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ever, it would remove from the President one of the major bargaining chips, if you would like, for settlement of those claims; namely, the ability to continue to control the frozen assets of the country involved. So it would remove not a legal power, but a political power to help achieve a settlement.

Mr. SANTOS. Nobody may file a claim against the property of a foreign national under normal circumstances in the absence of some allegation that that foreign national owes the person filing the claim something.

The mere fact that a foreign country has expropriated American property does not create a right for all Americans to claim against a foreign country, or the property of foreign nationals of that country.

So the power of a government to freeze property is much broader than whatever legal rights individuals may have to satisfy their claims against particular individuals.

Mr. BINGHAM. Those in favor of the Whalen amendment, as amended, will signify by the sign of "aye"; opposed, "no."

The ayes have it. The amendment is adopted.

I have no further amendments. Does any member wish to propose additional amendments?

Mr. MAJAK. Mr. Chairman, do we understand that staff should look at the question of whether section 208 (a) (2) is or is not redundant, and make technical corrections accordingly?

Mr. BINGHAM. That is correct.

If there are no further amendments, I would entertain a motion that the bill be reported favorably to the full committee.

Mr. WHALEN. Mr. Chairman, would a clean bill be introduced? Mr. BINGHAM. As I said before you came in, as soon as it is voted, we will have a bill prepared and introduced today with such members of the committee who wish to cosponsor. The staff will consult with members of the committee who would like to be on it as cosponsors.

We have the full committee scheduled to take this up on Thursday and Friday.

You would so move it?

Mr. WHALEN. I would so move.

Mr. BINGHAM. Those in favor of the motion signify by saying "aye"; those opposed, "no."

The ayes have it. The motion is carried.

Now we have one further item of business. I will quickly read the statement, while we have a quorum here. The next item on the subcommittee's agenda is concerned with computer sales to the Soviet Union. Of all the products we export to the Soviets, computers probably raise the most troublesome national security implications.

Soviet computer technology is far behind ours, and naturally this is an area where our businessmen want to exploit their competitive advantage and gain access to the Soviet market. But a computer which is sold for peaceful purposes might be diverted to military uses, and might contribute to raising the general level of Soviet technology to the detriment of our national security.


As members are well aware, this issue has surfaced recently in reports of the proposed sale of a powerful Cyber 76 computer to the Soviet Union. Many of our colleagues have expressed serious concern

to me over this sale, and have asked that the subcommittee look into the matter in order to insure that the national security is being adequately protected.

The subcommittee has jurisdiction over the Export Administration Act, which authorizes the President to regulate exports on various grounds including national security. An elaborate licensing process has been established to carry out the purposes of that act, and one of the subcommittee's major responsibilities is periodic authorization and oversight of that process.

The Subcommittee on International Trade and Commerce conducted extensive hearings in the 94th Congress on the general subject of export licensing of advanced technology. The time is now propitious for us to look in some depth at this particular troublesome aspect of that subject.

I am today issuing invitations to the Departments of Commerce, State, and Defense to appear at a hearing as soon as possible. A representative of the Control Data Corp., which is seeking to export the Cyber 76, is also being invited. I intend in that hearing to use the proposed sale of the Cyber 76 as a case study of the broader issue of computer sales.

Most of the information regarding the proposed sale is either classified or confidential. Accordingly, it is my intention to hold the hearing in executive session. Under the rules, a quorum is necessary for a motion to go into executive session, and a rollcall vote is in order.

In view of the fact that we now have a quorum, I hereby move that we go immediately into executive session at the next meeting of the subcommittee, at a time to be announced, for the purpose of taking testimony on the subject of computer sales to the Soviet Union. Mr. WHALEN. I will so move, Mr. Chairman.

Mr. BINGHAM. A rollcall is in order.

Mr. MAJAK. Mr. Bingham.


Mr. MAJAK. Mr. İreland.


Mr. MAJAK. Mr. Fowler.

Mr. FOWLER. Aye.

Mr. MAJAK. Mr. de la Garza.

[No response.]

Mr. MAJAK. Mr. Cavanaugh.


Mr. MAJAK. Mr. Whalen.

Mr. WHALEN. Aye.

Mr. MAJAK. Mr. Findley.


Mr. BINGHAM Thank you very much for your attendance. The subcommittee is adjourned.

[Whereupon, at 3:30 p.m., the subcommittee adjourned subject to call of the Chair.]





DEPARTMENT OF STATE, Washington, D.C., May 10, 1977.

Chairman, Subcommittee on Trade and Commerce, Committee on International Relations, House of Representatives

DEAR MR. CHAIRMAN: We have prepared the following comments on proposals made by the seven private witnesses in response to your request during the April 26 hearings on H.R. 1560, a bill to repeal the Trading With the Enemy Act and on H.R. 2382, a proposed Economic War Powers Act.

The proposals of these seven witnesses fall into two major categories, criteria for emergency actions and Congressional oversight.

Ideas for criteria for emergency actions include general conditions, linking each new measure to a new emergency declaration, high level economic policy review within the Executive Branch, relating the extent of action to the severity of the emergency, prohibiting use of Section 5(b) for export controls, limiting extraterritorial controls, and limiting peacetime controls on commerce to controls on the export of strategic and scarce commodities and to sanctions approved by international bodies.

Various suggestions were made that conditions should be specified which would warrant the use of Section 5(b) authorities. Examples given were extraordinary situations where there was a need to protect the national security, the national economy, and the international financial system. Such conditions correspond roughly to those which have in the past triggered the use of Section 5(b). Efforts to define conditions for declaring national emergencies were abandoned in connection with the National Emergencies Act. Any renewed effort should take into account the need for a formulation broad enough to cover unanticipated types of emergencies.

Mr. Lowenfeld recommended requirements that new measures be linked to a stated emergency and be based on a new declaration of emergency. We concur. Mr. Stanley recommended that CIEP or some similar body be required to review the matter before emergency actions were approved. We agree that a high level well coordinated economic policy review is necessary before new measures are approved.

Several witnesses suggested that the extent of the action should be related to the severity of the emergency. The Congress might wish to consider amending Section 5(b) to require a finding by the President that one of several specified conditions exist as a justification for invoking its powers. For instance, situations which might be regarded as less severe than a "national emergency" and therefore warranting less extensive action than called for by a "national emergency" might include any emergency relating to only one foreign country or to a specific economic crisis.

Mr. Metzger suggested that Section 5(b) should not be used for export controls. We agree that a preferable alternative would be a permanent Export Administration Act.

Mr. Lowenfeld and Mr. Stanley proposed that extraterritorial use of Section 5(b) authorities be limited. Mr. Lowenfeld proposed that extraterritorial controls be limited to U.S. citizens acting in an individual (as contrasted with a managerial) capacity and to operations plainly designed to avoid controls applicable in the U.S. It seems to us that effectiveness of U.S. control rather than the question of whether a U.S. citizen was acting in an individual or a managerial capacity should be determining. All extraterritorial controls have been designed to prevent circumvention of controls applicable in the U.S. Mr. Stanley suggested

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that controls normally not extend extraterritorially, except in exceptional cases for which there would be advance consultation with the other governments affected. We agree that extraterritorial controls should be applied in only exceptional circumstances. Since many third countries are affected by such controls, advance consultation with all of them would not be practical. We do agree that consultation with those most affected is wise.

Mr. Weiss proposed limiting peacetime controls on commerce (other than controls on the export of strategic or scarce commodities) to sanctions approved by international bodies. While we believe that we should cooperate with UN agreed sanctions, we also believe that the U.S. should retain freedom to determine, in the absence of action by an international body, that an emergency exists which affects U.S. interests seriously enough to warrant peacetime controls on commerce. Suggestions for closer Congressional oversight included concurrent resolutions to terminate controls, time limits on embargoes, consultation with Congress, and reporting requirements.

We see constitutional problems in concurrent resolutions to terminate controls. We can agree to a legislated annual limit on each national emergency unless the President makes a specific determination that such emergency is to continue in effect (along the lines of Section 202 (d) of the National Emergencies Act). However, we believe that legislated time limits on embargoes, or other measures which might be taken pursuant to an emergency, would be unwise. For instance, an arbitrary date for terminating an embargo might come at an inauspicious moment during the course of negotiations to normalize relations with the country with which trade was being embargoed.

The need to act quickly in emergency situations may on some occasions make prior consultation with Congress impossible. Accordingly, while we agree that Congress should be consulted on these matters, we think it would be unwise for legislation to require consultation prior to taking the emergency action.

We concur, in principle, with the idea of reporting to Congress and, specifically, with the reporting requirements set forth in Section 401 of the National Emergencies Act.


JULIUS L. KATZ, Assistant Secretary for Economic and Business Affairs.

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