Opening Remarks of Chairman Howard L. Berman

At hearing: “The Impact of Export Controls on National Security, Science and Technological Leadership”

Stanford University

Palo Alto, CA

January 15, 2010

Good morning – and to those who may be watching these proceedings in Washington via the Internet, good afternoon.

Today’s hearing is on the impact of U.S. export controls on our nation’s national security and our leadership in science and technology.

We are holding it here in Silicon Valley because no state is more heavily affected by export controls than California – with our cutting-edge high technology industry, academic institutions and scientific and research establishments – and no region of the state has more experience with such controls than this one..

We’re grateful to Stanford University – and most especially to Dr. Hennessey, one of our witnesses -- for hosting these proceedings and for all the technical and logistical support they provided to make this day possible.

For the benefit of people who are new to the subject, let’s start with defining our terms:

Through export controls the federal government restricts the international transfer of what are called “dual use” technologies – those that have legitimate civilian uses but also can be used for military purposes.

This is a critical aspect of our national security policy.

But there is a growing consensus among security experts as well as academics and industry leaders that our current system of export controls needs to be updated in order to continue protecting sensitive technologies while also maintaining U.S. technological leadership.

So this hearing serves at least two related purposes. The testimony will help our committee prepare for a complete revision of the statute that authorizes our system of licensing and controlling dual-use technologies. And what we learn today will contribute to congressional oversight of the export control policy review that President Obama has ordered, and that is now under way.

Joining us on the dais today is a valued member of our committee for many years, Zoe Lofgren, a Democratic representative of Southern California who is Chair of the California Democratic congressional delegation; and Anna Eshoo, in whose district Stanford University is located, Chair of the Intelligence Community Management Subcommittee of the House Permanent Select Committee on Intelligence, as well as many other things.

Export controls don’t get a lot of public or media attention. They have been an important part of the U.S. national security establishment since 1949, when our current control system began as a part of NATO.

Here in California, many of our 61 thousand exporting firms – such as Applied Materials in Santa Clara – and an increasing number of our academic and research establishments – such as Stanford – have significant compliance responsibilities.

You practically have to have a Ph.D, or a law degree -- or maybe both -- in order not to run afoul the increasingly complex U.S. export controls regime. The regulations now fill more than two thousand pages. There are frequent changes -- two dozen were announced last year alone. More than twenty-six hundred items and technologies are subject to controls, just in the dual-use area.

Exporters and universities are required to check six separate lists of potentially dangerous individuals and groups – with thousands of entries -- before allowing access to controlled goods and technological information.

In many cases, government approval is required, and the growth rate in applications and approvals of licenses is phenomenal: twenty-one thousand licenses were issued in 2008, double the number from 10 years ago.

Universities and other research institutions face a particular set of compliance challenges, as the U.S. moves to broaden and tighten the rules governing access by foreign students and researchers to science laboratories and research facilities.

These rules, aimed at regulating the transfer of technological knowledge – as opposed to goods – increasingly are affecting our high-tech companies as well.

Moreover, the worldwide diffusion of sensitive goods and technological knowledge has a significant impact on national security. These are the same technologies that drive scientific advances and commercial progress.

-- Thermal imaging cameras are being used in the latest collision avoidance systems for vehicles, while remaining a key advantage for our forces on the battlefield.

-- Encryption is an important defense for individuals, companies and governments against cyber warfare and cybercrime, while at the same time shielding communications among terrorists from interception by law enforcement authorities.

-- Commercial software reportedly is being used to defeat our un-manned drones in Afghanistan.

-- Bio-engineering and nano-technology carry the promise of prolonging life and curing disease, but can also be turned to designing a new generation of bio-weapons.

These are just four examples; there are countless others.

This area of public policy raises complex questions – and there are no easy answers.

Clearly, our national security requires a continued effort to prevent our adversaries from mis-using the benefits of science and industry against us and our allies.

But just as clearly, we need to refine and update our export control policy and attendant regulations to sustain America’s leadership in scientific research and discovery, and technology-driven industry. That, too, is part of protecting our national security.

Our committee, the Foreign Affairs Committee, is beginning the process of enacting a new statute to be the foundation for U.S. policy. Today’s hearing is in some ways the first formal step I that process.