WE ARE

TO THE COMMUNIST STATES.

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COCOM COUNTRIES UNFORTUNATELY DO

NOT CONSTITUTE A MONOPOLY IN THE MARKET FOR ALL HIGH TECHNOLOGY
ITEMS. THE SOVIET UNION AND THE OTHER WARSAW PACT COUNTRIES

ARE AWARE OF THIS AND ARE OCCASIONALLY ABLE TO OBTAIN SOME
EQUIVALENT HIGH-TECHNOLOGY PRODUCTS FROM NON-COCOM SOURCES.
FIS THERE IS ALSO A RISK OF THE DIVERSION OF COCOM-CONTROLLED
COCOM-ORIGIN EQUIPMENT AND TECHNOLOGIES THROUGH SUCH THIRD
COUNTRIES. THE UNITED STATES ATTEMPTS TO DEAL WITH THIS
DIVERSION PROBLEM IN PART BY REQUIRING LICENSES FOR REEXPORTS
OF THE US-ORIGIN EMBARGOED PRODUCTS FROM THIRD COUNTRIES
A SO-CALLED "EXTRATERRITORIAL" ACTION THAT HAS BEEN THE
SUBJECT OF SOME CRITICISM. OUR COCOM ALLIES CITE LEGAL AND
ADMINISTRATIVE REASONS FOR NOT HAVING SIMILAR REEXPOPT
LICENSING REQUIREMENTS. NEVERTHELESS, WE HAVE PFEN URGING
THEM TO INSTITUTE OTHER EFFECTIVE MEASURES TO DEAL WITH THE
PROBLEM OF DIVERSIONS FROM THIRD COUNTRIES. FURTHERMORE,

IS A

A

-

THE UNITED STATES MAINTAINS A DIALOGUE WITH CERTAIN NON-COCOM
INDUSTRIALIZED COUNTRIES ON THE EXPORT CONTROL AND DIVERSIONS
PROBLEMS. I CANNOT GO INTO DETAILS IN THIS OPEN HEARING,
BUT I AM HAPPY TO REPORT THAT DURING THE PAST YEAR WE HAVE
MADE CONSIDERABLE PROGRESS WITH SEVERAL NON-COCOM COUNTRIES
TO DEAL WITH THE PROBLEM OF THE DIVERSION OF US-CONTROLLED
COMMODITIES.

BEFORE LEAVING THE SUBJECT OF COCOM, I WOULD LIKE TO CALL YOUR ATTENTION TO THE CONSENSUS WE HAVE REACHED WITH OUP MAJOR ALLIES ON THE NEED TO REVIEW TOGETHER THE SECURITY

IMPLICATIONS OF VARIOUS ASPECTS OF EAST-WEST ECONOMIC

RELATIONS. TWO IMPORTANT ELEMENTS OF THIS REVIEW ARE TO BE
CARRIED OUT IN COCOM. THERE IS FIRST THE STRENGTHENING OF
COCOM ITSELF.
WORKING WITH OUR ALLIES ON THIS DURING THE PAST YEAR, AND WE
HOPE TO SEE FURTHER POSITIVE STEPS TAKEN IN THE MONTHS

AS I HAVE OUTLINED ABOVE, WE HAVE BEEN

AHEAD.

SECONDLY, A REVIEW OF OTHER HIGH TECHNOLOGIES,

INCLUDING THOSE WITH OIL AND GAS APPLICATIONS WHICH MAY HAVE SECURITY IMPLICATIONS FOR THE WEST, IS REING INITIATED. ÎN ORDER FOR COCOM MEMBER NATIONS TO GIVE TIMELY POLICY-LEVEL GUIDANCE TO THEIR COCOM DELEGATIONS IN BOTH OF THESE PROAD AREAS OF ACTIVITY, WE HAVE PROPOSED THE SCHEDULING OF A SECOND HIGH LEVEL COCOM MEETING THIS SPRING.

LET ME MOVE ON TO STATE'S RESPONSIBILITIES UNDER THE EXPORT ADMINISTRATION ACT AND OTHER RELATED LAWS AND REGULATIONS. THE STATE DEPARTMENT'S ROLE AND RESPONSIBILITIES IN THE EXPORT CONTROL AREA ARE BASED IN PART ON THE GENERAL RESPONSIBILITY OF THE DEPARTMENT FOR ADVISING THE PRESIDENT ON THE CONDUCT OF FOREIGN POLICY AND IN PART ON SPECIFIC LEGISLATIVE AND EXECUTIVE DIRECTIVES, INCLUDING THE EXPORT ADMINISTRATION ACT OF 1979, THE ARMS EXPORT CONTROL ACT OF 1976, AND EXECUTIVE ORDER 11958. THEY ARE ALSO BASED ON THE FUNDAMENTAL RELATIONSHIP BETWEEN EXPORT CONTROLS AND CUR OVERALL POLICY TOWARDS OTHER NATIONS.

THE STATE DEPARTMENT PLAYS A MAJOR ROLE IN THE

ADMINISTRATION OF THREE DISTINCT TYPES OF EXPORT CONTROLS:

(1) MUNITIONS, ADMINISTERED BY STATF; (2) NUCLEAP MATERIALS,
ADMINISTERED BY THE NRC AND THE DEPARTMENT OF ENERGY; (3)
OTHER ITEMS ADMINISTERED BY COMMERCE UNDER THE PROVISIONS OF
THE EXPORT ADMINISTRATION ACT OF 1979. I WILL LIMIT MY

REMARKS TO THE THIRD CATEGORY SINCE THIS IS THE SUBJECT OF
YOUR HEARING TODAY.

NATIONAL SECURITY CONTROLS

THE DEPARTMENT OF STATE PARTICIPATES ACTIVELY IN THE FORMULATION OF US NATIONAL SECURITY EXPORT CONTROL POLICY AND DECISION MAKING ON THE VARIOUS INTERAGENCY COMMITTEES SET UP FOR THIS PURPOSE. THESE INCLUDE THE ADVISORY COMMITTEE ON EXPORT POLICY (ACEP) CHAIRED BY THE DEPARTMENT OF COMMERCE

AT THE ASSISTANT SECRETARY LEVEL, ITS WORKING-LEVEL GROUP
THE OPERATING COMMITTEE, AND ITS CABINET LEVEL BODY THE
EXPORT ADMINISTRATION REVIEW BOARD. WHEN POLICY ISSUES GO
BEYOND THE CABINET LEVEL REVIEW BOARD, THE DEPARTMENT OF
STATE PARTICIPATES IN THE NATIONAL SECURITY COUNCIL OR
WHATEVER OTHER WHITE HOUSE REVIEW PROCEDURES MAY BE INVOLVED.

SECTION 5(K) OF THE EXPORT ADMINISTRATION ACT OF 1979 PLACES THE RESPONSIBILITY FOR CONDUCTING NEGOTIATIONS WITH OTHER GOVERNMENTS REGARDING SECURITY EXPORT CONTROL MATTERS ON THE SECRETARY OF STATE, WHO ACTS IN CONSULTATION WITH THE SECRETARY OF DEFENSE, THE SECRETARY OF COMMERCE, AND THE HEADS OF OTHER AGENCIES. WHILE STATE THUS HAS THE LEAD

ROLE IN CONDUCTING NEGOTIATIONS IN COCOM, I WOULD LIKE TO EMPHASIZE THAT THIS IS CLEARLY AN INTERAGENCY ACTIVITY. THE CONDUCT OF OUR ACTIVITIES ON COCOM AND ON OTHER MULTILATERAL EXPORT CONTROL MATTERS IS COORDINATED PRIMARILY WITHIN THE ECONOMIC DEFENSE ADVISORY COMMITTEE STRUCTURE, OR EDAC AS IT IS KNOWN IN THE BUREAUCRACY.

EDAC IS CHAIRED BY THE ASSISTANT SECRETARY OF STATE FOR ECONOMIC AND BUSINESS AFFAIRS UNDER THE AUTHORITY DELEGATED TO HIM BY THE SECRETARY OF STATE. ITS MEMBERSHIP INCLUDES ALL AGENCIES CONCERNED WITH THE ADMINISTRATION OF OUR EXPORT CONTROL PROGRAM. VARIOUS INTERAGENCY WORKING GROUPS WITHIN THE EDAC STRUCTURE ARE RESPONSIBLE FOR PREPARING US POSITIONS FOR NEGOTIATING IN COCOM AND FOR REVIEWING THE EXPORT CASES SUBMITTED TO THAT ORGANIZATION BY THE OTHER COCOM MEMBER GOVERNMENTS.

THE BROAD INTERAGENCY BASIS OF OUR ACTIVITIES IN COCOM IS ILLUSTRATED BY OUR PREPARATIONS FOR AND THE SUPPORT OF OUR LIST REVIEW NEGOTIATIONS. UNDER EDAC'S GENERAL GUIDANCE, ELEVEN TECHNICAL TASK GROUPS COMPOSED OF MORE THAN 100 TECHNICIANS FROM MANY AGENCIES, INTELLIGENCE ORGANIZATIONS, AND MILITARY TECHNICAL COMMANDS DEVELOPED THE US LIST REVIEW PROPOSALS. INTERAGENCY TEAMS ARE NOW IN PARIS WORKING FOR COMMITTEE APPROVAL OF THOSE PROPOSALS. ANOTHER EDAC WORKING GROUP ALSO COORDINATES THE INTERAGENCY REVIEW OF INFORMATION ON ALLEGED DIVERSIONS OF COCOM-CONTROLLED ITEMS AND INITIATES DIPLOMATIC APPROACHES TO OTHER GOVERNMENTS ON SPECIFIC DIVERSION CASES.

DURING THE PAST YEAR WE HAVE ALSO ESTABLISHED ANOTHER INTERAGENCY GROUP TO PROVIDE POLICY GUIDANCE AND COORDINATION M IN THE FIELD OF TECHNOLOGY TRANSFER. THIS IS THE SENIOR

INTERAGENCY GROUP ON THE TRANSFER OF STRATEGIC TECHNOLOGY, ATE WHICH I HAVE THE PLEASURE OF CHAIRING. IN THIS GROUP WF ATTEMPT TO PROVIDE A FORUM FOR POLICY DETERMINATION TO COORDINATE THE ONGOING WORK OF THE AGENCIES AND INTERAGENCY ORGANIZATIONS. ONE OF THE IMPORTANT FUNCTIONS OF THE GROUP

AS IT HAS DEVELOPED OVER THE PAST NINE MONTHS IS THE IDENTI-
FICATION OF PROBLEMS AND THE TASKING OF ACTIVITIES TO DEAL
WITH THEM.
FOR EXAMPLE, THE SENIOR GROUP HAS COMMISSIONED A
PUBLIC AWARENESS PROGRAM AND A NUMBER OF INTELLIGENCE

ASSESSMENTS OF TECHNOLOGY DIVERSION PROBLEMS IN SPECIFIC

AREAS AND HAS ENCOURAGED INCREASED ATTENTION TO THE IMPROVEMENT OF US EXTRADITION AND LEGAL ASSISTANCE TREATIES

WITH OTHER COUNTRIES TO STRENGTHEN EXPORT CONTROL ENFORCEMENT.

IT ALSO INITIATED BILATERAL DISCUSSIONS WITH SPECIFIC
NON-COCOM GOVERNMENTS AND A REVIEW OF THE TRAINING OF US
OFFICIALS INVOLVED IN EXPORT CONTROL MATTERS. I BELIEVE
THAT THIS SENIOR INTERAGENCY GROUP WILL CONTINUE TO PLAY AN
IMPORTANT ROLE IN OUR EFFORTS TO DEAL WITH THE PROBLEM OF
THE TRANSFER OF SENSITIVE TECHNOLOGIES TO THE SOVIET UNION
AND THE WARSAW PACT.