U.S. Eases Software Trade Position

By Nicholas D. Kristof
The New York Times

April 25, 1985

The Commerce Department has dropped its plans to require individual export licenses for computer software sold to friendly nations, a department official said yesterday. William T. Archey, acting Assistant Secretary for Trade Administration, said that current rules governing software exports - which do not require special licenses for shipping or transmitting programs abroad - would remain in place even after some new regulations take effect next Monday.

Some of the new rules, which would have significantly tightened software export rules, provoked a storm of protest from the industry after they were published Dec. 31. Companies and industry groups, such as the Association of Data Processing Service Organizations, said the software controls would put America's computer industry at a disadvantage without impeding the diversion of sensitive programs to the Soviet bloc.

The new regulations follow an agreement by an international organization, the Coordinating Committee on Multilateral Export Controls (Cocom), to restrict transfers of sensitive technologies to the Soviet Union and Eastern Europe. Cocom's members are: Belgium, Canada, Denmark, France, Greece, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Turkey, Britain, the United States and West Germany.

Mr. Archey termed the department's decision a ''clarification'' rather than a change. He announced it, without going into details, at a hearing Tuesday of a subcommittee of the House Foreign Affairs Committee. ''It's what the business community wants, and it's also common sense,'' Mr. Archey said last night. ''There's no enhancement of national security by getting into these thousands of transactions. And we have some idea where software is going from the end user's statement.''

Under the current system, the exporter must obtain from the customer a statement that the product will not be resold to the Eastern Bloc without authorization.

A difficulty of controlling software shipments is that, unlike computers and other hardware, software can be transferred instantly by telephone, or even by satellite. Even some of the most complex programs can be slipped out of the country on a floppy disk that fits in a shirt pocket.

Mr. Archey said that since all of the Cocom countries would have the same policy on export to the Eastern Bloc, trade in software within those countries posed less of a danger that the software would reach the Soviet Union and its allies.