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OCR for page 135
6
An Assessment of the
Multilateral Export Control System
The rapid diffusion of technology and the globalization of production
and marketing of high-technology products leave the United States little
choice but to work to improve and bring additional Western countries into
the system of multilateral export controls. The issue is how effective and
reliable an instrument the system is or can be made to be and what
approach the United States should take in improving upon it.
By persuasion and pressure the United States has led its allies to agree
to a broad set of controls on trade with the Soviet bloc. But U.S.
policymakers have often acted outside the consensus, with or without
multilateral consultation. The United States has imposed and maintained
unilateral national security controls; foreign policy controls on the export
to the Soviet Union of goods and technologies that have no military
importance; and controls on reexports of U.S. products, parts, and
components from CoCom countries. Some of these measures have posed
few problems in alliance relations, but others have been major irritants.
The panel believes that the multilateral system is so essential to the
effective denial or significant delay of strategic products and technology
to the Soviet Union, and that restrictions on West-West trade and
technology exchange are sufficiently harmful to U.S. economic and
Western security interests, that the United States ought now to pursue the
objective of developing a community of common controls in dual use
technology among cooperating Western countries. This concept implies
the construction of a common external "wall" of export controls to the
East accompanied by a significant liberalization of controls within the
135
OCR for page 136
~36 BALANCING THE NATIONAL INTEREST
West. To be successful a community of common controls must in time
include not only the industrialized allies but also a number of advanced or
rapidly industrializing non-CoCom countries.
The panel recognizes that this objective will require major policy
adjustments by both the United States and its major trading partners.
Furthermore, there may be an incentive for one or more countries to
remain outside the community as an island of unrestricted trading
activity. This could only be prevented by strict community control of
exports to the noncomplying country. Such contingencies need to be
addressed in developing the community. Nevertheless, recent improve-
ments in CoCom and moderately successful diplomatic initiatives with
certain neutral European countries have made the concept of a commu-
nity of common controls in dual use technology a realistic objective for
U.S. export control policy.
This chapter considers the adjustments that have already been made in
multilateral export controls and the obstacles to further progress. First, it
addresses the state of the CoCom arrangement its rejuvenation in recent
years and its remaining deficiencies. Second, it considers the extent to
which U.S. policies support or undermine international cooperation on
national security export controls. Finally, it reviews the progress and
pitfalls in securing the cooperation of leading countries that are not parties
to CoCom.
PROGRESS IN COCOM
Since 1980 CoCom has attracted unprecedented attention at high
political levels in member governments. In the wake of the Afghanistan
invasion, the United States persuaded its CoCom partners to adopt a
policy of allowing no exceptions for exports to the Soviet Union of items
falling within the CoCom general embargo. The U.S. government not only
has tightened its own strategic export controls but also has led a major
effort to revitalize the multilateral system.* At the Ottawa summit of
Western leaders in July 1981, President Reagan persuaded the allies to
call the first ministerial-level meeting of CoCom in 25 years. The meeting
took place in January 1982 and was followed by two other high-level
meetings-in April 1983 and February 1985.
The 1982 ministerial meeting reaffirmed the strategic and political
objectives of the organization; launched a comprehensive review of the
*Efforts by the Departments of Defense and State have led to: (1) important progress in
CoCom list reviews, (2) the shift of emphasis from product control to technology control,
and (3) improved administrative and technical support capabilities within the CoCom
secretariat.
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ASSESSING MULTILATERAL EXPORT CONTROLS 137
CoCom International List; called for national controls of "equal effec-
tiveness," including measures to deal with the reexport of controlled
equipment and technology from third countries; and urged improved
administration and enforcement of CoCom controls. The 1983 meeting
took place during the allies' confrontation over construction of the
Siberian gas pipeline and focused on the details of what was by then a full
agenda, as well as on the deficiencies of the CoCom establishment in
Paris inadequate staff, space, and equipment. The 1985 meeting ratified
the outcome of the list review process; adopted a new procedure of
continuous reviews; called attention to the diversion of goods in transit;
approved expedited processing of exception requests for the People's
Republic of China; and endorsed work on the means of dealing with the
export of intangible technical know-how.
As a consequence of these agreements, CoCom members have tight-
ened some of their licensing and enforcement procedures; admitted Spain
to membership; upgraded Paris headquarters operations; launched a
diplomatic effort to obtain the cooperation of nonmember countries;
created a group of advisers with military expertise, most of them
representing defense ministries; and added to the control list certain types
of machine tools, dry docks, semiconductor manufacturing equipment,
robotics, superalloy technology, telecommunications switching equip-
ment, and software. Perhaps most importantly, a 10-year debate over the
levels of computer hardware and associated technology that should be
denied to the Soviet military was finally resolved by a compromise,
removing lower-level computers from the International List.
In the panel's judgment the combination of a more up-to-date control
list and the commitment of most member countries to adhere to it in trade
with the Eastern bloc makes CoCom a reasonably effective, albeit
imperfect, instrument of control on which the United States can rely with
much greater confidence than the arrangement merited only a few years
ago.
COCOM DEFICIENCIES
Intra-CoCom Differences
It is widely believed both in the United States and abroad that some
CoCom nations are more assiduous than others in their adherence to
CoCom restrictions against direct sales of militarily useful goods and
technologies to the Soviet bloc. Goods that might not be sold if they were
of U.S. origin may be approved for sale to the bloc by another CoCom
country. Governments differ in their interpretations of the relevant
technical parameters. In situations of uncertainty about whether or not
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138 BALANCING THE NATIONAL INTEREST
equipment is controlled, U.S. firms tend to err on the side of caution by
refusing to do business or by requesting an export approval; foreign firms
are more likely to accept the order and ship the goods. This is particularly
likely to occur in countries whose governments have not allocated
adequate resources to enforcement of export controls and have not
otherwise stressed the importance of compliance with export controls to
their domestic producers.
Correcting such deficiencies and reconciling interpretations of the
International List have been principal objectives of the United States-
not only in CoCom negotiations but also in dealings with individual
governments. Much remains to be accomplished, but the underlying allied
consensus does enable the reconciliation of differences when a sound
strategic rationale exists for items subject to control.
There are more serious differences among CoCom countries, with
adverse consequences for both technology security and U.S. competi-
tiveness, in the treatment of exports of CoCom-controlled items to other
Western destinations that are potential points of diversion to the Eastern
bloc.
With few exceptions,* all CoCom countries license the export of
controlled dual use products to one another and to third countries as a
precaution against diversion. A crucial control consideration in West-
West trade generally is the reliability of customers. In conjunction with
individual licenses,! therefore, various CoCom members employ several
instruments, depending on the country destination, to ensure the reliabil-
ity of consignees. These instruments include: (1) requiring from the
recipient's government an import certificate (IC) and/or delivery verifica-
tion (DV) statement usually pledging that the item will not be reexported
to a proscribed country; (2) conducting a prelicense or postshipment
investigation of the consignee (an "end-user checked; (3) demanding from
the recipient (i.e., consignee) a declaration of the intended end use of the
item or a letter of assurance against its reexport to a proscribed country;
(4) maintaining a list of diverters or suspected diverters for use in
screening original license applications; and (5) in the U.S. case alone,
requiring that some reexports have the approval of the government of the
country of origin.
Formal requirements and informal practice, however, vary consider
*Canada, the United Kingdom, France, Germany, Japan, and the United States all issue
bulk licenses restricted to West-West trade. Apart from the U.S. special license arrange-
ments, the panel was able to acquire only incomplete information on the conditions for
obtaining and using licenses under these systems.
"Validated licenses are not required for direct trade between the United States and
Canada and vice versa.
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ASSESSING MULTILATERAL EXPORT CONTROLS 139
ably from one CoCom country to another. Consequently, controls on
International List items in West-West trade are inconsistently adminis-
tered. For example, major CoCom partners have not been willing to
maintain extraterritorial controls and do not cooperate in the enforcement
of U.S. reexport restrictions. Few CoCom members conduct prelicense
and end-use checks in the West or have formal mechanisms comparable
to the U.S. Table of Denial Orders for denying export rights to known or
suspected diverters. All CoCom members request import certificate and
delivery verification documents from only a handful of nonmember
countries (see Table 6-11. Because efforts to improve CoCom surveillance
of exports to third countries have been only marginally successful, such
surveillance remains the weakest link in the multilateral system.
The United States has been inclined to compensate for the weaknesses
and differences in the CoCom system by "going it alone." The only
plausible explanation for U.S. reexport controls on multilaterally con-
trolled commodities exported to other CoCom member countries is that
we do not have confidence that their control systems will reliably prevent
diversion. The U.S. approach, however, is ineffective for two reasons.
First, if direct controls by the host government do not adequately deter
questionable sales, indirect controls asserted from a considerable dis-
tance are unlikely to be any more effective. Second, because the CoCom
countries are not merely conduits of U.S. goods and technology but the
source of equally sophisticated items of interest to the Soviet bloc, any
policy that fails to address directly the weaknesses of CoCom is self-
deluding. Thus, while there are problems with the CoCom system, it is the
panel's view that there is no viable alternative to reliance on the
multilateral approach to export control that CoCom represents. The
United States should build on the widely shared perception of the Soviet
threat and create incentives for governments and industry to cooperate in
more vigorous and effective multilateral controls.
Scope of the International List
One of the impediments to more effective enforcement and cooper-
ation, especially in terms of the control of exports to third countries, is the
scope of the CoCom International List. As the panel confirmed in
discussions with officials in Europe and Asia, many member countries
believe the list far exceeds CoCom's grasp. Given finite resources, it is
impractical to enforce sweeping controls. Overly broad coverage also
reduces the credibility of the control system and encourages laxness on
the part of public officials and industry. Curtailing the control list would
have the further advantage of encouraging the cooperation of newly
OCR for page 140
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OCR for page 141
ASSESSING MULTILATERAL EXPORT CONTROLS 141
industrializing countries that are becoming producers of lower-level
controlled technology.
As a practical matter, CoCom may be able to control effectively only those
commodities and technologies where only a few non-CoCom countries
friendly to Western interests have developed indigenous capabilities. A1-
though some non-CoCom countries have agreed to control reexports of
CoCom country origin, they have for the most part refused to control
indigenous goods and technologies that fall within CoCom control parame-
ters. Thus, to maintain the effectiveness of its restrictions, CoCom is obliged
to update continually its control parameters in accordance with the cooper-
ation it has-or has not-obtained from relevant non-CoCom nations.
The CoCom List Review Process
Because of its investment in strategic technologies, its leadership role
in the alliance, and its global security interests outside the alliance, the
United States has typically advocated more extensive controls than its
CoCom partners at every list review. The existence of a much larger
export control bureaucracy in the United States may also account for the
greater number of U.S. control proposals.
Individually and collectively, other CoCom members devote less effort
to defining what controls are advisable and could be effective. As a result,
many CoCom members take a reactive stance in the list review process,
a stance often influenced by domestic commercial pressures. More thorough
assessments by other major CoCom nations (Canada, France, Great Britain,
Japan, and West Germany), comparable to those carried out by the United
States, would contribute to the development of well-documented proposals
for decontrol and to the evolution of a control list that is based on a solid
consensus and equally supported and enforced by all members.
The CoCom rule of unanimity is an unnecessary obstacle to removing
items from the CoCom list. Unanimous agreement to add items is
essential; all members must agree on the wisdom of new controls. The
requirement for unanimity to remove items from the list, however,
undermines the credibility of the embargo. One objection may force the
other CoCom members into giving lip service to controls that they no
longer believe are tenable and that they may subsequently undermine
through lax enforcement. A mechanism for implementing less-than-
unanimous judgments favoring decontrol would have at least two positive
effects: It would ameliorate the current situation in which there is, de
facto, a lack of multilateral cooperation in controlling some items; and it
would increase the effectiveness of the general embargo.
The capabilities being developed and acquired by competitive non-
CoCom countries probably warrant even shorter list review cycles than
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142 BALANCING THE NATIONAL INTEREST
those contemplated at the end of the 1985 round of CoCom discussions.
To reduce the current 4-year cycle to, for example, 2 years would
probably require a reduction in list coverage. This could be facilitated by
adding a "sunset" provision, perhaps limited to administrative exception
note items, that would cause these items to be removed automatically
during the next regular CoCom list review unless their continued inclu-
sion was rejustified and agreed upon.
The CoCom Exceptions Process
If an exporter wishes to ship goods or technologies on the International
List to a Soviet bloc destination for civilian use, he must apply to his own
government for permission. If national discretion authority does not
apply, a government that is supportive of the sale must seek an exception
at CoCom to the general embargo. CoCom approval of the exception
request requires unanimous consent.
There are several problems with the exceptions process. The primary
one is that member governments frequently interpret CoCom require-
ments or particular cases differently. For example, members may differ
in their judgments about a product's technical characteristics and thus
about the level of CoCom controls that apply to its export: whether it is
eligible for shipment at national discretion, whether it should receive
favorable CoCom consideration, or whether it requires full CoCom
consideration and approval. Or members may disagree about the
conditions under which an exception to the general embargo or favor-
able consideration may be granted. These conditions may be restric-
tions on the end use and end user or a requirement to substitute
equipment with lower technical parameters for the item in the original
application.
There is a widespread suspicion that members frequently object to
other countries' exception applications or otherwise manipulate the
exceptions process to benefit their own exporters. Individual members
may adopt a more liberal interpretation of what constitutes a "safe"
export and, in bringing such cases to CoCom as an exception request,
create an impression that they seek a commercial edge. The fact that the
United States has consistently submitted a majority of the requests for
exceptions formerly, for the Soviet Union, and more recently, for the
People's Republic of China-is often interpreted abroad as an effort to get
into the market first. In the United States it is taken as evidence of stricter
U.S. adherence to multilateral controls. Especially on its visits to
European and Asian countries, the panel sought evidence of U.S. use of
the exceptions process for unfair commercial advantage. It found no
evidence to support this allegation.
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ASSESSING MULTILATERAL EXPORT CONTROLS 143
Another problematic feature of the exceptions process arises from
member governments' needs for technical, end-use, end-user, and other
commercial information to make informed judgments. Governments of
the larger CoCom countries have sufficient in-house technical expertise,
but governments of smaller nations often rely on industry advisers to
assist in the evaluations. Even though the data are "sanitized" to protect
proprietary information, such reviews by industry have fostered the
suspicion that these governments may be seeking to promote commercial
interests by providing their producers with access to valuable commercial
intelligence.
The reliance of some member governments on private technical advice
has been an argument for enlarging the role of defense ministries in
national export control processes generally and in CoCom deliberations
specifically. CoCom members have established a group of military
experts representing the CoCom governments to consider the military
relevance to the Soviet Union of particular Western technologies.* This
organization meets independently of CoCom and reports its findings to
the member governments. Another proposal is to strengthen the technical
stab of CoCom so that smaller nations can participate in technical
assessments without having to rely on industry assistance.
Finally, the CoCom exception decision process and the ability of
member governments to weigh exception requests could be improved if
CoCom established a "precedents file" containing exception decisions,
commodity descriptions, and end-user information. Currently, these data
are not computerized nor are they readily available for review by CoCom
members.
Transparency of CoCom Decision Making
Most firms try to avoid the waste of time, money, and customer good-
will entailed in having a license application rejected. Difficult as it often is,
especially for U.S. exporters, to discern the basis of national government
export control decisions, the CoCom decision process and the criteria
applied within it are even more obscure. This situation could be remedied
if additional information on CoCom procedures and on commodities and
end users approved or denied were made available. CoCom members
could agree to submit appropriate information on approved and denied
cases within a reasonable time (e.g., delayed 6 months) and sanitized in
such a way that the information would not be useful for competitive
*See Joseph Fitchett, "West to Assess Exports With Military Use," International
Herald Tribune (October 12-13, 1985).
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144 BALANCING THE NATIONAL INTEREST
purposes. The panel perceived a great deal of interest in such an
arrangement during its overseas fact-finding missions.
U.S. POLICY AND INTERNATIONAL COOPERATION
Through foreign policy and economic cycles, the premise that Soviet
acquisitions of leading Western dual use technologies represent a signif-
icant military threat has not been seriously challenged anywhere in the
Western alliance. Although there have been lapses in attention and
frequent disputes over the scope and means of control, there has not been
a major international quarrel over principle. This consensus underlies the
success of the current administration in revitalizing CoCom despite the
fact that its initiatives coincided with a deep recession, a succession of
trade disputes, and the uproar over the Siberian gas pipeline embargo.
The goal of U.S. policy should be to improve the multilateral control
system to the point where removing controls from West-West trade is
possible. However, the panel believes that there are two features of U.S.
policy that impede progress toward this goal. One is the tendency to
resort to foreign policy trade sanctions to penalize Soviet political
behavior without clearly distinguishing them from strategic controls and
without adequate consultation with our allies. The other is the use of
extraterritorial controls that signal U.S. mistrust of our CoCom partners
and offend their national sovereignty.
Foreign Policy Pressures on CoCom
CoCom is designed to restrict the flow of goods and technology to the
Soviet bloc solely for national security reasons. This is resected in the
criteria used by CoCom for placing goods and technologies on the
International List. However, U.S. foreign policy considerations, separate
from the West-East military rivalry, have on occasion intruded on the
CoCom process.
Particularly when dealing with the bloc nations, it is difficult to
distinguish, clearly and consistently, measures that are aimed directly at
the bloc's military strength from measures that are aimed at its economic
growth and political adventurism. Obviously, a change in political
orientation within the bloc can radically change the national security
equation. For example, the radical changes in China's foreign and
domestic economic policies since the Cultural Revolution have led to a
far-reaching change in the West's perception of the national security
risks entailed in selling sophisticated technology to the PRC. Neverthe-
less, the CoCom controls are intended to focus only on national security
quite narrowly defined.
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ASSESSING MULTILATERAL EXPORT CONTROLS 145
The United States has taken a much more expansive view of what types
of goods and technology pose a military risk and has sought to use CoCom
to punish Soviet behavior for essentially foreign policy reasons. Exam-
ples include the U.S. proposal after the invasion of Afghanistan to
embargo turnkey projects amounting to more than $100 million and the
U.S. initiative after the imposition of martial law in Poland to add oil and
gas equipment and technology to the CoCom list. Such initiatives usually
meet with allied resistance and may threaten the ability of CoCom to
sustain the embargo of critical strategic items, even when undertaken
after consultation with our CoCom partners. They are certainly damaging
when taken abruptly and without prior discussion.
CoCom cannot function effectively without agreement on the national
security criteria to be used in compiling and implementing the Interna-
tional List. There is nothing to prevent a member from using export policy
to influence or express disapproval of another country's actions nor from
trying to persuade its allies to join in a trade embargo. But such initiatives
should not be presented as falling within the original CoCom mandate and
should not be discussed or implemented within CoCom except after
discussion and agreement in other venues such as NATO. Because
controls based on foreign policy considerations are likely to produce
dissension, it is wise to keep the CoCom process isolated from explicit
foreign policy considerations.
Extraterritorial Controls
In some circumstances the United States attempts to exercise licensing
control over reexports of U.S.-origin products from one foreign country
to another. The objective of such controls is understandable: The United
States seeks to ensure through the controls that products that were
licensed for export from the United States to a particular foreign country
do not find their way to proscribed destinations. In practice, however, the
value of the controls is highly questionable.
First, the controls are premised on the assumption that the jurisdic-
tional reach of the United States extends to actions by foreign citizens
that are undertaken outside the territory of the United States.* Many
other countries simply do not accept that U.S. authority has such an
*The acceptance of limits on the jurisdictional reach of the United States does not leave
the United States without any power to deter diversion through reexport. If the U.S. license
applicant makes false statements in the initial licensing application as to the intended
destination of the product, then of course sanctions could be imposed on the applicant.
Moreover, the United States could decline to approve licenses for further exports to a
foreign recipient who has reexported products to a proscribed destination.
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146 BALANCING THE NATIONAL INTEREST
expansive reach. Indeed, some of our closest allies have legislation that is
intended to block the United States' extraterritorial jurisdiction. The
controls are thus premised on legal grounds that are questioned by those
who are expected to comply.
Second, and perhaps as a consequence of doubts as to the legal
justification of U.S. efforts to control reexports, foreign compliance with
U.S. restrictions appears to be lax. The data examined by the panel
suggest that foreign-owned businesses in CoCom countries often ignore
the requirement to seek U.S. authorization to reexport, especially when
the U.S. content (parts, components, or technology) of the goods is
minimal or has lost its identity. This failure to observe U.S. requirements
is not, of course, a vehicle of diversion when the host government
controls exports in accordance with CoCom agreements.
Third, U.S. reexport controls impede progress toward a cooperative
and unified system of controls among the allies. In every country visited
by the panel on its European and Asian fact-finding missions, foreign
businessmen and government officials expressed strong opposition to
the U.S. system of reexport controls. The intensity of feeling is
disproportionate to the burden that foreign companies currently bear,
but the burden could become substantial if compliance were enforced.
Moreover, the grievance extends beyond questions of legal jurisdiction
and potential cost. The explanation for this hostility is far more funda-
mental: Our reexport controls are seen as convicting with widely ac-
cepted principles of international law and national sovereignty. Despite
the existence of certain anecdotal evidence regarding their previous
laxness in export control enforcement, our allies view current U.S. policy
as reflecting mistrust as to whether CoCom partners or other countries
that share our security concerns will adequately protect our common
interest in preventing the diversion of sensitive products to the Soviet
bloc.
The Political Costs of U.S. Policy
U.S. restrictions on West-West trade and technology transfer are
becoming a significant irritant in allied relations. Especially in Western
Europe, where U.S. export control policy has heightened prevalent
feelings of technological and economic insecurity, the panel found that
resentment against U.S. restrictions is surfacing in many quarters. As in
the pipeline episode, the objections are mainly to the extraterritorial reach
of U.S. law; but there is also concern about discrimination against
friendly foreign nationals in access to U.S. research and suspicion
regarding the terms of weapons cooperation agreements including those
related to the Strategic Defense Initiative (SDI). As many Europeans see
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ASSESSING MULTILATERAL EXPORT CONTROLS 147
it, not only are they impeded in gaining access to the technology that
would help Europe become competitive with the United States and Japan,
but they are also hampered in their commercial applications of the
technology (some of which they have helped to develop).
In 1985 the North Atlantic Assembly proposed a new European agency
to promote European technological independence and to bargain with the
United States on technology transfer issues. In a lengthy resolution
adopted in February 1986, the European Parliament was even more
critical of the "unilateral and especially indiscriminate proliferation" of
U.S. technology controls, proposing that the Commission of the European
Community consider seeking a European Court of Justice ruling on the
compatibility of CoCom rules with provisions of the Treaty of Rome
(which established the European Community). The resolution also ad-
vised European Economic Community member states to adopt legislation
modeled on Great Britain's Protection of Trading Interests Act blocking
the application of U.S. extraterritorial restrictions.
These statements reflect a mood that was forcefully conveyed to the
panel on its European fact-finding mission by government officials,
politicians, and private sector leaders alike. They raised the prospect of
eroding trust and cooperation among the NATO allies.
The current friction over national security export controls should be
viewed in the context of volatile but basically sound alliance relation-
ships. National security export controls are only one of many prevailing
irritants including traditional trade protection and subsidy issues, diffi-
culties in coordinating macroeconomic policies, unilateral U.S. foreign
policy controls, and obstacles (of which technology transfer policy is only
one) to the creation of a two-way street in military equipment develop-
ment and procurement. Moreover, West-West technology controls have
not been an impediment to agreements to strengthen the multilateral
export control system nor even to agreements on SDI collaboration.
Fundamental differences over West-East strategic trade are likely to
emerge only if there is a sharp divergence of perceptions regarding Soviet
behavior under the new leadership and the prospects for West-East
accommodation with the Gorbachev regime. So far no serious divergence
has occurred.
The test of U.S. export control policy, however, is not the level of
formal international cooperation that it engenders but the adequacy of the
export control performance of the allies and other Western countries at
both the governmental and private sector levels. The risk from the
imposition of controls to which there are strong objections is that such
controls will gradually undermine the credibility of the system and thus
the degree of compliance with it. Maintaining and extending a web of
unilateral West-West restrictions also may drive the development, appli
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148 BALANCING THE NATIONAL INTEREST
cation, and marketing of some technology to countries that are weaker
links in the chain of controls.
NEGOTIATIONS WITH NON-COCOM FREE WORLD COUNTRIES
The Export Administration Act requires that the United States take
"all feasible steps to initiate and conclude negotiations with appropriate
foreign governments for the purpose of securing cooperation" in control-
ling exports and reexports of controlled goods and technology. Countries
that agree to institute controls equivalent to those of CoCom shall be
treated in the same manner as CoCom member countries with respect to
U.S. licensing requirements (i.e., availability of the G-COM license for
shipments of less-sensitive controlled items, availability of the proposed
G-CEU license, and automatic licensing after 15 or 30 days).
Cooperation from countries that are not members of CoCom has
become important to the success of the CoCom control efforts; it will be
critical in the future as several third countries become significant markets
for CoCom-controlled goods and develop indigenous products that fall
within CoCom control parameters. As CoCom seeks to unify its controls
on exports to the Soviet bloc, the threat of leakage of controlled products
and technology through non-CoCom Free World countries grows. Ap-
proval for the shipment of controlled goods from CoCom to non-CoCom
nations has come to be based in part on the nature of the commitments or
controls these nations are willing to exercise to prevent reshipment of
these items to proscribed destinations.
CoCom members have formally agreed to urge non-CoCom nations to
establish and strengthen their controls vis-a-vis proscribed nations. CoCom's
Subcommittee on Export Controls has reviewed the policies of some 20
non-CoCom third countries and grouped them according to their relationship
to CoCom and the adequacy of their current controls. These groups include:
· nations sharing CoCom objectives such as New Zealand and Australia;
· nations sharing CoCom objectives but lacking adequate controls such
as South Korea and South Africa;
· neutral nations that do not share CoCom objectives but apply some
controls such as Sweden, Switzerland, Austria, and Ireland;
· nations that do not share CoCom objectives and apply few if any
controls such as Singapore, Malaysia, and India;
· nations on which information is inadequate such as Hong Kong; and
· nations that have a special ideological attachment to proscribed
nations.
The subcommittee also has set common objectives for member coun-
tries to guide their individual bilateral approaches to these nations. The
OCR for page 149
ASSESSING MULTILATERAL EXPORT CONTROrS 149
United States, for example, has proposed a number of objectives with
respect to third country controls on exports to CoCom-proscribed na-
tions. In the U.S. view, third countries should be asked to:
· assume responsibility for preventing reexports to the Soviet Union
and the Warsaw Pact countries of imported CoCom-controlled items that
do not have reexport authorization from the originating CoCom countries;
· monitor use of CoCom items in the Soviet Union and the Warsaw
Pact countries after obtaining reexport approval;
· control the export to proscribed destinations of indigenously pro-
duced products that are functionally equivalent to CoCom-controlled
items; and
· cooperate in enforcement measures.
If accepted, these conditions would amount to an adoption by third
countries of the CoCom control list, both for imported and indigenously
produced items, and of CoCom-like reexport and enforcement procedures
for authorized exports.
Although important agreements to protect some CoCom- and U.S.-
origin goods have been reached with a few countries, none of the
agreements concluded to date comes close to meeting the comprehensive
U.S. criteria. Agreements with the European neutrals include measures
to implement controls on selected categories of CoCom-origin items and
to coordinate these controls with the CoCom member country in which
the controlled item originates. In most cases, indigenous products are not
subject to such controls.
To date, negotiations with third countries have proceeded bilaterally.
The United States has conducted discussions with a number of govern-
ments supported by occasional interventions by other CoCom members.
To achieve effective control and to avoid placing U.S. exporters at a
competitive disadvantage, it is important that these diplomatic efforts be
closely coordinated in CoCom and that bilateral agreements concluded by
the United States be followed as expeditiously as possible by agreements
with other CoCom countries.
U.S. insistence on cooperation with U.S. reexport controls encourages
neither coordination in CoCom nor the cooperation of third countries. An
approach that does not create inducements for third country participation
is unlikely to succeed with many governments, especially those of
non-European, politically neutral countries. Raising the thresholds of
CoCom-controlled products, extending favorable U.S. licensing terms to
cooperating countries, and offering the prospect of a relaxation of U.S.
reexport controls are the key inducements available to the United States
in its efforts to extend the multilateral control system.
Representative terms from entire chapter:
multilateral export
