[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
EXPORT CONTROLS, ARMS SALES, AND REFORM: BALANCING U.S. INTERESTS, PART
1
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
MAY 12, 2011
__________
Serial No. 112-37
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Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
______
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COMMITTEE ON FOREIGN AFFAIRS
ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California BRAD SHERMAN, California
STEVE CHABOT, Ohio ELIOT L. ENGEL, New York
RON PAUL, Texas GREGORY W. MEEKS, New York
MIKE PENCE, Indiana RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina ALBIO SIRES, New Jersey
CONNIE MACK, Florida GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas DENNIS CARDOZA, California
TED POE, Texas BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania KAREN BASS, California
TIM GRIFFIN, Arkansas WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
C O N T E N T S
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Page
WITNESSES
The Honorable Ellen Tauscher, Under Secretary, Arms Control and
International Security, U.S. Department of State............... 10
The Honorable Eric L. Hirschhorn, Under Secretary, Bureau of
Industry and Security, U.S. Department of Commerce............. 18
The Honorable James N. Miller, Jr., Principal Deputy Under
Secretary of Defense for Policy, U.S. Department of Defense.... 29
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Ileana Ros-Lehtinen, a Representative in Congress
from the State of Florida, and chairman, Committee on Foreign
Affairs: Prepared statement.................................... 4
The Honorable Ellen Tauscher: Prepared statement................. 12
The Honorable Eric L. Hirschhorn: Prepared statement............. 20
The Honorable James N. Miller, Jr.: Prepared statement........... 31
APPENDIX
Hearing notice................................................... 60
Hearing minutes.................................................. 61
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 63
The Honorable Eric L. Hirschhorn: Material submitted for the
record......................................................... 64
Questions submitted for the record to all witnesses by the
Honorable Ileana Ros-Lehtinen.................................. 83
Written responses received from the Honorable Eric L. Hirschhorn
to questions submitted for the record by the Honorable Ileana
Ros-Lehtinen and the Honorable Jeff Duncan, a Representative in
Congress from the State of South Carolina...................... 86
Questions submitted for the record to the Honorable Ellen
Tauscher by the Honorable Jeff Duncan.......................... 100
Questions submitted for the record to the Honorable James N.
Miller, Jr., by the Honorable Jeff Duncan...................... 101
EXPORT CONTROLS, ARMS SALES, AND REFORM: BALANCING U.S. INTERESTS, PART
1
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THURSDAY, MAY 12, 2011
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10 o'clock a.m.,
in room 2172 Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
Chairman Ros-Lehtinen. The committee will come to order.
After recognizing myself and the ranking member, my good
friend Mr. Berman of California after 7 minutes each for our
opening statements, I recognize the chairman and the ranking
member of our Terrorism, Nonproliferation, and Trade
Subcommittees deg. for 3 minutes each for their
statements. We will then hear from our witnesses. I would ask
that you summarize your prepared statements in 5 minutes each
before we move to the question and answer period with members
under the 5 minutes rule as well.
Without objection, the witnesses' prepared statements will
be made a part of the record. Members may have 5 legislative
days to insert statements and questions for the record subject
to the length limitations in the rules.
The chair now recognizes herself for 7 minutes.
This morning the committee is holding the first in a series
of hearings examining United States strategic export controls,
what I would prefer to call trade security, and sweeping
changes proposed by the Executive Branch.
As members are aware, the main goal of export controls is
to keep certain states or non-state actors from developing or
acquiring military capabilities that could threaten important
U.S. security interests. United States policy, with respect to
the export of sensitive technology, has long been to seek a
balance between the U.S. economic interest in promoting
exports, and our national security interest in maintaining a
military advantage over potential adversaries, and denying the
spread of technologies that could be used in developing weapons
of mass destruction.
Clearly, the U.S. has a compelling interest in protecting
its critical technologies from theft, espionage, reverse
engineering, illegal export, and diversion to unintended
recipients.
In this regard, we understand from press reports that a
U.S. helicopter with certain advanced radar-evading designs
crashed during the otherwise flawless raid to capture or kill
Osama bin Laden in Pakistan. While the U.S. team took steps to
destroy the helicopter to protect the know-how relating to the
design, engineering, and manufacture of this sensitive defense
item, there are reports that sufficient parts of the helicopter
remained intact to afford foreign entities significant insight
into our technology. Pakistani officials must offer full
cooperation to the U.S. to safeguard and ensure the immediate
return of any parts, and prevent the sharing of any information
about them with third parties.
This example clearly illustrates the need and value of
strategic export controls. Over the years, numerous
Congressional hearings and GAO reports have called attention to
the need to reexamine our export control system. Responding to
these concerns, the President announced in August 2009 that he
had directed the National Security Council to carry out such a
study. Last year the administration proposed a complete
reorganization of the current system, proposing a single export
control list, a single licensing agency, a single primary
enforcement coordination agency, and a single information
technology system.
Ultimately, the new legislative authorities would be
required to implement the administration's plan, a plan
substantially at variance with the current statutory scheme for
controlling defense articles under the Arms Export Control Act
and dual-use items under the Export Administration Act, and
requiring committee review. To date, a compelling case has not
been made for the wholesale restructuring of our current
system, especially one that would include the creation of a
costly and perhaps unaccountable new Federal bureaucracy.
Although there are several aspects of the ongoing reforms
that many of us do support, I want to focus on challenging
issues associated with proposed reforms of the current
munitions and dual-use control lists. We are particularly
concerned that the pace and scope of the ongoing ``list
review,'' which simultaneously includes: Establishing a new
``tiering'' structure for controlled exports; a comprehensive
review of the Munitions List; and a complete re-write of that
list's 21 categories of defense items, is straining the system
and its personnel to its breaking point.
The Executive Branch interagency review is only one part of
the process. As required by section 38(f) of the Arms Export
Control Act, any item which the Executive Branch proposes to
remove from the Munitions List must first be reviewed by the
Committees on Foreign Affairs and Foreign Relations of the
House and Senate, respectively.
Although the committee intends to work with the
administration to expeditiously review hundreds or thousands of
38(f) cases in the months ahead, we will and must vigorously
perform our due diligence on these important security matters
in accordance with existing protocols. The committee cannot
fulfill its oversight responsibilities in this regard, however,
until it understands fully how such articles would be regulated
under Commerce jurisdiction, as well as assess enforceability
of the new controls.
However, largely due to the complexity of the ongoing
reforms, clarity with respect to future licensing policy has
not been forthcoming. The administration should reconsider this
time-consuming exercise and focus on common sense reforms upon
which we can all agree.
One example may be the treatment of generic parts and
components treatment; rivets, wire, bolts and the like
currently controlled on the Munitions List because they were
designed for military use but which have little in the way of
inherent military utility. Toward this end, I intend to
introduce legislation to clarify that generic parts and
components need not be regulated in the same manner as the more
sensitive defense articles. This modest, but important, step
would address a key concern of small- and medium-sized
enterprises, larger defense firms, and our allies.
Unlike the breathtaking scope of the proposed
administration reforms, this initiative can be implemented in a
timely manner without precipitating institutional gridlock or
sparking significant friction within the Legislative Branch. In
so doing, the committee will seek to ensure that this effort is
fully consistent with our broader national security interests,
including by: Preventing transfers or retransfers of such
articles to Iran; ensuring consistency with current
prohibitions on the transfer of defense and dual-use items to
China, for example; and requiring that any subsequent lessening
of controls for these items meet with the concurrence of the
Department of State and the Department of Defense, as well as
can be reviewed by Congress.
These, and other legislative changes, together with our
intent to authorize a short-term extension of the lapsed Export
Administration Act, will help enable Congress and the
administration to tackle together the critical changes
necessary to strengthen our national security, while advancing
commercial interests.
I now recognize Mr. Berman, the ranking member, for his
opening remarks.
[The prepared statement of Chairman Ros-Lehtinen follows:]
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Mr. Berman. Thank you, Madam Chairman. And thank you,
witnesses. And Ellen, particularly good to see you again.
In July 2009 Defense Secretary Gates and National Security
Advisor Jones urged President Obama to launch the Export
Control Reform Initiative that we are reviewing today. Their
concern, which I share, is that our export controls are out of
date, more unilateral and therefore less effective than they
were in the past and are fast becoming a burden on our defense
industrial base, our scientific leadership and our national
security.
My concern is widely shared among our national security and
scientific leaders. Two years ago the National Research Council
published a report which concluded that America's national
security is highly dependent on maintaining our scientific and
technological leadership. The committee was co-chaired by
former National Security Advisor Brent Scowcroft and Stanford
University President John Hennessy. They were joined by former
four star generals, admirals and senior intelligence officers,
university presidents and Nobel Laureates.
In stark terms these leaders reported that our outmoded
export controls were designed for the Cold War when the United
States had a global dominance in most areas of science and
technology. The current system of export controls now harms our
national and homeland security as well as our ability to
compete economically. It goes on to state that,
``In the name of maintaining superiority, the United
States now runs the risk of becoming less competitive
and less prosperous. We run of the risk of actually
weakening our national security. The Cold War mentality
of Fortress America cripples our ability to confront
the very real dangers of altered world conditions.''
The Obama administration's Export Control Reform Initiative
has taken on the mammoth task of reforming our export control
system, and I commend them for doing so.
The administration formed an interagency task form of all
agencies responsible for administering export controls, and
there are a lot, to assess what needed to be done and how to
implement changes. This task force has accomplished an
astonishing amount of work in the last 18 months, proving that
if focused, an efficient interagency review and planning is
indeed possible under the right leadership.
Last week, the NSC-led interagency team doing the work on
this project was selected as a finalist for one of the most
prestigious awards for public service, the Samuel Heyman
Service to America award. They deserve our congratulations and
thanks.
I welcome and generally support the administration's Export
Control Reform Initiative, although I have some questions about
some aspects, especially the idea of a single-licensing agency.
There are also measures that the Congress should take, such as
giving the President the flexibility to determine how controls
should be applied to exports of commercial satellites and
related components. The House passed my provision to accomplish
this in the last Congress with bipartisan support. I hope the
House will approve again in this Congress.
But more broadly, we need to update and revise the Export
Administration Act which lapsed from 1994 to 2000 and again in
2001. Shortly I will introduce legislation to accomplish that
objective.
Reform has generally been interpreted in terms of making
the military export control system more responsive to
exporters, more efficient and more predictable. But reform is
also a call for reassessment for questioning old assumptions
and patterns of thinking.
For example, the Arab Spring has shattered old assumptions
about the Middle East. It is a time of hope, but it is also
fraught with peril. The region is in turmoil. We all hope that
governments throughout the region will become more democratic
and stable, but it is a real possibility that we will see new
governments that are less sympathetic to our concerns; more
hostile to Israel then the current regimes. It is time for a
new level of caution on what we sell to the Middle East and
Persian Gulf. Arms will not produce more democratic regimes.
I would be interested in hearing from the witnesses about
the additional levels of review that arms sales to this region
are now undergoing to lower the risk to the security of the
United States and our friends and allies, especially Israel.
A second area of caution is that our controls on munitions
largely ignore the domestic environment. Persons and companies
in the United States are able to purchase military items that
are controlled for export without a license and without so much
as a background check so long as the item is not to be
exported. This is a God-send to smugglers for Iran and other
countries of concern, and a nightmare for Customs agents. Our
export control system is literally fighting with one arm tied
behind its back if we continue to ignore this loophole.
Investigators from the GAO using fake identities and front
companies were able to purchase several defense items,
including a flight computer for an F-16 aircraft and ship them
out of the United States with no difficulty as commercial mail.
I would be interested in the witnesses' thoughts about whether
it makes sense to set up a system whereby all domestic
purchasers of components for significant military equipment,
excluding the firearms, should be licensed and vetted by the
U.S. Government in order to purchase those components with an
easily accessible database that defense manufacturers and
distributors should check before selling to them.
In sum, our national security requires a wholesale revision
of export control policy, a re-evaluation of our arms transfer
policy in the Middle East and a critical review of domestic
access to military technology.
Thank you very much, Madam Chairman. And I yield back my
time.
Chairman Ros-Lehtinen. Thank you very much, Mr. Berman.
We will hear now from Mr. Royce, the chairman of the
Subcommittee on Terrorism, Nonproliferation, and Trade from 3
minutes, and then Mr. Sherman the ranking member.
Mr. Royce. Madam Chairman, thank you very much for holding
this hearing and for recognizing me here.
And let me just make one overarching point that I have to
keep our eye on, and that is that a country of particular
concern as we engage in this whole effort has got to be China.
As a matter of fact, that is where our focus needs to be. And
the reason for it is because Beijing is targeting our
technology by hook or by crook, and the Commerce Department and
State Department have been naive regarding China. I would argue
all of us in the United States have been woefully naive.
And I think that at the end of the day export control
reform must be very clear-eyed about Chinese intentions. We
should not kid ourselves anymore about what is going on.
So, as you know, Mr. Sherman and I have had several
hearings in the TNT Subcommittee on export control reform. We
heard about the broken U.S. export system, which is a relic of
the Cold War that is poorly suited for today's global economy;
we know that. The GAO has said export controls needs
substantial reform and we do know bureaucracies fall behind the
times. Conflicts between agencies further burden the system.
As one witness testifies: ``Interagency commodity
jurisdictions over the years have bordered on epic.''
The losers here are America's national security and
economic competitiveness. So this has to be fixed.
And in moving forward we must realize that it takes only
one key piece of cutting edge technology slipping through the
cracks to seriously compromise our security. Our technological
capabilities will only become more important, too, as the costs
of maintaining armed forces hits fiscal reality. So national
security here is paramount.
So is our economic competitiveness, which is a core
component of national security. And simply put: We will not
remain a military super power without a world class
technological base. Exports are essential to that base. So to
balance these issues, the administration is proposing a
single=licensing agency and putting fewer items behind higher
walls. Higher walls should be a greater scrutiny and a law
enforcement focus on key technologies.
So, we await the details.
Thank you again, Madam Chairman.
Chairman Ros-Lehtinen. Mr. Sherman?
Mr. Sherman. Thank you, Madam Chairman, for holding these
hearings. They would be justified even if it was just a chance
to see our old friend Ellen Tauscher. But they are also
justified by the substance that we are dealing with today. This
is an issue critical not only to our national security but also
our economy.
Before addressing the administration's export control
efforts, I want to mention one little noticed State Department
decision that is, I believe, still in process. And that is
granting a waiver allowing for the inspection and repair of jet
engines on the airplanes owned by Air Iran and the Iranian
Mahan Air. Under Secretary Tauscher and I have discussed this.
I have not been sufficiently persuasive up until now, but now I
have another chance.
These are so-called civilian aircraft, but they have been
used to ship weapons to Hezbollah, Hamas and other terrorist
organizations. They have been used for terrorist/intelligent
operations in Europe. And Mahan Air, in particular, is known as
a Revolutionary Guard affiliate.
It is natural for us to want all planes to be safe, but we
do not have to fix these planes. We can tell the world loudly
that they are unsafe and that no one should fly them, and that
Iranians wishing to fly should fly anyone of the many dozens of
Asian and European airlines that fly into and around Iran.
If instead, we fix the planes that are the very implements
of Iranian terrorism, then we demonstrate that our sanctions
against Iran go right up until the point where we might
inconvenience any Iranian citizen or any American corporation
which makes a mockery of those sanctions.
In early 2007, our Subcommittee on Terrorism,
Nonproliferation, and Trade held hearings that highlighted the
inefficiencies in the licensing process at the State
Department's Directorate of Defense Trade Controls. I joined
with Mr. Manzullo in introducing the Defense Trade Controls
Improvement Act of 2007. I should point out our subcommittee
has also had, as I think Ed Royce points out, over half a dozen
hearings on this issue. The bill was substantively folded in
the State Department Authorization Bill authored by Howard
Berman. That bill did not become law because the Senate lacked
adequate wisdom, but many of the provisions were acted upon and
implemented by the State Department, showing considerable
wisdom in that body.
Subsequently, the Obama administration has focused on
export controls. It even garnered a couple of sentences in the
State of the Union Address. This is in importance, though often
thankless task.
The main focus of the effort seems to be the category-by-
category review of the U.S. ML and Commerce list to loosen
unnecessary controls and eventually produce a single unified
list with different tiers.
I agree that we ought to have a higher fence around a
smaller yard. And I agree with Mr. Berman that that higher
fence has got to include licenses sometimes for domestic
purchasers who otherwise could easily be front companies.
I see that my time has expired, and I look forward to
questioning the witnesses.
Chairman Ros-Lehtinen. Thank you so much.
Our first witness will be the always lovely, ever engaging
and talented and smart and witty Ellen Tauscher, Under
Secretary of State for Arms Controls and International
Security.
Under Secretary Tauscher is well known to members of this
committee, having previously served with distinction for 13
years in this body representing California's 10th Congressional
District and a founding member of the Fun Gals' Caucus. We will
not talk about that.
And Eric Hirschhorn serves as the Under Secretary of the
U.S. Commerce Department's Bureau of Industry and Security. I
am sure that he is a fun guy in his own right.
Prior to serving in this capacity, Mr. Hirschhorn worked as
a partner in the Washington, DC, office of Winston and Straun.
Thank you.
And then we will finish with Dr. James Miller, the
principal Deputy Under Secretary of Defense for Policy. Prior
to his confirmation Dr. Miller served as Senior Vice President
for Director Studies at the Center for a New American Security.
We welcome all of you. All of your statements will be made
a part of the record. Please feel free to summarize it within
the 5 minutes.
Honorable Tauscher is recognized.
STATEMENT OF THE HONORABLE ELLEN TAUSCHER, UNDER SECRETARY,
ARMS CONTROL AND INTERNATIONAL SECURITY, U.S. DEPARTMENT OF
STATE
Ms. Tauscher. Thank you, Madam Chairwoman and Ranking
Member Berman, and members of the committee.
It is an honor to be here today. I have submitted my full
statement for the record, and I will give an abbreviated
statement because I appreciate the opportunity to be here today
with you to speak on the Obama administration's effort to
reform the United States export control system.
The Obama administration has two priorities in our efforts
to reform the export control system. We want to improve the
current system that it enhances United States national security
and we want an efficient system to help American companies
compete in the global marketplace.
I want to use my time to outline the administration's
reform strategy and the actions that the State Department is
taking to support that strategy.
For decades the United States export control system worked
adequately to keep sophisticated United States technologies out
of the hands of our Cold War adversaries. But today we face a
different challenge. We no longer face a monolithic adversary
like the Soviet Union. Instead, we face terrorists seeking to
build a weapon of mass destruction, states striving to improve
their missile capabilities with back door acquisitions of
technology and elicit front companies seeking items to support
such activities.
We also face far more rapid developments in technology
beyond our borders. The United States is no longer the sole
source of key items in technologies. In many cases, United
States companies must collaborate with companies in allied
countries to develop, product and sustain leading edge military
hardware and technology.
In November 2009, the White House stood up a task force to
create a new approach to export controls that would address
today's threats and the changing technological and economic
landscape. The task force included the Departments of State,
Defense, Commerce, Energy, Treasury, Justice, Homeland Security
and the Office of the Director of National Intelligence. The
sheer number agencies involved in export controls alone is a
key indicator for the need of reform.
The review found numerous deficiencies in our current
systems. Agencies have no unified computer system that will
permit them to communicate with each other, let alone with U.S.
exporters. Exporters must deal with numerous paperwork
requirements which in the case of my Department alone can be 13
different forms. And licensing requirements are confusing which
causes delays for U.S. exporters and helps those who would
evade our controls.
There is no regular process to review all of what we
control, and so controls lists have not been comprehensibly
updated since the early 1990s.
Our enforcement agencies do not always communicate well, so
we have seen instances of enforcement actions that are
ineffective and waste resources.
The task force recommended steps to address these problems
by creating standardized policies and processes, and
consolidating resources in four key areas which we refer to,
and Madam Chairman talked about, we call them the four
singularities. These include drafting a single control list,
designing a single information technology system, implementing
a single enforcement coordination capability and creating a
single licensing agency.
We are implementing these recommendations in three phases.
In phase 1, we made core decisions on how to rebuilt our
lists, recalibrate and harmonize our definitions, regulations
and licensing policies and create an export enforcement
coordination center, and to build a consolidated licensing
database.
We have started to implement phase 2 by revising the U.S.
Munitions List and a Commerce Control List. Dr. Miller will
discuss this topic in more detail
The Departments of State, Commerce and Treasury are
adopting the Department of Defense's export licensing computer
system as an initial step to creating a government-wide
computer system dedicated to supporting the export control
process.
We will create a single form for applications to State,
Commerce and Treasury, and exporters will submit these
applications through a single electronic portal.
And we hope to work with Congress to pass legislation to
create a primary U.S. export enforcement agency.
American businesses have complained for decades about the
lack of clarity and predictability as to just what a munition
is or what a dual-use item is. So we are creating a bright line
between munitions and dual-use items to provide clear guidance
on commodity jurisdiction issues.
The administration also wants to improve how Congress is
notified about arms sales and a transfer of items from the
United States Munitions List because the current process is
lengthy and unpredictable. This reform is of special interest
to me as a former Member of Congress. I know that by working
together we can better.
In phase 3 we plan to create the four singularities that I
mentioned, which will bring the initiative to its logical
conclusion.
Unless we complete this agenda and create a single list and
single licensing agency, we will miss the opportunity to better
focus our export control efforts and face higher national
security risks as a result. We have more to do to refocus our
export control system, but we are committed to this initiative
because it will enhance our national security and the
competitiveness of American companies.
I am happy to answer any questions, Madam Chairman. But
first, I would like to turn to my colleagues from the Commerce
Department and the Defense Department to give their
Department's perspectives on the reform effort.
[The prepared statement of Under Secretary Tauscher
follows:]
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Chairman Ros-Lehtinen. Thank you very much.
Mr. Hirschhorn?
STATEMENT OF THE HONORABLE ERIC L. HIRSCHHORN, UNDER SECRETARY,
BUREAU OF INDUSTRY AND SECURITY, U.S. DEPARTMENT OF COMMERCE
Mr. Hirschhorn. Thank you very much, Madam Chairman, and
Ranking Member Berman, members of the committee.
Chairman Ros-Lehtinen. If you could turn on your
microphone.
Mr. Hirschhorn. It is a pleasure to be here this morning. I
appreciate the chance to discuss with you export control reform
and the effort to bring that about.
The Export Control Reform Initiative recognizes that first
and foremost, our export control policy must keep sensitive
items out of the hands of end users who would harm our national
security. It also must facilitate interoperability with our
allies and, at the same time, should not undermine our defense
industrial base.
As you know, BIS, the Bureau of Industry and Security
controls exports and reexports of dual-use items. Working with
our colleagues at the Departments of State, Defense and Energy,
our policy and technical personnel evaluate more than 20,000
license applications a year to ensure that items sold abroad
are destined for appropriate end-users and appropriate end
uses.
In addition, we work on educating the regulated community
about our regulations and enforcing those regulations,
including a dedicated corps of special agents located here and
aboard.
Under Secretary Tauscher has noted the four ultimate goals
of export control reform. An interim but essential step is to
harmonize the U.S. Munitions List and the Commerce Control List
because the items we control and the means by which we control
them are the cornerstone of an effective export control system.
As part of this process, less critical items can be moved to
the more flexible licensing system under the Export
Administration Regulations. These items are primarily parts and
components for military end items.
Many of the items to be moved are inherently similar and
functionally identical to comparable items that are subject to
the EAR. All items especially designed for military application
will remain subject to control even after transfer unless there
is a contrary consensus among the agencies, including the
Departments of State and Defense.
We are also recrafting the Commerce Control List into a
three tiered structure that allows controls on items to cascade
over their life cycles based on their sensitivity and foreign
availability. This will facilitate more quickly adding controls
on new items and technologies while enabling the transition off
the list of items that no longer warrant control.
We anticipate that items in the highest tier, for example,
will require licenses worldwide.
For the second tier, a new license exception STA--for
strategic trade authorization--would permit exports of certain
dual-use items to our most trusted allies and friends, subject
to certain safeguards and requiring consignees within that
group of countries to obtain authorization from the United
States to re-export such items to any country not in the group.
Consignees, and their consignees, must agree not to
reexport or transfer the items without authorization. This one
piece of export reform will eliminate about 3,000 low risk
licenses a year.
At the same time, we will continue to maintain controls on
items for foreign policy reasons, such as specially designed
implements of torture, and maintain comprehensive controls and
sanctions on terrorist supporting countries.
Once the lists have been made positive and more specific,
we will have two aligned lists that can be combined into a
single control list. We believe that this single list can best
be administered by a single licensing agency.
We are also harmonizing definitions of key terms such as
``technology'' and ``specially designed'' across the various
sets of export control and sanctions regulations.
We owe a level playing field to those who seek to comply,
and therefore we are going to continue to enhance our education
outreach to the exporting and re-exporting community. And
domestically on the compliance side we are expanding our
enforcement operations and taking advantage of the permanent
law enforcement authorities that this committee played a major
role in providing last year as part of the Comprehensive Iran
Sanctions Act. We appreciate that very much, and it is helping
us do our job.
In November 2010, the President signed an Order creating
the Export Enforcement Coordination Center. This will better
enable us to share information with other enforcement agencies
and prevent us from getting under foot between one another.
This brings me to my final point and a central issue before
us today. The administration has recognized from the outset
that it needs to work closely with the Congress to ensure that
the goals of this reform initiative are met. This includes
continuing to brief members and staff regularly, providing
updates on our efforts and seeking your input on regulations,
and of course and most importantly, the enactment of
legislation. Success in this joint effort will strengthen our
national security and in doing so, strengthen our economy as
well.
Thank you very much, and I look forward to your questions.
[The prepared statement of Mr. Hirschhorn follows:]
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Chairman Ros-Lehtinen. Thank you, sir.
Dr. Miller?
STATEMENT OF THE HONORABLE JAMES N. MILLER, JR., PRINCIPAL
DEPUTY UNDER SECRETARY OF DEFENSE FOR POLICY, U.S. DEPARTMENT
OF DEFENSE
Mr. Miller. Thank you, Madam Chairwoman, and Ranking Member
Berman and members of the committee for the opportunity to
testify today on export control reform. I am very pleased to
join my colleagues Under Secretary of State Ellen Tauscher and
Under Secretary of Commerce Eric Hirschhorn.
I wanted to start by emphasizing what the chairwoman said
the outset: ``U.S. armed forces should always have the
technology advantage, and we should take all reasonable steps
to prevent potential adversaries from using our own technology
against us.'' It is in fact because export controls are so
important to our national security that reform is so essential.
As I think we all now recognize, over the years the
bureaucracy that surrounds our current systems has grown into a
byzantine set of processes with diffuse authority scattered
throughout the government. This structure results in time
wasted on process and jurisdiction issues, and it creates
opportunities for mistakes, enforcement lapses and openings for
problematic exporters to probe the system for the best results.
We have made incremental changes in progress in our export
system over time squeezing our processes for efficiencies, but
this is clearly not enough. We need to focus our efforts on the
most critical technologies that underpin U.S. military
advantages where they could be dangerous in the hands in
others. We need to focus on what Secretary Gates has called
``U.S. crown jewels.''
In over 95 percent of U.S. export control cases we say yes,
go off and only after a lengthy and cumbersome review mandated
by our current processes. By focusing our efforts better, we
will be better to protect the technologies and capabilities
that really matter.
As you know, the administration has proposed what we have
called the four singularities and that Ellen Tauscher outlined.
I want to say just a few words about each of them.
We are already making very good progress on the first two.
Last November, President Obama signed an Executive Order to
establish an Export Enforcement Coordination Center which will
bring together representatives from Commerce, FBI, ICE, the
intelligence community, military law enforcement and components
in other agencies. Agencies are now in the process of standing
up the center and establishing procedures for its operation. So
a single law enforcement coordination center is well underway.
We are also making good progress toward a single IT system.
The DoD is the executive agent for the new U.S. Government-wide
export licensing system which will be based on DoD's USXPORTS
system. We signed a Memorandum of Agreement with the Department
of State in February 2010, and expect initial operational
capability by August 2011. We signed an MOU with the Department
of Commerce in October 2010, and expect initial operational
capability in October 2011.
So, good progress on the first two. And in addition, work
is progressing toward the establishment of a single export
control list. We obviously need congressional support to
complete this task.
Establishing a single list is essential because the line
between purely commercial and purely military technologies has
blurred, and it will continue to blur. For example, high
accuracy gyroscopes that were once used only by the U.S.
military are now being used in commercial aircraft, conversely
our military uses commercial computers and processors in
military systems. From a national security perspective we
should treat items with similar capabilities the same way,
irrespective of whether an item was designed for a specific
civil or military purpose.
A single list based on positive control language that
capture key performance characteristics will allow us to focus
our efforts on key items that provide the U.S. with an
important military advantage or that pose risk to our security.
As you know, DoD has taken the lead in rewriting the U.S.
Munitions List. This is a major undertaking that is an
essential precursor to a single control list. We have involved
experts from the military departments and are working closely
also with the Departments of State, Commerce, Energy and other
Departments and Agencies.
Under a single list items that we consider to be U.S.
``crown jewels,'' those items and technologies that are the
basis for maintaining our military technology advantage,
especially those items that no foreign government or company
can duplicate such as hot section engine technology, will be
placed in that top tier, Tier 1 and guarded with extreme
vigilance. This is the highest of our higher walls of expert
control reform.
Items that provide substantial military and intelligence
capabilities will be placed in tier 2 and would be available
export on a case-by-case basis, including certain items that
would be eligible for license exemptions to specified U.S.
allies and partners as appropriate.
For tier 3, a license would be required for some but not
all destinations.
As Under Secretary Hirschhorn noted, the administration has
also begun revising and tiering dual-use controls on the
Commerce Control List so that when coupled with revised USML,
the two lists can be merged.
If we are able to move forward successfully to a single
list, it makes perfect sense and would make no sense otherwise,
to move forward with a single licensing agency. Our vision is
that the expertises that we currently have in government from
various agencies, including State, Commerce, Department of
Defense, Treasury and others would be involved and that these
individuals would work together to strengthen our approach. A
Board of Governors consisting of the Secretaries of key
department, including State, Commerce and DoD would oversee the
work of the single agency.
In conclusion, our national security will be far better
served by a more agile, transparent, predictable and efficient
export control regime. We have made good progress, but we need
help and we need support from Congress to complete this
critical effort.
Thank you very much for the opportunity to speak today, and
we look forward to your questions.
[The prepared statement of Mr. Miller follows:]
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Chairman Ros-Lehtinen. Thank you very much for excellent
testimony.
I will begin the round of questioning.
Under Secretary Tauscher, I wanted to ask about the Middle
East. Can you assure this committee that arms sales proposals
are based on well formulated, focused and realistic capability
requirements or ``wish lists'' from our friends for the latest
technology? Are you also confident that all sales comply with
U.S. conventional arms transfer policy? And I ask because, as
you know, the GAO recently found that State and DoD did not
consistently document ``how arms transfer to Persian Gulf
countries advanced U.S. foreign policy and national security
goals.'' And as Mr. Berman said, the Arab Spring is remaking
the political map of the Middle East, go or for bad, creating
new opportunities but new challenges.
So, what plans, if any, does the administration have to
review arms sales to that ever changing region?
Ms. Tauscher. Thank you for that very comprehensive and
timely question, Madam Chairwoman.
Yes, I can assure you that the United States State
Department goes through significant processes and consultations
both with the region, our allies and with the Congress, and
with the other Departments before we agree to front military
sales and agree to arm sales.
I know that everyone is sensitive about the Middle East. We
have been consistently working on consultations both with House
and Senate committees, but also inside the government and with
the region before we go forward with any kinds of arms sales.
So, I think that the answer is yes, Madam Chairwoman, we
are confident that we are consulting in a vigorous way. And,
yes, we are confident that when we do make these announcements
of a sale that they are going where they are supposed to be
going and that are not transferred. But as you said in your
testimony, it is very important that we make sure that there
are no questions about this system, and that is why reform is
so important.
It is important that we have common sense and we have a
comprehensive nature to this reform. As you know, attempts have
been made in the past through various administrations, both
Democratic and Republican, to make these reforms. Both the
bureaucracy fights it at times, and certainly just doing things
the way we have done them before is a way for people to
rationalize that we cannot make reforms. But the truth of the
matter is, and Secretary Gates has said this very elegantly,
``We cannot have a 20th century export reform regime for 21st
century threats and for 21st century global competitiveness of
American businesses.''
So I think that, once again, I reassure you that we are
confident that we are doing as best we can and that we are
protecting what we need to protect.
Chairman Ros-Lehtinen. Thank you.
And turning to Taiwan, it has been nearly 14 months since
the last major arms sales was notified for Taiwan. Over a year
ago, Assistant Secretary of State for Political Military
Affairs Andrew Shapiro assured the Committee on Foreign Affairs
that the State Department would undertake an extensive but
honest discussion with our committee regarding Taiwan. No such
discussions have been held for nearly 9 months, and you have
also violated requirements related to the Javits Report. So
consistent with the Taiwan Relations Act, when will the
administration be prepared to discuss Taiwan's defensive needs
with our committee?
Ms. Tauscher. Madam Chairwoman, we will appear before the
committee whenever you ask. And I will make sure that that is
as timely and as soon as possible, depending on your schedule.
Chairman Ros-Lehtinen. Thank you very much.
And a good place to start that discussion would be with
Taiwan's increasingly urgent requirements for a new practical
fighter aircraft. If Taiwan presents the administration with a
letter of request for the transfer of the new F-16 CD Fighter
Aircraft, will the administration accept that request? If not,
why not? And does Communist China have a veto on U.S. arms
sales to Taiwan?
Ms. Tauscher. No foreign country has a veto on any sales of
military requirements to our allies and friends; that is for
sure, and certainly not China.
But let me turn to Dr. Miller who can talk some more about
the Taiwan requirements. But let me say this. This
administration, like all previous administrations, values its
relationships with its allies, whether they be NATO allies or
near-NATO allies or members of different organizations that we
belong to. These are prized relationships. And part of the
projection of American power and American prestige is by
selling armaments to our friends. And so we will do everything
we can to have these consultations both open with you and at
the same time respectful of the relationship of our allies and
friends.
Chairman Ros-Lehtinen. Very good.
Dr. Miller, just for 1 minute.
Mr. Miller. Yes, of course.
Madam Chairwoman, let me first reiterate what the Under
Secretary had to say, and that is that no nation including
China has any veto over our export of arms, of course.
The Department of Defense in working with the Department of
State and others owes a report to Congress, as you know, on
Taiwan and arm sales. We are very close to concluding that. We
have done the detailed analysis that has been requested and
required in order to do that. And we will be prepared to come
forward and brief very soon on the topic.
And just to reiterate what Ellen Tauscher, also pleased to
come forward in whatever format you would like when you ask.
Chairman Ros-Lehtinen. Look forward to it. Thank you so
much.
My good friend Mr. Berman of California is recognized.
Mr. Berman. Thank you very much Madam Chairman. And thank
all of you for your testimony.
In line with the chairman's question regarding the Middle
East, for me the underlying question is there are huge changes
going on, changes that none of us anticipated. With respect to
future arms sales to that region, is there some process going
on within the administration to reassess and re-evaluate those
decisions in the context of what's happening and what the
implications are? Has that kind of reassessment either formally
or informally been undertaken? Are people thinking about
undertaking it?
Mr. Miller. Mr. Berman, let me answer in two time frames.
First, in the near term the administration has put on pause,
put on hold some transactions that were otherwise planned, as I
think you know and I expect that you have been briefed on. It
would probably be better to talk about those in a closed
session. Be happy to provide more information.
For the longer, for the question of where we go next and
does it imply a different set of guidelines. The administration
is looking at the implications and looking both on the broad
basis of Middle East and North Africa, looking on a country-by-
country basis. And I can assure you that the question of what
is the appropriate role of export and export control broadly
for the region and on a country-by-country basis has got to be
a part of that assessment.
Mr. Berman. Okay. In this vein, I do want to particularly
congratulate the administration for its outreach and
consultation with Israel on U.S. security policies in the
Middle East, including possible arm sales. My own sense is the
level of consultation that has gone directly with them by this
administration far exceeds what I have seen in the past. And
one way I know it is because I do not hear people complaining
about the lack of consultation. So, I appreciate that.
Mr. Miller, I would like to just take sort of the devil's
advocate's point of view for a second regarding the four
singularities: A single IT system, a single licensing list, a
single licensing agency and a single enforcement agency. As you
may know, and I sure did not before my staff wrote this, in
cosmological terms a singularity is a black hole, so dense that
nothing useful, not even information can come out of it. And
what goes on inside is a complete mystery beyond the law of
physics.
There are redundancies in the current system, and that is
what motivates a lot of us trying to get this reform. But let
us take the other side of the coin for a second. That
redundancy and that inefficiency and those different agencies
and bureaucracies, in effect create a system of checks and
balances with multiple agencies, with different missions review
of sales from their own perspectives. One wants those different
perspectives in this process. We want a Commerce Department
that is thinking about America's technological edge. We want a
State Department understand, evaluating the foreign policy
implications of export decisions, we want a Defense Department
that is thinking about what this is going to mean for our
national security and our forces. How in a system of four
singularities will those different perspectives still be
brought to bear?
Mr. Miller. Mr. Berman, let me very briefly comment on the
term. I thought that we should use the four singles instead
because, as you probably also know, singularities is referred
to a situation in which artificial intelligence reaches the
point at which it equals or surpasses human intelligence. So--
--
Mr. Berman. Is that on a case-by-case basis or----
Mr. Miller. I will take under advisement to change our
terminology. And I think the idea that four singles could equal
a homerun would be, perhaps, more appropriate.
I agree, and the administration agrees with your suggestion
that different perspectives need to brought to bear. Let me
talk about that at two different levels.
The first is that different perspectives, different
expertises on various technologies, on the expertise associated
with military operations and no intelligence assessments of
what other countries have and may have in the future have to be
brought together. That is a key purpose of having a single
licensing agency and a staff that is able to look across these
various types of technologies and items. We expect that this
staff of the SLA, the single licensing agency, would be able to
deal with the straightforward issues to be able to implement
guidance associated with it. But at the same time we expect
that for cases that are particularly challenging because they
represent a new technology or they represent an item of
technology going to a country that we think is essentially
marginal for the tier of the technology we are talking about,
we fully expect that the Departments will contribute their
views.
So while we would expect that some of our experts for the
Defense Technology Security Agency for the Department of
Defense would join the SLN, we also expect that we will
continue to have experts on these issues that will provide a
Department of Defense input, and that on the whole the number
personnel involved will be about the same, perhaps slightly
less. But in ballpark, about the same as they are today. But
those people will be able to work directly together on what we
think will be smaller number of difficult cases and be able to
then bring in departmental expertise overseen by a board of
governors that involves the Secretaries of these three
Departments and others that will bring in that outside
expertise and, where necessary escalate, take to higher levels
those new choices where new policy has to be made.
Chairman Ros-Lehtinen. Thank you very much.
Mr. Rohrabacher is recognized.
Mr. Rohrabacher. Thank you very much, Madam Chairwoman for
having us look at his very serious issue today. And special
welcome to Ellen Tauscher. We are very, very pleased you are
with us today.
And I would just like to start off by pointing out that I
have a newspaper, this is put out by the Communist Chinese
Government. And their headline is, ``Dialogue Produces Positive
Results.'' And I am sure that there were all sorts of
newspapers like this before World War II were positive results
with dialogues with the fascists and the Nazis that we had to
deal with in World II, people thought that they were going to
make war less likely and make friendship more likely by dealing
with those folks. And the fact is that the Hitler regime
benefitted greatly by its relationship to England, trade
relationship with England just prior to the Second World War.
On the issue today, clearly what it sounds like at the end
of this strategic and economic dialogue with China, which this
headline is referring to, Chinese Vice President Wang
stated, the deg. ``The United States committed to
accord China fair treatment in a reform of its export control
regime and relaxed high tech export controls toward China.''
It sounds like to me that the United States Government
still cannot differentiate between a dictatorship that murders
religious believers every day, has no opposition, political
opposition, no opposition parties, no freedom of speech and
press; that we cannot differentiate that country from Belgium
or France, or even Brazil. There should be a differentiation
between these countries, should there not in terms of the
technology that they are allowed to import from the United
States?
Ms. Tauscher. As my friend from California knows,
engagement is not endorsement, as Secretary Albright said many
years ago. And Secretary Clinton, if you read the American
papers, gave a very, very tough and consistent message to the
Chinese on a number of areas where we are not happy and we do
not believe our relationship is as transparent or as
forthcoming as it needs to be. Certainly on human rights, the
Secretary gave a very, very tough message.
Mr. Rohrabacher. Excuse me for interrupting. But are you
trying to suggest that the Clinton administration should be
looked at as making a tough statement with China? It was during
the Clinton administration that the technology from our space
program was transferred to China, which is now being used and
has been used to perfect the Chinese rocket systems, for Pete's
sakes.
Ms. Tauscher. I was speaking about Secretary Clinton just 2
days ago.
Mr. Rohrabacher. Oh, pardon me.
Ms. Tauscher. Just 2 days ago.
Mr. Rohrabacher. Pardon me.
Ms. Tauscher. And if you read the----
Mr. Rohrabacher. Sometimes I get my Clintons mixed up here.
Ms. Tauscher. Yes, well it can happen.
But Secretary Clinton made very clear to the Chinese just 2
days ago, I was there, about many different issues, especially
human rights. And that was a very tough message to give in an
engagement.
Mr. Rohrabacher. Yes.
Ms. Tauscher. But as I said, engagement is not endorsement.
And we do have a complicated relationship with the Chinese. But
nothing about that relationship includes special preferences.
And I think that as often happens in newspapers around the
world, the hometown paper sometimes engrandizes what exactly
happened.
Mr. Rohrabacher. Well, how about the statement of the Vice
President? You know, it is one thing to make a tough statement
on human rights and then the next day to leave people with the
impression that the United States is committed to relax high
tech export controls. I mean, this is a statement from the Vice
President right out of meetings with the administration. And I
can see why it might confuse them to think that we are actually
serious about protecting specific transfers.
Let me just get right to the heart of the matter, because I
got just a couple of seconds left. Should we have tougher
export controls toward dictatorships that are potentially
enemies, as China is potential, is an adversary but not an
enemy, but it is a rotten dictatorship? Should we have more
serious export controls and why is that not mentioned in the
interim report? Should it be a dual track?
Mr. Hirschhorn. If I may, Congressman.
The whole point of export control reform is to make exports
to our friends and allies easier and to build higher walls to
ensure that they do not go to improper places.
Mr. Rohrabacher. Yes.
Mr. Hirschhorn. And with the chair's indulgence, I would
like to read from the Joint Statement rather than from the----
Mr. Rohrabacher. Okay. That list that you said, it does not
include China, is that right?
Mr. Hirschhorn. That is correct.
Mr. Rohrabacher. Okay.
Mr. Hirschhorn. I would like to ask that the record include
the actual text from the Joint Statement.
Chairman Ros-Lehtinen. Without objection, subject to size
limitations.
Mr. Hirschhorn. Thank you.
Chairman Ros-Lehtinen. Congressman Cicilline is recognized.
Mr. Cicilline. Thank you, Madam Chairwoman.
And I thank the witnesses for their thoughtful testimony
this morning.
Under Secretary Tauscher, I want to particularly thank you
for your leadership on export control reform. We live in very
challenging economic times and international arm sales I think
are really critical to sustaining a strong industrial base here
in our country, and certainly our national security as well as
our interests in promoting robust job growth.
This is especially important in my District where several
of my constituent companies are affected by the long process of
arms sales. We received the letter in this committee from
Secretary Clinton raising the issue of the long process of arm
sales notification and congressional review. And I think like
many members of this committee, I am interested in finding a
solution that speeds up the process but also allows our
committee to exercise appropriate oversight in order to protect
our national security.
One suggestion has been made to add a time limit on the
prenotification process, similar to what is in place in formal
notifications. But, of course, some have criticized that idea
as saying that a time limit could impede congressional
oversight on sensitive arms transfers. And since you have the
unique perspective of having been on both sides having served
here in Congress and now at the State Department as Under
Secretary, could you share with us your thoughts on that? And
also comment on the State Department's concerns, if there are
any, about this informal review process and whether or not the
Department will propose a time limit for a period of review
similar to what is in place in formal notifications?
Ms. Tauscher. Thank you very much, Congressman.
You know, I think that we all agree that we want to get
this right, and this is not about a clock that would interfere
with our ability to protect American technology, especially our
most sensitive technology. But it is also important that we
deal with the real world and the global marketplace where we no
longer dominant in so many areas and where it is very, very
important for our economic recovery for American exports to
move out into those marketplaces and to create jobs.
So what we have here is over the years the average time for
the pre-consultation period for foreign military sales went
from an average of 29 days to an average of 57 days. The
different Departments have different time periods for the USML
and for the CCL. It is about 15 days in the State Department,
it is double that in the Commerce Department.
So we do not want to have an artificial metric. We do not
want time to be the metric. We want it to be done right, but at
the same time we believe that there are efficiencies that you
can get in the system by doing things where there is a common
view for the many different people and a common agency to go;
one place to go, one phone call that gives what we hope are
both comprehensive but common sense answers to how to go
forward, especially for the small and medium businesses that
are very, very dependent on exports for their livelihood.
So I think, Congressman, you have hit upon what is a
difficult tension area: How do we do this efficiently, in a
timely way so that we can trade with our allies, trade with our
friends and keep growing businesses, but at the same time as
Congressman Rohrabacher has made a very significant point, that
we make sure that people that are trying to go around the
system or trying to use the system, the inefficiencies in the
system to beat us, do not get that victory.
So as Congressman Berman said, redundancies are important,
so we need to build a system that has redundancies so that we
are making sure that we are checking and balancing each other
and getting things done in the right way. But stovepipes are
not redundancies. They are barriers to efficient processes. And
so what we want to do is remove these, and that is why the
singularities have been developed. We think that that is the
best way for us to give both the enforcers and the people that
are going to say yes and no a common view, having common
applications, things that are going to provide the efficiencies
of the system but also have redundancies to check and balance
and to move the system more quickly but we do not have a number
of days that we have to meet. We expect that it will shorten,
but this is not about just that.
Mr. Cicilline. Thank you.
I yield back the balance of my time.
Chairman Ros-Lehtinen. Thank you, sir.
Mr. McCaul of Texas is recognized.
Mr. McCaul. Thank you, Madam Chair.
And it is nice to see a former colleague in such high
places now.
I want to talk about a couple of issues. I just got off the
phone with Howard Schmidt, the Cyber Security Coordinator about
the presence of proposed legislation on cyber. And I think that
is important because while we can talk a lot about the physical
espionage, we know that that is taking place every day in the
virtual world. The Pentagon has been hacked into, NASA, and one
of the most hacked into offices, as you know, is the Export
Control Office in the Department of Commerce, and that is open
source.
I just say that. I think beyond that we probably cannot
talk a whole lot about that in a public hearing, but it is a
big concern to me. And I hope I can work with the
administration on this important issue.
Secondly, end use monitoring as it pertains to Pakistan. We
have teams that are supposed to be allowed to go in and monitor
end use, and yet Pakistan is denying these teams access. To me
that is very disturbing, particularly in light of the latest
revolution of the helicopter being shown off to China. Can you
very quickly in the time I have comment on the end use
monitoring issue?
Ms. Tauscher. Well, any country that does not provide the
access that we have in the agreement, immediately will come
under suspicion. And all of the different processes to approve
anything further will stop. So I think we have very good
controls in the existing system.
But as you know, and perhaps, Congressman, the best thing
to do is to offer you and other colleagues on the committee a
more classified briefing on some of these issues. Because I
think that we could satisfy some of your questions and
certainly get your input in that kind of forum.
But the key here is that we already have processes and a
system that stopped continuing business with people that do not
live up to their agreements. If it is about end use monitoring
or if it is about other kinds of controls that are part of the
agreement, if they do not live up to those agreements, things
begin to stop.
Mr. McCaul. Thank you. And I look forward to that briefing.
China has been on my radar screen for a long time. And when
I worked in the Justice Department I worked on the Campaign
Finance Investigation. I had the Johnny Chung case, which led
us directly to the Director of Chinese Intelligence funneling
money to him to be used in the campaign through China
Aerospace. And it was very disturbing.
And going back to Pakistan and China, we have $3 billion in
foreign aid, $1.5 billion of that for counterterrorism. And
when I look at what they are using the money for, it is defense
priorities, which is okay. It is supposed to be for
counterterrorism, but it is being used to pursue a joint
venture with China to develop the JF-17 Fighter Aircraft, a
surface-to-surface nuclear-capable missile with the help of
China, and a $1.3 billion deal which allows Pakistan to receive
J-10 fighters and six submarines from China; is that of any
concern to the administration?
Ms. Tauscher. Well, I think that it is fair to say that the
relationship with Pakistan is a significant one because of its
geography and because of the relationship and border with
Afghanistan. But as you know, this is a very complicated
relationship.
I think that once again, Congressman, if we could come in a
classified setting, I think we could assure you in many ways of
what is going on and have your input as to what you think
should be done.
Mr. McCaul. Well, I would welcome that. Because I think it
is very troubling and disturbing if this all is true because
this is taxpayer money being used to further China's interest.
You know, I think I speak for most Americans when I say we
would prefer that money to be used to buy American.
And so I see my time is just about expired. With that, I
will yield back.
And thank you so much for the testimony.
Chairman Ros-Lehtinen. Thank you so much.
Ms. Bass of California?
Mr. Connolly of Virginia.
Mr. Connolly. Thank you, Madam Chairwoman.
And Ellen Tauscher, welcome back to Congress. We are so
glad to you, and we miss you.
I would like to ask the panel, I guess the longer I have
looked at export controls of any kind, they strike me as
something that with good intentions, that almost always go
awry.
Technology, you know at the height of the Cold War maybe we
could control the transfer of technology, maybe we could
control certain sensitive items. But given the universality of
technology and access to information, I guess I would ask this
question: Are we on a full zone here? And that is question
number one, and I mean it quite sincerely. As somebody who, you
know I worked for a defense contractor and every year I had to
take a refresher course in compliance with Export
Administration controls. And I have to tell you, you almost
needed a Ph.D. to fully understand all the implications to make
sure you were never technically in violation of anything. And
if you have not taken those tests, I urge each and every one of
you take it and look it from the point of view of people who
have to comply.
So, the first question is: Given the changes in technology,
what are we doing here? And then secondly: What about
unintended consequences?
One looks at the commercial satellite industry as a case
study in good intentions that actually lead to all the results
that were undesirable. China got the technology anyhow, the
French got the business and we hurt our own domestic industry
capacity which seems to run counter to President Obama's
laudable goal of tripling our exports.
And let me before you answer, also applaud the
administration for this thorough review. Long overdue. Thank
you for doing it. But I wanted to add this other layer given
the end of the Cold War and the universality of access to
technology, how viable is an Export Administration in this part
of the 21st century? And what about unintended consequences?
Mr. Hirschhorn. Let me take a moment, Congressman, to
respond to at least the more general portion of your question
and then either Dr. Miller or Under Secretary Tauscher can
address the satellite issue if there is anything to add on
that.
This is not a unilateral exercise on the part of the United
States. We are members of four broad-based multilateral regimes
that include just about all the Western industrialized
countries and many other countries. There are between 35 and 45
countries that are members of each of those regimes, and we
have general agreement on what is to be controlled. That covers
most, if not all in some cases, of the places where this kind
of technology is available. No one can deny that there has been
a spread of technology. We and our allies and the members of
these regimes do what they can, which is a great deal as we see
from intelligence reports, to prevent the untoward spread of
this technology. Some of it does get out, but we are trying to
retard it, we are trying to prevent it as best we can.
Mr. Miller. Congressman, if I could add first a broad
comment and then I will talk about a few key technologies of
satellites in particular.
The broad comment is that I do think it would be foolish to
try to continue our system with its inefficiencies and, as you
have suggested, a number of self-inflicted wounds to speak
specifically to satellites.
A couple of decades ago the United States had about 75
percent market share globally of satellites. We are down in the
ballpark of 25 percent today. And when you see companies
advertising USML free satellite components and so forth, you
know that we have got some thinking to do. On that subject, we
recently provided a summary of what has been a very extensive
effort looking at applying export control reform to satellites.
We are in the middle of an in depth review, in fact past the
middle of an in depth review of Category 15 of the USML which
is on satellites. And while we think at this point that there
are a substantial number of items associated with commercial
satellites that could be moved from the USML to the Commerce
Control List, we expect that as we continue this review we will
find a number of other items that are so widely available
globally that we will feel comfortable in exporting them and
allowing our companies to compete better.
And another category that, while not as widely available
are available to our allies and partners, and we want to make
sure that our companies are able to compete with that for those
specific countries.
There is a few other examples. And one of the key points I
want to make is that what is critical, what is not available to
others changes over time and that is one of the reasons why we
think the integration of these lists and a single focal point
makes a lot of sense.
To date stealth technology remains a critical technology
where we have a real advantage. Some propulsion technologies,
including for space launch, I talked about hot section engine
technology, that is actually applied now in commercial
aircraft. We have a special variant basically that we use for
the military aircraft that we really do not want to get out
into----
Mr. Connolly. Unfortunately, my time is up and the chairman
is being very indulgent. And I know Ms. Tauscher knows how
strict that time limit is. But I hope you will come and see me
and talk about this. I have a deep abiding interest in the
subject.
Thank you.
Chairman Ros-Lehtinen. Thank you so much.
Mr. Royce is recognized.
Mr. Royce. Yes. Thank you. I appreciate Mr. Connolly's line
of inquiry there. And my colleague's from California as well.
And maybe we could get a little further into this right at this
juncture while you are here, Mr. Miller.
And I guess it was a pretty meager report that came out the
other day. I think it was a five pager. Is there a more
detailed report behind that that you are going to be publishing
subsequently? Is that my understanding?
Mr. Miller. Excuse me, Congressman. Yes, there is.
Mr. Royce. Okay. Well let me ask you this----
Mr. Miller. We had a, frankly, a lengthy report that did
not take account of the ongoing review of Category 15 of USML.
We would like to take that into account. And so as we complete
that in July, we will give a report that, frankly, is based on
the type of detailed analysis that you expect. And on behalf of
the administration, I know that we are late and I apologize. We
want to get it right.
Mr. Royce. Well I want to ask you this: Will that future
report now that we have got a little time where it examined
this question if the space industry-base continues to erode,
what would that mean for U.S. national security? And
specifically I think you should look, obviously, China. But I
was going to ask what other countries you are most concerned
with in this regard when it comes to satellites?
Mr. Miller. Congressman, the focus of this report will be
on the export control related issues.
Mr. Royce. I understand.
Mr. Miller. We----
Mr. Royce. But how do we get to that question I just asked
so that we are looking at this in sort of the totality of what
it means to national security vis-a-vis satellites? How do we
get you to do an addendum or a focused discussion of that
especially as it relates to China?
Mr. Miller. I was just about to say, one of the due outs
from the National Security Space Strategy that was completed a
few months ago is a hard look at our industry-base and our
capabilities over time. If we look in the rearview mirror, we
see a pretty daunting trend. And as we look forward, we see a
lot of challenges. So the Defense Department is working on that
and will be working with our interagency colleagues to provide
an assessment. And as we move forward on that, we would be
happy to come up and brief you and other members on that, sir.
Mr. Royce. Yes, I think Mr. Connolly and I, and Mr.
Rohrabacher and others here would certainly appreciate that.
Let me ask a question of Under Secretary Hirschhorn,
because in the testimony that I read Commerce you say is
stepping up its presence in Asia adding an export control
officer who will conduct end-use visits for dual-use items. So
in reading this, and maybe I misread it. I might not understand
this, but you say you have added a second ECO in China. And I
was just going to ask you, does that mean that there are only
two export control officers in all of China, or have I just
misread that? Well, anyway, let me begin with that.
Mr. Hirschhorn. You are correct that there are two in
China. We also have export control officers in a number of
countries where we think they are needed.
Mr. Royce. Well, we have been holding a series of hearings,
and of course I saw the agreement that we made with China the
other day and just how focused they are on us loosening our
expert control regime in certain ways. It just seems to me that
given inordinate amount of attention on the other side of the
Pacific, but especially given the amount of theft that
routinely occurs of intellectual property and attempts to get
at this technology, that that seems questionable that we would
only have two there. And I was also going to ask you about the
language skills; whether these individuals are really going to
be able to have access to Chinese facilities? Do they always
have that access? Let me ask you that very quickly.
Mr. Hirschhorn. Well, we select which facilities we visit.
Mr. Royce. Yes.
Mr. Hirschhorn. And which licenses we think are important
and ought to be followed up.
Mr. Royce. Can they really make a dent? Maybe this is
something we have missed. Maybe we are just too light on our
supervision on this front. But two export control officers in
all of China for all of the factories in China in order to try
to monitor what is going on given what we are finding out in
the hearings that we are doing here, and the Harvard Business
Review article from December of last year which is the expose
on a lot of what China's done here. It just seems kind of lax.
Mr. Hirschhorn. Well, we are trying to do more, Congressman
Royce. We have asked for an additional $10 million for
enforcement----
Mr. Royce. Yes.
Mr. Hirschhorn [continuing]. In 2011 and now again in the
2012 budget. We are hopeful that we will see some of that
funding, which will help our intelligence capability as well as
add to our enforcement staff.
We also work with the other agencies and through the Export
Enforcement Coordination Center which was established by the
President's Executive Order, and ultimately through the primary
enforcement coordination agency. We are trying to make sure we
use these resources in the most efficient way we can and to be
as aggressive as we can be.
Mr. Royce. Thank you, Mr. Hirschhorn.
And I am out of time, Madam Chairwoman.
Chairman Ros-Lehtinen. Thank you very much.
Mr. Deutch of Florida.
Mr. Deutch. Thank you, Madam Chairwoman.
Just a follow-up Secretary Hirschhorn. I had a meeting not
too long ago with a former BIS official who suggested that we
could better verify end user status and better control our
exports if we had more export control officers, particularly in
China given the seemingly bipartisan support for this. And I
know you spoke of the additional $10 million. How many
additional export control officers; what would make a
difference? I know there is now one more. What would you like
to see and what impact would that have?
Mr. Hirschhorn. Well, what I would like to see and what we
are able to see may be two different things. I would like to
submit something to the committee on that, if I might.
Certainly we do not have too many in China. I certainly
will grant you that.
Mr. Deutch. Right. We all agree.
Mr. Hirschhorn. But there are finite resources. We are
trying to put them where they will do the most good and be the
most efficient in finding diversions and making sure our
technology is protected.
Mr. Deutch. I appreciate that. I would ask you to consider
that further and, please, submit your thoughts.
I wanted to talk a bit about the ability of foreign nations
to take U.S. commercial technology and convert it to military
technology. Secretary Miller spoke earlier about the hot
section of aircraft engines. The U.S. does strictly control
what are considered the truly critical components of aircraft
engines, which is the hot section. It is my understanding and I
would ask Secretary Miller this question and Secretary
Hirschhorn as well, that this amounts to only about 10 to 20
percent of the critical technology for aircraft engines, which
allows other nations then to acquire 80 to 90 percent of the
available technology for the aircraft engine through technology
offset agreements and then focus their internal resources on
the remaining 10 to 20 percent. The reason I am concerned about
this is especially the fact that China has announced recently
it is going to be investing a $1.5 to develop aircraft engines,
could you speak to whether BIS is looking at increased controls
of other parts of the engine? And Secretary Miller, if you
could also address this issue that the notion quite simply that
while we are protecting what is the truly critical component,
the technology has advanced to the point that if 80 percent of
the technology is available that sophisticated countries are
able to then to adapt and figure out the remaining 10 to 20
percent?
Mr. Hirschhorn. Let me just briefly state that the hot
section technology is, indeed, uniquely available to us. The
other 80 percent of aircraft engine technology of which you
speak is, as you rightly observe, pretty broadly available
outside the United States. And that is a principal reason why
we do not control it in the same way we control the technology
that is critical for military purposes, and that we have close
to a monopoly on.
I think Dr. Miller will add something about hot section
technology.
Mr. Miller. I think Under Secretary Hirschhorn got it just
right. When you think about, in a sense, categories and the
line moves over time. There is a category of this technology
that is widely available internationally. I do not know what
the percentage is, but it is creeping upward over time and it
is creeping upward because of the indigenous interest in it.
And I think that we just have to take that into account.
There has been some fairly sensitive technology that we can
share with close allies, and then there is some that in our
future system that we call tier 1, that the presumption would
be against export that is really absolutely cutting edge and
that we would expect that there would be very, very rare
exceptions that they would be shared.
Mr. Deutch. I had this concern. I would like to explore
this further with you, perhaps after the hearing.
I wanted to quickly change in my remaining minute to the
technical advisory committees. And the suggestion that has been
made to me that often the participants in these technical
advisory committees are larger corporations. I would like to
know whether there are alternative methods being considered by
BIS to receive additional input to the technical advisory
committee, particularly from smaller companies, perhaps retired
industry experts, other ways to provide information where there
will not be a specific economic interest involved?
Mr. Hirschhorn. Well, we do look to the technical advisory
committees to give us technical advice. And obviously in many
cases the large companies have the most forward looking
technology. That said, we are making a concerted effort to
diversify those committees and to make sure that smaller and
medium size businesses are represented. But it takes time. This
is a long process because it involves not only a selection
process, but an extended process of getting security
clearances. We are trying to do that.
Mr. Deutch. I appreciate it.
And, Madam Chairwoman, if I just beg your indulgence for 15
additional seconds?
If you could provide my office some detailed information on
what it is that the BIS is doing to include smaller companies,
how you are reaching out to them, the standards that are being
applied, that would be a great help to me and I believe,
ultimately to these technical advisory committees as well.
And thank you, Madam Chair. I appreciate that.
Chairman Ros-Lehtinen. Thank you. We would love to have
access to that information as well. So if you could send it to
the committee, also.
Thank you.
Mr. Manzullo is recognized.
Mr. Manzullo. Thank you.
I appreciate you all being here, especially a former
colleague.
Let me give some of our colleagues a real life example of
what we are talking about.
This is a cable manufactured by one of our 2500
manufacturers in Illinois. It is a cable made to a specified
length. It is an ITAR. If it were a quarter inch shorter, it
would not even be regulated. This is the type of stuff which
you call the nuts and bolts of plates that have a strategic
hole in them. It is constant. It goes over and over. One of the
reasons why our machine tool world share has shrunk to 4
percent is because of our insistence that anything involving
access to more than four countries needs a license.
The United States now has a reputation of being an
unreliable supplier. We have completely lost in the machine
tool industry. The satellite industry, as Dr. Miller said, has
gone from 75 percent down to 25 percent. Manufacturing jobs in
this country have shrunk. It took three of us 3 years ago, 2
years to correct two sentences in Section 17(c) of the Export
Administration Act to allow the additional billions of dollars
in aircraft exports that were arbitrarily being held up by some
bureaucratic problem because people just are not talking to
each other.
A police helmet is uncontrolled, but you put a shield on it
and it is on ITAR.
I have seen time after time again, my constituents involved
in manufacturing having their European competition say that,
``We are ITAR free.''
You just reach a certain point where we end up binding
ourselves. Fifteen years ago the United States led the world in
neodymium iron boron and Samarium-cobalt permanent magnets.
Ninety-seven percent of that is now in China and we are
desperately trying to get that type of manufacturing to this
country.
I just want to commend the administration for spending a
tremendous amount of time in my office with this new proposal.
It is very transparent. To be able to combine the lists so that
my constituents can access one portal and find out exactly what
it is that they are doing wrong. We have been successful with
the AES system so that now people are able to tell whether they
are in compliance before they actually begin manufacturing the
product.
But my big concern, again, is what is the big picture on
this thing? I think it is absolutely essential that this
country maintain a manufacturing base. What I would like to
know are thoughts from the three of you as to how you think the
new system that you are proposing with the one list and the
portal can help the United States increase its manufacturing
base?
Ms. Tauscher. Congressman, thank you for your support. And
thank you for your consistent help in representing your
District so well.
I think that what you are talking about is a very narrow
area that needs special attention. It is called specially
designed. And for many decades these specially designed systems
and apparatus were basically based on the assumption that
technologies and items were developed for the military and only
later some subset found themselves to be commercially viable.
The truth is the exact opposite is true in the 21st century.
And so we have many specially designed items that are under
control that really do not need to be. They are commercially
available all over the world and this really hurts American
productivity, it hurts especially small businesses and medium
sized businesses. It hurts job creation. And what we are
proposing is a new definition for specially designed that will
provide clear guidance consistent with how the phrase is used
in international agreements for focus controls only on those
items that we intend to control and not capturing big baskets
of things that create all kinds of havoc for small and medium
sized businesses.
Mr. Manzullo. I appreciate that.
Just one unrelated question. The Section 1248 report, when
do you expect that to be finalized?
Mr. Miller. Congressman, we expect to finish the review of
Category 15 on the USML in July, and to be able to provide the
report, I think I would have to give us about a couple of
months after that. So, I would say this fall. And we are, as I
said earlier, conscious that we are late and we will move it
forward as quickly as possible. And be very pleased to brief in
the meantime as we have the intermediate steps, sir.
Mr. Manzullo. Thank you.
Chairman Ros-Lehtinen. Thank you.
Mr. Sherman is recognized.
Mr. Sherman. Thank you.
My first question is for the record because it deals with a
detail that you will want to look at when you get back to your
offices.
Right now a satellite license is pending at State. It is a
communication satellite for the Government of Azerbaijan. Now
this is packaged as if it is just a satellite that would allow
people in Baku to make cell phone cells or send emails. And, of
course, that means a general in the Azeri army could make a
call to his mother in Moscow or some general in Moscow, but
that is, after all, just a telephone call or an email.
I would hope that you would look carefully at this license
to see whether the particular satellite will give Azerbaijan
the ability to do surveillance or jamming. And so my question
for the record is will you reject this license if the satellite
in question gives the Azeri government the capacity to jam or
Armenian communications or surveil Armenia or Nagorno-Karabakh?
So, I look forward to reading your answer.
I do want to pick up on the chairwoman's comments that you
are moving forward with this. You are going to moving a lot of
things from one list to another. Please give us enough time to
review things. You have worked carefully with us in the past
and you do not want us to protest 200 items just because you
gave us 400 items and we only got time to look at 200.
My question relates to the industrial base of this country.
If we do not export a particular item, then we do not get the
money which helps build our industrial base. And somebody else
gets the order and that builds their industrial base. But
sometimes when you take something off the Munitions List what
is being exported, perhaps, is not the product but the tools
and the dies that allow somebody else to make the product or
the technology, the plans.
Does a decision to take, say that wire that Don Manzullo
hold up, if you took that off the Munitions List, does that
mean that you would have to take off the list the tools, the
dies, the plans on how to make that component or can you deal
separately with the technology for manufacture and the product
that is manufactured?
Mr. Hirschhorn. We do today treat technology separately
from end items and from capital goods that manufacture end
items. So the existing Commerce List, for example, does allow
us to treat them differently. But in many cases, technology
that is widely available is not going to be preserved by our
controlling it. If it is out there, it is out there. And we are
trying to limit----
Mr. Sherman. Yes. And the technology of making that
particular wire may not be all that secretive.
But what you are saying is if you take a particular item
off the Munitions list, you could very well leave on the list
the plans, specifications, tools and dies that would allow
somebody else to make that product?
Mr. Hirschhorn. It is certainly possible. And it is going
to be an item-by-item review, but in many cases part of why
these items are going to moved to Commerce control, and I
stress that they still will be controlled but it is a more
flexible set of controls, is because either the items do not
have a particular military use or because the technology is----
Mr. Sherman. Let me ask the Under Secretary of State, I
mean is there a jobs analysis here where we would say, ``Well,
exporting this particular product produces jobs in America and
it is generally consistent with U.S. national security.'' And
at the same time say, ``We are going to prohibit the export of
the manufacturing technology, both because that could give
another country a lot more than just the product.'' I mean, it
is the technology to make this product and they could soup that
up and make next year's product or next decade's product as
well. It is a national security issue, but also it means
exporting jobs. Is there going to be a separate analysis of the
industrial-base input back fact of exporting a product versus
exporting the tools and the dies and the techniques?
Ms. Tauscher. Well, Congressman Sherman, no, there is no
specific jobs analysis but it is intuitive, and I think
everyone believes, first and foremost this review is about
national security. But we believe that the importance of
protecting national security and having bigger fences over
smaller property will give us the transfer of----
Mr. Sherman. I would point out that the statute says that
our industrial-base is critical to our national security. And
so it is not just the product, it is whether you are building
the industrial-base of the United States or building an
industrial base in a rival country. And so I hope that a job/
industrial-base is part of it, not just talking to generals
about what this particular box can do on that particular
airplane
Chairman Ros-Lehtinen. Thank you, Mr. Sherman.
Ms. Buerkle of New York is recognized.
Ms. Buerkle. Thank you, Madam Chairman. And thank you for
holding this very important hearing export control reform. And
thank you to all of our witnesses this morning for being here.
I think that we can all agree that the export system in its
current form is a complex, bureaucratic maze that we need to
correct. The question is: What are those corrections going to
look at?
If small or a medium sized firm looked at this reform, do
you think it is going to be their assessment that this is going
to be simpler, more streamlined approach to exporting?
Ms. Tauscher. I was actually going to answer Congressman
Sherman. But, thank you, Congresswoman, I think that is a great
question and it is a metric that is very important to us.
I think one of the reasons why the President's reforms are
so supported by the Chamber of Commerce, the National
Association of Manufactures and many technology business
associations is for the very reason that the ancillary benefit
is more American job creation and more streamlined system that
protects national security.
Mr. Sherman. Will the gentleman yield for 10 seconds?
It is about jobs----
Chairman Ros-Lehtinen. Hold on. Hold on. Hold on.
Ms. Buerkle. Absolutely.
Mr. Sherman. It is about jobs, not profits. And if the
Chamber of Commerce says it is great and the machinist says it
is wrong, who cares about jobs?
I yield back.
Chairman Ros-Lehtinen. Ms. Buerkle.
Ms. Buerkle. Thank you.
And going back to my colleague Mr. Cicilline's point, it is
about the clock when it comes to these businesses. And when I
hear redundancy is important, not for businesses it is not
important. They need to get their product out to market as
quickly and as efficiently as possible.
Ms. Tauscher. But redundancy does not have to cost time.
There has to be checks and balances that ensure that national
security is the number one effort to make sure that we protect
the most precious national security secrets. Redundancy does
not mean that we have to have more time added to the clock. But
we do have to ensure you and the American people that we have
checks and balances in the system to make sure that we do not
have a little slip between lip and cup and cause something to
be transferred that is not meant to be transferred
Ms. Buerkle. Thank you.
Mr. Miller. Could I just briefly?
Ms. Buerkle. Absolutely.
Mr. Miller. The other thing from a business perspective I
would think would be desirable is predictability. And as we
shift USML to a positive Control List where we specify the
elements that would be allowed and not allowed rather than say
everything in a broad category is subject to review over some
unspecified period of time, I think that predictability of
outcome as well as timeliness would be valuable.
Ms. Buerkle. Thank you.
Mr. Hirschhorn, my next question is for you. It is
regarding the Coordination Center. How would you counter the
argument that this just represents another bureaucratic layer
on top of an already complicated system?
Mr. Hirschhorn. Well, it is not a bureaucratic layer. It is
not going to involve, for example, additional personnel other
than one or two people who will be permanently situated there.
Everyone else will be participating from their existing
agencies.
It is essential that the various agencies that have
enforcement responsibilities in this area not step on one
another's toes. The last thing we want is a situation where
Agency A goes after a suspect company that turns out to have
been Agency B's front operation, another enforcement agency's
front operation. And the point of this Coordination Center and
this coordination effort is to make sure we do not run into a
situation like that, and also to make sure we do not duplicate
one another's work.
I do not think it is creating another bureaucracy so much
as making the enforcement system a lot more efficient. When we
start a case, for example, we are going to submit the names of
the people that are possibly involved to the Coordination
Center. And we are going to get back from the other agencies
whether they have any information on those kinds of
individuals.
It is really quite convenient to have a place where
everybody goes and the people can sit in the same place rather
than having to rely on long distance kinds of communication.
Ms. Buerkle. Thank you.
And my last question, and I will allude back to what my
colleague Mr. Sherman mentioned in his opening remarks, and
that is the coordination between Congress. I mean, I think we
all agree that this export reform needs to be coordinated with
Congress. And so I would like to just hear assurances of how
you think that that will happen.
Ms. Tauscher. Yes, Congresswoman. We are anxious to
continue briefing both staff and members. And as Dr. Miller
said, the 1248 Report will be ready and in the not too distant
future we look to bring that report up and have briefings. And
I know for myself and for my colleagues, anytime you choose to
call, we will be sure to answer the call in the same day and
get back to you. And come up on our horse as fast as we can to
answer whatever questions you have.
Mr. Miller. I agree fully with Under Secretary Tauscher.
Ms. Buerkle. Thank you.
Chairman Ros-Lehtinen. Thank you so much.
Mr. Rivera?
Mr. Rivera. Thank you, Madam Chair.
With your permission and indulgence, my subcommittee chair,
the gentlemen from California Mr. Rohrabacher has asked to
follow-up on some questions. May I yield my time to him?
Chairman Ros-Lehtinen. Mr. Rohrabacher is recognized.
Mr. Rohrabacher. You know I have heard references to bolts
earlier and to gyroscopes. Let us note that those were pivotal
technologies in the development of the Chinese missile system.
Before we gave them exploding bolts which permits stage
separation, their long march rocket system was totally
unreliable. And it was the United States that developed
exploding bolts and this methodology of separating stages. Also
at the same time we provided them the information they needed
to have more than one payload. And, yes, that was for
delivering satellites but guess what? It also makes sure their
rockets now, their missiles now can deliver more than one
nuclear warhead.
The gyroscopes that we are talking about as well. These are
things that cost us billions of dollars to perfect. The United
States has spent billions of dollars of research that ends up
in the hands of a country that is targeting us with their
missiles. Is there any doubt in anybody's mind out there what
group is targeted by these Chinese missiles? It certainly is
not Belgium, and it probably is not Great Britain. But we can
rest assured we are high on the target list.
That is a travesty and we should make sure that never
happens again, and yet we have another article by another
Chinese Communist publication at the end of the meetings with
the administration, ``U.S. To Ease High Tech Limits.'' They are
not meaning high tech limits to Belgium, they are meaning it to
Beijing.
I hope that we are not on the way to another great transfer
of technology in the name of some company getting a couple of
years of higher profits.
The interim report restricts launch failure investigations.
And let me just note that that was the vehicle in which these
other technologies that I just mentioned that were transferred
15 years ago to the Chinese. But it also says that among the
information that we can transfer to unspecified foreigners, is
that technology which ``will ensure a safe ride to orbit.''
Does that mean we can help the Chinese perfect? Because it does
not say who they are referring to. Are the Chinese excluded
from that, helping ensure a safe ride to orbit? It does not say
they are excluded in the report. Are they excluded from that?
Mr. Miller. Congressman, the principles that are outlined
in that very short report which will be, as you know, as I said
will be elaborated, are applicable. And that is that the answer
will depend on what technology is helping provide a safe ride
to orbit. And that a country such as China will not be accorded
the same treatment as a country such as the United Kingdom. And
we----
Mr. Rohrabacher. Okay. So there is something in the report
that should suggests that creating a safe ride to orbit and the
technology that does that will be permitted to a democratic
country like Great Britain, but not to China? Where does it say
that in the report?
Mr. Miller. That report is a very short summary of----
Mr. Rohrabacher. Then it will be in the full report? You
are saying that that will be specifically delineated in the
full report?
Mr. Miller. Sir, no, what I am saying is that we will have
a system and what we propose is to move toward a system where
this is more transparent to Congress and to others----
Mr. Rohrabacher. The answer is no, is that what you are
telling me? You can answer that with a yes or no. Is that going
to be in the report?
Mr. Miller. Well, Congressman----
Mr. Rohrabacher. It is not going to be, is it?
Mr. Miller. Congressman, what I will tell you is that----
Mr. Rohrabacher. Usually when people do not answer yes or
no to questions like this, it is because they do not want to
give a specific answer.
Mr. Miller. Congressman, I will assure you that it is
question that will be asked of the report by me as I review it.
Mr. Rohrabacher. All right.
Mr. Miller. As I said, I think the right answer----
Mr. Rohrabacher. And who will it be answered by?
Mr. Miller. I will review the report before it comes back
up. And so I think the correct answer is to think that there
categories of technology that can be broadly transferred, there
are other categories that should not be broadly transferred.
And other----
Mr. Rohrabacher. There are some countries that should not
be transferred----
Mr. Miller. And there are some countries----
Mr. Rohrabacher. And that should not be transferred to
because they are violators of human rights and potential
threats to our national security.
Last year this committee endorsed the removal of some
satellites and components from the Munitions List, but clearly
stated the exception of barring any of these transfers to
China. I would hope that remains our policy, Madam Chairwoman.
Chairman Ros-Lehtinen. Thank you very much, Mr.
Rohrabacher.
And I thank the witnesses as well as the excellent
questions from our members. We all look forward to working with
you as this process moves forward either in an open setting or
in a classified setting.
Thank you.
And with that, the committee is now adjourned.
[Whereupon, at 11:50 a.m., the committee was adjourned.]
A P P E N D I X
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Questions Submitted for the Record to All Witnesses by the Honorable
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Florida, and chairman, Committee on Foreign Affairs
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Written Responses Received from the Honorable Eric L. Hirschhorn, Under
Secretary, Bureau of Industry and Security, U.S. Department of
Commerce, to Questions Submitted for the Record by the Honorable Ileana
Ros-Lehtinen, a Representative in Congress from the State of Florida,
and chairman, Committee on Foreign Affairs, and the Honorable Jeff
Duncan, a Representative in Congress from the State of South Carolina
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Questions Submitted for the Record to the Honorable Ellen Tauscher,
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Department of State, by the Honorable Jeff Duncan, a Representative in
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Questions Submitted for the Record to the Honorable James N. Miller,
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Department of Defense, by the Honorable Jeff Duncan, a Representative
in Congress from the State of South Carolina
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