Bureau of Export Administration
U. S. Department of Commerce

For Immediate Release
December 13, 1999

Increase in Computer Exports and Verifications


WASHINGTON -- The U.S. Department of Commerce today submitted its second annual report to Congress on end-use verifications of high performance computers as required by the National Defense Authorization Act. The report covers exports to 50 "Tier 3" countries, including China, India, Israel, Russia, Pakistan and India and shows that nearly 700 high performance computers were exported to these countries, including 473 to China.

Tier 3 exports increased 80 percent compared to the 390 exported a year ago. Commerce officials conducted over 240 on-site verifications during last year, more than double the 101 performed in the previous year. During these inspections, a Commerce official visits the site where the U.S.-manufactured computer is being used to verify that it is used for the approved non-military purpose.

Once again, the overwhelming majority of these verifications occurred at banks, telecommunications providers, insurance companies, and railroads. In a significant number of instances, the end-users have received more than one visit from Commerce officials, a result of multiple orders by these end-users and the legal requirement to conduct a verification of each individual computer.

Commerce conducted 46 end-use verifications in China over the last year. This compares to one verification in the previous year. No problems were encountered.

"The requirement that we seek to visit each computer, which is impossible given our limited resources, means that the destination country can pick and choose which computers it permits us to see. If our professionals had discretion to select the verifications that truly matter, we would be able to enforce the law more effectively," said Commerce Under Secretary for Export Administration William Reinsch.

"Our efforts to gain access to U.S. origin computers in China have begun to pay off although we still have more work to do with the Chinese," said Assistant Secretary for Export Enforcement F. Amanda DeBusk. "From Congress, we need the flexibility to focus on preventing and detecting diversions and more resources for verifications."

Commerce is required by the National Defense Authorization Act for FY 1998 to conduct an on-site verification of every high performance computer exported to the 50 Tier 3 countries and to report to Congress on the location and end-use of each computer. A high performance computer is defined as one that performs 2,000 millions of theoretical operations per second (MTOPS). Several desktop workstations with a value of less than $5,000 now meet this standard. The standard is slated to be raised to 6,500 MTOPs effective January 24, 2000.

Commerce cannot publicly disseminate the report to Congress because it contains sensitive business information.