1. Shipments of commodities contained in the Positive List [1] are under control to virtually all destinations;
2. For some commodities, a general license is authorized permitting exportation to virtually all friendly destinations without requiring that an export license be issued;
3. All commodities, whether or not on the Positive List and irrespective of any general license provisions, are under licensing control to subgroup A destinations (i.e., Soviet Bloc, including Communist China and North Korea), Hong Kong and Macao.
The Comprehensive Export Schedule published by the Bureau of Foreign Commerce (BFC) of the Department of Commerce must be consulted in order to determine whether a validated license is required for the exportation of a given commodity to a specific destination as well as to determine other export control regulations of the Commerce Department. The Comprehensive Export Schedule is supplemented 2 or 3 times a month by BFC’s Current Export Bulletin. The Secretary of Commerce’s Quarterly Report to the President and the Congress reports major policy changes and activities of the Department of Commerce in carrying out its export control activities.
The two main policies as indicated in the Export Control Act which is administered by the Department of Commerce are export controls for security and for short supply reasons. The objective of security controls as embodied in the Export Control Act of 1949, as extended, is to exercise the necessary vigilance over exports from the standpoint of their significance to the national security. The controls were designed to deny or restrict the exportation of strategic commodities to the Soviet bloc in order to impede the buildup and maintenance of the Soviet war potential. Shipments of all commodities to Communist China and North Korea are embargoed while shipments to the European Soviet bloc, Hong Kong, and Macao are either denied or restricted. In addition, all proposed shipments of strategic commodities to all destinations, except Canada, are carefully scrutinized to assure that the goods will not be transshipped or diverted to unfriendly hands. The Commerce Department has developed procedures to prevent the frustration of our own export controls which would result from shipping a strategic item to a country which (1) ships identical or closely similar items to the Soviet bloc, or (2) would use the American item directly in the manufacture of strategic items for the Soviet bloc.
In order to prevent the transshipment abroad of United States commodities, the Department of Commerce also has regulations covering the unauthorized movement of United States commodities after they leave United States shores. These regulations generally referred to as the “destination control” provisions are designed to prohibit the reexportation from the country of ultimate destination except upon written authorization from BFC. These regulations also restrict ships, planes or other carriers from delivering United States origin goods to other than the destination specified on the export control documents. In addition, the United States participates in the international IC/DV (import certificate—delivery verification) system described elsewhere in this report.
In addition to United States export controls for security reasons, it is necessary to administer export controls for short supply reasons in order to protect the domestic economy from the excessive drain of scarce materials and to reduce the inflationary impact of abnormal demand. Such controls are usually exercised by means of export programs or quotas fixed by the Secretary of Commerce. The easing of supply programs in recent months has led to the prompt lifting of nearly all domestic controls over materials: such actions have generally been followed by the relaxation of related export controls for short supply reasons. Thus, export controls for short supply reasons do not play as important a part as before in comparison with security controls.
[1] The Positive List of Commodities is a current list contained in the Comprehensive Export Schedule showing the commodities which require a validated license from the Bureau of Foreign Commerce of the Department of Commerce.