The U.S. Government actively pursues its mission to control exports of sensitive equipment, software and technology as a means to promote our national security interests, foreign policy objectives, and pursuit of world peace. Through our export control system and other restrictive measures, the U.S. government can effectively:
- Provide for national security by limiting our adversaries' access to sensitive U.S. technology and weapons
- Promote regional stability
- Take into account human rights considerations
- Prevent proliferation of weapons and technologies to problem end-users and supporters of international terrorism
- Comply with international commitments, i.e. nonproliferation regimes and UN Security Council sanctions
To effectively implement an export control system, a country must first exhibit a broad national commitment to the endeavor. This commitment is first illustrated by making the political decision to adhere to international nonproliferation norms, as defined by various multilateral regimes, and engage solely in responsible arms transfers.
Second, a nation must establish a legal authority to control the export of defense-related and dual-use goods and technologies. This authority would adhere to six legal principles:
- Comprehensive Controls
- Implementing Directives
- Enforcement Power and Penalties
- Interagency Coordination
- International Cooperation
- Protection against governmental dissemination of sensitive business information.
Third, a country should implement regulatory procedures to implement export control laws and policies. These procedures should establish clear lines of authority and provide for a list of controlled items. The control list should adhere to multilateral regime lists and should be clear and easily accessible to exporters. The designated authority administering the regulatory regime should review license requests for completeness and clarity.
Fourth, proper enforcement measures should be built into the system. Preventive enforcement is essential, and should include established licensing procedures (i.e. screening the proposed item, quantity, end-use and all parties involved in the transaction for any potential export) and compliance mechanisms (i.e. working in partnership with industry to educate them on how to monitor and control their own export activity). The ability and authority to interdict and investigate illicit exports are necessary to implement an effective export control system. International cooperation can ensure full compliance with export legislation.
The U.S. is a member of various multilateral nonproliferation regimes, including:
- Nuclear Suppliers Group (NSG) - With 39 member states, the NSG is a widely accepted, mature, and effective export-control arrangement, which contributes to the nonproliferation of nuclear weapons through implementation of guidelines for control of nuclear and nuclear-related exports.
- Zangger Committee - The purpose of the 35-nation Nuclear Non-proliferation Treaty (NPT) Exporters (Zangger) Committee is to harmonize implementation of the NPT requirements to apply International Atomic Energy Agency (IAEA) safeguards to nuclear exports. The Committee maintains and updates a list of equipment and materials that may only be exported if safeguards are applied to the recipient facility (called the "Trigger List" because such exports trigger the requirement for safeguards).
- Missile Technology Control Regime (MTCR) - MTCR partners have committed to apply a common export policy (MTCR Guidelines) on a common list of controlled items, including all key equipment and technology needed for missile development, production, and operation. MTCR Guidelines restrict transfers of missiles - and technology related to missiles - for the delivery of WMD. The regime places particular focus on missiles capable of delivering a payload of at least 500 kg to a distance of at least 300 km -- so-called "Category 1" or "MTCR-class" missiles.
- Australia Group (AG) - Objective is to ensure that the industries of the thirty-two participating countries do not assist, either purposefully or inadvertently, states or terrorists seeking to acquire a chemical and/or biological weapons (CBW) capability. All AG participants exercise national export control over items listed on the AG control list.
- Wassenaar Arrangement (WA) - Objective is to prevent destabilizing accumulations of arms and sensitive dual-use equipment and technologies that may contribute to the development or enhancement of military capabilities that would undermine regional security and stability, and to develop mechanisms for information sharing among the partners as a way to harmonize export control practices and policies.
The Arms Export Control Act (AECA) is the cornerstone of U.S. munitions export control law. This statute is implemented by the International Traffic in Arms Regulations (ITAR). All persons or entities that engage in the manufacture, export, or brokering of defense articles and services must be registered with the U.S. government. The ITAR sets out the requirements for licenses or other authorizations for specific exports of defense articles and services. The AECA requires the State Department to provide an annual and quarterly report of export authorizations to Congress. Certain proposed export approvals and reports of unauthorized re-transfers also require congressional notification.
The Export Administration Act of 1979, as amended, authorizes the Department of Commerce, in consultation with other appropriate agencies, to regulate the export or re-export of U.S.-origin dual-use goods, software, and technology. The Department of Commerce implements this authority through the Export Administration Regulations (EAR). In addition to export controls agreed in the multilateral regimes, the Department of Commerce also imposes certain export and re-export controls for national security, foreign policy, and other reasons, most notably against countries designated by the U.S. Secretary of State as state sponsors of international terrorism, as well as certain countries, entities and individuals subject to domestic unilateral or UN sanctions. Additionally, the Department of Commerce administers and enforces regulations that prohibit certain trade and transactions with certain countries, entities, and individuals by U.S. persons or from the United States under the Trading with the Enemy Act and the International Emergency Economic Powers Act.
Various other U.S. agencies have licensing authority for different exports:
- Nuclear - Nuclear Regulatory Commission, Departments of Energy and Commerce
- Trade embargoes & sanctions/Transactions - Department of the Treasury
U.S. control lists correspond directly with the lists maintained by the various multinational nonproliferation regimes, but are augmented by unilateral controls when necessary to ensure national security and foreign policy imperatives. The three major lists of controlled items are the Commerce Control List (CCL), the United States Munitions List (USML), and the Nuclear Regulatory Commission Controls (NRCC).
The CCL includes the following:
- Items on Wassenaar Arrangement Dual-Use List
- Nuclear-related dual use commodities (compiled in the Nuclear Suppliers Group's Nuclear Referral List)
- Dual-use items on Missile Technology Control Regime List
- CW Precursors, biological organisms and toxins, and CBW-related equipment on Australia Group lists
- Controls in furtherance of U.S. foreign policy and other objectives, including anti-terrorism, crime control, Firearms Convention, regional stability, UN sanctions, and short supply reasons
The U.S. Munitions List regulates defense articles and services. An article or service may be designated as a defense article or service if it:
- Is specifically designed, developed, configured, adapted or modified for a military application and
- Does not have predominant civil applications, and
- Does not have performance equivalent (defined by form, fit, and function) to those of an article or service used for civil applications, and
- Is specifically designed, developed, configured, adapted or modified for a military application, and has significant military or intelligence applicability such that control is necessary.
NOTE: The intended use of the article or service after its export is not relevant in determining whether the article or service is controlled on the U.S. Munitions List.
The NRCC regulates:
- Exports of nuclear equipment and materials.
Also, the Department of Energy regulates the provision of assistance for foreign atomic energy activities:
- Under its legal authorities, DOE can authorize U.S. persons under certain circumstances to engage in the production of special nuclear material outside the United States. Some transfers may take place pursuant to general authorizations in DOE regulations. Other transfers - including transfers of unclassified nuclear technology related to trigger list items listed in Part I of the Nuclear Suppliers Group Guidelines - require specific authorizations.
Exporters generally must submit a license request with the appropriate agency for any item on one of these lists. License requests typically go through an extensive review process, including review by interested U.S. government agencies, such as the Department of Defense, Department of Energy, the intelligence community, and NASA, as well as interested bureaus within the Department of State. During this process, the U.S. government reviews:
- the eligibility of the applicant
- all parties involved in the transaction
- appropriateness of the quality and quantity of the proposed export to the end-user and stated end-use>
- any legal impediments to the proposed export
- any national security implications presented by the proposed export
- any foreign policy implications, including but not limited to:
- potential effect on regional stability
- human rights
- ensuring compliance with multilateral control regimes.
In 2001, the Office of Defense Trade Controls in the Department of State's Bureau of Political-Military Affairs reviewed 49,000 requests for export licenses. A small number of friends and allies receive U.S.-origin defense- related goods and services. Some potential transfers are embargoed by U.S. law, UN Security Council Resolutions, or multilateral agreements. The U.S. Department of Commerce typically receives some 12,000 dual-use export applications per year.
In addition to the three control lists, the U.S. export control system also relies on catch-all guidelines to ensure problematic dual-use exports, which may not otherwise be subject to export controls, do not fall through the cracks. Also known as the Enhanced Proliferation Control Initiative (EPCI), the regulations prohibit the export without a license of any dual-use equipment, software, or technology that would contribute to projects of proliferation concern. The Export Administration Regulations identify missile projects of concern, as well as particular foreign entities that the U.S. Government designates as end-users of concern. An Individual License to export is required if an exporter:
- Knows or has reason to believe that an export will be used in a weapons of mass destruction (WMD) program or missile project of concern, or
- Is informed by the Department of-Commerce that an export would present an unacceptable risk of use in or diversion to a WMD program or missile project of concern.
Each EPCI-related license application is reviewed on a case-by-case basis. If the U.S. Government determines that the export poses an unacceptable risk of use in or diversion to a nuclear proliferation activity, or that the export would make a material contribution to a chemical or biological proliferation activity, or a missile project of concern, the license is denied.
Applying common sense is essential in weeding out potentially problematic transfers. Alarms should sound if:
A customer or agent -
- Is reluctant to provide end-use/user information
- Is willing to pay cash for high-value shipments
- Has little background or history in the relevant business
- Appears unfamiliar with the product or its use
- Declines normal warranty/service/installation
- Orders products/quantities incompatible with the relevant business
- Provides vague delivery dates or locations
A shipment involves -
- Private intermediary in major weapons sale
- Freight forwarder designated as consignee/end-user
- Intermediate consignee's business or location incompatible with end-user's
- Shipments directed to trading companies, freight forwarders, or companies with no connection to buyer
- Requests for packing inconsistent with normal mode of shipping
- Choice of circuitous or economically illogical routing, or through multiple countries;
The end-user requests -
- Equipment inconsistent with inventory
- Spare parts in excess of projected needs
- Performance/design specs incompatible with resources or environment
- Technical capability/end-use incompatible with consignee's line of business
- End-use at variance with standard practices
- Middleman from third country to place order
- Refuses to state whether goods are for domestic use, export, or re-export
The U.S. government has built in various enforcement mechanisms to ensure compliance with our export control laws. U.S. Customs officials have the authority to check any export or import against its license at the borders. For dual-use items, Department of Commerce officials also investigate violations. Licensing authorities often implement pre-license checks and post-shipment verifications.
Criminal and civil penalties for export control violations can be severe. For munitions export control violations, the statute authorizes a maximum criminal penalty of $1 million per violation and, for an individual person, up to 10 years imprisonment. In addition, munitions violations can result in the imposition of a maximum fine of $500,000 per violation of the ITAR, as well as debarment from exporting defense articles or services. Currently, for dual-use export control violations, criminal penalties can reach a maximum of $500,000 per violation and, for an individual person, up to 10 years imprisonment. Dual-use violations can also be subject to civil fines up to $12,000 per violation, as well as denial of export privileges. It should be noted that in many enforcement cases, both criminal and civil penalties are imposed.
The Arms Export Control Act (AECA) was amended in 1996 to cover brokering activity by all persons (except officers/employees of the USG acting in an official capacity) with respect to the manufacture, export, import, or transfer of any defense articles or defense service on the U.S. Munitions List of the ITAR. It is noteworthy that this coverage is not limited to U.S. origin defense articles/services, but also extends to brokering involving foreign defense articles and services. Under the ITAR, all persons engaged in the business of brokering activities are required to register with the Department of State and obtain the applicable authorizations for each brokering transaction.
As defined in the ITAR, a broker is anyone who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission or other consideration. "Brokering activities" include the financing, transportation, freight forwarding or taking of any other action that facilitates the manufacture, export, import, or transfer of a defense article or service irrespective of its origin. This includes activities -- by U.S. persons who are located inside or outside of the U.S., or foreign persons subject to U.S. jurisdiction -- involving defense articles or defense services of U.S. or foreign origin that are located inside or outside of the U.S. This does not include, however, activities by U.S. persons that are limited exclusively to U.S. domestic sales or transfers, and persons exclusively in the business of financing, transporting, or freight forwarding, whose business activities do not also include brokering defense articles or defense services.
Any person registering as a broker must also provide an annual report to the U.S. government enumerating and describing its brokering activities and any exemptions used for other covered activities.
Penalties for violating the law are stiff and can be civil and/or criminal. Individuals and companies can be fined as much as $1,000,000 and sentenced to up to 10 years per criminal violation. The law also carries civil penalties of up to $500,000 per violation, rather than per violator. In addition, violators may be subject to a range of lesser penalties from an administrative notice of reprimand to being debarred or having their export/brokering licenses suspended or revoked.
The United States also works closely with its friends and allies to halt the transfer of arms-related and proliferation-related items to countries of concern as well as regions of conflict. When we receive information on potential transfers of concern, we seek to persuade the countries involved to prevent such transfers.
Under U.S. law, all transfers of military-related items to countries the Secretary of State has determined to be state sponsors of international terrorism are prohibited. These state sponsors of international terrorism include Iran, Iraq, Libya, North Korea, Syria, Sudan, and Cuba.
The United States has several statutory restrictions on the sale or transfer of arms-related and proliferation- related items to specific countries in addition to the authority given the President by the AECA, the EAA, IEEPA and other more general export control and sanctions statutes. Examples of these statutes include:
- Sanctions for transfers of lethal military equipment to state sponsors of terrorism
- Iraq Sanctions Act (sanctions for noncompliance with UN Security Council sanctions against Iraq)
- Iran-Iraq Arms Nonproliferation Act of 1992
- Iran Nonproliferation Act of 2000
U.S. law prohibits providing various types of assistance to a foreign government that has provided "lethal military equipment" to a country whose government has been determined to be a state sponsor of terrorism.
The U.S. has designated the following countries as state sponsors of terrorism: Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria.
Among other things, the Iraq Sanctions Act prohibits providing certain types of assistance to a country that that is not in compliance with United Nations Security Council sanctions against Iraq.
The UN sanctions include an embargo on sale or supply to Iraq of conventional weapons, weapons of mass destruction, and certain dual-use items, unless authorized by the 661 Committee.
Among other things, this Act imposes certain mandatory sanctions on any foreign person or government determined by the President to have transferred or retransferred goods or technology that contribute to efforts by Iran or Iraq to acquire chemical, biological or nuclear weapons or to acquire destabilizing numbers and types of certain advanced conventional weapons.
The mandatory sanctions against such governments include: suspension of U.S. assistance (except for urgent humanitarian assistance); suspension of co-development, co-production and military and dual-use technical exchange agreements; suspension of exports to the country of items on the U.S. munitions list; and U.S. opposition to multilateral development bank assistance to the country.
This Act authorizes the President to impose a variety of sanctions against foreign persons who have transferred to Iran items listed by the multilateral export control regimes as well as items that the U.S. would prohibit to Iran because of their potential to contribute to missile or weapons of mass destruction ("WMD") programs in Iran.
The available sanctions are: a ban on U.S. Government procurement from the foreign person; a ban on foreign assistance to the foreign person; a ban on imports from the foreign person; a ban on exports of munitions list items to the foreign person; and a ban on exports to the foreign person of dual-use items.
