With Kenneth I. Juster, Undersecretary of commerce for industry and security

With Kenneth I. Juster, Undersecretary of commerce for industry and security

The Commerce Department's Bureau of Industry and Security (BIS), formerly the Bureau of Export Administration, launched the Transshipment Country Export Control Initiative last October to encourage greater security among nations with large-volume transshipment ports. BIS has been meeting with government and industry officials of Singapore, Thailand, Panama, Cyprus, Malta, Hong Kong, Taiwan and the United Arab Emirates, among others. In July, the bureau sponsored a global export-control conference in Sydney, Australia. Undersecretary Kenneth I. Juster discussed the initiative, designed to prevent U.S. exports from being diverted to terrorist groups or the countries that support them.

Q. How prevalent is the problem of U.S. exports being diverted into illegal channels?

A. It's hard to say because you don't always know what is being diverted. Intelligence indicates that transshipment hubs have been used by terrorist organizations as diversion points. Sometimes this happens through free trade zones that are adjacent to the hubs. We've targeted countries where we feel we can have some immediate impact, or countries with free trade zones that are often located near countries of concern, whether it be in Asia or the Middle East. These are really chokepoints for the international trading system. If handled properly, we can sensitize these countries to the need for effective export controls, so that items do not get diverted to the wrong parties as they pass through their ports. At the same time, we don't want to hamper legitimate business at these transshipment hubs.

Q. How much cooperation are you getting?

A. I think it's been very positive. Many of these countries had not focused on export controls before Sept. 11. Their focus had been totally on the speed by which they can facilitate trade through their ports. I think they all realize now that if problems arise at their ports, it will have a detrimental effect on the global trading system. I think most countries recognize that security is part of their overall risk-management equation. Export controls are part of good security.

Q. How have the enforcement efforts of BIS shifted since Sept. 11, 2001? Are you concentrating on controlling components or precursor chemicals for weapons of mass destruction? For example, as you know, ammonium nitrate has a dual use as a fertilizer or explosive.

A. I think it's a little more complicated than that. We control a whole range of items that have both commercial and military applications. Obviously, the highest concern is any item that can contribute to a weapons-of-mass-destruction program. I believe we have precursor chemicals adequately covered on our control list. Theoretically, every item is controlled for export. We have nine categories under our Commerce Control List, and then an additional category, which is everything else, including fertilizers, automobiles, and pens, pencils and paper clips. We have catch-all provisions that say that if any of these items are being knowingly exported for use in a weapons program, or missile development, then they could not be exported without a license.

Q. It seems that what you're doing is the mirror image of what the Bureau of Customs and Border Protection is doing with its Container Security Initiative, and new Census Bureau requirements for mandatory reporting of control-list items and munitions.

A. Our initiatives are related, and can be confusing to the countries involved, but there are many dimensions to this security issue. As a government, we are working to address all of them, so the transshipment hubs have better physical security and container security, and enhance their export controls.

Q. Will your effort be affected by the new Customs rules requiring advance electronic notice for exports as well as imports?

A. Yes. The ability to collect data will be helpful for everyone, especially the collection of that data in electronic format. At the end of the day, analyzing data and seeing where there are anomalies, helps those in the world of enforcement.

Q. The Export Administration Act expired in August 2002. Does operation under the International Emergency Economic Powers Act affect what you're trying to do?

A. We would certainly like there to be a new Export Administration Act. It would enhance our own export-control policy. It would also enhance our ability to persuade other countries of the importance of adopting such legislation.