ACCESSION NUMBER:344690 FILE ID:ECO302 DATE:05/18/94 TITLE:ENCRYPTION DISPUTE PERSISTS AS EXPORT-CONTROL BILL ADVANCES (05/18/94) TEXT:ENCRYPTION DISPUTE PERSISTS AS EXPORT-CONTROL BILL ADVANCES (House committee bill emphasizes multilateral regimes) (650) By Bruce Odessey USIA Staff Writer Washington -- A House of Representatives committee has approved legislation for moving the U.S. export-control system out of the Cold War era, but the Clinton administration opposes some provisions, especially one relaxing controls on computer software with encryption capability. The Foreign Affairs Committee May 18 approved by voice vote the bill revising the Export Administration Act (EAA) and extending it from expiration of the current EAA on June 30, 1994, through June 30, 1998. Before the bill becomes law it must go before other House committees with jurisdiction and win passage in the full House and Senate. The Senate Banking Committee is scheduled to consider its version of the EAA bill May 24. A House-Senate conference to reconcile different versions of the bill 1s likely. The Foreign Affairs Committee bill covers products useful in both civilian and military applications, but not weapons themselves, which are covered by another law. It would link most controls to multilateral regimes and gives the president leverage to strengthen those regimes, including preferential treatment for regime members. It would make the control system more transparent and impose strict deadlines, requiring decisions on export applications within 30 days. The bill would authorize the president to control exports as required by participation in multilateral regimes such as the Missile Technology Control Regime, the Nuclear Suppliers Group, the Australia Group (for biological and chemical weapons) and any successor regime to the Coordinating Committee for Multilateral Export Controls (COCOM), which went out of existence March 31. It would restrict the president's authority to impose unilateral controls except on exports to terrorist countries. First, the control would have to meet specific criteria, including whether it could be enforced and whether the economic cost would exceed any national-security benefit. Second, it would limit unilateral controls to 60 days unless they were adopted multilaterally or were included in a total embargo against a specific country. The president could seek extension of unilateral controls, but Congress could reject them by a joint House-Senate resolution of disapproval. An official who asked not to be identified said the unilateral-control restrictions posed a problem for the Clinton administration. A bigger problem, however, remained the encryption provision, the official said. That provision would allow exports of "generally available" encryption software or hardware as long as the intended end-use is civilian. The National Security Agency opposes this proposal while U.S. industry supports it, arguing that such products are available from competing non-U.S. suppliers. Representative Lee Hamilton, committee chairman, said he was seeking consultation on this issue with Anthony Lake, President Clinton's national security adviser, and members of the House Intelligence Committee. "A compromise might be possible," Hamilton said. Other controversies could emerge, including one concerning the Arab League boycott of U.S. businesses that conduct trade with Israel. An amendment approved by Foreign Affairs would give a right to private U.S. companies to sue other U.S. companies that violate U.S. antiboycott law by supplying information to Arab states about trade with Israel. Another controversy could emerge about an amendment expected to be offered during House floor debate by Representative Robert Torricelli. It would prohibit exports of satellites for launch in China or Russia if those countries were providing that service at less than a fair price. It would pit U.S. satellite producers against U.S. providers of launch services. U.S. oil companies are likely to oppose a provision of the bill extending current law prohibiting exports of oil from Alaska's North Slope. The Foreign Affairs bill would expand legislation passed by Congress in April, which imposes government procurement sanctions against countries that violate nuclear non-proliferation agreements. The bill would also allow imposition of import sanctions in those cases. 1NNN .