Export Control Act

The Export Control Act of 1940 was one in a series of legislative efforts by the US government and initially the administration of President Franklin D. Roosevelt to accomplish two tasks: to avoid scarcity of critical commodities in a likely prewar environment^[1] and to limit the exportation of materiel to Imperial Japan. The act originated as a presidential proclamation by Roosevelt forbidding the exporting of aircraft parts, chemicals, and minerals without a license, and it was intended to induce Japan to curtail its occupation of the coast of Indochina.^[2]

The text stated that whenever the President deemed it "necessary in the interest of national defense," he could prohibit or curtail the exportation of military equipment, munitions, tools, and materials.^[3][4]

Although controls were first authorized in 1940 in regard to munitions and similar materials essential to the defense effort, its coverage was extended in 1942 to all commodities and broader geographic coverage after the United States entered World War II. The act was extended with modifications through 1948, and it was envisioned that remaining controls would soon disappear at the time of re-enactment in 1949.

The scarcity of certain goods in the world markets, however, made the continuance of controls necessary to prevent a drain on such goods from plentiful American supplies with its consequential inflationary effects. National security and foreign policy concerns, especially following the outbreak of the Korean War, were new and compelling reasons for passing the Export Control Act of 1949 and in extending it until (at least) 1958. The law included both domestic policies aimed primarily at conditions within the United States as well as controls directed at conditions outside the country, as instruments of American foreign policy.

That is exemplified by the restrictions on export of certain strategic or military items to the Soviet bloc or to other countries that it felt, if permitted, would be detrimental to US foreign policy during the Cold War.

The foreign policy motive became so strong that it brought legislation directing the president to enlist the co-operation of other nations in enacting controls on trade with the Soviet block to parallel those of the United States. The benefits of the various economic and military aid programs were to be withheld from nations unless they co-operated, as in the Mutual Defense Assistance Control Act of 1951.