Title:  TEXT: COMMERCE DEPT. PRESS RELEASE ON COMPUTER EXPORTS RULE (Law makes new requirements on shipments)

Date:  19980202

Washington -- The U.S. Department of Commerce is publishing a regulation placing new requirements on U.S. exports of lower-end high-performance computers to 50 countries, including China, Russia, India and Israel.

A February 2 press release from the department's Bureau of Export Administration (BXA) said the regulation becomes effective February 3, the day it is scheduled to be published in the Federal Register.

The regulation implements a provision of the 1997 defense authorization bill that was passed into law over the objections of the Clinton administration.

The law requires advance notification to BXA of all proposed shipments to the group of 50 countries of computers with speeds between 2,000 and 7,000 million theoretical operations per second (MTOPS).

After notification a number of federal government agencies have 10 days to object to the proposed sale; an objection would require the exporter to go through a lengthy process requesting a license for the shipment.

The law also requires BXA to perform post-shipment verifications on the end use of exports to the 50 countries of all computers performing better than 2,000 MTOPS. Under the regulation, BXA is assigning the exporters themselves to file a written report on end use within 30 days after shipment.

Following is the text of the press release:

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Washington -- The Department of Commerce will publish a rule implementing the provisions of the FY 1998 National Defense Authorization Act (NDAA) which require notification of exports and re-exports of high performance computers (HPCs) and post-shipment verifications of certain of those exports and re-exports. The rule includes a savings clause, allowing the completion of certain shipments already in transit, in compliance with existing regulations, without submitting a notice.

Under the new law, advance notification is required of all exports and re-exports of computers with computing speeds between 2,000 and 7,000 million theoretical operations per second (MTOPS) to Computer Tier 3 countries. Previously, such computers were eligible for export or re-export to civil end-users under License Exception CTP (composite theoretical performance) without prior notice to the U.S. Government. For CTP-eligible transactions destined to Tier 3 countries, this rule adds the NDAA notification requirement to the tam and conditions of License Exception CTP. Exports and re-exports of computers with CTPs greater than 7,000 MTOPS to Tier 3 countries continue to require a license.

Exporters and re-exporters will be required to submit notices to the Department's Bureau of Export Administration (BXA). BXA will refer all notices to the Departments of Defense, Energy, State, and the Arms Control and Disarmament Agency within 24 hours of the date of registration of the complete request. BXA will adjust its voice information system electronic filing system STELA by February 17 so that exporters will be able to obtain results of the 10-day review through that system. After that time, if no agencies raise objections within a 10-day period, STELA will confirm that the exporter or re-exporter may proceed with the transaction without obtaining a license. If an objection is made to the export, the notification will be converted to a license application, and the system will advise the exporter or re-exporter that a license is required. BXA, will issue subsequent written confirmation.

The legislation also requires the Department of Commerce to perform post-shipment verifications on all exports of HPCs more than 2,000 MTOPS to Tier 3 countries. To assist BXA in conducting end-user post-shipment verifications, each exporter must provide a written report with specific end-user information to BXA within 30 days of export to any Tier 3 country. This information must be accurate as of the date of the report. When a license is required, BXA will review applications in consultation with other agencies and will impose appropriate safeguards as license conditions.

The regulations also harmonize computer export reporting requirements to those required under the Wassenaar Arrangement. The notification requirement will provide data for exports to Tier 3 countries from 2,000-4,000 MTOPS, and Wassenaar reporting requirements will covet exports of machines more than 4,000 MTOPS.

The counties that are included in Tier 3 are Afghanistan, Albania, Algeria, Andorra, Angola, Armenia, Azerbaijan, Bahrain, Belarus, Bosnia, & Herzegovina, Bulgaria, Cambodia, China (People's Republic of), Comoros, Croatia, Djibouti, Egypt, Estonia, Georgia, India, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Macedonia (The Former Yugoslav Republic of), Mauritania, Moldova, Mongolia, Morocco, Oman, Pakistan, Qatar, Romania, Russia, Saudi Arabia, Serbia & Montenegro, Tajikistan, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Vanuatu, Vietnam and Yemen.

The, new regulation is effective on February 3, and comments on this rule must be received on or before March 20, 1998.

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