New U.S. Controls on Supercomputers

Computers performing more than two billion operations per second (2,000 MTOPS) are subject to new export controls. On November 18, President Clinton signed the National Defense Authorization Act (Public Law 105-85, Sections 1211 through 1215), which obliges exporters to notify the U.S. government before shipping or reexporting any such computer to a list of countries including China, India, Israel, Pakistan and Russia.

The requirement is a roll-back of the President’s decision in late 1995 to loosen export controls on supercomputers–the first such roll-back in recent history. Under previous law, computers operating between 2,000 and 7,000 MTOPS could be shipped without an export license as long as a civilian use and a civilian user were claimed. IBM and Silicon Graphics, Inc., are under federal investigation for allegedly shipping computers within this range to nuclear weapon design sites in Russia and China.

Under the new law, exporters are required to notify the Secretary of Commerce in writing before shipment. The Commerce Department must then transmit the notification within 24 hours to the Departments of Defense, Energy, State and the Arms Control and Disarmament Agency. These agencies have ten days to object in writing. If any does so, the exporter must apply formally for an export license.

In a November 20 interview with the Risk Report, William Reinsch, Undersecretary of Commerce for Export Administration, stated that the Commerce Department does not view the new law as self-executing. Mr. Reinsch said that Commerce hopes to issue regulations within the next few weeks, after clearing them with other federal agencies.

The new provision originated with a recommendation by the Wisconsin Project on Nuclear Arms Control in testimony before a subcommittee of the House Committee on National Security. In April the Wisconsin Project recommended that all computers performing more than 2,000 MTOPS be licensed before shipment to countries falling within “Computer Tier 3,” a list of countries judged to be risky recipients of American computer technology.

The full Committee then wrote a bipartisan amendment into the defense bill to accomplish that end. The amendment passed by a large margin in the House, but failed by a large margin in the Senate. The current language emerged as a compromise from the House-Senate conference.

Both the computer industry and the Clinton Administration fought the provision in Congress. Vice President Al Gore, Assistant to the President for National Security Affairs Samuel Berger and Director of the Office of Management and Budget Franklin Raines all contacted key members of Congress. Despite the defeat, however, the Administration is now gearing up to comply. “We didn’t support it, but we will implement it faithfully,” Mr. Reinsch told the Risk Report. He also argued, however, that the provision was unwise in view of the rapid increases he expects to see in computing power. “The absurdity of this provision will become obvious within a short period of time,” he said.

The new law allows the President to adjust the performance level of computers that trigger the notification process, but the change cannot take effect for 180 days after the President submits a report to Congress justifying a new level. According to Reinsch the 180 day period, which he has said is too lengthy, “will create an incentive to do something sooner rather than later.” The Administration had argued for a period of 30 to 60 days.

The President can also remove countries from the Tier 3 list, but cannot remove China or Russia, which are overt nuclear weapon states, or remove India, Israel or Pakistan, which have refused to sign the Nuclear Nonproliferation Treaty. In addition, no decision to remove a country can take effect for 120 days after the President submits a report to Congress justifying the removal.

Within 60 days of enactment of the new law, the President must also report to Congress all American exports of computers performing more than 2,000 MTOPS to all countries since January 25, 1996. The report must name the exporter, the manufacturer, the speed, and the destinee. And for exports to Tier 3 countries, the President must indicate whether the destinee is engaged in military or mass destruction weapon activities.

Tier 3 country exports will also require post-shipment checks for all computers faster than 2,000 MTOPS shipped after the date of enactment. The President must report to Congress annually the results of these checks, and in cases where no check was made, explain why none was done. This requirement is expected to present a challenge concerning China, which now refuses all post-shipment checks. According to Mr. Reinsch, the law will require that post-shipment checks be done “in perpetuity” for computers over 2,000 MTOPS. He said that this provision would create a “significant resource problem” in the years ahead.

Mr. Berger argued in October that the 10-day notice provision would “tax sorely the resources of our export control agencies and the intelligence community,” and “could create a bureaucratic logjam.” According to Congressional testimony in April by Mr. Reinsch, however, American companies are now exporting an average of only two computers per week that would be subject to the provision. That would only result in two notifications per week to the export control agencies.

 

Appendix: National Defense Authorization Act (Public Law 105-85), signed by President Clinton, November 18, 1997.

Sec. 1211. Export Approvals for High Performance Computers

(a) PRIOR APPROVAL OF EXPORTS AND REEXPORTS- The President shall require that no digital computer with a composite theoretical performance level of more than 2,000 millions of theoretical operations per second (MTOPS) or with such other composite theoretical performance level as may be established subsequently by the President under subsection (d), may be exported or reexported without a license to a country specified in subsection (b) if the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, the Secretary of State, or the Director of the Arms Control and Disarmament Agency objects, in writing, to such export or reexport. Any person proposing to export or reexport such a digital computer shall so notify the Secretary of Commerce, who, within 24 hours after receiving the notification, shall transmit the notification to the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the Director of the Arms Control and Disarmament Agency.

(b) COVERED COUNTRIES- For purposes of subsection (a), the countries specified in this subsection are the countries listed as “Computer Tier 3” eligible countries in section 740.7(d) of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997, subject to modification by the President under subsection (e).

(c) TIME LIMIT- Written objections under subsection (a) to an export or reexport shall be raised within 10 days after the notification is received under subsection (a). If such a written objection to the export or reexport of a computer is raised, the computer may be exported or reexported only pursuant to a license issued by the Secretary of Commerce under the Export Administration Regulations of the Department of Commerce, without regard to the licensing exceptions otherwise authorized under section 740.7 of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997. If no objection is raised within the 10-day period, the export or reexport is authorized.

(d) ADJUSTMENT OF COMPOSITE THEORETICAL PERFORMANCE- The President, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the Director of the Arms Control and Disarmament Agency, may establish a new composite theoretical performance level for purposes of subsection (a). Such new level shall not take effect until 180 days after the President submits to the congressional committees designated in section 1215 a report setting forth the new composite theoretical performance level and the justification for such new level. Each report shall, at a minimum–

(1) address the extent to which high performance computers of a composite theoretical level between the level established in subsection (a) or such level as has been previously adjusted pursuant to this section and the new level, are available from other countries;

(2) address all potential uses of military significance to which high performance computers at the new level could be applied; and

(3) assess the impact of such uses on the national security interests of the United States.

(e) ADJUSTMENT OF COVERED COUNTRIES-

(1) IN GENERAL- The President, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary of Energy, the Secretary of State, and the Director of the Arms Control and Disarmament Agency, may add a country to or remove a country from the list of covered countries in subsection (b), except that a country may be removed from the list only in accordance with paragraph (2).

(2) DELETIONS FROM LIST OF COVERED COUNTRIES- The removal of a country from the list of covered countries under subsection (b) shall not take effect until 120 days after the President submits to the congressional committees designated in section 1215 a report setting forth the justification for the deletion.

(3) EXCLUDED COUNTRIES- A country may not be removed from the list of covered countries under subsection (b) if–

(A) the country is a “nuclear-weapon state” (as defined by Article IX of the Treaty on the Non-Proliferation of Nuclear Weapons) and the country is not a member of the North Atlantic Treaty Organization; or

(B) the country is not a signatory of the Treaty on the Non-Proliferation of Nuclear Weapons and the country is listed on Annex 2 to the Comprehensive Nuclear Test-Ban Treaty.

(f) CLASSIFICATION- Each report under subsections (d) and (e) shall be submitted in an unclassified form and may, if necessary, have a classified supplement.

SEC. 1212. REPORT ON EXPORTS OF HIGH PERFORMANCE COMPUTERS.

(a) REPORT- Not later than 60 days after the date of the enactment of this Act, the President shall provide to the congressional committees specified in section 1215 a report identifying all exports of digital computers with a composite theoretical performance of more than 2,000 millions of theoretical operations per second (MTOPS) to all countries since January 25, 1996. For each export, the report shall identify–

(1) whether an export license was applied for and whether one was granted;

(2) the date of the transfer of the computer;

(3) the United States manufacturer and exporter of the computer;

(4) the MTOPS level of the computer; and

(5) the recipient country and end user.

(b) ADDITIONAL INFORMATION ON EXPORTS TO CERTAIN COUNTRIES- In the case of exports to countries specified in subsection (c), the report under subsection (a) shall identify the intended end use for the exported computer and the assessment by the executive branch of whether the end user is a military end user or an end user involved in activities relating to nuclear, chemical, or biological weapons or missile technology. Information provided under this subsection may be submitted in classified form if necessary.

(c) COVERED COUNTRIES- For purposes of subsection (b), the countries specified in this subsection are–

(1) the countries listed as “Computer Tier 3” eligible countries in section 740.7(d) of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997; and

(2) the countries listed in section 740.7(e) of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997.

SEC. 1213. POST-SHIPMENT VERIFICATION OF EXPORT OF HIGH PERFORMANCE COMPUTERS.

(a) REQUIRED POST-SHIPMENT VERIFICATION- The Secretary of Commerce shall conduct post-shipment verification of each digital computer with a composite theoretical performance of more than 2,000 millions of theoretical operations per second (MTOPS) that is exported from the United States, on or after the date of the enactment of this Act, to a country specified in subsection (b).

(b) COVERED COUNTRIES- For purposes of subsection (a), the countries specified in this subsection are the countries listed as “Computer Tier 3” eligible countries in section 740.7 of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997, subject to modification by the President under section 1211(e).

(c) ANNUAL REPORT- The Secretary of Commerce shall submit to the congressional committees specified in section 1215 an annual report on the results of post-shipment verifications conducted under this section during the preceding year. Each such report shall include a list of all such items exported from the United States to such countries during the previous year and, with respect to each such export, the following:

(1) The destination country.

(2) The date of export.

(3) The intended end use and intended end user.

(4) The results of the post-shipment verification.

(d) EXPLANATION WHEN VERIFICATION NOT CONDUCTED- If a post-shipment verification has not been conducted in accordance with subsection (a) with respect to any such export during the period covered by a report, the Secretary shall include in the report for that period a detailed explanation of the reasons why such a post-shipment verification was not conducted.

SEC. 1214. GAO STUDY ON CERTAIN COMPUTERS; END USER INFORMATION ASSISTANCE.

(a) IN GENERAL- The Comptroller General of the United States shall submit to the congressional committees specified in section 1215 a study of the national security risks relating to the sale of computers with a composite theoretical performance of between 2,000 and 7,000 millions of theoretical operations per second (MTOPS) to end users in countries specified in subsection (c). The study shall also analyze any foreign availability of computers described in the preceding sentence and the impact of such sales on United States exporters.

(b) END USER INFORMATION ASSISTANCE TO EXPORTERS- The Secretary of Commerce shall establish a procedure by which exporters may seek information on questionable end users in countries specified in subsection (c) who are seeking to obtain computers described in subsection (a).

(c) COVERED COUNTRIES- For purposes of subsections (a) and (b), the countries specified in this subsection are the countries listed as “Computer Tier 3” eligible countries in section 740.7(d) of title 15 of the Code of Federal Regulations, as in effect on June 10, 1997.

SEC. 1215. CONGRESSIONAL COMMITTEES.

For purposes of sections 1211(d), 1212(a), 1213(c), and 1214(a) the congressional committees specified in those sections are the following:

(1) The Committee on Banking, Housing, and Urban Affairs and the Committee on Armed Services of the Senate.

(2) The Committee on International Relations and the Committee on National Security of the House of Representatives.