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Statement of Vann H. Van Diepen, Acting Deputy Assistant Secretary of State for Nonproliferation Controls, Before the U.S.-China Commission
17 January 2002
Members of the Commission:
Thank you for the opportunity to provide the views of
the Department of State on export controls and China.
Our relationship with China continues to be one of the
most complex foreign policy issues facing this
Administration, We have been encouraged by the level of
cooperation that we have received from China on fighting
terrorism since September 11. However, this does not
mean that we have diminished in any way our commitment
to pursue our objectives in areas where key differences
exist between us, such as nonproliferation and human
rights. To this end, I believe that existing export
controls play a crucial role in safeguarding U.S.
national security and foreign policy interests while
also upholding important U.S. political and economic
interests in responsible trade with China.
China is a focus of our export control policy because it
is a growing regional military power and because Chinese
entities have been involved in proliferation-related
activities. The Administration applies strong export
controls on both dual-use items and munitions with the
goal of not contributing to nuclear, missile, CBW and
other military programs of concern in China or
elsewhere.
Before I elaborate on the controls in the Export
Administration Regulations (EAR) and the International
Traffic in Arms Regulations (ITAR), it is important to
comment on China as a market. U.S. industry has rightly
identified China as the largest potential market of the
coming century. Now is a critical time when our
companies are jockeying for position in the market with
competitors from Europe and Asia. First entry is often
the difference between success and failure. When the
business relationship involves controlled dual-use
items, these realities require export control policy and
individual licensing decisions that strike an
appropriate balance between traditional security
concerns and U.S. economic security. This can be
particularly problematic in our relationship with China,
where it is often difficult to identify the line between
the public and private sectors and between military and
civil end-users.
Ultimately, however, when there is a conflict between
economic and traditional security concerns, export
controls must uphold U.S. national security and foreign
policy. This is particularly clear in the case of
munitions exports.
Munitions exports
Exports to China of items on the U.S. Munitions List (USML),
which currently includes satellites and many satellite
components, are prohibited by the sanctions imposed
following the 1989 Tiananmen Square massacre. The
sanctions allow for a Presidential waiver if an export
is deemed to be in the U.S. national interest. Several
waivers have been granted over the years to allow the
launch of satellites from China (including those under
Commerce control pursuant to a separate provision of the
Tiananmen sanctions), as well as for encryption
equipment when it was on the USML. But the overall
number of munitions-list exports to China since 1989 has
been extremely small.
Exports of satellites and components for launch from
China have sometimes been prohibited because of Chinese
missile proliferation activities, and there have been
periods where we would not consider such waivers or
satellite licenses because of proliferation concerns.
For example, as a matter of policy the U.S. decided in
February 2000 not to approve satellite licenses or
waivers for China until it had addressed our missile
proliferation concerns. In November 2000, the Chinese
made certain missile nonproliferation commitments to us
that made it possible for us to resume normal processing
of licenses for the launch of U.S. satellites on Chinese
boosters. We reviewed cases that had been submitted and
were considering whether to recommend waivers of
Tiananmen sanctions to the President. However, because
of subsequent exports to Pakistan by Chinese entities
that were inconsistent with the November 2000 U.S.-China
missile nonproliferation arrangement, the U.S. in
September 2001 sanctioned a Chinese entity, and, by
extension, certain activities of the Chinese government.
These missile sanctions preclude for two years approval
of new export licenses for the export to China of any
items on the Missile Technology Control Regime (MTCR)
Annex (which, in USML terms, would include satellites
containing Annex items) and present another barrier, in
addition to the Tiananmen sanctions, to the export of
U.S. satellites, or foreign satellites containing USML
components, to China.
We have discussed this issue with China, including at
senior levels, and remain open to further dialogue. The
key to moving forward on this issue is in China's hands.
China must take steps to resolve our concerns regarding
implementation of its November 2000 missile
nonproliferation commitments -- including putting in
place comprehensive missile-related export controls --
before we can consider waiving the September 2001
missile sanctions and recommending to the President that
he waive Tiananmen sanctions for satellite projects.
Dual-use goods
By definition, dual-use items pose fewer national
security risks than items under munitions controls.
Decisions on dual-use exports, therefore, must be more
sensitive to the economic consequences while still
upholding U.S. national security. Therefore, the
Administration continues to maintain a system of
dual-use controls, including on China, that focuses on
evaluating the appropriateness of the proposed export to
the civil needs of the end-user and the risk of
diversion.
The Commerce Department under the EAR maintains dual-use
controls that include China in the following areas of
proliferation and military concern; National Security
(NS), Nuclear Nonproliferation (NP), Missile Technology
(MT), and Chemical and Biological Weapons (CB). The
NS-control specifically outlines a policy of extended
review or denial for China if the item makes a "direct
and significant" contribution to electronic and
anti-submarine warfare, intelligence gathering, power
projection or air superiority. The NP-control includes a
policy of extended review or denial for items to China
that make a "direct and significant" contribution to
nuclear weapons and their delivery systems. The
MT-control includes a policy of denial for items deemed
to make a "material contribution" to missile
proliferation; various restraint and denial criteria
also are required by U.S. commitments under the Missile
Technology Control Regime (MTCR). Furthermore, the
National Defense Authorization Act for FY1999 requires
that any export of MTCR-controlled items to China be
preceded by a Presidential certification that the export
is not detrimental to the U.S. space launch industry and
will not "measurably improve" Chinese missile or
space-launch capabilities. The CB-control includes a
policy of denial for those items deemed to make a
"material contribution" to CBW programs. The
Administration also continues to enforce those aspects
of the Tiananmen sanctions that prohibit export of items
controlled for crime control from the U.S. to China
without a license.
Another key component of our export controls generally
is the ability to control items based on the end-use and
end-user. EAR "catch-all" controls require a license to
export or re-export any item subject to the EAR that the
exporter or re-exporter knows will be used for WMD- or
missile-related activities in certain countries,
including China. The catch-all controls also prohibit
certain activities of U.S. persons in support of certain
nuclear, missile, chemical or biological end-uses
regardless of whether that support involves the export
or re-export of items subject to the EAR. In addition,
agencies involved in dual-use export control have placed
a number of end-users of concern (including Chinese
end-users) on the Commerce Department Entity List
because of an unacceptable risk that items going to
these entities would be used in, or diverted to,
proliferation activities. By further focusing China
controls on not only the item to be exported but also
the ultimate end-use and on certain end-users, we have
created a system that is both efficient and effective.
It is also of great importance that our export controls
are not undermined by other countries. The U.S.
therefore works closely within the multilateral regimes
and individually with regime partner countries to ensure
that U.S. security is not undercut by foreign sales. The
MTCR, Nuclear Suppliers Group (NSG) and Australia Group
all have "no undercut" policies in place. Certain
categories of items controlled by the Wassenaar
Arrangement are subject to post-facto undercut
reporting, albeit not a true "no undercut" policy. We
believe that these regimes, in addition to our
discussions with and demarches to the major potential
supplier nations of sensitive exports, have helped
preserve the integrity of our export controls --
including vis-a-vis China.
Conclusion
Are these U.S. export controls enough? That question has
been posed by some concerned about what they see as a
growing Chinese military threat. Are the controls too
extensive? Just as loudly, some in industry question the
utility of limiting access to a lucrative market. While
it may be ultimately unsatisfying to all sides, the
reality is somewhere in between -- which is par for the
course in export control. Our policy on export controls
to China, as in the case of export controls more
generally, must continue to balance national security
concerns and other foreign policy concerns with economic
concerns.
U.S. export control policy on China allows us to
implement stringent sanctions on end-users of concern
and prohibit specific military- or proliferation-related
exports, relying on the U.S. government's thorough
reviews of applications and the extensive license
conditions imposed to take national security concerns
into account. Our policy also allows us to treat
flexibly areas where the technology is widely available
as commodity items or physically impractical to control,
such as low-level computers or encryption, thus helping
U.S. companies to compete in China on a level playing
field. The Administration continually reviews export
control policies for China and other countries in an
effort to take into account the realities of the market
and technology.
In conclusion, it is important that we continue to
maintain an active dialogue on and with China. The State
Department welcomes the opportunity to discuss these
crucial issues with members of Congress and the
Commission.
This
material is produced independently for NTI by the James Martin
Center for Nonproliferation Studies at the Monterey Institute of
International Studies and does not necessarily reflect the
opinions of and has not been independently verified by NTI or
its directors, officers, employees, agents. Copyright © 2007 by
MIIS.
