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"I actually have a pretty good collection of Arms Control Today, which I have read throughout my career. It's one of the few really serious publications on arms control issues."
– Gary Samore
Former White House Coordinator for Arms Control and WMD Terrorism
U.S. National Export Controls

S. Korea, U.S. Sign Civil Nuclear Pact

July/August 2015

By Daniel Horner

South Korean Foreign Minister Yun Byung-se (left) and U.S. Energy Secretary Ernest Moniz sign an agreement for peaceful nuclear cooperation in Washington on June 15.(U.S. Department of Energy)South Korea and the United States on June 15 signed an agreement for peaceful nuclear cooperation after years of talks that had been bedeviled by the need to square U.S. nonproliferation policy with South Korean aspirations to develop its nuclear fuel cycle and be recognized as an equal nuclear partner.

One bone of contention has been the issue of whether the United States would provide so-called advance consent for South Korean sensitive nuclear activities that fall under the agreement. The pact provides such consent for relatively noncontroversial activities, but not for uranium enrichment or for pyroprocessing, a spent fuel treatment process that South Korea is pursuing and that Washington considers to be a form of reprocessing.

Through an ongoing, joint fuel-cycle study and a high-level bilateral commission that is established by the agreement and two supplementary documents, the new accord “contains pathways” toward a “possible” U.S. decision “to grant advance consent to [South Korea] to enrich or pyroprocess U.S.-obligated nuclear material,” according to the agreement’s Nuclear Proliferation Assessment Statement (NPAS). The NPAS, which is required under U.S. law, is one of the documents that accompanied the text of the agreement in a package that President Barack Obama sent to Congress on June 16.

Under the 1978 Nuclear Non-Proliferation Act, U.S. nuclear cooperation agreements must include language saying that the partner country may not undertake activities such as uranium enrichment and spent fuel reprocessing under the agreement unless Washington first consents to those activities.

In the agreements with Japan, Euratom, and India, the United States provided consent for the life of the agreement. Under a proposed agreement that is now before Congress, China would receive similar consent. South Korea was seeking a similar arrangement.

In 2011, South Korea and the United States began a joint study on pyroprocessing, which is due to be completed in 2021. Once the study is finished, the two sides “shall consult with a view to identifying appropriate options for the management and disposition of spent fuel subject to the Agreement and for further development or demonstration of relevant technologies,” according to the new agreement. The consultations are to take place “as promptly as possible so that nuclear energy programs of either Party would not be unduly hampered” and are to be under the auspices of the high-level commission. That body is to be headed by the U.S. deputy secretary of energy and the South Korean vice minister of foreign affairs. 

The agreement lists the criteria that the study is to use in assessing pyroprocessing—technical feasibility, economic viability, and nonproliferation acceptability. The two countries also must agree that the technology “does not significantly increase the risk of proliferation and ensures timely detection and early warning of diversion.”

In addition, the two sides have to agree that pursuing pyroprocessing “avoids the buildup of stocks of group actinides in excess of an amount that is reasonably needed.” The term “actinides” refers to a series of metallic elements in the periodic table, some of which are potentially usable as nuclear explosives.

A former U.S. official who worked on nuclear cooperation agreements said the last provision does not appear in other pacts and reflects the current U.S. policy on limiting the amount of separated plutonium. U.S. officials “don’t want to see another Japan happen,” he said in a July 3 interview, referring to Japan’s accumulation of separated plutonium well in excess of the country’s ability to use the material in its nuclear reactors.

Pyroprocessing differs from conventional reprocessing because the plutonium separated from spent fuel by pyroprocessing remains mixed with other actinides. South Korean officials have argued that this difference makes pyroprocessing more proliferation resistant than traditional reprocessing.

The NPAS notes that the United States treats pyroprocessing as a proliferation-sensitive technology and says that the United States believes that the Nuclear Suppliers Group also should do that.

That document acknowledges that the determination of whether a technology significantly increases the risk of proliferation is “subjective” and says that the proposed agreement gives the secretary of energy the “latitude” to make that determination, as required by the Atomic Energy Act.

The agreement makes clear that the potentially proliferation-sensitive activities can proceed only through mutual consent, but a former congressional staffer expressed concern that U.S. officials ultimately would accede to the South Korean requests. “For years, I’ve watched Americans forget that it’s through mutual consent. Friends are often harder to say no to” than enemies, he said in a June 30 interview.

In a July 2 interview, a congressional analyst said the structure of the agreement is “intended to allow each side to spin it positively.” The United States can say it did not give advance consent to pyroprocessing, and South Korea can say that the pact does not foreclose that possibility “forever,” he said.

He noted that the agreement’s duration is 20 years, with provision for a five-year extension. That time frame would allow the Koreans to revisit the contested issues relatively soon if they are not satisfied with the pace of progress, he said. U.S. nuclear cooperation agreements generally have had terms of at least 30 years, some of which allow for an unlimited number of five-year extensions. The shorter time frame in the new agreement was at the insistence of the South Koreans, the analyst said.

The former U.S. official agreed that the new accord represents a compromise by both sides. He added that the establishment of the high-level commission indicates “how seriously [the United States is] addressing” the South Korean concerns.

The new agreement replaces one that was due to expire last year but was extended for two years. Officials from the two countries initialed the new pact in April. (See ACT, May 2015.)

The June 16 submittal to Congress starts a countdown of 90 days of so-called continuous session. The agreement can enter into force if Congress does not block it during that time. Congress also can vote to add conditions to the agreement.

After years of talks, South Korea and the United States signed an agreement for peaceful nuclear cooperation.

Obama Eases Rules on Arms Exports

Jefferson Morley

In a little-noticed move Oct. 15, the U.S. government began to revamp its long-standing system for regulating the export of U.S.-made weapons ranging from submachine guns and night vision goggles to killer drones and fighter jets.

The Export Control Reform Initiative, launched by the Obama administration in August 2009, will affect U.S. oversight of U.S. firms supplying the $83 billion global arms market. In an Oct. 15 statement, the White House said the initiative will end “the disproportionate focus on the least sensitive items such as nuts, bolts and screws instead of the most sensitive items”; encourage closer logistical collaboration with U.S. military allies and partners; and boost the U.S. defense industrial base.

In the first of a series of scheduled changes, the State Department turned over responsibility for reviewing the export of military equipment and aviation components to the Commerce Department. In the coming year, jurisdiction over tens of thousands of additional items formerly appearing on the U.S. Munitions List, a compendium of weapons-related technologies monitored by the State Department, will be transferred to the Bureau of Industry and Security in the Commerce Department.

The shift will change how the U.S. government monitors most international arms sales. Until now, the State Department reviewed the export of military equipment under a variety of specific criteria to ensure that U.S.-made weapons did not wind up in the hands of repressive governments, terrorists, human rights abusers, or countries subject to UN arms embargoes.

The Commerce Department now will oversee arms exports with a simplified applications process designed to promote its mission of creating new markets for U.S. manufacturers. In general, only the export of items deemed critical to U.S. military and intelligence efforts will remain on the U.S. Munitions List.

“These changes are being made to address the increasing challenges posed by an outmoded export control system created during the Cold War,” the White House said in the Oct. 15 statement. The idea is to make it easier to export more nonsensitive equipment while freeing up the State Department to increase scrutiny of the most significant military items. The public interest news site ProPublica called the changes “a big win” for the defense industry.

The changes will spare manufacturers the cost of registration fees, which can be as much as $2,250, required by the State Department, according to Lauren Airey, director of trade facilitation policy for the National Association of Manufacturers.

“Companies could also save time and money if they face fewer regulatory hurdles in licensing, by taking advantage of license exceptions that are available to exports licensed by the Commerce Department,” Airey said in Oct. 28 e-mail to Arms Control Today.

Critics say the government’s efforts to control unwanted arms transfers will suffer. In April 2012, the General Accountability Office (GAO) said the State and Commerce departments “have not fully assessed the potential impact that control list reforms may pose for the resource needs of their compliance activities.” The GAO estimates the Commerce Department will receive 16,000 to 30,000 additional license applications “but has not assessed the impact this added responsibility would have on its end-use check resource needs.” The Commerce Department told the GAO that it has established a Munitions Control Division with a staff of 25 people to monitor the end users of the most sensitive military items.

The changes will hinder U.S. and international law enforcement efforts, predicts Steven Pelak, former national coordinator of export control enforcement at the Justice Department. Pelak, now a lawyer in private practice, says license exceptions for U.S. exporters will make it easier for Iranian and Chinese front companies to purchase equipment barred by U.S. arms embargoes without being vetted by the U.S. government. “[The Department of] Homeland Security, the National Criminal Investigative Service, the FBI, and the Bureau of Alcohol Tobacco and Firearms will all have a more difficult job,” Pelak said.

The next category of export items to come under the Commerce Department’s jurisdiction will be military vehicles, vessels, and submersibles, scheduled to be put on the department’s control list Jan. 6. So far, the Commerce Department has approved new export regulations for six of 19 categories of trade items. No rules have been issued for the export of semi-automatic weapons, a chief concern of human rights groups. Such weapons remain on the State Department’s U.S. Munitions List for the time being.

As the administration reforms the oversight process for foreign weapons sales, critics see risks for human rights and law enforcement.

Letter to the Editor: Export Control Reform Tightens U.S. Arms Embargoes

Rose E. Gottemoeller and Eric L. Hirschhorn

We would like to address a number of concerns raised by Brittany Benowitz and Barry Kellman (“Rethink Plans to Loosen U.S. Controls on Arms Exports,” April 2013).

First, the cornerstone of President Barack Obama’s Export Control Reform Initiative is rebuilding the nation’s control lists so that the administration can prioritize its controls. This prioritization does not mean that the administration is lowering its standards for ensuring that export controls prevent human rights abuses or that it is weakening U.S. arms embargoes. A careful reading of how the initiative is prioritizing controls will show that the new system will help the U.S. government do a better job of safeguarding vital technologies and will tighten U.S. arms embargoes.

Second, export control reform is a national security initiative and is unrelated to the National Export Initiative that promotes exports. At its heart, the national security review for the export control initiative was conducted by experts across the U.S. government to fundamentally reform the current system. Export control reform is intended to enhance U.S. national security and foreign policy by focusing resources on the threats that matter most, increasing interoperability with allies and partners by ensuring more timely access to U.S. defense articles during conflicts, and strengthening the U.S. defense industrial base by reducing incentives for foreign manufacturers to avoid or even eliminate their use of U.S. parts and components.

Third, the administration has not put forward any proposal to ease restrictions on the export of small arms. It is considering some consolidation of duplicative requirements that exist today, but this consolidation would not remove the requirement for an export license, regardless of which agency has licensing jurisdiction. Possible consolidation into one set of requirements is a commonsense approach that would make more efficient use of government resources and would ensure greater consistency and visibility for all agencies involved in the licensing and enforcement process. Consolidation also would make it easier for exporters to comply with the rules. As has been the case for all changes to the existing system proposed to date, any proposed changes to current export rules governing small arms will be published for public comment. The administration will continue to make all planned and actual changes available from a single webpage at www.export.gov/ecr/.

Brittany Benowitz and Barry Kellman respond:

The Obama administration’s efforts to enhance coordination of export controls and to focus on the most sensitive equipment deserve commendation. Our point of divergence is whether munitions transferred from State Department to Commerce Department control will be subject to the human rights and counterterrorism restrictions of the Foreign Assistance Act, including so-called Leahy vetting that prohibits the provision of munitions to foreign security forces that engage in human rights abuses. If not, there will continue to be serious cause for concern that shifting licensing authority to the Commerce Department will inadvertently lead to an increase in exports of atrocity-enabling military equipment to irresponsible actors.

    Fourth, unlike the State Department, the Commerce Department has a law enforcement branch with more than 100 special agents dedicated exclusively to criminal and administrative enforcement of export control violations, with all the requisite statutory law enforcement authorities. This special Commerce Department unit is in addition to the continued criminal enforcement of State and Commerce department regulations by the FBI and the Department of Homeland Security’s Immigration and Customs Enforcement. This means that any items moved to Commerce Department jurisdiction actually will be subject to more law enforcement oversight.

    Finally, the State Department’s ability to review proposed defense exports for potential human rights concerns under export control systems that it and the Commerce Department administer will not be diminished as a result of export control reform. The administration will continue to use its long-established criteria for assessing the potential risks to international stability and human rights arising from proposed exports of munitions and dual-use items.

    Export control reform will bolster, not diminish, the U.S. government’s ability to administer an effective export control system to address national security and foreign policy challenges, including human rights, in the 21st century.


    Rose E. Gottemoeller is acting undersecretary of state for arms control and international security. Eric L. Hirschhorn is undersecretary of commerce for industry and security.

     

    Rose E. Gottemoeller and Eric L. Hirschhorn say that the Obama administration’s planned export control reforms will help the U.S. government do a better job of safeguarding vital technologies and will not diminish its ability to prevent human rights abuses.

    Officials Spell Out Nuclear Trade Policy

    Daniel Horner

    The Obama administration will not adopt a policy of insisting that countries renounce uranium enrichment and spent fuel reprocessing as a condition for concluding agreements for nuclear cooperation with the United States, two senior administration officials said in a Jan. 10 letter to Capitol Hill.

    The letter, which indicates the results of a long-running internal policy review, has sparked criticism across the political spectrum.

    Since at least the fall of 2010, there has been debate within the administration over whether the United States should press its potential nuclear partners to give up enrichment and reprocessing. (See ACT, October 2010.) The model for that approach is the May 2009 U.S. nuclear cooperation agreement with the United Arab Emirates (UAE).

    That pact contains a UAE commitment not to pursue enrichment and reprocessing; if the UAE broke that commitment, the United States would have grounds for terminating the agreement. The UAE had previously adopted a national policy renouncing enrichment and reprocessing in favor of reliance on international fuel supplies, but the agreement “transform[ed] the UAE policy into a legally binding obligation,” according to President Barack Obama’s message conveying the agreement to Congress. (See ACT, June 2009.)

    In the statement, Obama said the pact “has the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development.” A Department of State spokesman in 2010 referred to the UAE agreement as the “gold standard.”

    In the Jan. 10 letter, which first was reported by Global Security Newswire, Deputy Secretary of Energy Daniel Poneman and Undersecretary of State for Arms Control and International Security Ellen Tauscher say they will “pursue 123 agreement negotiations on the basis of a case-by-case review.” Section 123 of the U.S. Atomic Energy Act requires the United States to have a nuclear cooperation agreement with any country with which it conducts nuclear trade.

    Referring to a January meeting with Vietnam about a potential 123 agreement, Poneman and Tauscher said U.S. negotiators would “lay out a spectrum of options for addressing enrichment and reprocessing.”

    In a Feb. 14 letter to Poneman and Tauscher, Rep. Ileana Ros-Lehtinen (R-Fla.), the chairman of the House Foreign Affairs Committee, sharply questioned this approach. “Given that it is unlikely that many countries will freely impose binding restrictions on themselves when given a choice, any request by the U.S. that they do so would be interpreted by all as little more than a pro forma exercise,” she wrote.

    Sen. Richard Lugar (R-Ind.), the ranking member of the Senate Foreign Relations Committee, published an article on the Web site of The National Interest calling on Obama to reverse the policy. “If he does not, Congress must provide needed leadership,” he said.

    In a joint opinion piece in The Christian Science Monitor, John Bolton, who served as U.S. ambassador to the United Nations and as undersecretary of state for arms control and international security under President George W. Bush, and Rep. Edward Markey (D-Mass.) criticized the Obama policy and endorsed legislation introduced in the House last year that would toughen the congressional review process for 123 agreements that did not follow the UAE model. The bill, which was introduced by Ros-Lehtinen and Rep. Howard Berman (D-Calif.), the ranking member of her committee, was approved by the panel last April, but has stalled since then. The Obama administration and the nuclear industry have raised objections to it.

    Critics have portrayed the policy articulated in the Poneman-Tauscher letter as a reversal, but administration officials have disputed that characterization. In remarks at a Feb. 16 nuclear policy conference in Arlington, Va., and an interview afterward, Poneman said that “it always has been U.S. policy” to approach 123 agreements case by case. With regard to the UAE, he noted that it had adopted a national policy first and the Obama administration “chose to acknowledge [the UAE’s] domestic decision.” There is “nothing that stops us from doing that again,” he said.

    “The constant is we should do whatever minimizes the spread of the dangerous technologies” and should use whatever means are “most effective to achieve that end,” he said.

    At a Feb. 15 breakfast meeting with reporters, Assistant Secretary of State for International Security and Nonproliferation Thomas Countryman said the letter “does not mean in any way that [the United States is] retreating” from its commitment to nonproliferation.

    He said that “other countries are not interested in imposing this requirement” to give up enrichment and reprocessing. The United States “should not make a blanket statement that will lock ourselves out of certain markets” and remove its “ability to influence choices other countries are making” with regard to the nuclear fuel cycle, he said.

    In part because 123 agreements give the United States this influence, it is important for the U.S. nuclear industry to be able to “compete on a level playing field,” he said. The United States has “an interest in having as many of these [123] agreements as strongly worded as possible,” he said.

    He added that 123 agreements are “only one, and I would say not the most important, means of addressing our concerns” about the spread of enrichment and reprocessing. He cited in particular the agreement last year by the Nuclear Suppliers Group to revise its guidelines for exports relating to enrichment and reprocessing.

    In their article, Bolton and Markey said the policy described in the Poneman-Tauscher letter “may expedite the profitability of [123] agreements for the nuclear industry, but will do so at the expense of US and world security.”

    Carol Berrigan, senior director of industry infrastructure and supply chain at the Nuclear Energy Institute, said in a Feb. 14 interview that the industry sees its role as being a “responsible partner” with the U.S. government in developing nuclear relations with other countries. She said she viewed the Poneman-Tauscher letter as a “reaffirmation” of a “pragmatic” policy.

    The Obama administration will not adopt a policy of insisting that countries renounce uranium enrichment and spent fuel reprocessing as a condition for concluding agreements for nuclear cooperation with the United States, two senior administration officials said in a Jan. 10 letter to Capitol Hill.

    House Takes Up Export Reform Debate

    Xiaodon Liang

    Members of the House Foreign Affairs Committee heard testimony May 12 on the Obama administration’s export control reform initiative, praising and criticizing different aspects of the process. Committee Chairman Ileana Ros-Lehtinen (R-Fla.), speaking about a planned new single licensing agency, said she was not convinced “the creation of a costly and perhaps unaccountable new federal bureaucracy” was necessary but was sympathetic to President Barack Obama’s goal of boosting exports through streamlining of regulatory requirements. According to the administration, the proposed reform intends to create four “singularities”: a single licensing agency, a single list of controlled items, a single online license management system, and a single enforcement agency. (See ACT, October 2010.)

    Rep. Howard Berman (D-Calif.), the panel’s ranking member, introduced legislation May 26 to replace the lapsed Export Administration Act (EAA), which serves as the basis for the Department of Commerce’s controls on dual-use items. (See ACT, May 2010.) The EAA expired in 2001, but has been preserved through the declaration of an economic state of emergency in annual executive orders.

    At the hearing, Berman asked if the centralization of licensing powers would negate checks and balances built into the current, multidepartment licensing process. In his testimony, Principal Deputy Undersecretary of Defense for Policy James Miller said he expected that each department would continue to bring different concerns to the process but that intense scrutiny would be focused on a smaller number of “particularly challenging” cases.

    Miller also said U.S. policy on arms sales to the Middle East will be reassessed on a “country-by-country” basis. Some transfers already have been frozen, he said, declining to provide details at an open hearing.

     

    Members of the House Foreign Affairs Committee heard testimony May 12 on the Obama administration’s export control reform initiative, praising and criticizing different aspects of the process.

    House Panel Revises U.S. Nuclear Export Law

    Daniel Horner

    The House Foreign Affairs Committee last month approved a bill that would change the law governing U.S. agreements for civil nuclear cooperation by adding to the nonproliferation requirements that U.S. nuclear partners must meet.

    At its April 14 session, the panel voted 34-0 to send the bill, H.R. 1280, to the House floor. As Arms Control Today went to press, no schedule had been set for a floor vote.

    A Senate aide said in an April 26 interview that he “certainly” expected the Senate to produce a companion bill. “Multiple drafts” are circulating, but the Senate probably will not start moving legislation until the House has acted, he said.

    The House bill had been introduced April 1 by committee chairman Ileana Ros-Lehtinen (R-Fla.) with several other senior members of the panel as co-sponsors. One of those was Rep. Howard Berman (D-Calif.), the ranking member, who also introduced his own bill, H.R. 1320, which overlapped with Ros-Lehtinen’s in many respects but contained some key differences. The legislation approved by the committee was “an amendment in the nature of a substitute,” which adapted the original Ros-Lehtinen bill to include some key elements of Berman’s.

    Under U.S. law—section 123 of the Atomic Energy Act—the United States must negotiate nuclear cooperation agreements with other countries before engaging in nuclear trade with them. The law lists nine nonproliferation conditions that normally are required in U.S. agreements, including comprehensive international safeguards, adequate physical security, and the U.S. right of “prior consent” to uranium enrichment or spent fuel reprocessing of U.S.-origin nuclear material by the recipient country.

    Ros-Lehtinen’s and Berman’s original bills included a provision tying eligibility for U.S. nuclear cooperation to a country’s commitment that it would not begin pursuing a domestic enrichment or reprocessing program. The committee-approved bill adopts that approach.

    The bill also would change the circumstances under which cooperation agreements could enter into force without a congressional vote. Under current law, most nuclear cooperation agreements can enter into force after 90 days of so-called continuous session unless Congress enacts legislation blocking the pact. Agreements that meet the nine nonproliferation criteria can come into force this way. Those that do not meet all those conditions require a vote of approval in both chambers of Congress. The only cooperation agreement to come into force by the second route was the one with India, which Congress approved in 2008. (See ACT, October 2008.)

    The House legislation retains that basic structure. However, by adding the restriction on enrichment and reprocessing, along with a number of other new conditions, it requires countries to do more to be eligible for “fast-track” approval, as Berman called it.

    The two-track approach was in Berman’s bill; Ros-Lehtinen’s original bill would have required an affirmative approval vote for cooperation agreements with all countries. Among the other requirements is that each cooperating country has joined an array of international agreements, “has signed, ratified, and is fully implementing” an additional protocol to its safeguards agreement with the International Atomic Energy Agency, “has established and is fully implementing an effective export control system,” and “is closely cooperating with the United States to prevent state sponsors of terrorism from acquiring or developing nuclear, biological, chemical weapons” or “destabilizing numbers and types of advanced conventional weapons, including ballistic missiles.”

    In her statement at the April 14 session, Ros-Lehtinen said Congress should “act now to put these new protections in place, so that cooperation between the U.S. and other countries to promote peaceful nuclear activities can grow without fear that it will be used to undermine our national security and that of the world as a whole.”

    In a statement issued later that day, the Nuclear Energy Institute, which represents the nuclear industry in Washington, called on the House to reject the bill. The institute argued that the main effect of expanding the list of U.S. requirements would be to drive potential U.S. nuclear partners into the arms of other suppliers and therefore reduce the United States’ global influence on nuclear nonproliferation and safety. “It is clear that if the United States makes renunciation of enrichment and reprocessing rights a prerequisite for trade, the outcome will be few, if any, new Section 123 agreements,” the statement said.

    It warned that the bill “threatens thousands of American jobs and billions of dollars in exports by U.S. companies.”

    In comments to reporters after an April 26 appearance at a Washington think tank, Deputy Secretary of Energy Daniel Poneman said actions that would have the effect of taking the United States “out of the market” would be “unhelpful” to U.S. nonproliferation objectives. He said the administration was “taking a very methodical look” at the House legislation.

    Setting a Standard

    Part of the impetus for the legislation came from the U.S. nuclear agreement with the United Arab Emirates (UAE) and a debate over whether it is possible or advisable to replicate key provisions of that agreement in other U.S. nuclear accords. In that pact, which was concluded in 2009, the UAE commits itself to refrain from pursuing enrichment or reprocessing. (See ACT, June 2009.) Pursuing such programs would be grounds for the United States to halt nuclear cooperation with the UAE, an unprecedented provision in U.S. cooperation agreements.

    A Department of State spokesman last year referred to the UAE agreement as the “gold standard,” but the Obama administration has been divided over the question of how to apply the UAE model to other countries. (See ACT, October 2010.) One particular piece of that question is whether to apply it to countries outside the Middle East.

    One country affected by the debate is Vietnam. In March 29 remarks at the Carnegie International Nuclear Policy Conference, Richard Stratford, the director of the State Department’s Office of Nuclear Energy, Safety and Security, said the United States has signed a memorandum of understanding with Vietnam and has “given them a text of a 123 [agreement].” However, he said, “that discussion is on hold for the moment because…there is an issue as to whether we should require the gold standard in all future” 123 agreements.

    With regard to another much-discussed potential 123 agreement, Stratford took issue with press accounts saying that Jordan would not agree to the same terms that the UAE did. “I wouldn’t count on that,” he said. Stratford said the two sides were “very, very close to an agreement that both of us like.” He noted that, with the current turmoil in the Middle East, the Jordanian government “had other issues on its mind.” However, he said, if the Jordanians “are prepared to engage at some point in the future, I think we will come to conclusion, and I think that the Congress will like the result. But let’s see what happens.”

    Accounts of the negotiations vary on what the specific terms of the deal might be, but the general idea seems to be that Jordan would not pursue enrichment or reprocessing for some specified period of time and that the two sides would revisit the issue at the end of that period.

    In an April 19 interview, a House aide who follows nonproliferation issues closely said the cooperation agreement with Jordan would not have to use “the actual words” of the UAE agreement as long as the effect is the same. “There are many paths to enlightenment,” he said.

    One result of the House legislation may be that the administration presses harder for strong nonproliferation conditions in ongoing talks, the staffer said.

    Multiple Suppliers

    In an April 22 interview, a nuclear industry source said a Jordanian decision to accept U.S. conditions similar to those in the UAE agreement might have limited significance because Jordan has indicated it is not seriously considering the United States as a nuclear supplier. If the United States is not the supplier, it does not have the authority to demand the return of nuclear goods exported to Jordan if the country reverses its decision, the source said.

    For many countries, the source said, signing a cooperation agreement with the United States nowadays is “for cachet or convenience, but not for commerce.” During the 1970s, the time of the last major revision of U.S. nuclear export law, the United States held a much more dominant place among suppliers, the source said. With the current diversity of suppliers, the unilateral restrictions of the House legislation represent “a very misconceived approach,” the source said.

    The legislation requires a “report on comparability of nonproliferation conditions by foreign nuclear suppliers,” but does not specify action that Congress should take in response to the report. The “implied purpose” of the report is to exert some pressure on non-U.S. suppliers to upgrade their nonproliferation requirements to be more consistent with the ones the bill would establish, the Democratic staffer said.

    In his statement at the April 14 committee session, Berman urged the Obama administration “to use all its influence to convince the other nuclear supplier states to adopt the same nonproliferation and security conditions in their agreements that we observe in ours, especially when those same suppliers are seeking nuclear business in the United States.”

     

    A House committee has approved a bill that would create new nonproliferation requirements for U.S. nuclear trade partners. A key goal of the bill is to discourage new uranium-enrichment and spent fuel reprocessing programs.

     

    Lawmakers Eye Fixes to Law on Nuclear Pacts

    Daniel Horner

    Key members of Congress from both parties last month expressed support for revising U.S. law on agreements for peaceful nuclear cooperation, citing a number of nuclear pacts that have been recently submitted to Congress or are being negotiated as showing the need for change.

    At a Sept. 24 House Foreign Affairs Committee hearing, Chairman Howard Berman (D-Calif.) and Rep. Ileana Ros-Lehtinen (R-Fla.), the ranking member, talked about changes they planned to make or were considering. Ros-Lehtinen said she intended to introduce legislation, although she did not indicate when.

    In an interview later that day, a congressional source who is following the issue closely said that “different people [in Congress] are working on different things.” The drafting process is still in the “nascent stages,” and there is no expectation that legislation will move this year, he said. He said he has not heard “any real objections” from congressional offices about pursuing the change. At the same time, no one involved “is under any illusions” that the job will be easy, as the administration is certain to object to any legislation that it sees as restricting its latitude to negotiate with other countries, he said.

    A main focus of the hearing was how to use U.S. nuclear cooperation agreements—often called “123 agreements” after the section of the U.S. Atomic Energy Act that requires such pacts with U.S. nuclear trading partners—to control the dissemination of technologies for enriching uranium and reprocessing spent fuel. Those technologies can be used to produce highly enriched uranium or plutonium for nuclear weapons.

    The new 123 agreement with the United Arab Emirates (UAE) has been characterized as a model for U.S. nuclear cooperation policy. In that agreement, the UAE commits itself to refrain from pursuing enrichment or reprocessing. Pursuing such programs would be grounds for the United States to halt nuclear cooperation with the UAE, an unprecedented provision in U.S. cooperation agreements.

    The agreement was originally negotiated by the Bush administration, which signed it just before leaving office in January 2009. (See ACT, March 2009.) After some lawmakers questioned whether the UAE pledge was legally binding, the Obama administration negotiated a new version of the agreement, signing it and submitting it to Congress in May 2009.

    Like the Bush administration, the Obama administration hailed the pact as a model for future agreements, particularly in the Middle East. In his statement accompanying the agreement’s submittal to Congress on May 21, 2009, President Barack Obama said the pact “has the potential to serve as a model for other countries in the region that wish to pursue responsible nuclear energy development.”

    However, the administration apparently has had difficulty replicating the provisions of the UAE agreement in pacts with other countries.

    Jordan and Vietnam

    Negotiations on a 123 agreement with Jordan—another cooperation agreement for which negotiations have spanned the Bush and Obama administrations—reportedly have been held up by Jordanian objections to UAE-style provisions on enrichment and reprocessing. The administration apparently is not insisting on such a provision in discussions with Vietnam, which has signed a memorandum of understanding (MOU)—a possible precursor of a 123 agreement—with the United States. That MOU reportedly does not contain commitments similar to the ones in the UAE agreement and in MOUs with Bahrain and Saudi Arabia.

    In an Aug. 5 press briefing, Department of State spokesman P.J. Crowley declined to say directly whether a U.S. nuclear cooperation agreement with Vietnam would require that country to forgo uranium enrichment. With regard to the UAE model, he said, “We certainly want to see other countries make that same kind of decision and that same kind of agreement in their own interest as the administration pursues its nonproliferation agenda.” However, he said that “the interests and needs of particular countries will vary from one to the other” and that “if Vietnam chooses, as part of its own self-interest and exercising its right under the [nuclear Nonproliferation Treaty] to enrichment, that is a decision for them to make. It’s not a decision for the United States to make.”

    At a July 27 nuclear industry conference, a U.S. official said of the UAE agreement, “I think that’s the direction we’re going to go in for the Middle East.” In his remarks and a brief interview afterward, he did not say whether the United States was pushing for the same terms with Vietnam.

    The Jordan agreement is “very, very close,” but the “pressure is off” because there is not enough time left in the current Congress for the agreement, he said. Under U.S. law, most nuclear cooperation agreements can enter into force without a congressional vote approving them if they lie before Congress for 90 days of so-called continuous session without Congress blocking them. However, if a Congress ends with only part of the 90-day period elapsed, the congressional clock would have to restart after a new Congress takes office.

    In his comments at the meeting, the official declined to say whether the Jordan agreement would have a UAE-style provision on enrichment and reprocessing.

    Reuters reported Sept. 28 that Jordan expects to sign an agreement by the end of the year. The article quoted Kamal Khdier, the director of planning for the Jordan Atomic Energy Commission, as saying the two sides had reached a compromise that allows Jordan to keep open the option of enrichment. The report could not be confirmed by Arms Control Today’s deadline.

    A provision in the U.S.-UAE agreement says that the terms of that pact “shall be no less favorable in scope and effect than those which may be accorded, from time to time, to any other non-nuclear-weapon State in the Middle East.” If another Middle Eastern country does obtain more favorable terms, the UAE can request consultations with the United States “regarding the possibility of amending this Agreement so that the position described above is restored.”

    In Sept. 7 remarks at the HenryL.StimsonCenter, Deputy Energy Secretary Daniel Poneman emphasized that the Vietnam MOU should not necessarily be compared to the UAE agreement. He said the United States is “certainly not offering to Vietnam any kind of deal in which we—certainly at this stage—get into any kind of pledges about what they should or should not be doing to their own fuel cycle; that would be inappropriate.” He also indicated that the United States would not necessarily be pressing for that kind of restraint later in the negotiations with Vietnam or Jordan.

    Asked if the administration had criteria that varied from one region to another for determining when it should press for such restraint, he said, “I think the critical factor is going to be that we’re going to try to make sure that the guiding principle throughout is a reliance on market methods.” He was referring to an effort supported by Obama, President George W. Bush,  and others to set up an international mechanism that would ensure countries would have reliable access to nuclear fuel at a reasonable cost so that the countries have less incentive to pursue indigenous enrichment programs.

    Two sources who follow the issue closely said last month that the administration is reviewing its policy on nuclear cooperation agreements. They suggested that the resulting uncertainty over the policy may account for some of the variations in recent administration descriptions of it.

    Enforcing Standards

    At the Sept. 24 hearing, Berman asked what leverage the United States has if it presses potential nuclear partners to accept conditions matching those in the UAE agreement. Some observers have argued that the United States currently has very little because of its limited ability to insist that non-U.S. suppliers require the same nonproliferation conditions the United States does.

    To address that point, Henry Sokolski of the NonproliferationPolicyEducationCenter has said Congress should pass legislation disqualifying foreign nuclear companies doing business in the United States from benefits such as U.S. loan guarantees if the companies and their governments undercut U.S. nonproliferation policy.

    In his opening statement at the hearing, Berman said the United States should seek the same commitment it received from the UAE “for every new nuclear cooperation agreement that it negotiates in all regions of the world” and “should also consider making this an additional statutory requirement in the Atomic Energy Act.”

    Near the end of the hearing, he said, “The Vietnam story is not over yet.”

    Ros-Lehtinen said one element of the bill she is drafting is a requirement that “our potential partners permanently forego the manufacture of nuclear fuel.”

    She said “the most urgently needed change” in U.S. nonproliferation law is to require an affirmative vote to approve nuclear cooperation agreements.

    Ros-Lehtinen cited the pending U.S.-Russian 123 agreement as an example of the need for that revision. She blasted “the inability of the previous and current administrations to certify that the Russian government, businesses, and individuals were no longer assisting Iran’s nuclear and missile programs and that the Russian government was fully cooperating with the U.S. in our efforts to stop Iran from acquiring a nuclear weapon.” (See ACT, June 2010.)

    She called the pact a “political payoff to the Russians, pure and simple” and said it “cannot be defended on its merits.”

    Thomas Graham Jr., a former U.S. nonproliferation official who is now chairman of Lightbridge Corporation, testified that the agreement would correct a “historical anomaly” and give the United States an agreement with its “indispensable” nonproliferation partner.

    The Obama administration submitted the Russian agreement to Congress in May. When Congress adjourned at the end of September, the agreement still needed another 15 days to reach the required 90-day threshold, according to a congressional source. The length of Congress’ postelection sessions will determine whether it meets that mark or if the administration will have to resubmit the agreement, starting a new congressional clock, after the new Congress takes office in January.

     

    Key members of Congress from both parties last month expressed support for revising U.S. law on agreements for peaceful nuclear cooperation, citing a number of nuclear pacts that have been recently submitted to Congress or are being negotiated as showing the need for change.

    At a Sept. 24 House Foreign Affairs Committee hearing, Chairman Howard Berman (D-Calif.) and Rep. Ileana Ros-Lehtinen (R-Fla.), the ranking member, talked about changes they planned to make or were considering. Ros-Lehtinen said she intended to introduce legislation, although she did not indicate when.

    Defense Treaties, Export Reform Move Ahead

    Jeff Abramson

    The Senate last month provided its advice and consent to ratification of defense trade cooperation treaties with Australia and the United Kingdom, a step toward establishing license-free exports between the United States and the two countries.

    The Senate’s Sept. 29 action, which was preceded by Senate and House approval of controversial legislation to implement the treaties, came a month after President Barack Obama and senior officials provided greater detail on their export control reform plans, including the results of efforts to apply their approach to an existing class of controlled items.

    The treaties, signed in 2007 by the Bush administration, provide a framework for licensing exemptions for preapproved defense projects and firms. Supporters have argued that the accords will improve bilateral cooperation between allies. Secretary of State Hillary Rodham Clinton welcomed approval of the treaties, saying Sept. 30 that they would enhance “our ability to equip our armed forces with the best technology available in the most expeditious manner possible.”

    For years, the treaties had stalled in the Senate Foreign Relations Committee, in part due to questions members raised about congressional involvement in the treaties’ implementing arrangements, which the Bush and Obama administrations had argued were outside congressional oversight. (See ACT, January/February 2010.) On July 14, Sen. Richard Lugar (R-Ind.), the panel’s ranking member, introduced legislation requiring congressional approval of changes to the implementing arrangements.

    In announcing the measure, Lugar noted that “efforts by both the Bush and Obama administrations to develop a viable approach for implementing and enforcing the treaties without new legislation have been unsuccessful to date.” Sen. John Kerry (D-Mass.), the committee’s chairman, worked with Lugar to revise the legislation, which was approved by voice vote in the committee Sept. 21.

    The legislation, approved in the Senate by unanimous consent Sept. 27 and in the House by voice vote Sept. 28, also establishes that violations of the treaties would be enforceable under the Arms Export Control Act (AECA). Because the treaties would create exemptions from existing law, experts had raised concerns about whether the AECA and the enforcement authority that flows from it would apply to treaty infractions.

    The legislation also establishes limits on the treaties. It excludes from the treaty’s coverage certain items restricted by the Missile Technology Control Regime, as well as biological agents and articles and services related to the design and testing of nuclear weapons, controlled under the U.S. Munitions List (USML).

    It sets out a number of reporting and notification requirements, including 15-day prior notification of certain exports to be made under the treaty. Those exports were defined in a Sept. 30 Department of State document as “proposed exports of defense articles and services that meet the dollar thresholds for notification in the Arms Export Control Act: $25 million for major defense equipment and $100 million for other defense articles and services.”

    Although he supported the treaties, Sen. Russell Feingold (D-Wis.) expressed apprehension about a treaty-based approach to export reform, writ large. After the Sept. 21 committee vote, he said he was “very concerned that these treaties may make it easier for arms dealers to divert weapons to illicit purposes,” in part because license exemptions may remove the evidentiary trail U.S. enforcement officials “use to detect and prosecute the diversion of weapons.” He also criticized the treaties as an attempt to limit congressional oversight by going around the House, which has no constitutional role in treaty advice and consent.

    “This approach should not become the norm. I urge the administration to rely on the regular legislative process to address any future, perceived deficiencies in our arms export regime,” Feingold added.

    Export Reform Plans Fleshed Out

    In his comments on the defense treaties, Feingold drew attention to the Obama administration’s broader export control reform effort, additional details of which were announced at the end of August. Instead of strengthening the export control regime, Feingold argued, “the administration appears to be moving in the opposite direction with a larger effort to decontrol the export of sensitive military equipment.”

    In a video statement delivered Aug. 31 to an annual Department of Commerce export control conference, Obama cast the effort differently. He praised the reforms, saying that, “by enhancing the competitiveness of our manufacturing and technology sectors, they’ll help us not just increase exports and create jobs, but strengthen our national security as well.”

    The reform effort, announced last year and further elaborated in April by Secretary of Defense Robert Gates, calls for a greater focus on a smaller set of items and for the consolidation of multiple agencies and export lists via four “singles”: a single control list, a single licensing agency, a single enforcement agency, and a single information technology (IT) system. (See ACT, May 2010.) In the revised system, controlled munitions and dual-use items, those with both military and commercial uses, would be assigned to one of three tiers. Tier assignment would be based in part on how widely available goods and technology are outside the United States, with different licensing policies at each tier.

    Because creating a single licensing agency requires congressional action, the administration intends to apply the tier structure to the Department of State-administered USML and Commerce Department-administered Commerce Control List, with each agency retaining its licensing functions until a single agency is created. In an Aug. 30 White House press release and in speeches by senior officials at the Aug. 31 Commerce conference, the administration shared preliminary results of its efforts to apply this system to tanks and military vehicles, contained primarily in USML Category VII. Of the 12,000 items in that category licensed by the State Department last year, 42 percent would likely be moved to the Commerce list and 32 percent decontrolled altogether, according to the press release.

    Of the 26 percent to remain on the USML, none would be assigned to the highest tier, which would generally require licenses and be comprised of items “that provide a critical military or intelligence advantage to the United States and are available almost exclusively to the United States” or that “are a weapon of mass destruction.” More than two-thirds of these remaining USML items—18 percent of the original total of 12,000—would fall into a revised USML second tier of items that “provide a substantial military or intelligence advantage to the United States and are available almost exclusively from our multilateral partners and Allies.” Items in this tier would be authorized for export to partners and allies using license exemptions or “general authorizations,” which do not require licenses for each export. The remaining USML items would fall into the third tier; such items “provide a significant military or intelligence advantage,” but are more widely available and would not require a license more broadly.

    Positive Lists

    The administration also elaborated on its intention to move toward a “positive list” approach. The press release defined a positive list as one that “describes controlled items using objective criteria (e.g., technical parameters such as horsepower or microns) rather than broad, open-ended, subjective, catch-all, or design intent-based criteria.” The positive list methodology is more characteristic of the Commerce Department’s approach than of the State Department’s, which considers whether an item is intended for military use.

    The press release highlighted brake pads as an example, saying that pads for use in the M1A1 tank “are virtually identical to brake pads for fire trucks but the tank brake pads require a license to be exported to any country in the world, while the fire truck brake pads can be exported to virtually all countries without a license.”

    Another emphasis of the review process has been to create “higher walls” around sensitive items and improve enforcement of U.S. controls. The White House release detailed what some of the steps in this direction might be, including additional end-use assurances and increased site visits in the United States and abroad. Assistant Secretary of Commerce for Export Administration Kevin Wolf indicated at the conference that new conditions may also be placed on exporters that use certain license exemptions envisioned in the system. Such conditions could include “destination control statements…reporting requirements that distinguish between end-users and distributors, and…recordkeeping requirements,” he said.

    On other aspects of the “singles” approach, Obama promised to issue an executive order establishing a center that would coordinate enforcement across multiple agencies but not replace them. At the conference, Undersecretary of Commerce for Industry and Security Eric Hirschhorn indicated that IT system development is underway with the Department of Defense now operating a system that the State Department is expected to use in early 2011. “Commerce should be on board later in 2011, and other agencies to follow,” Hirschhorn said.

    The administration did not detail when and which specific USML Category VII items would be tiered or decontrolled. It also has not elaborated on how other important military items that may be widely available but have exacerbated conflicts around the globe, such as shoulder-fired missiles or small arms and light weapons, might be specifically treated in this system.

    There were indications, however, that the positive list approach still would contain some criteria that do not rely on the same sort of technical descriptions. Wolf said a designation of “specially designed” would be used “as a control criterion only when required by multilateral obligations or when no other reasonable option exists.” He indicated that some items could be added to the third tier by interagency consensus “for statutory, national security, foreign policy, or human rights reasons, or other multilateral obligations.”

    The timetable for completing the reform effort remains unclear. Experts have said that review of other USML categories will be more difficult than the work on Category VII. Also, legislation to establish a single licensing agency has yet to be introduced.

    The White House press release said the “goal is to begin issuing proposed revisions to the control lists and licensing policies later this year.”

     

    The Senate last month provided its advice and consent to ratification of defense trade cooperation treaties with Australia and the United Kingdom, a step toward establishing license-free exports between the United States and the two countries.

    The Senate’s Sept. 29 action, which was preceded by Senate and House approval of controversial legislation to implement the treaties, came a month after President Barack Obama and senior officials provided greater detail on their export control reform plans, including the results of efforts to apply their approach to an existing class of controlled items.

    Arms Experts Criticize Defense Trade Treaties

    Sections:

    Body: 

    For Immediate Release: September 24, 2010

    Media Contacts: Jeff Abramson, Deputy Director, (202) 463-8270 x 109, Daryl G. Kimball, Executive Director, (202) 463-8270 x 107

    (Washington, DC) Tuesday, the Senate Foreign Relations Committee approved by voice vote a resolution for advice and consent for ratification of Defense Trade Cooperation Treaties with Australia and the United Kingdom as well as legislation to implement them. Experts at the nonpartisan Arms Control Association (ACA) recommended today that the full Senate indefinitely defer consideration of these treaties.

    "The Senate should indefinitely defer consideration of these treaties because they would create country specific exemptions from export licensing of military items, which invites opportunities for diversion and misuse," said Daryl G. Kimball, Executive Director of the Arms Control Association.

    "In negotiating these treaties, the Bush administration sought to circumvent the House of Representatives, which plays a vital role in monitoring U.S. arms policy and practice. Any measures to dramatically alter U.S. export practices should have the consent of the entire Congress" ACA Deputy Director Jeff Abramson said.

    In letters to the committee in 2008 (PDF) and 2009 (PDF) , Arms Control Association experts outlined concerns about the treaties, including the lack of implementing legislation, lack of legal clarity for enforcing violations, and circumvention of Congressional oversight. Legislation forwarded by the committee would address many of these issues and need to be approved by both the House and Senate to become law.

    "Leaders in the Senate Foreign Relations Committee have done a good job of attaching useful strings, but this treaty approach remains deeply flawed," said Abramson.

    As Senator Feingold (D-Wisc.) noted in a Sept. 21 statement, the Government Accountability Office (GAO) has reported that diversion of weapons from the United States, including through the United Kingdom and Australia, is a major source of weapons for countries of concern to the United States, including Iran. The GAO also has reported that U.S. officials charged with enforcing our arms export controls are concerned that licensing exemptions reduce the evidentiary trail they use to detect and prosecute the diversion of weapons.

    The treaties, signed in 2007, provide a framework for licensing exemptions for pre-approved defense projects and firms. The Obama administration has continued to support the treaties, but in 2009 broke with the previous administration on efforts to create a more expansive, legally binding global accord regulating all international arms trade, referred to as the Arms Trade Treaty (ATT). In announcing the decision to pursue an ATT, Secretary of State Hillary Rodham Clinton said October 14, "the Arms Trade Treaty initiative presents us with the opportunity to promote the same high standards for the entire international community that the United States and other responsible arms exporters already have in place to ensure that weaponry is transferred for legitimate purposes."

    "Ratifying pacts that create loopholes in a robust export control system undermines U.S. interest in seeing that a future arms trade treaty promotes tough global standards," Abramson added.

    Additional Resources:

    U.S. National Export Controls resources page
    http://www.armscontrol.org/subject/48/date

    Letter to Senate Foreign Relations Committee, Dec. 9, 2009
    http://www.armscontrol.org/system/files/DTCTLetter_ACA_Dec9_09.pdf

    Concerns Regarding Defense Trade Cooperation Treaties, May 21, 2008
    http://www.armscontrol.org/system/files/DTCTstatement_May21_08.pdf

    ACA's Arms Trade Treaty resources page
    http://www.armscontrol.org/subject/116/date

    Description: 

    Tuesday, the Senate Foreign Relations Committee approved by voice vote a resolution for advice and consent for ratification of Defense Trade Cooperation Treaties with Australia and the United Kingdom as well as legislation to implement them. Experts at the nonpartisan Arms Control Association (ACA) recommended today that the full Senate indefinitely defer consideration of these treaties.

    Gates Outlines Export Control Overhaul

    Jeff Abramson

    The Obama administration is shifting U.S. policy on export controls by focusing its efforts on “crown jewel” technology and items, Secretary of Defense Robert Gates said last month.

    The plan, announced April 20 in a speech to a Business Executives for National Security meeting in Washington, would align procedures across multiple bureaucracies in the near term without new legislation. It also calls for working with Congress to adopt new laws that would make a single agency responsible for export licenses, possibly by the end of this year. Many key elements have yet to be detailed, including which specific weapons and dual-use goods might be moved to new tiers or removed entirely from control lists. Dual-use goods are items, technology, and information that have both military and civilian uses.

    Gates said that President Barack Obama hopes to work with Congress “to turn these proposals into legislation that the president can sign sometime this year.” That plan, however, has not garnered significant congressional support.

    After the April 20 speech, Rep. Howard Berman (D-Calif.), chairman of the House Foreign Affairs Committee, said Gates had “delivered a forceful rationale” for revising U.S. export control systems. Berman has been working on a new Export Administration Act (EAA), which regulates dual-use items. He said that he has been “closely consulting” with the administration and expects to introduce legislation “shortly.”

    He was more noncommittal on the broader overhaul. He noted that Gates had “set forth his own vision of how the…export control systems might be fully merged. Should the president propose such a step later this year, I will carefully consider it.” A congressional source said in an April 22 interview that, for now, legislators considered the administration proposals as only a “study.”

    In a statement, House Armed Services Committee Chairman Ike Skelton (D-Mo.) said, “I am confident that we can work closely with Secretary Gates on a bipartisan basis and with other committees in the Congress to make sure that the system protecting our technology is as excellent as the technology itself.” Rep. Howard McKeon (R-Calif.), the panel’s ranking member, welcomed the chance to “carefully study” the proposal and stressed “national security as the paramount factor in the export control system.”

    On Jan. 27, Gates and other administration officials briefed congressional leaders on the ongoing review. According to congressional sources, there was some resistance at that time to aspects of the review and some of its assumptions. In the April 20 speech, Gates said, “I valued the feedback and the suggestions they provided at the time, and look forward to further dialogue.”

    Opponents of export control overhaul cite concerns about national security and the danger of weapons and technology ending up in the hands of enemies of the United States and its allies. In the speech and in responses to questions, Gates admitted that previous export control reform efforts had failed, noting that the Department of Defense at times contributed to those failures. The Pentagon “has not overflowed in the past with enthusiasts for this kind of change,” he said.

    The new element this time, he argued, is broad interagency support for the reform effort. He specifically identified Secretary of State Hillary Rodham Clinton, Secretary of Commerce Gary Locke, and Undersecretary of State for Arms Control and International Security Ellen O. Tauscher as backing the effort.

    In his speech, Gates criticized the current system for trying to control too much and argued that requiring licenses on spare parts for certain military equipment already exported, such as F-16 fighter jets, hampers cooperation with allies. He said that defense trade cooperation treaties with the United Kingdom and Australia, which remain in the Senate awaiting its advice and consent, would be a “step in the right direction,” but that fundamental reform was needed. (See ACT, January/February 2010.) “Frederick the Great’s famous maxim that he who defends everything, defends nothing certainly applies to export control,” Gates stated.

    Gates emphasized that the administration, rather than Congress, needed to act first. “[M]y hope is that as we streamline the process that the executive branch is responsible for, that there will be those in the Congress who can then lead some efforts to streamline the effort up there,” he said.

    Higher Walls and Consolidated Processes

    The guiding concept behind the administration’s export control reform approach is often described as “higher fences around fewer items.” Obama previewed that theme in a March 11 speech at the Export-Import Bank’s annual meeting when he said, “What we want to do is concentrate our efforts on enforcing controls on the export of our most critical technologies, making America safer while enhancing the competitiveness of key American industries.”

    In the April 20 speech, Gates added a bit more detail, identifying items and technologies “relating to global terrorism, the proliferation and delivery of systems of weapons of mass destruction, and advanced conventional weapons” as being of primary concern. Goods that “have no significant military impact or that use widely available technology could be approved for export more quickly,” he said.

    Currently, the departments of Commerce, Defense, and State all play major roles in approving and monitoring U.S. exports of defense items and dual-use goods. Under the Arms Export Control Act, the Defense and State departments oversee the transfer of defense articles and services listed on the U.S. Munitions List. Under the EAA, the Commerce Department oversees the Commerce Control List covering dual-use goods. (See ACT, January/February 2008.) Gates specifically called this “bureaucratic apparatus” a “major obstacle” and one that “results in confusion about jurisdiction and approval.”

    The administration plan aims to consolidate the export control system via four “singles.” They are a single control list, a single licensing agency, a single enforcement agency, and a single information technology (IT) system.

    In the first two phases of the three-phase plan, the administration would refine existing control lists and create a new tiered system that would allow for an item or technology to “be cascaded from a higher to a lower level of control as its sensitivity decreases,” according to Gates. During this period, congressional notification would be required to remove items from the munitions lists or transfer them to the dual-use list, according to a White House fact sheet released the same day as Gates’ speech. In the final phase, which would require new legislation from Congress, the two lists would be merged.

    According to the fact sheet, licensing would similarly be streamlined to harmonize procedures among existing agencies at first, in order to “achieve significant license requirement reduction.” Whether the eventual single licensing agency would be housed in an existing agency or within an entirely new one is still under consideration, according to one of the senior Pentagon officials who conducted a background briefing April 19. Gates said he expects a presidential decision this spring on the agency’s location.

    The administration also has not determined where it would locate the consolidated enforcement agency, but the officials said that it is currently being considered as separate from the licensing agency. They stressed the coordinating role of the enforcement agency, explaining that “even once reform is accomplished… there will still be multiple players involved in enforcement.” One of the officials cited “ICE [Immigration and Customs Enforcement], State [Department] enforcement, Commerce Export Enforcement Office, FBI, and many others” as part of the enforcement system.

    The proposed single IT system would encompass licensing as well as enforcement information. Like the other steps, an enterprise-wide IT system would be fully implemented only in the final phase of the plan.

    Tackling IT issues has been an ongoing effort. The Bush administration called for reforms of underlying technology so that all agencies could review the same data. (See ACT, March 2008.)

    A senior Defense Department official indicated at the April 19 briefing that the Pentagon’s IT system is “likely to be the backbone of where we go forward.”

    Plan Support and Antecedents

    Aspects of the plan, including an emphasis on administration-based action, can be traced to a 2009 National Academy of Sciences study, which found that “the current system of export controls now harms our national and homeland security, as well as our ability to compete economically.” Until December 2006, when he became defense secretary, Gates co-chaired the committee associated with the study.

    Industry groups, including the National Association of Manufacturers (NAM) and the Aerospace Industry Association, expressed general support for the new approach, which echoes arguments they have made for years in favor of loosening control on widely available technologies and streamlining licensing processes. In an April 20 statement, NAM Vice President for International Economic Affairs Frank Vargo said, “Manufacturers are pleased the Administration is moving forward with changes to modernize the current Cold-war era system.”

    The Obama administration announced the start of its export control review in August 2009. (See ACT, September 2009.) At the April 19 briefing, a senior Pentagon official said that the National Intelligence Council assessed the U.S. export control system and came to “the frank and unfortunate conclusion” that “the system itself poses a potential threat to national security.” Gates simply noted the need for urgent action “given the harmful effects of continuing with the existing set of outdated processes, institutions, and assumptions.”

     

    The Obama administration is shifting U.S. policy on export controls by focusing its efforts on “crown jewel” technology and items, Secretary of Defense Robert Gates said last month.

    The plan, announced April 20 in a speech to a Business Executives for National Security meeting in Washington, would align procedures across multiple bureaucracies in the near term without new legislation. It also calls for working with Congress to adopt new laws that would make a single agency responsible for export licenses, possibly by the end of this year. Many key elements have yet to be detailed, including which specific weapons and dual-use goods might be moved to new tiers or removed entirely from control lists. Dual-use goods are items, technology, and information that have both military and civilian uses.

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