In a Feb. 20 speech to the Heritage Foundation in Washington, D.C, Bureau of Industry and Security chief Mario Mancuso expressed full support for the agency’s dual-use export control policies, particularly the validated end-user program. The VEU program seeks to facilitate increased exports of high-technology products to companies in China that have a record of using such items responsibly, and Mancuso defended both its utility and its relevance. The program is being scrutinized by members of Congress after a recent report by the Wisconsin Project on Nuclear Arms Control questioned whether it unwisely reduces controls on the sale of U.S. high-tech products to Chinese companies that have significant links to China’s military.
In his remarks, Mancuso said the revised China export control policy issued by the BIS in June 2007, which includes the VEU program as well as new controls on certain defense-related items, reflects the broader U.S. foreign policy goal of encouraging China’s political and economic integration with the world while preparing for other possibilities. He said the VEU program aids this objective by making routine transactions to screened customers faster and less bureaucratic. “VEU enables the U.S. government to devote less time to routine transactions to customers we know a great deal about, and more time and attention to customers and transactions in China we know less about,” Mancuso said. “In this way, VEU both facilitates civilian trade in China and enhances U.S. national security.”
Mancuso also defended the choice of the five Chinese companies initially approved as VEUs in October 2007. The Wisconsin Project report asserted that two of these companies are affiliated with China’s military-industrial complex as well as companies that the U.S. has previously punished for proliferation and other improper export activities. However, Mancuso emphasized that these five companies were unanimously accepted by U.S. agencies with dual-use export control responsibilities.
In addition, Mancuso said, these choices were made only after a rigorous approval process that includes a multi-agency national security certification; mandatory follow-on compliance obligations, which include mandatory disclosure obligations and on-site visits by U.S. government personnel; and ongoing U.S. government monitoring and supervision, which includes automatic, periodic reviews to ensure that the initial VEU certification is still appropriate. Within the Commerce Department alone, he said, VEU applications are subject to:
• a comprehensive compliance assessment that reviews the applicant’s business, corporate information and export control licensing history;
• a review of past transactions to ensure a demonstrable history of using controlled U.S. technology responsibly;
• a review of proprietary information, publicly available information and classified intelligence reports to cross-check critical data, confirm ownership interests and corporate structure and make a thorough assessment about an applicant’s fitness for the VEU program;
• a separate law enforcement review; and
• a technical analysis of the item or items that the VEU applicant has requested for inclusion in the program to confirm the variety, plausibility and associated risks of various possible end-uses.
World Trade/Interactive
