FILE ID:97052204.ECO

(Israeli, Indian entities first on list)  (750)
By Bruce Odessey
USIA Staff Writer

Washington -- The Department of Commerce has begun to identify foreign
entities that the U.S. government believes are engaging in
proliferation of weapons of mass destruction.

Under recent Clinton administration policy, the Commerce Department
has so far identified two entities for which U.S. exporters need to
apply for export licenses even if the products they want to ship are
not controlled.

First on the Entity List, named in February, was Ben-Gurion University
in Israel. The Commerce Department requires export license application
for U.S. shipments to Ben-Gurion of all computers with capacity of
2,000-7,000 million theoretical operations per second.

Second on the list, published earlier in May, is Bharat
 Electronics LTD in India,
 for which all U.S. exports require a Commerce license application.

"We have done that because of our concern that these two entities are
involved in activities which may contribute to the proliferation of
weapons of mass destruction," Eileen Albanese, director of the Office
of Exporter Services in Commerce, said in a May 22 interview.

She said that she expects the Entity List to grow considerably.

"There are more names in the pipeline," Albanese said, "and how long
the list is going to end up being in the end, I don't know."

Names can come off the list, too; the Clinton administration has hopes
that the threat of negative publicity will encourage foreign entities
to disengage from proliferation activities, she said.

"If a company or an entity changes its ways, we would definitely
consider taking it off the list," Albanese said. "It's not as if
you're there forever and nobody ever looks at you again."

The current policy had its origins in the Iran-Iraq war when a U.S.
company nearly exported to Iraq a sophisticated furnace that could
have been used to build weapons. Although U.S. regulation did not
control exports of that furnace, the Commerce Department managed to
get the shipment stopped.

After that experience, President Bush issued by executive order in
1991 the Enhanced Proliferation Control Initiative (EPCI), a catch-all
provision authorizing the Commerce Department to require a license
application for any export the U.S. government believes will
contribute to development of weapons of mass destruction -- nuclear
weapons, chemical and biological weapons, and missiles -- even if
Commerce does not otherwise control the export.

Under that initiative any exporter must seek a Commerce license if he
knows or has reason to know that the uncontrolled commodity he is
shipping is going to be used to develop a weapon of mass destruction.

To inform exporters, Albanese said, the Commerce Department is
starting to provide this list of foreign entities believed to be
engaged in development of weapons of mass destruction for which export
license application is necessary.

Six years passed from signing of the EPCI executive order until start
of the Entities List, she said, because a number of concerns arose:
Intelligence agencies were concerned about compromising intelligence
sources and methods. The State Department was concerned about
diplomatic ramifications.

"Exporters were getting frustrated that they could not get a timely
answer from the U.S. government," Albanese said.

Responding to both the business complaints and inter-agency concerns,
in December 1996 the National Security Council issued guidelines -- a
deadline system for making decisions on whether to publish the name of
a foreign entity identifying it as a proliferation concern. Here is
how the system works:

First, an exporter asks for Commerce Department guidance about whether
a license application is required for a certain foreign entity. After
the Commerce Department collects information about that entity over
two or three weeks, it submits that information to four other
agencies: the Defense, Energy and State departments and the Arms
Control and Disarmament Agency.

Then the five agencies have 14 days to decide by majority -- not
consensus -- whether to publish the name of the foreign entity in the
Federal Register. Any dissenting agency or agencies could challenge
the decision by escalating it to higher-level officials.

In the Bharat Electronics case, Albanese said, the decision to publish
was made by a majority, it was escalated and it was sustained.

Albanese warned exporters not to get the wrong idea: The few names on
the list are not the only entities to be concerned about. "It's still
an obligation of the exporter to 'know your customer,'" she said.