The Committee on Banking, Housing and Urban Affairs has jurisdiction over export controls for all goods, services, and technologies except for munitions and fissionable materials. Consequently, the Committee will soon consider a bill to reauthorize the Export Administration Act, which lapsed on August 20, 1994. This Act provided the legal framework for the Department of Commerce to implement export controls for both national security and foreign policy reasons. Currently, the Administration is implementing dual-use export controls through an executive order under the International Emergency Economic Powers Act.

While the Cox Report discusses many issues outside of this Committee's jurisdiction, the Cox Report analyzes United States dual-use export policies toward the People's Republic of China and evaluates whether China diverted dual-use exports for military purposes. In particular, the Cox Report analyzes U.S. exports of high performance computers and machine tools to China. The Cox Report also discusses Chinese launches of U.S. communication satellites that may have resulted in illegal technology transfers to China. However, the passage of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 classified communication satellites as munitions. Thus, communication satellite exports are no longer within the jurisdiction of this Committee.

The unclassified Cox Report concludes with thirty-eight recommendations, eighteen of which touch on the reauthorization of the lapsed Export Administration Act.

The following are the Cox Report recommendations relevant to the Banking Committee's jurisdiction:

1. The U.S. should insist that the People's Republic of China adhere fully to, and abide by, the Missile Technology Controls Regime (MTCR) and all applicable guidelines. (Recommendation 9)

2. The U.S. must vigorously enforce, and seek multilateral compliance with the MTCR. (Recommendation 10)

3. In light of the demise of the Coordinating Committee on Multilateral Export Controls (COCOM) and the insufficiency of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the U.S. should work, including in the context of the scheduled 1999 review of the Wassenaar Arrangement, to establish new binding international controls on technology transfers that threaten international peace and U.S. national security. (Recommendation 11)

4. The Select Committee recommends that the U.S. take appropriate action to improve the sharing of information by nations that are major exporters of technology so that the U.S. can track movements of technology and enforce technology control and re-export requirements. (Recommendation 12)

5. The U.S. should work to reduce the transfer of weapons systems and other militarily significant technologies from Russia and other nations to the People's Republic of China (PRC). (Recommendation 13)

6. Appropriate congressional committees should report legislation requiring the Secretary of State, Director of Central Intelligence, and the heads of other relevant executive departments and agencies to report in a timely fashion to appropriate congressional committees, including the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence, on technology transfers that raise a proliferation concern and on the implementation of all the foregoing recommendations in this paragraph. (Recommendation 14)

7. The Select Committee expects that the executive branch will aggressively implement the Satellite Export Control Provisions of the Strom Thurmond National Defense Authorization Act for FY 1999. (Recommendations 15, 16, 17, 18)

8. The Select Committee recommends that appropriate congressional committees report legislation directing the Department of Energy, in consultation with the Department of Defense, to conduct a comprehensive review of the national security implications of exporting high-performance computers (HPCs) to the PRC. (Recommendation 25)

9. The Select Committee supports the sale of computers to the People's Republic of China for commercial but not military purposes. The Select Committee recommends that the appropriate congressional committees report legislation that requires establishment by the PRC of an open and transparent system by September 30, 1999, which provides for on-site inspection of the end-use and end-user of such high performance computers, without notice, by U.S. nationals designated by the U.S. government. Failure to establish such a system by that date should result in ...lowering the performance level of high performance computers that may be exported to the PRC, denial of export licenses for computers destined to the PRC, or other appropriate measures. (Recommendation 27)

10. The Select Committee recommends... efforts by the executive branch to encourage other computer-manufacturing countries, especially those countries that manufacture HPCs, to adopt similar policies toward HPC exports to the PRC. (Recommendation 28)

11. The Select Committee recommends that the appropriate congressional committees report legislation to reenact the Export Administration Act, with particular attention to reestablishing the higher penalties for violation of the Act that have been allowed to lapse since 1994. (Recommendation 29)

12. Relevant executive departments and agencies should establish a mechanism to identify, on a continuing basis, those controlled technologies and items that are of greatest national security concern. (Recommendation 30)

13. Provide longer review periods when deemed necessary by any reviewing executive department or agency on national security grounds. (Recommendation 31)

14. Require a consensus by all reviewing executive departments and agencies for license approval, subject to appeal procedures. (Recommendation 31)

15. Current licensing procedures should be modified to streamline the process and provide greater transparency, predictability, and certainty. (Recommendation 32)