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Thursday, May 6, 2010

The Export Administration Act: Evolution, Provisions, and Debate

Ian F. Fergusson
Specialist in International Trade and Finance

The 111th Congress may consider legislation to renew, modify, or reauthorize the Export Administration Act (EAA). On July 31, 2009, Representative Sherman introduced the Export Control Improvements Act (H.R. 3515), co-sponsored by Representative Manzullo and Representative A. Smith, that contains provisions on export controls enforcement, integration of export control data in the AES, and diversion control. The House Foreign Affairs Committee is also reportedly working to produce as comprehensive rewrite of the EAA. As part of the Administration's export control review, Defense Secretary Robert M. Gates has proposed creating a unified export control structure merging the dual-use and munitions export control regimes, some aspects of which may require legislative consent. 

Through the EAA, Congress delegates to the executive branch its express constitutional authority to regulate foreign commerce by controlling exports. The EAA provides the statutory authority for export controls on sensitive dual-use goods and technologies: items that have both civilian and military applications, including those items that can contribute to the proliferation of nuclear, biological, and chemical weaponry. The EAA, which originally expired in 1989, periodically has been reauthorized for short periods of time, with the last incremental extension expiring in August 2001. At other times and currently, the export licensing system created under the authority of EAA has been continued by the invocation of the International Emergency Economic Powers Act (IEEPA). EAA confers upon the President the power to control exports for national security, foreign policy or short supply purposes. It also authorizes the President to establish export licensing mechanisms for items detailed on the Commerce Control List (CCL), and it provides some guidance and places certain limits on that authority. The CCL currently provides detailed specifications about dual-use items including equipment, materials, software, and technology (including data and know-how) likely requiring some type of export license from the Commerce Department's Bureau of Industry and Security (BIS). BIS administers the Export Administration Regulations (EAR), which, in addition to the CCL, describe licensing policy and procedures such as commodity classification, licensing, and interagency dispute resolution procedures. 

In debates on export administration legislation, parties often fall into two camps: those who primarily want to liberalize controls in order to promote exports, and those who believe that further liberalization may compromise national security goals. While it is widely agreed that exports of some goods and technologies can adversely affect U.S. national security and foreign policy, some believe that current export controls can be detrimental to U.S. businesses and to the U.S. economy. According to this view, the resultant loss of competitiveness, market share, and jobs can harm the U.S. economy, and that harm to particular U.S. industries and to the economy itself can negatively impact U.S. security. Others believe that security concerns must be paramount in the U.S. export control system and that export controls can be an effective method to thwart proliferators, terrorist states, and countries that can threaten U.S. national security interests. Controversies have arisen with regard to particular exports such as high performance computers, encryption technology, stealth materials, satellites, machine tools, "hot-section" aerospace technology, and the issue of "deemed exports." The competing perspectives on export controls have clearly been manifested in the debate over foreign availability and the control of technology, the efficacy of multilateral control regimes, the licensing process and organization of the export control system, and the economic effects of U.S. export controls.

Date of Report: April 26, 2010
Number of Pages: 31
Order Number: RL31832
Price: $29.95

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