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EGlossary Administrative exception note (AEN) A note appended to certain CoCom International List categories describing commodities that can be ap- proved for sale to CoCom-proscribed destinations solely at national discretion. Automatic licensing procedure As mandated by the Export Administra- tion Amendments Act of 1985, a requirement that individual validated license applications for most exports to CoCom nations must be approved automatically by Export Administration 15 working days after filing unless the applicant is notified that more time (not to exceed 15 additional working days) is required. At the end of the 15- (or 30-) working-day period, the export is deemed to be licensed, even if no document or communication to that effect has been sent or received. Bilateral In the context of this report, referring to two-sided negotiations or agreements between two nations regarding export controls. CoCom (Coordinating Committee on Multilateral Export Controls) An in- formal organization that cooperatively restricts strategic exports to controlled countries. It consists of 16 member nations: Belgium, Canada, Denmark, France, the Federal Republic of Germany, Greece, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Spain, Turkey, the United Kingdom, and the United States. Commodity Any article, material, or supply except technical data. 2748
GLOSSAR Y 279 Community of common controls A proposed cooperative arrangement for trade in controlled commodities among Free World nations that share an expressed willingness to adhere to common or equivalent national security export controls. Under such an arrangement, licenses would be required (from the cooperating nation shipping a controlled com- modity) only for the export of controlled commodities to nations not a party to the arrangement. Consignee In the context of this report, the recipient of a shipment of commodities or technical data subject to national security export controls. Continuous review The process within CoCom by which one-fourth of the entries on the International List are reviewed each year on an ongoing basis and particular entries may be reviewed within any one-year period at the request of a member nation. Changes to list entries are published annually by member nations. Country groups Seven groups of foreign countries, established by the Commerce Department for export control purposes and designated by the symbols Q. S. T. V, W. Y. and Z (see Figure 4-3 on pp. 84-851. Canada is not included in any country group and is referred to by name in the Export Administration Regulations. Customs-free (bonded) zones Storage and transfer sites in various nations within which commodities in transit are not, for administrative and legal purposes, considered to be imports and therefore are not subject to inspection. Distribution license A special 2-year license, without dollar value or quantity limits, authorizing the export of eligible commodities to approved consignees in specified countries. Distribution license con signees must be foreign distributors or users of the licensed commodity in Free World countries. Diversion Shipment of militarily significant dual use products and tech- nology to unapproved end users, either directly, through the export of controlled products without a license (i.e., smuggling), or indirectly, through transshipment using a complex chain of increasingly untrace able reexports. Dual use In the context of this report, describes technology or products that have both military and commercial applications. Embargo A legal prohibition on commerce. End use The purpose or application for which controlled commodities or technical data will be used by a consignee.
280 APPENDIX E End-user check An investigation by officials of the Department of Com- merce or Department of State to confirm that a consignee is reputable and is engaged in the business claimed in statements to licensing authorities. End-use statement A formal declaration by a consignee of the specific purpose or application for which controlled commodities or technical data will be used. Espionage Covert efforts to obtain illicitly-by theft, bribery, or black- mail protected information or technology that is classified or of relevance to military systems. Exception request An application by a CoCom member, in support of an application by a domestic firm, seeking the approval of all member nations to permit the export of a commodity subject to CoCom controls to a proscribed destination. Extraterritoriality In the context of this report, the assertion by the U.S. government that its export control regulations govern trade in U.S.- controlled commodities and technical data of U.S. origin outside the territorial boundaries of the United States. Farewell The French intelligence community codename for a high-level Soviet official who provided France with extensive information on the scope, organization, and successes of covert Soviet technology acqui- sition activities in the West. Favorable consideration A category of items on the CoCom International List that, by agreement among the members, will be considered favorably for export to proscribed destinations, on a case-by-case basis, provided the proposed transactions meet certain conditions specified in accompanying notes. Foreign availability According to the Export Administration Act of 1979, a state existing when a non-CoCom-origin item of comparable quality is available to adversaries in quantities sufficient to satisfy their military needs. Foreign availability may apply to items that CoCom-proscribed nations manufacture domestically or buy freely from uncontrolled sources. Foreign national Any person who is not a citizen of the United States and who has not been lawfully admitted for permanent residence in the United States under the Immigration and Naturalization Act. Free World In the context of this report, nations not subject to the CoCom strategic trade embargo. General embargo Restrictions maintained through CoCom to prevent ex- ports of certain munitions, nuclear, and dual use items to proscribed
GLOSSAR Y 28 ~ destinations. Exceptions to the embargo are granted only for specific transactions on a case-by-case basis and must be approved unanimously. General license An export license established by the U.S. Department of Commerce for which no application is required and for which no document is granted or issued. General licenses are available for use by all persons or organizations, except those listed in and prohibited by the provisions of the Export Administration Regulations Supplement No. 1 to Part 388; the licenses permit exports within the above provisions as prescribed in the regulations. These general licenses are not applicable to exports under the licensing jurisdiction of agencies other than the Department of Commerce. Globalization The spread of business activities to numerous and diverse countries around the world. Goods in transit Goods that are being transported from a vendor's point of origin to the premises of a foreign consignee. Import certificateldelivery verification (ICIDV) procedure A procedure sometimes used by the United States, other CoCom countries, Austria, and Hong Kong to monitor the movement of exports of militarily strategic commodities. When the IC/DV procedure is required by an exporting country for a specific transaction, an importer certifies to the government of the importing country that he will be importing specific commodities and will not reexport them except in accordance with the export control regulations of that country (i.e., the importing country). The government of the importing country, in turn, certifies to the exporting country that such representations have been made prior to the transaction. After the commodities have been shipped, the importer's government certifies that the controlled items have been received by the designated consignee. Individual validated license (IVL) Written approval by the U.S. Depart- ment of Commerce granting permission, which is valid for 2 years, for the export of a specified quantity of products or technical data to a single recipient. Individual validated licenses also are required, under certain circumstances, as authorization for reexport of U.S.-origin commodities to new destinations abroad. International List The CoCom list of dual use commodities and technical data that are subject to validated licensing requirements when proposed for export from CoCom countries to other nations. Keystone equipment Sophisticated devices essential to the successful operation/completion of manufacturing processes. (Some examples include process control equipment and specialized machine tools.)
282 APPENDIX E Letter of assurance A written statement from the foreign recipient of restricted technical data under restriction that the data will not be made available to proscribed nations. Merchant (firms) Firms that sell their products on the open market, as opposed to producing only for internal consumption. Militarily Critical Technologies List (MCTL) A document originally man- dated by Congress listing technologies that the Department of Defense considers to have current or future utility in military systems. It briefly describes arrays of design and manufacturing know-how; keystone manufacturing, inspection, and test equipment; and goods accompa- nied by sophisticated operation, application, and maintenance know- how. Military justification for each entry is included in the classified version of the list. Multilateral As used in this report, referring to agreements or negotia- tions among three or more nations to reach common accord on national security export controls and procedures. National discretion A level of CoCom control under which some items on the International List, as indicated in administrative exception notes, may be licensed for sale to proscribed nations by one member country without the approval of the others. National interest exception A determination by the U.S. Secretary of Commerce, in accordance with Section 12(c) of the Export Adminis- tration Act of 1979, permitting the confidential disclosure of informa- tion obtained by the Commerce Department for consideration of or concerning export license applications. National security export controls Procedures designed to regulate the transfer of technology from one country to another in such a way as to protect militarily important technologies from acquisition by potential adversaries (see the Export Administration Act of 1979, as amended). Nexus Connection or linkage. President's Export Council A group established by executive order in 1973 and reconstituted in 1979 to provide a forum on current and emerging problems and issues in U.S. foreign commerce. Its members include primarily leaders in business, industry, and agriculture and members of Congress. Proscribed countries In terms of national security export controls, Alba- nia, Bulgaria, Cuba, Czechoslovakia, Estonia, the German Democratic Republic, Hungary, Kampuchea, Laos, Latvia, Lithuania, the Mongo
GLOSSAR Y 283 lien People's Republic, North Korea, the People's Republic of China, Poland, Rumania, the USSR, and Vietnam. Reexport The exportation of commodities or technical data from one foreign destination to another at any time after initial export from the country of origin. Reverse engineering Reproduction of a unique product based solely on examination and analysis of a sample of the product. Secrecy orders An order issued, at the request of a defense agency, by the Patent and Trademark Office of the Department of Commerce, which prohibits or limits the use of an innovation described in a patent application and the dissemination of related, underlying technical information. Shipper's export declaration (SED) Any declaration required under regu- lations of the Department of Commerce and other U.S. government departments or agencies in connection with exports. Strategic goods and technologies Items designed especially or used prin- cipally for development, production, or utilization of arms, ammuni- tion, or military systems; items incorporating unique technological know-how, the acquisition of which might give significant direct assistance to the development and production of arms, ammunition, or military systems; and items in which proscribed nations have a defi- ciency that hinders this development and production and that they are not likely to overcome within a reasonable period. Sunset provision In the context of this report, a clause mandating the periodic review and automatic termination of a CoCom export restric- tion unless its continued inclusion on the International List has been rejustified and agreed upon. Table of Denial Orders (TDO) A list included in the Export Administra- tion Regulations of specific individuals or organizations that have been denied export privileges, in whole or in part. Orders are published in full in the Federal Register. Technical data Information of any kind that can be used or adapted for use in the design, production, manufacture, utilization, or reconstruc- tion of articles or materials. The data may take a tangible form, such as a model, prototype, blueprint, or an operating manual (the tangible form may be stored on recording media); or they may take an intangible form such as technical know-how. Software is considered technical data. Technological commodity Mass-produced items that are marketed, dis- tributed, and/or warehoused in large quantities for use by distributors
284 APPENDIX E and customers around the world. Most items that can be purchased from retail outlets on a cash-and-carry basis are also technological commodities. Examples of commodities currently subject to national security export controls are some personal computers and related peripheral devices, floppy discs, and microchips. Technology transfer In the context of this report, the acquisition by one country from another of products, technology, or know-how that directly or indirectly enables a qualitative or quantitative upgrading of deployed military systems or the development of effective countermea- sures to military systems deployed by others. Third countries Free World nations that are not members of CoCom. Transshipment The transfer, by a series of separately documented ship- ments, of controlled products through one or more countries en route to a final destination that may be a proscribed country. Initially, the final destination and in later transactions, the country of origin are con- cealed to avoid export or reexport prohibitions. Unilateral In the context of this report, referring to actions relating to national security export controls that are taken by only one nation. U.S. Control List The list of commodities under the export control jurisdiction of the Commerce Department's Export Administration. U.S. Munitions List A list of defense articles and services, which was developed by the Department of Defense and is now maintained by the State Department with the advice of DoD. The International Traffic in Arms Regulations pertain only to items on the list and to directly related technical data, the export and reexport of which must be approved in advance by the State Department. Validated license Written approval issued by the governments of various nations granting limited permission to export controlled commodities or technical data, either on a single- or a multiple-transaction basis. In the case of the United States, validated licenses also are required, under certain circumstances, for reexport of U.S.-origin commodities to new destinations abroad.
