311. Information Memorandum From the Assistant Secretary of State for Economic Affairs (Trezise) to Secretary of State Rogers 1

SUBJECT

  • New Export Control Law

The Export Administration Act of 1969, which was passed on December 23,2 contains a strong Congressional endorsement of expanded trade with Eastern Europe. It provides for the denial of exports, apart from foreign policy or short supply reasons, only when it is determined that the export would prove detrimental to the national security of the United States. Foreign availability must be taken into account in denying an export application as well as in establishing the export licensing requirement. When export licenses are required on the grounds that considerations of national security override considerations of foreign availability, the reasons for doing so must be reported to Congress. The new Act drops all reference to economic potential as grounds for denying an export.

Major changes embodied in the new Act are described below:

Declaration of Policy

The former Act stressed export control as a means of defense against the Communist threat, as seen in 1949. The new Act declares that it is the policy of the United States to “encourage trade” with the countries of Eastern Europe and the Soviet Union and states that exports will be controlled only to protect the domestic economy, to further the foreign policy and “to the extent necessary to exercise the necessary vigilance over exports from the standpoint of their significance to the national security of the United States.”

Authority

[Page 807]

As in the former Act, the President has discretionary authority to regulate exports and to determine the timing of decontrol actions. In the new Act, however, the Secretary of Commerce is directed to review and make necessary revision of the United States export control list, and to make such organizational and procedural changes as required to carry out the policy set forth therein. Commerce is also directed to report to the Congress within six months on the progress made. Senator Muskie stated for purposes of legislative record on December 23 that while the conferees could not agree on an interpretation of the language changes in the Act, they envisioned an orderly transition to the new policy contained therein. He said that the Administration would have the flexibility it needs to review the control list in light of the new policy.

As indicated in paragraph 1, the new Act requires that free world availability be taken into account in determining the requirement for an export license as well as in taking action on the license application. The old law did not mention foreign availability.

Information to Exporters

The new Act stipulates that, insofar as it is consistent with national security, exporters will be informed of the considerations causing their export license requests to be denied or to be subject to lengthy examination. This is new.

Termination Date

The bill approved by the Senate would have granted authority to control exports for four years. However, the compromise finally adopted grants authority for only 18 months, i.e., until June 30, 1971. The former Act was extended several times over its 20-year validity, usually for two or four year periods.

Conclusion

The new legislation provides the President with a legislative basis for the policy he has already approved in NSDM-15,3 which is to bring our export control list more closely in line with the COCOM list. In total there are roughly 1800 items which require validated licenses for export to the Soviet Union and Eastern Europe. These include 600 items on the multilateral COCOM list and 1200 items controlled unilaterally by the U.S. Of the 1200 items, there should be little difficulty in decontrolling for Eastern Europe and the USSR the 700 which do not now require licenses for export to free world countries. For most of these products there has [Page 808]been a presumption for approval for export to Eastern Europe, but the mere requirement of an export license constitutes an obstacle to trade. Of the remaining 500 items on the U.S. list which require export licenses for free world as well as Communist destinations, it is estimated that about 300 are available elsewhere in the free world and thus are additional candidates for decontrol under the new legislation. In sum, our target presumably should be to reduce the present 1200 items under United States unilateral export control to approximately 200. (The 600 items on the COCOM strategic list will not be directly affected by the new Act.)

We are in touch with Commerce with respect to the decontrol actions to be taken in pursuance of the policy contained in the new Act and in NSDM-15. It may develop that I will want to ask you to make some suggestions to the White House concerning the extent and timing of these actions.

  1. Source: National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 15. Confidential. Drafted by W.B. Dozier (E/EWT) on December 31, 1969, and cleared by Massey (L/E), Cronk (E/ITP), and Schnee (H). Attached but not printed are excerpts from Sections 3 and 4 of the Export Administration Act of 1969, including the following language from Section 3 (1) and (2): “(1) It is the policy of the United States both (A) to encourage trade with all countries with which we have diplomatic or trading relations … and (B) to restrict the export of goods and technology which would make a significant contribution to the military potential of any other nation or nations which would prove detrimental to the national security of the United States. (2) It is the policy of the United States to use export controls (A) to the extent necessary to protect the domestic economy from the excessive drain of scarce materials and to reduce the serious inflationary impact of abnormal foreign demand, (B) to the extent necessary to further significantly the foreign policy of the United States … and (C) [to protect] the national security of the United States.”
  2. Signed by President Nixon on December 30, 1969. (P.L. 91-184; 83 Stat. 841)
  3. Document 299.