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LAWS REGULATING EXPORT ACTIVITIES
Export Controls
The U.S. government controls certain exports to protect national security, to
further U.S. foreign policy interests, to limit the proliferation of chemical
and biological weapons and missile technology, and to ensure adequate domestic
supply of certain goods that are in short supply.
Export Administration Act of 1979 (EAA): This law lapsed in September
1990, but the Bush and Clinton administrations have kept its export-control
system operating under an emergency law called the International Emergency
Economic Powers Act (IEEPA). Caught between business and defense interests,
Congress has failed in several attempts to pass legislation to reform the Cold
War-era EAA. Under EAA's provisions, the U.S. Department of Commerce controls
exports of dual-use commodities -- goods of a civilian nature that also have
potential military applications.
The Department of Commerce's Bureau of Export Administration (BXA) is the
primary licensing agency for dual-use exports. The State Department licenses the
export of defense articles and services under the authority of the Arms Export
Control Act, while certain nuclear materials and equipment are licensed by the
Nuclear Regulatory Commission under the authority of the Atomic Energy Act.
A very small percentage of exports and reexports require the submission of a
license application to BXA. License requirements depend on an item's technical
characteristics, its destination, its end-use and end-user, and other activities
of the end-user. The first step for an exporter to take to find out whether a
license is required is to determine, or request the BXA to determine, whether
the product is on the Commerce Control List (CCL). This is the list of products
subject to the export controls administered by the Commerce Department.
The BXA screens all export license applications to ensure that items are not
illegally exported. In addition, it reviews specific individual license
applications to access diversion risks, identify potential violations, and
determine the reliability of those receiving controlled U.S.-origin commodities
or technical data. BXA also carries out post-shipment verifications to ensure
that a controlled U.S.-origin item has actually been delivered to the authorized
end-user or consignee, and that it is being used as claimed on the export
license application.
Persons knowingly violating export control regulations face fines of $50,000
or five times the value of the exports involved, whichever is greater, in
addition to imprisonment of up to five years. If an individual has knowledge
that an item will be used for the benefit of -- or that the destination or
intended destination of the item is -- a country to which exports are restricted
for national security or foreign policy purposes, the penalties for that
individual increase to $250,000, imprisonment for up to 10 years, or both.
Penalties for firms can be $1 million or up to five times the value of the
exports involved, whichever is greater.
The effectiveness of many of the controls are enhanced by their being
maintained as part of multilateral control arrangements. Currently, the United
States is a member of the Nuclear Suppliers Group, the Australia Group, the
Missile Technology Control Regime, and the Wassenaar Arrangement.
Export Promotion
The U.S. government seeks to promote the export of specific types of products
through the following programs.
Fair Trade in Auto Parts Act of 1988: This law requires the U.S.
Department of Commerce to establish an initiative to increase the sale of
U.S.-made auto parts to Japanese markets. The law expires in December 1998.
Federal Agriculture Improvement and Reform Act of 1996: This law,
contained in the 1996 U.S. farm bill, continues a number of export-promotion
programs in the U.S. Department of Agriculture. The Commodity Credit Corporation
(CCC) provides credit guarantees of up to 98 percent of the principal and a
portion of the interest on loans made by private banks for the purchase of U.S.
agricultural exports. The Market Access Program uses CCC money to help the U.S.
private sector promote agricultural exports through advertising, trade shows,
and in-store demonstrations. The Export Enhancement Program subsidizes U.S.
exports of wheat, rice, barley, and other commodities to counter sales in
markets subsidized by the European Union. The Dairy Export Incentive Program
similarly subsidizes dairy exports to counter subsidized sales by foreign
governments. The Emerging Markets Program provides money for technical
assistance to promote U.S. agricultural exports to emerging markets.
P.L. 480: The Food for Peace Program, originally passed by Congress in
1954, provides agricultural assistance to countries at different levels of
economic development. Title I, administered by the U.S. Department of
Agriculture, provides for government-to-government sales of agricultural
commodities to developing countries under long-term credit arrangements. Titles
II and III are administered by the U.S. Agency for International Development
(USAID). Title II provides for the donation of U.S. agricultural commodities by
the U.S. government to meet humanitarian food needs in foreign countries. Title
III provides for government-to-government grants to support long-term economic
development in the least-developed countries. Section 416(b) provides for
overseas donations of surplus commodities to carry out assistance programs in
developing countries.
The Food for Progress Program, a distinct program created in 1985 that is
much smaller than P.L. 480, authorizes exports of agricultural commodities on
credit terms or on a grant basis to support developing countries and countries
that are emerging democracies committed to free-market practices in their
agricultural economies.
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