EXTENSION AND REVISION OF THE EXPORT ADMINISTRATION ACT OF 1979 TUESDAY, MARCH 8, 1983 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY AND TRADE, The subcommittee met at 3:45 p.m. in room 2200, Rayburn House Office Building, Hon. Don Bonker (chairman of the subcommittee) presiding. Mr. BONKER. The subcommittee will come to order. The Subcommittee on International Economic Policy and Trade meets today for the fourth of its hearings on the extension of the Export Administration Act of 1979. This particular hearing will deal with several issues regarding reauthorization of the Export Administration Act, one of which involves the DOD's position concerning controls on products containing embedded microprocessors. This unilateral control, which has placed U.S. exporters at a competitive disadvantage, was a subject of discussion at the subcommittee hearing last Thursday. Mr. Frank Kapper, Acting Assistant Deputy Under Secretary for Technology Transfer of the Department of Defense will address this issue. We will also hear from a panel that includes representatives of the National Machine Tool Builders' Association and the National Council for United States-China Trade on the views of their organizations on the Export Administration Act-suggestions, recommendations that they have for the subcommittee. Also appearing on the panel is John Orth, chairman of the foreign availability subcommittee of the Computer Systems Technical Advisory Commit tee. Mr. BONKER. We will begin with Mr. Frank Kapper from the Department of Defense on technology transfer. Is that correct? Mr. KAPPER. My remarks will be directed to embedded computers primarily. Mr. BONKER. Please proceed. STATEMENT OF FRANK KAPPER, ACTING ASSISTANT DEPUTY UNDER SECRETARY FOR TECHNOLOGY TRANSFER, DEPARTMENT OF DEFENSE Mr. KAPPER. Thank you very much, Mr. Chairman, members of the subcommittee. First off, I do have some prepared remarks here which I will be referring to as well as handouts which answer the questions which were provided to us by your staff. Mr. BONKER. All right, Mr. Kapper, your responses to questions will be placed in the record. We will appreciate your summarized remarks. Mr. KAPPER. Thank you very much. A major concern is with the U.S. unilateral control under Commodity Control List Item 4529B of equipment containing embedded microprocessors. Later on, I can define 4529B. Currently, our Cocom allies do not control equipment containing computers, but the United States has included this item in our Cocom proposal IL-1565 which is being negotiated during the list review. This imbalance between how the United States and other countries treat the issue is causing an unfair burden on U.S. equipment manufacturers who incorporate computers in their products. The major concerns of Defense associated with the equipment are the increased capability of the equipment-such as speed of computation of results, improved productivity, or quality in mili tary production facilities, process control and networking-which have direct applications to command and control and other activi ties. The potential diversion of controlled computer spare parts and the ability of a potential adversary to modernize his military production facilities or weapon systems using state-of-the-art equipment is also of concern. DEFINITION OF EMBEDDED COMPUTER I would like to provide a quick definition as to what embedded computers are under CCL-4529B. It states: Other instruments, not elsewhere specified, for measuring, indicating, recording, testing or controlling electronic, electric, or non-electric quantities that incorporate digital computers defined in entry No. 1565 sub-entries [d] and [e]; and parts and accessories, not elsewhere specified. It is a rather broad definition. U.S. industry and the Commerce Department wish to decontrol equipments which are only controlled because they contain an embedded computer. Defense has reviewed some of the equipment caught under 4529B and identified the following list of candidates for decontrol: chromatographs, spectrophotometers, pH meters, elemental analyzers, and thermal analyzers. Defense is currently in the process of developing the performance limits of the embedded computers which would present the lowest risk to national security for the equipment listed above. We expect to have this work completed within the next 10 days and we will be forwarding recommendations to the Department of Commerce on each of these equipment series classes. NATIONAL SECURITY CONCERNS IN DECONTROLLING EQUIPMENT The specific national security concerns which must be weighed in making the decision to decontrol the equipment cover five areas: First, will the equipment, itself, significantly enhance the quality or quantity of a potential adversary's military production capabil quity? As an example, liquid chromatographs which can produce more than 5 liters in substance in 8 hours can be applied effectiveestly in the development of chemical agents. t Second, when a product is decontrolled, the manufacturer can ship an unlimited number of spare parts to support the product. If the product contains controlled components or general purpose computers whose software can be easily modified, the potential exists for the diversion to other controlled applications, for example, in command and control systems or, for example, like our TAC fire system. Third, in some cases, when a computer is incorporated in a product, the equipment can be networked with a larger computer or process control system to provide qualitative or quantitative improvements in a potential adversary's capability. One of the key things here, for example, is when you network your radar so as to provide better air-defense coverage, which is a key concern of ours. Fourth, the decontrol of equipment containing microcomputers should not release other technical know-how such as the controls on the microcomputer development systems which are controlled under CCL 1529 because these can be used to develop both the microcomputer software and hardware which can be used in other controlled applications. I think basically what we are saying here is, we do not want to release the production know-how and all the supporting documentation to produce the microcomputers themselves. Fifth, the decontrol of the equipment should not release the technical know-how to incorporate computers, interface them with analog to digital converters or modify the operating software. This gives essentially sort of the "heart" if you will, of embedded computers for military applications. In previous testimony the issue of equipment such as blood analyzers and urine testing equipment was raised. The Department of Commerce has not made a specific recommendation to Defense to decontrol this equipment. Defense recognizes the low risk to national security of medical equipment used for patient care, treatment or diagnosis. As long as the national security concerns identified above are satisfied, the equipment is limited to care, treatment or diagnosis and not useful in research or other controlled applications, Defense could agree with the Commerce recommendation for decontrol. The militarily critical technologies list developed by Defense identifies a number of products as keystone equipment which are currently controlled in the United States by CCL 4529B. These include the following four items: robotics, process control equipment, automatic test equipment, and data acquisition equipment. These products can be networked together to produce automated factories or in quality control systems to have a major impact on improving a potential adversary's military production capability. For example, we know the Soviets are very, very capable in many areas. One of their biggest weaknesses has been the quality control aspect. This is one of the key things that we would like to have them continue to have problems with. Defense is not developing its criteria for decontrol in a vacuum. We have had a number of meetings with representatives of indus try and associations to better understand their problem with the current controls and to let them better understand our national security concerns. The dialogs have been applied to the Defense review of export cases, delegations of authority to Commerce and will be incorporated in criteria for decontrol. In a few cases, some companies have voluntarily begun to apply their own controls on spare parts, using a one-for-one replacement procedure on controlled parts to prevent diversion. This is the end of my prepared remarks, Mr. Chairman. RESPONSES BY THE DepartmenT OF DEFENSE TO QUESTIONS SUBMITTED BY Question. What are embedded computers and how are they used? Answer. The definition of an embedded computer is not simple as it immediately sounds. The computer can be a single integrated circuit, a single printed circuit board with a number of computer chips on it, a set of printed circuit boards which perform various functions or a "stand-alone" computer system. The "embedded" computer is usually physically mounted inside the equipment, but in some cases, the equipment can consist of multiple pieces of equipment or the computer is accessible to the user. The embedded computer issue can best be described by an example. There are many products on the market which are used for chemical analysis. Before the proliferation of low cost computers, these products contained meters and dials which were read visually by a technician who then performed a series of manual calculations to arrive at a result. This process was labor intensive, prone to human error in reading and analyzing the data and lacked repeatability. The advent of low cost digital computering capability which could be built into the instruments solved these problems. The dials and meters were replaced with analog to digital converters which changed the voltages used to drive the dials into digital data which could be read by the built-in computers. Stored programs in the computer performed calculations on the digital data and provided a direct read-out to the technician. This change eliminated the human error in reading the instrument, increased accuracy and speed, and solved the repeatability problem because a given voltage always produced the same digital value. The embedded computer, itself, can take a number of forms. The lowest level, and the most primitive form, is a set of logic circuits which perform a specific functions. These are usually called "hand-wired" logic circuits because the functions they per form can only be altered by physically changing the wiring. An example would be an early digital voltmeter. The next level is the dedicated microcomputer chip. In this case, the major element of the computer is a single integrated circuit device which is programmed by the instrument manufacturer to perform one or more spe cific operations related to a specific instrument they manufacture and which would be useless if installed in another type of instrument. These devices usually contain a small fixed program which cannot be altered by the user and a small scratch pad area of memory (usually 128 locations) for performing basic arithmetic. They are referred to as "front panel" instruments because the user simply presses a single key or series of keys to select from a fixed menu of operations. An analogy is the automatic safety check in some automobiles today. When you turn on the ignition, the system checks to see if the doors are locked, the brakes are safe and other features. If all of the values are within predetermined limits, the dash light turns from red to green and you know the systems are all right. The embedded computer described above are of no concern to Defense if the instrument they are embedded in is not militarily critical. The next level of complexity begins to touch on Defense's concerns for national security. This is the use of general purpose microprocessors and computers embedded in instruments. A general purpose microprocessor device is different from a single chip microcomputer because the program is stored externally in other memory devices, which allow the program to be changed. This capability allows the microprocessor to be used in a large variety of configurations, from the mundane to the sophisticated level. These configurations can be conveniently divided into three areas for discussion, the specially designed board level, the general purpose board level, and complete computer system level. problem dour to the A. Specially designed computer boards Some instrument manufacturers (Perkin-Elmer for example) design their own computer boards which can only be used in specific instruments or families of instruments. These boards cannot be used in other products or as stand-alone general Co purpose computers without major modifications to the hardware and software. This few group can be subdivided into two levels of concern, the dedicated board and the user Own reprogrammable board. man The dedicated board computer is an extension of the dedicated microcomputer cedure chip described earlier. It allows a larger program, a larger scratch pad area, and more flexibility. It would still be of the "front panel" type but with a larger menu of functions. The board usually contains a general purpose microprocessor, a large set of fixed instructions (which the user cannot change) and a small scratch pad area of memory for storing calculations and data. The major concern of Defense is with the general purpose component chips (especially microprocessor and memory chips) which are controlled under Commodity Control List (CCL)-1564. When these chips are soldered into the dedicated board, the national security risks are reduced. If the chips are in sockets, there are two concerns. First, the chips containing the fixed program could be changed, thereby allowing the functions of the computer and instrument to change. Second, there are concerns with quantities of these chips being supplied as spare parts which could then be diverted to other non-approved applications. EMINE! The user reprogrammable board computer is also specially designed by an instrument manufacturer for a specific instrument or family of instruments, but provides the user with the capabilities of a general purpose computer in addition to the capabilities of the instrument. An example is the Perkin-Elmer Model 3600 Data Station. In this case, the system provides a user programmable area of memory, some form of a high-level programming language such as Basic, or Fortran, and a full keyboard and display. Here, the user can write special analysis programs, store and load data from an external source and in some cases interface the system in a network with other computers or instruments. The major concern of Defense is with the computer system performance as controlled by CCL-1565. In this case, the instrument can perform the functions of computer and should be treated as such for export control purposes. B. General purpose computer boards Other instrument manufacturers do not design special computer boards for their equipment. Rather, they purchase general purpose computer boards which have a wide variety of applications. The boards are characterized and interfaced to the instruments through an industry standard bus (a specific connector configuration or set of wires). Examples are the Intel Multi-Bus, Pro Log Std Bus, Motorola S-50 Bus, S-100 Bus and others. The instrument manufacturer usually installs a fixed program on the boards by inserting Read Only Memory (ROM) memory chips into sockets on the boards. This process produces boards which have specific applications in a manufacturer's instruments, but changing the ROM's can produce boards with other applications which could be of national security concern. In CCL-1565, these boards are called "single board computers" and are tightly controlled in the export regulations. An example of how the military uses these boards can be found in the AMRAAM air-to-air missile program. In developing the on-board computer, the AMRAAM developer purchased low cost commercial Multi-Bus boards to develop the system. After the hardware and software details were worked out, the developer simply substituted military quality boards in the operational system. Except for the temperature and reliability characteristics of the military boards, the commercial boards functioned identically. The major concern of Defense with general purpose computer boards is their availability as spare parts and the ease with which they can be diverted to general computer and military applications. The Soviet Union, tends to design some of their weapon systems to use captured Western equipment. The classic example is their 61 mm mortar. It can fire their 61 mm ammunition and our 60 mm mortar rounds, but our mortars cannot fire their ammunition. With the proliferation of computers in the future battlefield, it would be dangerous for the West to allow an adversary the opportunity to easily develop and utilize weapons developed on Western general purpose microprocessors. C. Complete computer systems The last group of embedded computers are the complete systems. In this case, the instrument manufacturer buys a stand-alone computer (including frame, power supply, boards and interfaces) and simply mounts it in the cabinet of the instrument. This has typically been done using Digital Equipment and Data General mini |