Estonia eyes U.S. computers

Eased U.S. controls to benefit the country's banks and image

TALLINN - U.S. President Clinton announced last week that computer export controls on Estonia will be eased, which will facilitate Estonian banks' and large companies' abilities to import technology.

Estonia was the only country to be promoted from tier three to tier two, which is the United States' system for categorizing sets of restrictions for different countries. The second tier includes most of the South and Central American countries, Southeast Asia, South Korea, Slovenia and most of Africa.

The modifications will take effect once they make it through a congressional notification period of 120 days.

The restrictions mainly limit the countries' capacity to import the most powerful computer chips and encryption technology for computer security.

"This is a good sign overall. We are coming closer to more international free trade," said Ivar Paalberg, CEO of Microlink Computers.

Paalberg said that the eased restrictions concerning IT are particularly significant, as this is one of Estonia's key industries. He said Estonia will be able to import technology three to four times more powerful once the new regulations take effect at the beginning of 2001.

Banks in particular will benefit from increased aptitude of their large mainframe networks, he said. Or, as Nancy Nelson, economic officer for the U.S. Embassy in Tallinn, described them, "the giant computers in rooms with locked doors."

She pointed out that Estonia currently has only about half a dozen of this type of computers.

Nevertheless, the promotion to the second tier was not easily attained, she said. Estonia had inherited its three tier ranking from the former Soviet Union, on which America imposed extremely tight controls for exporting its computer technology.

Advancement from a tier classification involves much more than merely proving the country has not caused suspicion nor violated any regulations, according to Nelson.

"Countries actually have to show improvement to be moved up. Estonia has done all of its homework. It has put the procedures in place, held seminars and raised public awareness (on computer technology)," she said, adding that moving up to tier two was also important to the government as a matter of Estonia's image. "Estonia did not want to be associated with Afghanistan and Belarus!"

Nelson said the main advantages of the looser controls will be a simplified and speedier export application process.

"Now it will be much more automatic. And for IT industries, they see it as key to get the technology rapidly," she said.

Heiki Kubar, Hansapank's director of IT infrastructure, noted that the new regulations are "just the right timing" for Hansapank, as in December it will start unifying its banking systems throughout the Baltics.

"When we centralize the systems, this is where more powerful computers are needed," he said.

Kubar explained that because Estonian banks are still relatively small in comparison to Western banks, they have not needed the same extent of high-power computer technology. Still, he said Hansapank has sometimes had problems getting the technology it desires even from countries outside the United States, such as Canada.

Another factor is price.

"In the U.S. there are many more competitive players, with prices 32 to 40 percent higher than they used to be, whereas in Europe, there are two to three main players," he said.