8 March 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html
House Documents Online via GPO Access

105th Congress, 2d Session - - - - - - - - - - House Document 105-191

The White House,
Washington, December 19, 1997.

Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.

Dear Mr. Speaker:

As required by section 204 of the International Emergency Economic Powers Act (50 U.S.C. 1703(c)) and section 401(c) of the National Emergencies Act (50 U.S.C. 1641(c)), I transmit herewith a 6-month periodic report on the national emergency declared by Executive Order 12924 of August 19, 1994, to deal with the threat to the national security, foreign policy, and economy of the United States caused by the lapse of the Export Administration Act of 1979.

Sincerely,

William J. Clinton.

      President's Periodic Report on the National Emergency 
   Caused by the Lapse of the Export Administration Act of 1979

     1.  On August 19, 1994, in Executive Order No. 12924, I 
declared a national emergency under the International Emergency 
Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.) to deal with 
the threat to the national security, foreign policy, and economy 
of the United States caused by the lapse of the Export 
Administration Act of 1979, as amended (50 U.S.C. App. 2401 et
seq.) and the system of controls maintained under that Act.  In 
that order, I continued in effect, to the extent permitted by 
law, the provisions of the Export Administration Act of 1979, as 
amended, the Export Administration Regulations (15 C.F.R. 768 et
seq.), and the delegations of authority set forth in Executive 
Order No. 12002 of July 7, 1977 (as amended by Executive Order 
No. 12755 of March 12, 1991), Executive Order No. 12214 of May 2, 
1980, Executive Order No. 12735 of November 16, 1990 
(subsequently revoked by Executive Order No. 12938 of 
November 14, 1994), and Executive Order No. 12851 of June 11, 
1993.  As required by the National Emergencies Act (50 U.S.C. 
1622(d)), I issued notices on August 15, 1995, August 14, 1996, 
and August 13, 1997 continuing the emergency declared in 
Executive Order 12924.

     2.  In 1996, I issued two Executive Orders in order to take 
additional steps with respect to the national emergency described 
and declared in Executive Order 12924.  On October 12, 1996, I 
issued Executive Order 13020 in order to provide for appropriate 
controls on the export of commercial communication satellites ard 
hot-section technologies for the development, production, and 
overhaul of commercial aircraft engines transferred from the 
United States Munitions List to the Commerce Control List.  On 
November 15, 19g6, I issued Executive Order 13026 in order to 
provide for appropriate controls on the export and foreign 
dissemination of encryption products.

     3.  I issued Executive Order No. 12924 pursuant to the 
authority vested in me as President by the Constitution and laws 
of the United States, including, but not limited to, IEEPA.  At 
that time, I also submitted a report to the Congress pursuant to 
section 204(b) of IEEPA (50 U.S.C. 1703(b)).  Section 204 of 
IEEPA requires follow-up reports, with respect to actions or 
changes, to be submitted every six months.  Additionally, section 
401(c) of the National Emergencies Act (50 U.S.C. 1641(c)) 
requires that the President, within 90 days after the end of each 
six-month period following a declaration of a national emergency, 
report to the Congress on the total expenditures directly 
attributable to that declaration.  To comply with these 
requirements, I have submitted combined activities and 
expenditures reports for the six-month periods ending 
February 19, 1995, August 19, 1995, February 19, 1996, August 19, 
1996, and February 19, 1997.  The following report covers the 
six-month period from February 19, 1997 to August 19, 1997.

                               [1]



     4.  Since the issuance of Executive Order No. 12924, the
Department of Commerce has continued to administer and enforce
the system of export controls, including antiboycott provisions,
contained in the Export Administration Regulations (EAR).  In
administering these controls, the Department has acted under a
policy of conforming actions under Executive Orders No. 12924,
13020 and 13026 to those required under the Export Administration
Act, insofar as appropriate.

    5.  Since my last report to the Congress, there have been
several significant developments in the area of export controls:

     A.  Multilateral Developments


Wassenaar Arrangement. The Wassenaar Arrangement on Export
Controls for Conventional Arms and Dual-Use Goods and
Technologies is a multilateral regime currently consisting of 33
member countries.  Its purpose is to contribute to regional and
international security and stability by promoting transparency
and greater responsibility in international transfers of
conventional arms and dual-use goods and technologies.

     Pursuant to the initial elements agreed to in the Wassenaar
     Arrangement, member countries exchange information on
     certain dual-use license approvals and denials.  In April
     1997, the U.S. Government participated in the first
     semiannual submission of transfer data made by member
     countries since the November 1996 implementation of the
     Wassenaar dual-use export control list.  The first List
     Review exercise of the regime took place in June 1997.


Australia Group. The Australia Group, an informal multilateral
forum, cooperates in curbing the proliferation of chemical and
biological weapons through the harmonization of export controls,
the exchange of information and other diplomatic means.  The
group currently has 30 member countries.

     In accordance with the AG-agreed control list, the
     Department of Commerce maintains export licensing
     requirements for precursor chemicals, microorganisms and
     toxins, equipment, whole plants and technology that may be
     used in the production of chemical or biological weapons.

     Following the entry-into-force of the Chemical Weapons
     Convention (CWC) in May 1997, the Commerce Department's
     Bureau of Export Administration (BXA) prepared a paper on
     the compatible aims of the CWC and the AG.  The United
     States will present the paper for consideration at the AG's
     annual meeting in October.


                                2



     The AG's no undercut policy provides that members notify
     each other of denials of export licenses for controlled
     items.  This prevents a member from undercutting another
     member's denial without prior consultation.  In addition, AG
     members have agreed not to transfer or reexport controlled
     items to non-AG members without first ensuring the
     legitimacy of the end-use and verifying the final
     disposition of the goods.  Members also are expected to
     obtain assurances that the items will not be used for
     chemical or biological weapons purposes and to require
     approval for subsequent reexports from non-AG countries.

     In addition, the U.S. continues to encourage other AG
     members to adopt 'catch-all' controls to provide mechanisms
     for controlling: 1) exports of items not captured by the AG
     list when the exporter knows the items will be used in
     activities that contribute to the proliferation of chemical
     and biological weapons; and 2) activities of persons subject
     to AG members' jurisdiction that contribute to such
     proliferation.


Nuclear Supplies Group. The Nuclear Suppliers Group (NSG),
currently composed of 34 member countries, maintains a control
list of nuclear related dual-use items and guidelines for their
control.

     In May 1997, the Nuclear Suppliers Group agreed to delete
     oscilloscopes from the NSG Dual Use Annex.  However, the
     United States proposed, and the NSG approved, a statement of
     commitment to preclude the use of oscilloscopes in
     activities that are contrary to the basic principles of
     nonproliferation.  Consistent with the NSG decision,
     effective August 6, l997, U.S. exports of oscilloscopes no
     longer require a license except when destined for designated
     terrorism-supporting countries or countries that are not
     signatories to the Nuclear Non-Proliferation Treaty (Israel,
     India and Pakistan).

     The Department of Commerce continues to implement the "no-
     undercut" provision of the NSG.  Under this provision, a
     notification of a license denial received from an NSG member
     country precludes other member countries from approving a
     similar transaction, thereby assuring that the earlier
     denial is not "undercut."  There are procedures for member
     countries to consult if they wish to disagree with the
     original denial.

     The Department of Commerce also continues to notify the NSG
     of license applications for exports of non-NSG controlled
     items that the United States has denied under the Enhanced
     Proliferation Control Initiative (EPCI) due to concerns
     about the end users.  Other NSG members have implemented


                                3



     similar 'catch-all' controls for items that are not on the
     NSG Dual Use Control List, and notify the NSG of such
     e denials.


Missile Technology Control Regime MTCR. The MTCR is an
informal group that was founded in l9B7 by the U.S. and its six
G-7 trading partners.  With the addition of Turkey in May 1997,
the MTCR now has 29 member countries that coordinate their
national export controls to help prevent missile proliferation.
Each member, under its own national laws, has agreed to adhere to
the MTCR guidelines for items listed on the MTCR Equipment and
Technology Annex.  The United States continued to maintain the
MTCR controls during the reporting period.

     In March and June 1997, the MTCR sponsored two expert-level
     transshipment workshops, one on legal and regulatory
     authority, held in the United Kingdom, and one on licensing
     and enforcement, held in Switzerland. The workshops were
     follow-on fora from the successful Washington seminar in
     July 1996 where 12 MTCR member countries and seven non-MTCR
     participants (Cyprus, Hong Kong, Jordan, Malta, Singapore,
     South Korea, and the United Arab Emirates) met for the first
     time.  The transshipment series served as an outreach
     program to explore different approaches to the real world
     problem of illegal transshipments of MTCR-listed equipment
     and technology to missile programs and other projects to
     develop weapons of mass destruction.  The transshipment
     series will serve as a model for future cooperation between
     regime member and non-member countries.


     B. Bilateral Cooperation/Technical Assistance


     As part of the Administration's continuing effort to
encourage other countries to strengthen their export control
systems, the Department of Commerce and other agencies conducted
a wide range of discussions with a number of foreign countries.

Hong Kong. The United States has closely monitored the
effectiveness of the 'one country, two systems' policy
established by the People's Republic of China (PRC) since Hong
Kong's return to PRC sovereignty on July 1, 1997.  BXA is
collecting statistics on applications to export to Hong Kong and
comparing them with former years, noting any significant
differences in patterns of procurement.  In addition, at the
request of the Hong Kong government, BXA sent a senior analyst to
Hong Kong for a six-month secondment from November 1996 to May
1997.  The BXA analyst advised members of the Hong Kong Trade
Department in technical matters related to export controls.  Hong
Kong has published the Wassenaar List as part of its export
control system.


                                4



In October (after the period covered by this report), Commerce
Secretary William Daley signed an agreement with his counterpart,
Hong Kong Secretary Denise Yue, establishing regular meetings on
export controls.  This agreement reaffirms the U.S. policy of
treating Hong Kong differently from the rest of China on export
controls.  Hong Kong committed to continue to adhere to various
international export control rules.

Nonproliferation Export Control Cooperation. During the
reporting period, BXA, in conjunction with representatives from
the Departments of State, Defense, Energy, and U.S. Customs
Service, hosted or coordinated 19 technical exchanges in support
of U.S. export control cooperation programs with Russia, Ukraine,
Kazakhstan, Belarus, other emerging states in the Central Asian
and Caucasian regions, and the Baltic and Central European
states.  The cooperation effort focuses on five areas -- the
legal requirements for an effective export control system, export
control system automation, licensing procedures and practices,
enforcement, and government-industry relations -- to familiarize
governments with the elements that constitute effective export
control systems and to assist them in developing their own export
control systems.  Programs conducted during this reporting period
are highlighted below.

Legal and regulatory development programs were presented during
the reporting period for delegations from Ukraine, Georgia,
Uzbekistan, and Kyrgyzstan.

BXA demonstrated its automated export licensing system to several
foreign delegations, explaining how it is configured for
interagency review of license applications.  In April, a NEC
representative attended the dedication ceremony for Kazakhstan's
newly installed automated system.  In June, BXA participated in
discussions with Armenia and Azerbaijan to identify areas of
possible technical exchanges as these nations begin to address
the need for export controls.

During the reporting period, symposia on licensing procedures and
practices, focusing on dual-use license application processing,
were held in Washington, D.C. for representatives of the Baltic
States (Estonia, Latvia and Lithuania), Russia, and Kazakhstan.
A U.S. Government delegation traveled to Kyrgyzstan for a similar
program.  Foreign officials were also given the opportunity to
describe their export licensing systems to U.S. Government
officials.

BXA hosted preventive export enforcement workshops for officials
from the Baltic States (Estonia, Latvia, and Lithuania), in June,
and from the South Central European States (Bulgaria, Moldova,
Romania, and Slovenia), in July. Pre-license checks, post-
shipment verifications, and the use of criminal and
administrative sanctions to deter illegal exports were discussed.
Delegations met with Export Enforcement field office personnel,


                               5



federal judges, Assistant U.S. Attorneys, and U.S. Customs
Service officials.

In April, BXA arranged a series of workshops for nine Ukrainian
Government officials and 13 Ukrainian industry representatives to
address the roles of industry and government in achieving export
control cooperation.  This technical exchange provided a business
perspective on export controls, explaining the importance of
voluntary industry compliance with export controls and industry
contributions of technical expertise to government agencies
through Technical Advisory Committees.  The workshops included
visits to several U.S. companies, who demonstrated their internal
export compliance procedures for the Ukranian delegations.

Special activities during the reporting period included a
'Department of Commerce Day' with the Monterey Institute of
International Studies, a conference in Washington, D.C., to
discuss nonproliferation issues and challenges attended by
representatives from more than 17 countries, and UPDATE
Conference 1997 in July, where BXA hosted fifteen foreign
delegations for a week-long symposium held in conjunction with
its annual UPDATB seminar.

     C.   Regulatory Actions: Published and Pending

Implementation of the wassenaar Arrangement. Interagency review
of the implementation of the Wassenaar Arrangement, including a
revised Commerce Control List and new reporting requirements,
continued during the reporting period.  The revised Commerce
Control List will continue to use the same numbering system as
the European Union List.  BXA anticipates publishing this rule in
late 1997.

Encryption Amendments. BXA circulated for interagency review an
amendment to the rule published on December 30, 1996,
transferring certain encryption items from the U.S. Munitions
List to the Commerce Control List.  The draft rule includes a
clarification of the temporary exports eligible for shipment
under a License Exception and a liberalization of controls for
financial institutions.

Entity List.  In a regulation published on February 3, 1997, BXA
established the Entity List to inform exporters of certain
end-users subject to export license requirements for specified
items because BXA has determined that there is an unacceptable
risk of use in, or diversion to, certain nuclear, missile, or
chemical or biological weapons end uses.  Subsequent rules
published on May 16 and June 30, 1997 added entities to the list.

Export Controls and Notification Requirements for Chemicals Under
the Chemical Weapons Convention.  BXA circulated for interagency
review draft regulations to implement Chemical Weapons Convention
(CWC) trade restrictions that will affect Australia Group (AG)
controlled chemicals and other chemical weapon agents and
precursors.  The draft rule maintains current control levels for


                                6



AG-listed chemicals but implements additional restrictions and
notification requirements mandated by the CWC.

Easing of Export Controls on Oscilloscopes. Effective August 6,
1997, BXA reduced license requirements for exports of
oscilloscopes to all countries except designated terrorism-
supporting countries and nuclear countries of concern.

Support for the Cuban People. On March 3, 1997, BXA published a
rule that implemented the President's October 6, 1995
announcement of a licensing policy of approval, on a case-by-case
basis, of certain exports to human rights organizations, news
bureaus, and individuals and non-governmental organizations
engaged in activities that promote democratic activity in Cuba.
This rule is consistent with the Cuban Democracy Act of 1992 and
the Cuban Liberty and Democratic Solidarity (Libertad) Act of
1996.  However, the ban on all U.S. flights to Cuba imposed by
the President following the shoot-down of a U.S. civilian
aircraft by Cuban military aircraft in February 1996 continues to
apply to temporary sojourn flights that previously had been
allowed under licenses for humanitarian, journalistic, or other
approved purposes.  All humanitarian exports now must transit
third-countries on foreign carriers in order to be delivered to
Cuba.


     D.   Regulatory Reform

     On March 25, 1996, BXA published the completely restructured
Export Administration Regulations (EAR).  On January 1, 1997, the
transition period from the old to the new EAR ended. Primarily in
response to comments and suggestions from the exporting
community, BXA published corrections and clarifications to the
text of the EAR on May 9, 1997.  Remaining corrections and
clarifications to the Commerce Control List will be published as
part of the rule implementing the Wassenaar Arrangement in fall
1997.


     E.   Licensing of Items Transferred from the International
          Trade in Arms Regulations

Commercial Communications Satellites and Hot Section Technology
for the Development, Production or Overhaul of Commercial
Aircraft. BXA accepted jurisdiction over commercial
communications satellites and hot section technology, formerly on
the U.S. Munitions List, in a rule published on October 21, 1996.
This rule also imposed enhanced national security and foreign
policy controls on these items.  As a result, BXA has approved 11
licenses for commercial communication satellites having a total
value of $2,669,010,000 since October 1996.  BXA has issued no
licenses for hot section technology since accepting jurisdiction.


                                7




Encryption Items Transferred from the U.S. Munitions List to the
Commerce Control List.  On December 30, 1996, BXA published an
interim rule transferring jurisdiction over commercial encryption
products from the State Department to the Commerce Department.
From January to August 1997, BXA received over one thousand
license applications for exports valued over five hundred million
dollars.  Thirty-seven companies submitted commitment plans which
explain how they will build and market key recovery products, and
other companies have plans in preparation.  These companies
include some of the largest software and hardware manufacturers
in the country.  BXA approved 32 plans as of August 1997, and
expects to approve more very shortly.  BXA has not rejected any
plans.  Eight companies have submitted requests for a one-time
review of key recovery encryption items, which will facilitate
the establishment of a key management infrastructure (KMI).  BXA
has approved three of these products for eligibility under
License Exception KMI, allowing their export to certain
destinations without a license if specified conditions are met.


     F.   Export License Information

     During the reporting period, BXA continued to receive many
requests for export licensing information in enforcement
proceedings and under the Freedom of Information Act.  BXA
continues to withhold from public disclosure information obtained
for the purpose of consideration of, or concerning, export
license applications, unless the release of such information is
determined by the Under Secretary to be in the national interest,
pursuant to Executive Order No. 12924's directive to carry out
the provisions of the Export Administration Act, to the extent
permitted by law.


     G.   Export Enforcement

     Export Enforcement continued, through its three constituent
offices, its programs of prevention of diversions, investigation
/enforcement of the export control provisions of the Export
Administration Regulations, and enforcement of the antiboycott
provisions of the Export Administration Regulations.

Prevention Activities. Export Enforcement's prevention
activities included selecting transactions for pre-license checks
and post-shipment verifications by representatives of U.S.
diplomatic posts, and "safeguards" visits, in which Export
Enforcement personnel traveled to other countries to verify the
details of sensitive export transactions and to advise the host
governments on export control issues.  Finally, EE's prevention
activities included outreach visits to domestic firms and
programs to foster enforcement cooperation with other governments
(see section B. above).   The statistics on EE's prevention
activities during the reporting period are as follows.

Pre-license checks initiated                 158


                                8




Pre-license checks completed                 171

Post-shipment verifications initiated         94

Post-shipment verifications completed         70

Additional post-shipment verifications
initiated and completed as part of
safeguards visits                             44

Export license applications reviewed       4,500

Outreach visits by
Office of Export Enforcement agents          267

Investigations.  The Office of Export Enforcement opened 171 and
closed 410 investigations during the reporting period.

Under its Shipper's Export Declaration Program, the Office of
Enforcement Support (OES) reviews copies of the shipper's export
declarations (SEDs) filed by exporters and, using a computerized
index of data fields, produces a list of SEDs targeted for closer
review, focusing particularly on licensed shipments, shipments
bound for destinations of concern, shipments of strategic
commodities of proliferation concern, and other criteria.
Through this review, OES identifies SEDs that may indicate
violations of the Export Administration Regulations and refers
them to the Office of Export Enforcement. OES made 143 such
referrals during the reporting period.

Office of Antiboycott Activities.  The Office of Antiboycott
Compliance continued to supply the State Department with
information on boycott requests received by U.S. persons.  The
State Department uses this information in its discussions with
boycotting countries concerning ending the Arab League boycott of
Israel.  Quarterly summary data and analysis were supplied in
March and August 1997.  The Office of Antiboycott Compliance
opened 17 and closed 24 investigations during the reporting
period.

Summary of Major Cases.  The results of the major cases closed by
the Office of Export Enforcement and the Office of Antiboycott
Compliance during the reporting period are summarized below.

Settlements reached with the U.S. Air Force, the U.S. Justice
Department, and a Government Contractor for Alleged Violations of
the Antiboycott Regulations:  On February 27, 1997, a settlement
was reached with the U.S. Air Force, an Air Force officer, the
U.S. Department of Justice and one of its employees, and a
government contractor, CACI Inc. - Commercial, and one of its
employees, for alleged violations of the antiboycott provisions
of the Export Administration regulations.


                                9






It was alleged that, in a November 1991 meeting conducted by Air
Force officers, representatives of the Justice Department and
CACI were told that Jews or people with Jewish surnames could not
go to Saudi Arabia as part of a microfilming team that was
providing litigation support services to Justice and the Air
Force.  Justice Department and CACI employees screened,
interviewed, and selected people to go to Saudi Arabia.  At least
one U.S. person was refused a place on the microfilming team
based on religion or national origin.

The U.S. Air Force and the Justice Department settled allegations
investigated by Export Enforcement's Office of Antiboycott
Compliance (OAC).  The Air Force and Justice Department each
instituted measures to prevent a similar event from happening
again.

The Air Force officer in charge of the litigation team in 1991
agreed to settle two allegations that he violated the antiboycott
provisions by requiring or knowingly agreeing to require Justice
and CACI to discriminate against individuals based on religion.

The Justice Department official involved in the microfilming
project agreed to settle two allegations that she violated the
antiboycott provisions by agreeing to discriminate against
individuals based on religion or national origin, and
subsequently taking a boycott-based discriminatory action against
a U.S. person on the basis of religion.

CACI Inc. - Commercial, an Arlington, Virginia contractor, and a
senior CACI Inc. employee involved in the microfilming project,
each agreed to settle three allegations that each violated the
antiboycott provisions by knowingly agreeing to discriminate
against individuals based on religion or national origin, taking
a boycott-based discriminatory action against a U.S. person on
the basis of religion, and, with respect to one particular
individual, discriminating based on religion or national origin.


Thomas Doyle and Robert Vance Denied Export Privileges: On
March 10, 1997, Thomas Doyle, former President of International
Spare Parts, Cheshire, Connecticut, and Robert Vance, the firm's
Vice President, were denied export privileges until July 31,
2006.  In July 1996, Doyle and Vance had been convicted of
exporting and diverting U.S. commodities to Libya through the
United Kingdom and Malta.  The U.S. Customs Service and the
Office of Export Enforcement conducted the investigation.

Bank Sadarat Iran in NY Receives $36,000 Civil Penalty for
Alleged Antiboycott Violations:  On March 12, 1997, a settlement
between the Department and Bank Sadarat Iran - New York
Representative Office ("BSI") was approved.  Under the terms of
the settlement, BXA's Office of Antiboycott Compliance imposed a
$36,000 penalty on BSI to settle allegations that, between
November 1991 and April 1992, BSI implemented two letters of
credit that contained requirements prohibited by the antiboycott


                                10




regulations, furnished two items of information about the
company's business relations with Israel and, on four occasions,
failed to report its receipt of boycott-related requests from
Dubai.  The Department suspended payment of the civil penalty for
three years.  Payment of the penalty will thereafter be waived,
provided that BSI does not violate the Export Administration Act
or Regulations, or fail to meet other terms and conditions of the
Department's order.

Vaughts Sentenced For Illegal Exports of Aircraft parts to Iran:
On March 14, 1997, the Chief Judge for the Northern District of
Texas in Dallas sentenced Ronald Lee Vaught and Larry Don Vaught,
who had earlier pled guilty of conspiracy to export aircraft
parts to Iran, to three years' probation, a $100 special
assessment fee, and a fine of $10,000.  Previous1y, the Chief
Judge had sentenced co-conspirators Peter Harms to 57 months in
federal prison and a $100,000 fine, and William Dias to three
years' probation and a $20,000 fine.  This action concluded the
successful prosecution of all four defendants in this
investigation.

JML Freight Forwarding Pays $15,000 Civil Penalty For Preparing
Shipping Documents Containing False Information:  On March 26,
1997, a Final Order was signed imposing a $15,000 civil penalty
on JML Freight Forwarding, Inc. (JML) of Kearny, New Jersey,
formerly known as Jacky Maeder, Ltd., for allegedly preparing
three Shipper's Export Declarations that contained false
information.  The Department alleged that on three occasions, the
East Boston, Massachusetts, branch of JML prepared and used
export control documents for the purpose of effecting exports of
titanium bars from the United States to Switzerland, representing
that the exports qualified for General License G-DEST, when, in
fact, validated licenses were required.

Freight Forwarder Penalized for EAR Violation:  On April 2, 1997,
BXA ordered Thyssen Haniel Logistics, Inc., of Atlanta, Georgia
(Thyssen), formerly known as Amerford International Corporation,
to pay a $30,000 civil penalty to resolve allegations that it
prepared Shipper's Export Declarations that contained false
information.  The Department alleged that on six occasions, the
East Boston, Massachusetts branch of Thyssen prepared and used
export control documents for the purpose of exporting titanium
bars from the United States to Germany, representing that the
exports qualified for export under General License G-DEST, when,
in fact, a validated license was required.

Kaufman Penalized $10,000 for Illegally Exporting Computers to
Cuba:  On April 10, 1997, the Department imposed a $10,000 civil
penalty on Martin Kaufman of Orleans, Ontario, Canada, acting as
agent for Tourism Consultants International of the British West
Indies.  Tourism Consultants International, with Kaufman acting
as agent, allegedly exported U.S.-origin computer equipment from
the United States through Jamaica to Cuba, in violation of the
Export Administration Regulations.


                                11




Compaq Computer Corporation Receives $55,000 Civil Penalty:  On
April 18, 1997, the Department imposed a $55,000 civil penalty on
computer manufacturer Compaq Computer Corporation of Houston,
Texas.  The Department alleged that Compaq made three separate
shipments of computers to Venezuela, Chile, and the People's
Republic of China from September 1992 through June 1993 without
obtaining the required export licenses.  While neither admitting
nor denying the alleged violations, Compaq agreed to pay the
civil penalty.

Freight Forwarder Pays $15,000 Civil Penalty:  On May 1, 1997,
Hellmann International Forwarders, Inc. (HIF) of Miami, Florida,
was ordered to pay a $15,000 civil penalty to resolve allegations
that it prepared Shipper's Export Declarations that contained
false information.  The Department alleged that on three
occasions, the Chelsea, Massachusetts, branch of HIF prepared and
used export control documents for the purpose of exporting
titanium bars from the United States to Sweden.  These documents
represented that the shipments qualified for export under General
License G-DEST, when, in fact, a validated license was required.

Advanced Vacuum Systems Pays $5,000 Civil Penalty:  On May 1,
1997, Advanced Vacuum Systems, Inc. (AVS) of Ayer, Massachusetts,
was ordered to pay a $5,000 civil penalty to resolve allegations
that the company exported equipment to the People's Republic of
China (PRC) without having obtained the required validated
license.  The Department alleged that AVS exported one low
pressure sintering furnace with spare parts to the PRC, under the
authority of General License G-DEST, when a validated license was
required.

President Titanium Pays $125,000 Civil Penalty for Illegally
Exporting Titanium Bars:  On May 29, 1997, President Titanium of
Hanson, Massachusetts, was ordered to pay a $125,000 civil
penalty to resolve allegations that it made numerous unlicensed
shipments of titanium bars.  The Department alleged that on 25
separate occasions, President Titanium exported titanium bars to
England, France, Germany, South Africa, Switzerland and the
Netherlands without the required validated licenses.

Albuquerque Company Pays $180,000 for Illegal Thyratron Exports:
On May 29, 1997, the Department imposed a $180,000-civil penalty
on Lasertechnics, Inc. of Albuquerque, New Mexico, for allegedly
exporting U.S.-origin thyratrons from the United States without
the required export license.  Payment of $80,000 of the civil
penalty was suspended for three years, and will thereafter be
waived provided Lasertechnics, Inc. commits no violations of the
Export Administration Act or the Export Administration
Regulations during the suspension period.

BXA alleged that, on 36 separate occasions from November ~991
through March 1994, Lasertechnics, Inc. exported U.S.-origin
thyratrons from the United States to Hong Kong, Ireland, Malaysia


                               12                                   




and Singapore without obtaining the licenses required by the EAR
for nuclear nonproliferation reasons.  Thyratrons send a high-
voltage current through a device and can be used as a nuclear
triggering device, but can also be used for medical and
scientific purposes.  Hydrogen thyratrons were controlled at the
time of the violations for nuclear nonproliferation reasons and
are currently controlled for anti-terrorism reasons.

Pan Asia Denied Export privileges For Two Years:  On May 29,
l997, the Under Secretary for Export Administration issued an
order denying the export privileges of Pan Asia, a Singapore
entity, for a period of two years.  Pan Asia had reexported U.S.-
origin items from Singapore to Vietnam in 1993, prior to the
lifting of the embargo against Vietnam.

Digital Creations Fined $800,000 for Illegal Computer Exports to
China:  On June 13, 1997, Digital Creations Corporation of
Closter, New Jersey, was sentenced an $800,000 criminal fine for
violating the Export Administration Act and Regulations.  In
December 1994, Digital Creations Corporation had pleaded guilty
to charges that it exported a DEC computer to the People's
Republic of China without having obtained the required export
license from the Department of Commerce.

Summit Marketing, Inc. Pleads Guilty to Illegal Exports to Iran:
On June 13, 1997, Sanford Groetzinger, President, Summit
Marketing, Inc. (SMI) and SMI's Corporate Counsel pled guilty in
the U.S. District Court for Boston, Massachusetts to alleged
criminal violations related to the export of numerous civilian
and military aircraft components to Iran via Germany and France
during 1992 and 1993 without having obtained the required export
licenses from the Commerce and State Departments. Sentencing was
scheduled for September 26, 1997.

Delft Instruments, N.V. Pays $50,000 Civil Penalty:  On
June 16, 1997, the Department imposed a $50,000 civil penalty
on Delft Instruments, N.V., a firm located in the Netherlands,
to settle allegations that Delft made false statements to the
Department in connection with an enforcement action.  The
Department alleged that, on five separate occasions between
August 2, 1991 and February 10, 1992, Delft made false and
misleading statements of material fact to the Department when
Delft opposed the renewal of a 1991 temporary denial order.  The
alleged false statements related to representations Delft made to
the Department concerning whether members of its Executive Board
knew that Delft had exported thermal imagining prototypes to Iraq
and Jordan without the required U.S. export licenses.  Delft
pleaded guilty in 1992 to charges that it had violated the Arms
Export Control Act by exporting U.S.-origin thermal imagining
prototypes to Iraq without the required export license.

Lansing Technologies Corporation Pleads Guilty for Illegal Export
to PRC:  On June 17, 1997, Lansing Technologies Corporation,
represented by its president, Red Chin Yang, pled guilty in U.S.


                                13




District Court for the Eastern District of New York to a two-
count criminal information that charged the company with the
illegal export of Digital Equipment Corporation vector processors
and the illegal export of a data acquisition control system to
the People's Republic of China without obtaining the required
export licenses from the Commerce Department.

Dell Computer Corporation Pays $50,000 Civil Penalty for Illegal0
Exports to Iran:  On June }7, 1997, the Department imposed a
$50,000 civil penalty on Dell Computer Corporation of Austin,
Texas.  Dell made three shipments of U.S.-origin computer
equipment from the United States to Iran without the required
U.S. export licenses. The exports took place between March 1992
and June 1992. In connection with the exports, the Department
also alleged that the company made false and misleading
statements of material fact on the export control documents.

McKeeve, McNeil International Denied Export Privileges for Ten
Years:  On June 20, 1997, Scotland-based export/import company
McNeil International, and company president David McKeeve each
were denied export privileges for a period of 10 years under
Section 11(h) of the Export Administration Act.  McKeeve and
McNeil International were previously convicted in U.S. District
Court, Boston, Massachusetts, of violating the International
Emergency Economic Powers Act by attempting to divert computer
equipment to Libya.  McNeil International was fined $125,000 and
McKeeve was sentenced to 51 months in federal prison.

Samsonite Receives $25,000 Civil Penalty for Alleged Antiboycott
Violations:  On June 27, 1997, the Department imposed a $25,000
fine on Samsonite Corporation of Colorado, to settle allegations
of violations of the antiboycott provisions of the Export
Administration Act and Regulations.

I.G.G. Corporation Pleads Guilty to Illegal Exports, is Fined
$50,000 and Pays $400,000 Civil Penalty:  On July 17, 1997,
I.G.G. Corporation (I.G.G.) pleaded guilty in the U.S. District
Court for the eastern District of Pennsylvania to a one-count
criminal information charging the company with knowingly
exporting electronic components from the United States to the
Indian Space Research Organization (ISRO) without the required
export licenses.  I.G.G. was assessed a $50,000 criminal fine, a
special assessment of $200 and placed on probation for five
years.  In addition, on July 17, BXA ordered I.G.G. to pay a
$400,000 civil penalty and denied I.G.G's export privileges for a
period of seven years.  The denial period was suspended in its
entirety, and will be waived if the company does not violate U.S.
export control laws during the suspension period.

Fisher Scientific Worldwide Inc. Pays $10,000 Civil Penalty:
On July 17, BXA ordered Fisher Scientific Worldwide Inc. of New
Hampshire to pay a $10,000 civil penalty to settle allegations


                               14




that it violated the antiboycott provisions of the Export
Administration Regulations.  On five occasions, Fisher Scientific
failed to report its receipt of requests from Syria and Kuwait to
engage in restrictive trade practices or boycotts.

Tex-Co International, Inc. Denied Export privileges for Ten
Years:  On July 15, 1997, Tex-Co International, Inc. (Tex-Co),
Houston, Texas, was denied export privileges by BXA for a period
of 10 years under Section 11(h) of the Export Administration Act.
Tex-Co had been convicted in U.S. District Court for the Southern
District of Texas, Houston Division, as a result of a U.S.
Customs Service investigation, on one count of violating the
International Emergency Economic Powers Act by knowingly and
willfully exporting oil field equipment to an intermediary for
ultimate delivery to Umm Al-Jawaby Oil Service Company, Ltd., a
specially designated national of the government of Libya, without
written authorization of the U.S. government.  Tex-Co officials
created the intermediary, a London company, as a shell company.

Penny Ray and James Lee Found Guilty: On July 18, 1997, a jury in
the Northern District of California found Penny Ray, also known
as Lei Ping, and James Lee, also known as Li Jin, each guilty of
violating the Arms Export Control Act.  Ray and Lee had been
indicted in December 1995 for having exported, in December 1990,
15,000 cutter blades and dies for the production of the cutter
blades used in artillery fuses without the required Department of
State export license.  The information leading to the indictment
was originally uncovered during an investigation by BXA.  After
referral to the U.S. Customs Service, BXA provided significant
support to Customs and the Department of Justice during the
ensuing investigation and trial.  Sentencing was scheduled for
September 2, 1997.

William A. Roessl Denied Export Privileges for Ten Years:  On
July 22, 1997, BXA affirmed the recommended decision and order of
the Administrative Law Judge and denied William A Roessl's export
privileges for a period of 10 years under Section 11(h) of the
Export Administration Act.  Roessl, doing business as Enigma
Industries, was found to have exported U.S.-origin computer
equipment through Canada to the Federal Republic of Germany
without the required export license.  In addition, Roessl made
false and misleading statements of material fact to the U.S.
Customs Service on a Shipper's Export Declaration by representing
the ultimate destination of the goods as Canada, when Roessl knew
the goods were not destined for Canada.

Hongkong and Shanghai Banking Corporation Pays $23,000 Civil
Penalty:  On July 24, 1997, BXA ordered the New York branch of
The Hongkong and Shanghai Banking Corporation Limited (a Hong
Kong banking organization) to pay a $23,000 civil penalty to


                                15




settle allegations that between December 1989 and February 1997,
on three occasions, the bank agreed to refuse to do business with
blacklisted persons in connection with boycott requests from
Qatar; on one occasion, the bank confirmed a letter of credit
from the United Arab Emirates that contained a prohibited boycott
request; and on nine occasions the bank failed to report, or
failed to report in a timely manner, boycott-related requests it
received from Jordan, Oman, Qatar and the United Arab Emirates.

Suburban Guns (Pty) Ltd. of Capetown, South Africa:  On July 25,
1997, Suburban Guns (Pty.) Ltd. of Capetown, South Africa was
sentenced in U.S. District Court, Southern District of New York,
to a two-year term of probation and assessed a $10,000 criminal
fine and a $600 special assessment for violations of the Export
Administration Act and IEEPA.  Managing Director Fred Tatos pled
guilty on behalf of Suburban Guns on February 10, 1997 to charges
that it knowingly and willfully exported arms, specifically
shotguns and rifles, and ammunition to South Africa without
obtaining the required export licenses from BXA and the State
Department.  This investigation was conducted jointly by BXA and
the U.S. Customs Service.

DATRAC AG Ordered to Pay $2,500 Civil Penalty.  On July 25, 1997,
BXA ordered DATRAC AG of Switzerland to pay a $2,500 civil
penalty to settle allegations that DATRAC reexported U.S.-origin
data communications equipment from Switzerland to Singapore
without obtaining the required reexport authorization from BXA.


5.  The expenses incurred by the Federal Government in the six-
month period from February 19, 1997 to August 19, 1997 that are
directly attributable to the exercise of authorities conferred by
the declaration of a national emergency with respect to export
controls were largely centered in the Department of Commerce,
Bureau of Export Administration.  Expenditures by the Department
of Commerce are anticipated to be $21,136,000, most of which
represents program operating costs, wage and salary costs for
Federal personnel, and overhead expenses.


                            ###


                             16

[End]

PDF conversion to HTML by JYA/Urban Deadline