming a `Country C' designee, the UAE Federal Council passed the emirate's first ever export control statute in March 2007. That law, also created a control body known as the National Commission for Commodities Subject to Import, Export, and Re- export Controls and that law was signed on August 31, 2007 by Emirates President H.H. Sheikh Khalifa bin Zayed Al Nahyan. Reportedly, the law's structure and control lists were modeled after the export control regime of Singapore, another prominent transhipment hub. It remains unclear, however, the extent to which the law is being enforced or whether resources are being devoted to preventing the diversion or illegal transhipment of controlled U.S. goods and technologies. The United States has one export control officer (ECO) on the ground in the UAE to investigate violations of U.S. dual- use export control laws. This officer may be augmented by U.S. Foreign Commercial Officers in conducting end-use check and post-shipment verifications. A recent GAO report mentioned a ``high-rate of unfavorable end-use checks for U.S. items exported to the UAE,'' but the report did not elaborate further. The United States also has engaged in technical cooperation to assist the UAE in developing its export control regime. Officials from BIS and other agencies reportedly traveled to the UAE in June 2007 to discuss the proposed statute. In addition, the Department of State has also provided training through its Export Control and RelatedBorder Security (EXBS) program. This program provides participating countries with licensing and legal regulatory workshops, detection equipment, on-site program and training advisers, and automated licensing programs. Since FY2001, UAE has received between $172-$350 thousand annually in this assistance. For FY2009, State has requested $200 thousand for the UAE under this program. RECENT U.S. AID TO UAE ---------------------------------------------------------------------------------------------------------------- FY2007 and FY2006 FY2008 FY2009 (Combined) FY2007 (est.) (req) ---------------------------------------------------------------------------------------------------------------- NADR (Non-Proliferation, Anti- $1.094 million......... $1.581 million......... $300,000 $925,000 Terrorism, De-Mining, and Related)-- Anti-Terrorism Programs (ATA). NADR--Counter-Terrorism Financing... $300,000 (FY2006 only). $580,000............... ........... $725,000 NADR--Export Control and Related $250,000............... $172,000............... $300,000 $200,000 Border Security Assistance. International Military Education and ....................... ....................... $14,000 $15,000 Training (IMET). International Narcotics and Law ....................... ....................... $300,000 ........... Enforcement (INCLE). ---------------------------------------------------------------------------------------------------------------- Source: Department of State, FY2009 Budget Justification. ____________________