Illegal Technology Transfer
The U.S. Government -- often in collaboration with its allies -- controls the export of certain technologies and commodities to countries that for various reasons are judged to be inappropriate recipients. The violation of these export controls is commonly referred to as illegal technology transfer and is a serious security concern.
The Arms Export Control Act regulates the export of defense articles and services. Such exports may be licensed only if their export will strengthen U.S. national security, promote foreign policy goals, or foster world peace. The Arms Export Control Act is administered by the Department of State, Center for Defense Trade Controls, through the International Traffic in Arms Regulations (ITAR) and the U.S. Munitions List. The Munitions List is a list of defense articles that require a license prior to export.
The Export Administration Act regulates the export of dual-use items, that is, items that have both military and civilian uses. Dual-use items that would make a significant contribution to the military potential of another country are on the Department of Commerce's Commodity Control List, and a license is required for their export. The Commodity Control List includes items from the Defense Department's Militarily Critical Technologies List and technology that could support the proliferation of chemical, biological, or nuclear weapons or missile technology.
A number of countries conduct major programs to avoid U.S. export controls. The potential magnitude of such programs is illustrated by the program conducted by the former Soviet Union. After the demise of the Soviet Union, the Russian government made public annual reports from the Chief of the KGB (Soviet Intelligence) to the Secretary General of the Communist Party, Michael Gorbachev, for the years 1985, 1986, 1988 and 1989. These reports state that the KGB acquired 12,000 to 13,000 samples of equipment or products each year from the West. Principal customers for these samples were the Ministry of Defense, Military-Industrial Commission, and the State Committee for Science and Technology. Not all these samples were obtained from the U.S., and not all of them were obtained illegally, but a majority probably were.1
In many cases of illegal technology transfer, the intended end-user is a country whose policies are unfriendly to the United States, but this is not always the case. Some friendly countries obtain U.S. technology illegally to seek economic advantage. One study of illegal technology transfer operations during the 12-year period from 1981 to 1993 identified 56 different end-user countries.2 The same study found as follows:
The initial buyer in illegal technology transfer operations is often a front company in the U.S. set up to acquire technology legally and then export it illegally to an unauthorized recipient.
To help U.S. businesses recognize indicators of possible intent to circumvent export regulations, the Department of Commerce's Bureau of Export Administration developed the following check list: 3
The Bureau of Export Administration hotline for reporting suspected export violations is 1-800-424-2980.
Information on export controls is available on the Internet in an up-to-date database at www.gpo.gov/bxa. This website contains the entire Export Administration Regulations (EAR), including the Commerce Control List, the Commerce Country Chart, and the Denied Persons List.
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