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Reagan Signs Bill on Exports to Soviets

July 12, 1985

Undated (AP) _ WASHINGTON (AP) - President Reagan signed a bill Friday giving him new power to halt shipment of strategic goods to the Soviet Union through other countries.

The Export Administration Act also unwinds some of the red tape that has tied up what business people consider legitimate sales to the Soviets.

In a written statement, Reagan said the law ″strikes an acceptable balance between enhancing our commercial interests and protecting our national security interests.″

At the same time, it gives Congress new influence on agreements made by the president to sell nuclear material. That would include an agreement with China that may be signed when President Li Xiannian meets with Reagan at the end of the month.

Under the law, the president may cut off imports from a foreign company, even if it is in a friendly country, when a court finds that it has violated U.S. security.

Early in his administration, Reagan tried unsuccessfully to hamper the Yamal natural gas pipeline from the Soviet Union to western Europe by cutting off American exports to companies that helped build it.

U.S. allies have repeatedly protested as ″extraterritoriality″ such enforcement of American law on their soil.

The 10 governments in the European Community, the Common Market, objected to the new law from the beginning. Today Ella Krucoff, press officer for its Washington delegation, said:

″The Community is concerned about how the law will be applied and the guidelines that will be published... We will be watching these guidelines carefuly and reserve all our rights under international law and practise.″

Another new feature of the law tightens controls on foreign embassies in Washington, which are designated foreign territory.

″If the Soviets found a sensitive item in a Washington chain store and started buying it up and piling their purchases into the embassy, this would give us power to interfere,″ said one U.S. official who spoke on condition he remain anonymous.

Other provisions are designed to please American exporters and their customers in other countries.

The U.S. government can hold up for no more than 30 days a license for an American firm to export a sensitive item to a COCOM country. COCOM, short for Coordinating Committee, is an organization of the United States and its allies, with headquarters in Paris, which cooperate in limiting exports to Communist-ruled areas. They include members of the North Atlantic Treaty Orgnization and Japan, but exclude Iceland.

In the past, applications for licenses have taken months to clear through the Department of Commerce.

When an American business wants to sell a sensitive item to the Soviets, the burden of proof will be on the U.S. government to show that they can not buy it anywhere else. If they can, and if the government still wants to prevent the American sale, the State Department will have 18 months to persuade the other source to stop selling it.

If the State Department fails in that time, the American sale can go ahead.

New export controls for foreign policy reasons will require more justification than in the past. The administration will have to show that benefits from the controls will outweigh the harm they might do to U.S. trade and to relations with allies.

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