High-tech, other exports may find easier going in US effort to cut red tape
Boston — America's high-tech industry and other exporters may see bureaucratic red tape and time delays diminish soon - even though Congress remains deadlocked on the issue of how best to rewrite export regulations.
The Commerce Department, which has primary authority in export control matters, is pushing ahead with a series of initiatives aimed at streamlining the export license review process and further decontrolling certain United States goods, according to William T. Archey, acting assistant secretary for trade administration at the Commerce Department.
The push will occur even if Congress fails to enact the proposed updated Export Administration Act. The act, which regulates exports of US goods on the basis of national security, foreign policy, or short supply, is foundering in a deeply split House-Senate conference committee.
The export act is designed in part to prevent the flow or diversion of sensitive US high technology that might ultimately be used to help upgrade the Soviets' most sophisticated weapons systems.
''If there is no act, we will take as a starting point what would have been in the act,'' Mr. Archey told executives at a Boston hearing Tuesday.
He was referring to a provision in the proposed export act calling for establishment of a government system to permit the decontrol of strategic goods that have already been determined to be widely available overseas.
The provision would call on government to determine the ''foreign availability'' of controlled goods. If comparable goods were found to be widely available to the Soviets from non-American sources, the goods would be considered for decontrol and would then not need export licenses to be sold abroad.
''We think this is a very important area that has been long ignored, and we are not going to ignore it anymore,'' Archey said.
According to John Boidock, director of the Commerce Department's Office of Export Administration, the department conducted six ''foreign availability'' investigations this year. The number of investigations is expected to rise next year. Archey says the department has already hired 18 members of an expected new staff of 24 to conduct foreign availability reviews. A formal proposal on a new program is expected to be completed by December.
Mr. Archey says delays in processing export license applications have been substantially reduced. American exporters had complained that delays in receiving licensing authorizations left them at a competitive disadvantage with foreign companies able to guarantee faster delivery.
In an effort to ease the problem, Commerce streamlined its license review procedure. Archey says that as of this month the department is processing some 80 percent of Western-world export licenses in 15 days or less. Last February such licenses took 40 to 45 days for review.
The department expects to receive some 140,000 individual requests for export licenses this year. Last year, roughly 95,000 such applications were filed.
Archey's comments came during a Commerce Department hearing on the department's proposed regulations governing multiple shipments of high-technology goods overseas - so-called distribution licenses. The department is in the process of conducting a series of hearings with high-technology officials to record their concerns about the new regulations. In addition to Boston, hearings have been scheduled in Minneapolis, Dallas, and San Francisco.
The new regulations mark a shift in philosophy toward emphasizing company responsibility to ensure that sensitive US products are not diverted to the Soviet Union. The rules basically call for companies doing business overseas to establish an internal control system, to educate and identify key personnel involved in the control effort, and to notify their customers that controlled US goods are not to be diverted.
Some executives from high-tech companies say the proposed regulations may discriminate against small firms that may not be able to satisfy current criteria to qualify for a distribution license. The regulations, expected to be operative by Jan. 15, include provisions for Commerce Department audits of company compliance.
This year department officials will randomly audit some 50 companies. Next year 100 will be audited, Archey says.
Some 750 American companies now operate with the use of distribution licenses. They earn an estimated $20 billion a year in overseas sales.
In January, the Commerce Department proposed an initial set of new distribution license regulations that would have required companies to assemble lists of overseas customers and obtain written certifications from customers that they would not reexport goods controlled to protect US security.
The initial proposal was dumped after the department received 250 negative letters from industry as well as negative responses from nine foreign countries. Archey says the new regulations do not represent a ''backing off'' by the department from the tough first regulations. Rather, he says, the new rules further enhance US security by being easier to administer and more effective.
''We don't think that national security and the right of American companies to do business overseas is necessarily a conflict,'' Archey says. ''I have yet to meet a businessman who doesn't think we need an export control policy.''