Index

                              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
exports).

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 violators.

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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