Licensing Mass Destruction

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The Commerce Department's process is secret. Neither Congress nor the public is permitted to examine Commerce licensing in the open. This is true despite the fact that dual-use licenses are supposed to be for civilian items restricted to peaceful use.

Commerce refuses even to confirm the existence of an individual
license application, and refuses to disclose which applications have
been approved after the exports have gone out. Cases come into public
view only when someone inside the government becomes angry
enough to leak them to the press. This means that only the exporters
know which cases are pending, and only the exporters' voices are
heard by the licensing officers when decisions are made. The effects
are to freeze the public and Congress out of the process and to open
the door to the worst forms of private lobbying.
The Commerce Department argues that secrecy is necessary to protect
proprietary interests. But the U.S. nuclear industry competes well on
the international market despite the openness of NRC regulation.

Congress should now require the Commerce Department to publish
quarterly summaries of all dual-use licensing actions. This information
already exists in a database. It could be released by pushing a button.
The resulting list would be the same as the one that Commerce
released in March on Iraq, but would include countries such as Iran,
Libya and Syria. The list would only cover licensing actions that have
been completed. Pending sales would not be revealed. Congress could
accomplish this by amending Section 12(c) of the Export
Administration Act, which the Commerce Department now interprets
as requiring complete secrecy for dual-use licenses.
The list would also include the name of the exporter. If a company is
ashamed of having sold one of its products to a developing country,
the company should not have made the sale in the first place.
Reputable companies do not object to telling the truth about their
business. If the sales are legitimate, and satisfy the export criteria,
there is no reason to keep them hidden. The decision to license them is
an official government act paid for with tax dollars. Pushing export
licensing into the light of day would encourage the exporters to be
honest, encourage the government to be careful, and allow the public
to find out whether U.S. exports are undermining national security.

ANNEX: IRAQI END USERS

Following is a list of the known Iraqi military and nuclear end users that imported sensitive American equipment from 1985 to August 2, 1990, when Irag invaded Kuwait:

Iraqi Airways: One of the "agents and front companies" that Iraq used for its "arms procurement network,” according to the U.S. Treasury Department. In a press release on April 1, 1991, Treasury

http://www.wisconsinproject.org/pubs/reports/1991/licensemd.html

11/19/2002

• Many of the items approved for Iraqi Airways fell into

categories that are listed, by their commodity control numbers,
as useful in the development, testing, production and
deployment of missiles capable of delivering nuclear weapons.
Items such as compasses, gyroscopes, accelerometers,
computers, radars and navigational equipment all fall into this
category. It is possible that some of these items aided the Iraqi

SCUD program.
• The procedures by which missile technology exports are

approved are not available to the public. It is widely assumed
that at least the Department of State reviews and approves these
sensitive exports. However, the Department of Commerce
approved at least six exports that appear to be on the missile
technology list with no external review. In one case (B373514),
the Commerce Department approved over a million dollars'
worth of compasses, gyroscopes, and accelerometers without
consulting either the State or Defense Departments. All items in
category 1485 are missile items and should have been referred
to the State Department.

Iraqi Air Force:

http://www.wisconsinproject.org/pubs/reports/1991/icensemd.html

11/19/2002