Export Controls

The government decided in 1996 to relax the controls over the export of high performance computers even though the executive branch had not identified how this equipment could be used by countries of concern, such as India and Pakistan (referred to as tier three countries), for military purposes. A Department of Energy study on how high performance computers could be used for nuclear weapons development was completed in June 1998, but Defense Department study on how such computers could be used by countries of concern has not yet been completed. As to the foreign availability of high performance computers, GAO found that subsidiaries of U.S. computer manufacturers dominate the overseas market, and they must comply with U.S. controls. Because there is limited competition from foreign high performance computer manufacturers and U.S. manufacturers reported no lost sales to foreign competition in tier three countries, GAO concludes that foreign suppliers of high performance computers had no impact on sales by U.S. exporters. Russia, China, and India have developed high performance computers, but the capabilities of their equipment are believed to be limited. Thus, GAO's analysis suggests that high-performance computers capable of more than 2,000 millions of theoretical operations per second are unavailable to tier three countries without restriction from foreign sources. GAO summarized this report, along with GAO/NSIAD-98-196, in testimony before Congress; see: Export Controls: Changes in Controls Applied to the Export of High Performance Computers, by Harold J. Johnson, Associate Director for International Relations and Trade Issues, before the Subcommittee on International Security, Proliferation, and Federal Services, Senate Committee on Governmental Affairs. GAO/T-NSIAD-98-250, Sept. 16 (13 pages).

GAO noted that: (1) the executive branch has identified high performance computing as having applications in such national defense areas as nuclear weapons programs, cryptology, conventional weapons, and military operations; (2) however, except for nuclear weapons, the executive branch has not identified how and at what performance levels specific countries of concern may use HPCs for national defense applications--an important factor in assessing risks of HPC sales; (3) a Department of Energy study on nuclear weapons was completed in June 1998; (4) the study shows that nuclear weapons programs in tier 3 countries (which pose some national security and nuclear proliferation risks to the United States), especially those of China, India, and Pakistan, could benefit from the acquisition of HPC capabilities; (5) the executive branch has only recently begun to identify how specific countries of concern would use HPCs for nonnuclear national defense applications; (6) to date, a Department of Defense study on this matter begun in early 1998 is not completed; (7) with regard to foreign availability of HPCs, GAO found that subsidiaries of U.S. computer manufacturers dominate the overseas HPC market and they must comply with U.S. controls; (8) three Japanese companies are global competitors of U.S. manufacturers, two of which told GAO that they had no sales to tier 3 countries; (9) the third company did not provide data on such sales in a format that was usable for GAO's analysis; (10) two of the Japanese companies primarily compete with U.S. manufacturers for sales of high-end HPCs at about 20,000 millions of theoretical operations per second (MTOPS) and above; (11) two other manufacturers, one in Germany and one in the United Kingdom, also compete with U.S. HPC suppliers, but primarily within Europe; (12) only the German company has sold HPCs to tier 3 countries; (13) Japan, Germany, and the United Kingdom each have export controls on HPCs similar to those of the United States, according to foreign government officials; (14) because there is limited competition from foreign HPC manufacturers and U.S. manufacturers reported no lost sales to foreign competition in tier 3 countries, GAO concluded that foreign suppliers of HPCs had no impact on sales by U.S. exporters; (15) in addition, Russia, China, and India have developed HPCs, but the capabilities of their HPCs are believed to be limited; (16) thus, GAO's analysis suggests that HPCs over 2,000 MTOPS are not available to tier 3 countries without restriction from foreign sources.