Fact Sheet: Export Controls on Computers (8/3/00)
                              THE WHITE HOUSE

                       Office of the Press Secretary

For Immediate Release                              August 3, 2000

                                FACT SHEET

                       EXPORT CONTROLS ON COMPUTERS

President Clinton today announced an update of U.S. export controls on
computers that will promote our national security, enhance the
effectiveness of our export control system, and ease unnecessary regulatory
burdens on both government and industry.   Today's announcement is the
fifth revision to U.S. export control parameters since 1993.  This action
reflects the Clinton Administration's efforts to ensure effective controls
on militarily sensitive technology while taking into account the increased
availability of commodity products, such as servers and workstations, of
which millions are manufactured and sold worldwide every year.

The Administration's computer export controls are designed to permit the
government to calibrate control levels and licensing conditions depending
upon the national security or proliferation risk posed at a specific
destination, to enhance U.S. national security by ensuring controls on
computer exports are effective, and to minimize impediments to legitimate
computer exports, which will help preserve the technological lead of the
U.S. computer industrial base.

As directed by the President in February 2000, the Administration has again
reviewed U.S. computer export controls, taking into account recent
advancements in computing technology, and our security, nonproliferation
and other national security interests.

This review found that advancements continue in the power and capabilities
of widely available computing systems, reflecting the exponential growth in
individual microprocessor speeds that has occurred since 1995.  The speed
of the general purpose microprocessor used in standard personal computers
and business applications today has increased by a factor of sixteen since
the Administration's 1995 decision took effect.  This growth will continue
- U.S. companies plan commercial sales of individual "chips" rated over
5000 Million Theoretical Operations Per Second (MTOPS) by late 2000.
Moreover, while there are military1 applications across a range of MTOPS
levels, the national security agencies have reaffirmed their previous
conclusion that there is no definitive line that separates levels of
computing power on the basis of their usefulness for military applications.
In light of this finding, the advances in basic computing technologies, and
the problems inherent in trying to control commodity level items, the
Administration has determined that widespread commercial availability of
computers with performance capabilities up to 28,000 MTOPS makes that a
realistic and enforceable control level for the next six months.

The Revised Controls

The revised controls announced today maintain the four country groups
announced in 1995, but amend the countries in Tiers 1 and 2, and control
levels for Tiers 2 and 3 as follows:

Tier I (Western Europe, Japan, Canada, Mexico, Australia, New Zealand,
Hungary, Poland, the Czech Republic and Brazil): Exports without an
individual license are permitted for all computers (i.e. there is no prior
government review).

* Argentina will be moved from Tier 2 to Tier 1.

Tier II (South and Central America, South Korea, most of ASEAN, Slovenia,
most of Africa): Exports without an individual license are permitted up to
33,000 MTOPS with record-keeping and reporting as directed; individual
licenses (requiring prior government review) are needed above 33,000 MTOPS.

* The Tier 2 individual licensing level will be changed from 33,000 MTOPS
to 45,000 MTOPS immediately.

* Estonia will be moved from Tier 3 to Tier 2.  As required by the National
Defense Authorization Act of 1998, this decision requires a 120-day
congressional notification before it becomes effective.

Tier III (India, Pakistan, all Middle East/Maghreb, the former Soviet
Union, China, Vietnam, Central Europe): Based on President Clinton's
February 2000 decision, exports are permitted under license exception up to
12,500 MTOPS and individual licenses are required for exports to military
end-uses and end-users above that figure.  Exports under license exception
are permitted for civil end-users between 12,500 MTOPS and 20,000 MTOPS,
with exporter record keeping and reporting as directed.  Individual
licenses are required for all end-users above 20,000 MTOPS.

* The Administration will implement a single level, 28,000 MTOPS, above
which individual licenses will be required for all end-uses in Tier 3
countries.  The Administration is removing the civilian and military
end-user distinction in Tier 3 because the national security agencies have
determined that the previous distinction (based on the judgment that there
is a difference in the availability and ease of upgrade/assembly between
four and eight processor systems) is no longer valid.   Agencies now judge
that this distinction no longer exists due to improvements in, and
worldwide availability of, single processors, boards, chipsets, and
operating systems.

The 1998 National Defense Authorization Act (NDAA), P.L. 105-85, imposed a
requirement for companies to provide the Commerce Department with prior
notice of exports for systems above a specified level to all Tier 3
end-users.   U.S. export control agencies have 10 days to inform the
company if it must apply for a license.   The President's February 2000
decision raised the NDAA notification level to 12,500 MTOPS; that decision
will become effective on August 14, 2000 (the end of the 180-day
Congressional notification period.)

* The NDAA notification level will be raised from 12,500 MTOPS to 28,000
MTOPS.  The President will advise the appropriate Congressional committees
of his decision to raise the NDAA notification level.  By law, Congress has
six months to review this decision, after which the change to NDAA
notification level will go into effect.

* The Administration will continue to review advances in computer
technology to determine if additional changes to licensing levels and the
NDAA notification level are warranted.   The Administration will complete
its next review by November 2000.

Tier IV (Iraq, Iran, Libya, North Korea, Cuba, Sudan, and Syria).  There
are no planned changes for Tier IV, current policies continue to apply
(i.e. the United States will maintain a virtual embargo on computer

For all these groups, reexport and retransfer provisions continue to apply.
The revised controls will become effective when they are implemented in
formal Commerce Department regulations.  We will continue to implement the
Enhanced Proliferation Control Initiative (EPCI), which provides authority
for the government to block exports of computers of any level in cases
involving exports to end-uses or end-users of proliferation concern or
risks of diversion to
proliferation activities.  Criminal and civil penalties apply to EPCI

In addition, the Department of Commerce will continue to review its list of
published entities of concern as a means of informing exporters of
potential proliferation and other security risks.  The Department will
remind exporters of their duty to check suspicious circumstances and
inquire about end-uses and end-users.  Exporters are advised to contact the
Department of Commerce if they have any concern with the identity or
activities of the end-users.   The Commerce Department also will work to
expand its efforts  --  through public seminars and consultations with
companies -- to keep industry regularly informed regarding problem
end-users and programs of proliferation concern.

Legislative Proposal.  The National Defense Authorization Act of 1998
requires a six-month Congressional notice period if the President decides
to raise the level that triggers the 10-day pre-export notification
requirement for Tier 3 countries, and a four-month notice if the President
decides to move a country out of  Tier 3.  The six-month notice period in
particular limits our ability to respond quickly to rapid changes in
technology.  The Administration has sought to change both waiting periods
to one month, and the Congress is considering legislation that would change
the six-month notice period to two months.  We will continue to work with
Congress to make these waiting periods more realistic in light of the pace
of technological change.

New Control Methodology.  On a longer-term basis, we will work with
Congress to adopt an approach that permits us to adjust our export controls
in a predictable and timely manner when we are faced with the continuing
challenges of controlling items so widely available that they amount to
commodity items, like computers and microprocessors, which are sold by the
hundreds of thousands and even millions.   The national security agencies
are reviewing various approaches.
Multilateral Coordination. The Administration is consulting with other
nations in the context of our common controls on high performance
computers, and with the members of the Wassenaar Arrangement -- the
multilateral successor to COCOM, to ensure that they understand the basis
for today's changes in controls.  We are committed to working closely with
them to adjust multilateral controls to reflect technological advances and
collective security concerns.  Our controls are consistent with the
purposes of the Wassenaar Arrangement -- to deny arms and sensitive
dual-use technologies to countries of  concern, and to develop mechanisms
for information sharing among the partners as a way to harmonize our export
control practices and policies.

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