NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1998 (Senate - June 19, 1997)

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AMENDMENT NO. 420

(PURPOSE: TO REQUIRE A LICENSE TO EXPORT COMPUTERS WITH COMPOSITE THEORETICAL PERFORMANCE EQUAL TO OR GREATER THAN 2,000 MILLION THEORETICAL OPERATIONS PER SECOND)

Mr. COCHRAN. Mr. President, I send an amendment to the desk for myself and Mr. Durbin.

The PRESIDING OFFICER. The clerk will report.

The assistant legislative clerk read as follows:

The Senator from Mississippi [Mr. Cochran], for himself and Mr. Durbin, proposes an amendment numbered 420.

Mr. COCHRAN. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:

At the end of subtitle E of title X, add the following:

SEC. . SUPERCOMPUTER EXPORT CONTROL.

(a) Export Licensing Without Regard to End-Use and End-User.--

(1) In general.--Notwithstanding any other provision of law, effective upon the date of enactment of this Act, computers described in paragraph (2) shall only be exported to a Computer Tier 3 country pursuant to an export license issued by the Secretary of Commerce.

(2) Computers described.--A computer described in this paragraph is a computer with a composite theoretical performance equal to or greater than 2,000 million theoretical operations per second.

(b) Limitation on Reexport.--It is the sense of the Senate that Congress should enact legislation to require that any computer described in subsection (a)(2) that is exported to a Computer Tier 1 or Computer Tier 2 country shall only be reexported to a Computer Tier 3 country (or, in the case of a computer exported to a Computer Tier 3 country pursuant to subsection (a), reexported to another Computer Tier 3 country) pursuant to an export license approved by the Secretary of Commerce and that the preceding requirement be included as a provision in the contract of sale of any such computer to a Computer Tier 1, Computer Tier 2, or Computer Tier 3 country.

(3) Computer Tiers Defined.--In this section, the terms `Computer Tier 1', `Computer Tier 2', and `Computer Tier 3' have the meanings given such terms in section 740.7 of title 15, Code of Federal Regulations.

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Mr. COCHRAN. Mr. President, on the 11th of June, my Subcommittee on International Security, Proliferation, and Federal Services of the Committee on Governmental Affairs held a hearing on the subject of proliferation and U.S. dual-use export controls. The hearing focused almost entirely on the subject of U.S. exports of high-performance computers, also known as supercomputers.

In preparing for and conducting this hearing, we learned that the administration's policy on supercomputers, which are an integral component for developing, producing and maintaining nuclear weapons, ballistic missiles, and practically all advanced weapon systems, could put American lives and interests at risk.

I am offering this amendment as a necessary first step to staunch the flow of American-made supercomputers to countries and places they should not be going.

On October 6, 1995, President Clinton announced a new export control policy for supercomputers which decontrolled supercomputer exports to a great extent. He said that he had `decided to eliminate controls on the exports of all computers to countries in North America, most of Europe, and parts of Asia.' Continuing further, `For the former Soviet Union, China, and a number of other countries, we will focus our controls on computers intended for military end uses or users, while easing them on the export of computers to civilian customers.'

There is, of course, a delicate balance that must be struck between presenting U.S. national security by controlling dual-use exports and promoting exports. We must be careful not to place American manufacturers in a position where they cannot export goods that other countries are exporting, though, of course, our national security interests dictate that some goods cannot be sold to some countries no matter how irresponsibly other countries behave. For example, the willingness of some Western European countries to work with Libya to construct a chemical weapons complex does not justify the involvement of United States companies in similar ventures.

President Clinton's October 6, 1995, announcement liberalizing U.S. export controls on supercomputers established four country tiers to guide American exporters, at the same time eliminating restrictions on the export of computers capable of less than 2,000 million theoretical operations per second-- this is referred to as an MTOPS--for all except tier 4 countries, it is unrestricted if the computers are capable of less than 2,000 MTOPS. Whether it makes sense to decontrol computers capable of up to that level is one of the issues which should be studied more extensively. I will ask the General Accounting Office to do so.

Country tier 1, consisting primarily of NATO allies, effectively establishes a license-free zone for U.S. high-performance computer exports. Computers of unlimited capacity under this policy can be exported to any tier 1 country without regard to the identity of the end user or the intended end use.

The policy for country tier 2, which includes countries such as South Korea, Hungary, Poland, and the Czech Republic, allows unlicensed exports to any country within this tier of computers capable up to 10,000 million theoretical operations per second. And the policy continues the virtual embargo against those nations--the terrorist nations such as Iran, Iraq, Syria, and North Korea--that comprise country tier 4. There are many deficiencies in this new policy, Mr. President.

Our amendment addresses what we consider to be the most significant deficiency in need of immediate attention. It is a problem specific to the part of the policy pertaining to country tier 3 which I want to describe now. The policy announced by President Clinton for tier 3 countries, which include Russia, China, and some others, is based entirely upon the questions of who the end user will be and for what end use the supercomputer is intended. End use and end user are the critical factors for tier 3 exports.

The tier 3 policy requires an export license to be granted by the Department of Commerce under only two circumstances: First, if the computer to be exported is capable of 2,000 MTOPS and is going to a military end use or end user; and second, if the computer to be exported is capable of 7,000 MTOPS and is going to a civilian end use and end user. This policy requires no export license for manufacturers who want to sell supercomputers capable between 2,000 and 7,000 MTOPS to buyers in tier 3 countries when there is to be a civilian end use and end user. It is the exporter--not the Department of Commerce, not the U.S. Government--who is given the latitude under the policy for determining whether the purchaser's representations are accurate, that it is not a military end user and will not use the supercomputer for a military purpose.

The Clinton administration policy further requires American exporters to act on the honor system, policing themselves and deciding themselves whether or not the end user is going to be a military entity or will be putting the supercomputer to a military use.

Unfortunately, some companies have already been tempted to take a chance. Maybe they were not sure; maybe they were tempted by the profits of the transaction. Whatever the motivations and the understandings or lack of information, or for whatever the reason, we have known that some transactions have involved the sale of supercomputers, without objection from our Department of Commerce or our Federal Government to those who may be putting computers to a military use, or maybe military entities themselves.

We know now, for example, based on statements from the Russian Minister of Atomic Energy and from United States Government officials, that there are at least five American supercomputers in two of Russia's nuclear weapons labs: Chelyabinsk-70 and Arzamas-16. Minister Mikhailov of the Russian Ministry of Atomic Energy has not been reluctant to proclaim what these high-performance computers will be used for, and he said in a speech in January they will be used to simulate nuclear explosions, and that the computers are, in his words, `10 times faster than any previously available in Russia.'

Four of the five supercomputers we are aware of publicly in Russia's nuclear weapons labs came from Silicon Graphics, a company in California, I think. According to the CEO, Edward McCracken, it was his company's understanding that the computers were for environmental and ecological purposes. It may be that Silicon Graphics was unable to determine whether a Russian nuclear weapons lab was going to be the military end user or if its supercomputers would be put to a military end use. But it seems from the statements made by the Atomic Energy Minister in Russia that they certainly are available to them for those purposes.

We also know at least 47 high-performance computers have been exported without licenses to the People's Republic of China. One of the computers sold also by Silicon Graphics is now operating in the Chinese Academy of Sciences. The Chinese Academy of Sciences is a key participant in military research and development, and works on everything from the DF-5 ICBM--which, incidentally, is capable of reaching the United States--to uranium enrichment for nuclear weapons. There can be no question about the Chinese Academy of Science's status as a military end- user.

According to the Department, its new Silicon Graphic Power Challenge XL supercomputer provides it with computational power previously unknown, which is available to all the major scientific and technological institutes across China. We can only hope that some of these institutes in China are using the supercomputer's technology for peaceful purposes, but we cannot help but suspect that some may be a part of the weapons development program in China, which is on a fast track to modernize their nuclear weapons system and capabilities and their missile technologies and all the rest.

At our recent hearing, we had the benefit of testimony from the Under Secretary of Commerce for Export Administration, William Reinsch, who said that the Clinton administration doesn't know if any of the supercomputers in China or Russia are being used for weapons-related activities, but the Commerce Department is in a difficult position. You have to appreciate how difficult it must be to have the responsibility for both promoting exports and controlling exports, and that is the dilemma that this Department is in. But we have to realize that nuclear weapons labs are potential end users and have been shown already by the evidence before our committee that they have obtained American supercomputers and they may be put to a military end use.

In 1986, the Department of Energy published an unclassified report entitled, `The Need for Supercomputers in Nuclear Weapons Design.' The report's conclusion included this statement: `The use of high-speed computers and mathematical models to simulate complex physical processes has been and continues to be the cornerstone of the nuclear weapons design program.' These computers continue to be important to the design and production of nuclear weapons and other types of weapons of mass destruction and delivery systems.

I do not see how we can tolerate the continuation of a policy that makes it easier for Russia and China to modernize their nuclear weapons and delivery systems. We ought not to be in the business of helping them to improve the quality of our weapons, their technology, their delivery systems, particularly when there is evidence of proliferation from those countries to other countries.

This amendment, I want to point out, does not include a comprehensive revision of our export control policy. It is targeted to one specific part of the policy. We hope that with the findings that are obtained from the General Accounting Office study and our further studies in our subcommittee, which is reviewing this entire issue and proliferation problems generally, that we will be able to come up with and work with the administration and hopefully develop a consensus agreement on a modification of our export policy.

We think the time is here, it is now, when we need to stop the unrestricted flow of these supercomputers to potential users all around the world that can threaten our Nation's security and put at risk American citizens. It is not like some other country has these systems available for sale on the market. They do not. We are the state-of-the-art producer of the supercomputers. Japan has the capacity to produce supercomputers as well, but their export policy is more restrictive now than ours is. So we are the culprit, if we are putting in the hand of military end users and military weapon system producers in other countries technologies that are superior to what they have now and that can be used to make more lethal their nuclear weapons and their missile systems. We are putting in jeopardy the lives of our own citizens.

I am hopeful that this amendment, in concert with other efforts that we are making, will help improve our capacity to monitor these exports and require license in those situations where we think this export might present a proliferation problem, because we know from previous experience in Russia and China, as well, private companies have demonstrated that they do not have the adequate restraints to make determinations about where and how their exports are distributed into other country's hands. We know that transshipments are occurring. We also know that it is difficult to verify in a country like China what the private company that may be the purchaser of a supercomputer really intends to do with it once they have it. It is difficult to get access, to get information, and so a private company has a very difficult time developing an information base on which it can really make a conclusion about the end use or the end user. That is another reason to change this policy. The Commerce Department is going to have to do a better job of compiling information about those who are in the market worldwide for these supercomputers and making this information available to our exporters and the companies that have these supercomputers for sale.

Mr. President, I encourage the Senate to look very carefully at this proposal. I hope that the amendment will be agreed to. Senator Durbin and I were involved in questioning witnesses before our subcommittee just recently on this subject, and we are convinced that this is a policy that has to be changed, and the time to change it is right now.

Our amendment does not in any way change the policy President Clinton announced in October 1995, though it is my judgment that the entire policy is in need of serious evaluation and revision, and I will also be asking the General Accounting Office to assist me in this evaluation. Our amendment requires the Department of Commerce, in concert with other parts of the executive branch, to determine whether an entity in a tier 3 country is a military or civilian end-user, and whether the end-use will be for a military or civilian purpose. By their exports to Russian and Chinese nuclear weapons labs, private companies have demonstrated that they do not do an adequate job of making this determination. Government has the resources and information available to make the best determination possible, and should step in to ensure that America's national security is not being compromised for sake of a more profitable quarter.

In a country like the People's Republic of China, how can any private company have the resources to determine whether an end-user is military or civilian?

Some suggest that the process can be left unchanged, but that the Commerce Department can do a better job of helping industry make the proper end-use and end-user determination by publishing a list of end-users to which high performance computer exports are prohibited. I disagree with this suggestion. Any published list would necessarily be incomplete, for a complete list would compromise U.S. intelligence sources and methods. Any published list would also serve as a marketing tool for the world's proliferators, making their job of finding specific clients easier. And, any published list would be only too easy to manipulate by both the purchaser and the exporter who may not be willing to operate under the honor system. If, for example, Chelyabinsk-70 is on the list of prohibited locations, does that mean that a Chelyabinsk-71, not on the list, can receive U.S. exports of high performance computers? What's to stop an exporter like Silicon Graphics from accepting the convenient suggestion that, `yes, Chelyabinsk-70 does nuclear weapons work, but at Chelyabinsk-71 we conduct only environmental research.'

Publishing a list could reduce, but not eliminate, the problem we face, though in so doing other serious problems would be created. Congress needs to change the current process so the Government--with the most access to information with which to make the most informed determination of military end-use and end-user--makes the decision on whether to ship these computers to countries who are modernizing their weapons and delivery systems and engaged in proliferation of these technologies. America should not be participating in the qualitative upgrade of Russian and Chinese proliferant activities.

The Commerce Department maintains that President Clinton's supercomputer export control policy is working. Commerce continues to make this claim despite the fact that the administration's policy has allowed American supercomputers to be shipped to Russia's and China's nuclear weapons complexes, and who knows where else. If this policy is working, what would a policy that wasn't working look like? Would there be more supercomputers in Russia and China, or would we know absolutely that our supercomputers were in Iran, North Korea, or other terrorist states?

The cold war's end does not decrease the need for the continued safeguarding of sensitive American dual-use technology. While there may no longer be a single, overarching enemy of the United States, there is little doubt that many rogue states, and perhaps others, have interests clearly contrary to those of the United States. Helping these nations--or helping other nations to help these nations--to acquire sensitive dual-use technology capable of threatening American lives and interests makes no sense.

I thank Senator Durbin for his work with me on this issue, and look forward to continuing to work with him to get to the bottom of this problem. I encourage all of my colleagues to support this amendment.

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Mr. DURBIN addressed the Chair.

The PRESIDING OFFICER (Mr. Bennett). The Senator from Illinois is recognized.

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PRIVILEGE OF THE FLOOR

Mr. DURBIN. Mr. President, first, I ask unanimous consent that the privilege of the floor be granted to Lamelle Rawlins during the pendency of this debate.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. DURBIN. Mr. President, I am pleased to join my colleague from Mississippi, Senator Cochran, as a cosponsor of this important amendment. I think anyone who had attended our hearing within the last 2 weeks on this issue would have been shocked at what they learned. We have expanded opportunities for the purchase of some of the most valuable technology in the world. It is technology developed in the United States, which has no parallel anywhere else in the world, and we are selling it. The fact that we are selling it is nothing new. The United States has done that for years. But this technology is so important and sensitive that the people who buy it automatically acquire a capacity, a capability that they have never had in their history. In other words, our expertise, our knowledge, our technological skill is being sold.

What makes this particularly important is that this very technology has the capacity to give to the purchasing country the skills and abilities that they have never had before to develop things that are very positive, on one hand, but also potentially very negative. I was reminded of a quotation that is attributed to Mr. Lenin in the early days of his establishment of the Soviet republics. He said that it was his belief that `a capitalist would sell you the rope that you would use to hang him.' I thought about that over and over, as we discussed this question of selling these computers to countries like China and Russia, which have the capacity to allow them to develop extraordinary military capability.

Recent news accounts about sales of supercomputers to Russian nuclear weapons labs and the Chinese Academy of Sciences--in apparent circumvention of United States export control regulations--have raised troubling questions about the control that the United States exercises over supercomputer exports.

China has purchased at least 46 United States supercomputers. Of these, 32 are one particular model that is faster than two-thirds of the classified computer systems available to our own Department of Defense, including the United States Naval Underwater Weapons Center, United States Army TACOM, and United States Air Force/National Test Facility.

The Commerce Department and the Justice Department are investigating the unlicensed sale--unlicensed sale--of four over-2000 MTOPS computers to the Russian nuclear weapons facility Chelyabinsk-70.

The computers recently sold are 10 times more powerful than anything Russia ever had before, and we sold it to them.

There is ample room for mistakes and confusion in the current dual-use export control system for supercomputers.

According to a New York Times article on February 25 of this year, in an effort to circumvent United States export controls, Russia's nuclear weapons establishment obtained a powerful IBM supercomputer through a European middleman and said they planned to use it to simulate nuclear tests.

I was on this floor 2 weeks ago giving a speech about a test ban, recalling the speech given by President Kennedy before American University in 1963. I came to the floor with Senator Harkin and said it is time for us to have a comprehensive nuclear test ban, moving toward the day when there are no nuclear weapons threatening this world. In the world we live in today, you don't need to detonate a nuclear weapon. If you have a supercomputer, which can simulate that detonation, you can derive the same information--or a lot of it--through this model and through this technology. These are the very same computers and capabilities that we are selling.

The Nation's export controls for supercomputers `amount to a

kind of honor system,' according to one U.S. official quoted in the Wall Street Journal. Companies that have doubt about a customer's activities are expected to call the U.S. Government for advice.

Think about that. You have a computer company and you have a sale worth millions of dollars and you don't know whether it is going to be used for a peaceful purpose or a military purpose. Well, the honor system says it is time to call the Department of Commerce and check it out and see if they have any records or classified information. They may not share the information with you, but they may tell you there is some concern. But it is an honor system. There is nothing built into the law to guarantee this kind of surveillance, this kind of supervision.

Companies may fail to obtain licenses to sell supercomputers ordered for civilian purposes, such as weather forecasting or air pollution studies or natural resources prospecting and development, but these computers end up in places which do design work for nuclear weapons programs--not a civilian use. Companies may knowingly ignore licensing requirements or, alternatively, companies may unwittingly fail to recognize a suspect end-user.

The first step toward better export controls is better communication. Increased accountability and interaction between industry and the Federal Government called for by this amendment will help facilitate that interchange.

Even William Reinsch, the Undersecretary for Export Administration for the Commerce Department, quoted by Senator Cochran with whom I share the sponsorship of this amendment, testified at the Governmental Affairs subcommittee hearing last week, agreed that better communication is essential. He invited and encouraged companies to consult with the Commerce Department when faced with challenging sales decisions.

The current system for supercomputer exports involves controls on high-power computer exports set forth in Federal regulations that divide the countries of the world into various categories, or tiers.

The licensing policies vary depending on which category the country falls into. There are countries for which no export license is required--tier 1--some countries for which licenses are required for extraordinarily high performance machines--tier 2--some for which licenses are required, depending on whether the end-use is military rather than civilian--tier 3--and countries for which sales are totally banned--tier 4.

The tier 3 countries include India, Pakistan, all of the Middle East/Maghreb, the former Soviet Union, China, Vietnam, and the rest of Eastern Europe.

Under current rules, export licenses are required to export or re-export computers with a composite theoretical performance, known as CTP, greater than 2000 MTOPS to military end-users and end-uses and to nuclear, chemical, biological, or missile end-users and end-uses in tier 3 countries.

However, for civilian end-users or end-uses that don't fall into a military or proliferation category, licenses are not required for export or re-export of computers under 7000 MTOPS to these countries.

What this means is that for many sales, no Government oversight or decisionmaking takes place at the front end if the exporter determines that he is selling to a company that portrays itself as a civilian user because no license is required.

Because of the differences in the licensing rules that apply to exports for military and proliferation uses than those governing sales for civilian use, the U.S. Government plays no upfront role in determining whether the end-use of a supercomputer under 7000 MTOPS sold to a buyer in a tier 3 country is indeed to be used for a civilian purpose.

I know this is involved, I know that it is complicated. Let me try to cut to the bottom line. If a company in the United States seeks to sell a supercomputer, one of great capacity, and the end-user, the company that is buying in another country, says this is strictly for a civilian purpose, it is not going to be used

for anything of a military capacity, there are virtually no controls on that sale; nor is there much of anything done to track that sale, once it is made, as to where that computer actually ends up.

The responsibility is all on the shoulders of the manufacturer or exporter to make the determination on whether or not a license is needed, whether or not the computer might be used for military purposes. Exporters run the risk of relying on assurances of the purchasers or their own intelligence information about end-use, rather than the resources of the Government. Either intentionally or inadvertently, exporters have made sales to destinations for which a license should have been obtained, because of end-use, but was not.

The Cochran-Durbin amendment would require that all U.S. exports of supercomputers above 2,000 million theoretical operations per second--a measure of the computer's speed--to a tier 3 country be licensed by the Commerce Department.

The presently more lenient requirements for civilian end-use sales in this category would be made identical to stricter ones applicable to sales for military proliferation purposes.

The amendment would shift responsibility from industry to the Government for deciding the propriety and conditions of the sales.

By subjecting all such sales above 2,000 MTOPS to licensing requirements, the United States may be able to prevent the uncontrolled flow of technology for unauthorized use or diversion to purchasers in countries who may have vastly different interests than those of the United States.

Civilian sales of supercomputers above 2,000 MTOPS to purchasers in tier 3 countries would be reviewed and approved by the Commerce Department, using the same standards used in licensing military and proliferation sales to these countries.

In addition, the amendment expresses the sense of the Senate that Congress should enact legislation requiring that any computer exceeding 2,000 MTOPS exported to a tier 1 or tier 2 country shall only be reexported to a tier 3 country, or reexported by a tier 3 country to another tier 3 country, pursuant to an export license approved by the Secretary of Commerce.

We are trying to track these computers, once sold, and determine where they are going to end up. We are saying to those countries, whom we consider to be our allies and friends, that we are going to ask you to bear responsibility for the end-use of the computer. We don't want you to be a conduit for the sale of a computer to a country where the United States suspects it may be used for military purposes.

The sense of the Senate would call for legislation that would require any reexport to a tier 3 country would have to be done under U.S. export license. This amendment is clearly necessary. I urge my colleagues to join Senator Cochran and myself. If you had listened to the testimony, as we did, you would have discovered, as I did, that there has been a dramatic increase in technology and expertise in this field. It is estimated that every 9 months to a year most of the computers that we are talking about become obsolete and move on to higher standards.

The United States is where these computers are made and the country from which they are sold. As we are concerned about the proliferation of those items that can be used for the construction of nuclear, biological, and chemical weapons, we should also be concerned about the potential that we are selling technology that can also be used for proliferation of military weaponry. If we are truly seeking a peaceful world--and we are--the United States should take care not to sell that technology which allows another country to develop weapons of destruction.

I think the Cochran-Durbin amendment strikes an appropriate balance. It brings our Government into the decision process. It protects those exporters in the United States who truly are trying to do the right thing and sell for civilian use. But it gives them a backup, and it leaves some assurance that will be another party investigating when it comes to sales of a suspect nature.

This amendment is an important step toward addressing some of the growing concerns about U.S. export control policies governing sales of dual-use technology and whether those policies may be permitting access to sophisticated American technology to aid in the buildup of nuclear weapons capability of other countries.

Recall the words of Mr. Lenin: `A capitalist will sell you the rope that you will use to hang him.'

Let's not have that occur. Not in the name of free trade and good commerce should we forget our responsibility to national and world security. I believe the Cochran-Durbin amendment is a sensible and responsible way to bring some order to what is becoming a very chaotic situation.

I urge my colleagues to join Senator Cochran and me in support of this amendment.

I yield the remainder of my time.

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Mr. COCHRAN addressed the Chair.

The PRESIDING OFFICER. The Senator from Mississippi.

Mr. COCHRAN. Mr. President, I commend the distinguished Senator from Illinois for the great force of his argument and for the clarity of his statement in support of this proposal.

I ask unanimous consent that the Senator from Michigan [Mr. Abraham] be added as a cosponsor to the amendment.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. COCHRAN. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The legislative clerk proceeded to call the roll.

Mr. WARNER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER (Mr. Enzi). Without objection, it is so ordered.