February 24, 1994


Mr. Chairman, members of the Subcommittee, it is a pleasure for me to testify before this panel in connection with the Administration's submission of the proposed Export Administration Act (EAA) of 1994.

The Congress will consider this new EAA in a time of change. The Soviet Union has disappeared and with it a monolithic Communist threat. Former members of the Warsaw pact are now joining NATO's Partnership for Peace. As a consequence, COCOM will end its operations on March 31. The national security requirements that shaped all previous EAAs are gone.

In their place are new challenges and regions where instability and confrontation threaten American interests. The threat of the proliferation of weapons of mass destruction and their missile delivery systems is real and must be countered. A new EAA must take account of these threats and ensure that goods and technologies sought by proliferators are not acquired from U.S. firms. At the same time we must seek to ensure that American exporters receive prompt responses to license applications.

At the center of our nonproliferation export control efforts stands a number of multilateral arrangements that the U.S. helped to create - the Australia Group, the MTCR, and the Nuclear Suppliers Group. These groups of suppliers share a common objective of preventing the proliferation of weapons of mass destruction and their delivery systems. This Administration, as others, has worked vigorously to ensure that these arrangements are effective, that their control lists are comprehensive, their controls appropriately targetted, and then common standards applied, and practices are harmonized. We accomplish this through rigorous implementation of our own obligations under these multilateral arrangements as well as through information sharing, and intensive diplomacy, with other suppliers.

The Administration's proposed EAA recognizes the importance of these multilateral control systems and will further strengthen our efforts in this regard. While the EAA is not the sole authority under which the U.S. licenses exports, events in Iraq demonstrate that EAA controls are more important than ever. Iraq came close to developing a nuclear weapon capability by procuring, often clandestinely, dual-use commodities. If we want to stop proliferation we need the type of controls embodied in this Act. We believe that the proposed legislation provides for an effective system of controls while at the same time ensuring that U.S. industry is able to compete effectively for markets.

In my testimony, I would like to highlight the perspectives and roles of the U.S. Arms Control and Disarmament Agency (ACDA) in the formulation and implementation of the Administration's nonproliferation and export control policies, and particularly how ACDA uniquely complements and contributes to the interagency process.


President Clinton, in nominating John D. Holum as ACDA Director, said that "My administration has placed the highest importance on arms control and combatting the proliferation of weapons of mass destruction. . . . A revitalized Arms Control and Disarmament Agency will play an important role in achieving new arms control agreements and fighting weapons proliferation during the coming years."

At his confirmation hearing last year, and in a recent speech to the Arms Control Association, Director Holum set forth his view of the relationship between nonproliferation and export control policy, and his vision of ACDA's approach to them. To the Senate Foreign Relations Committee, he observed that:

With the Cold War over, arms control challenges have changed, but they are no less compelling. In some ways, the world is becoming a more dangerous place, as a few outlaw states hunger for technologies that threaten all of our survival. We need effective export controls and strong efforts to stem proliferation, now more than ever before. . . . working with our allies and friends, if possible, we must develop even more effective ways to regulate exports of potentially dangerous technologies and dual-use items -- while also addressing the national imperative of economic growth.

He elaborated on these thoughts to the Arms Control Association:

Continuing, the Director said:


Among the Agency's primary functions under the Arms Control and Disarmament Act of 1961, are that ACDA "shall have the authority to carry out . . . "(d) the preparation for, operation of, or as appropriate, direction of United States participation in such control systems as may become part of United States arms control and disarmament activities." ACDA's formal participation in the regulation of U.S. dual-use exports dates from 1978, when the Nuclear Nonproliferation Act of 1978 directed the President to establish procedures for the review of all U.S. nuclear-related dual-use exports. These procedures included ACDA in all instances. Since that time the Agency's role has expanded to encompass missile and chemical/biological weapons (CBW) nonproliferation and broader dual-use export control policy development, particularly multilateral export controls.

Last fall, in the context of the President's decision to revitalize ACDA, the Administration decided to clarify and codify our involvement in dual-use export review and decision-making in areas related to arms control, nonproliferation, and disarmament as they are covered by the EAA. As the National Security Adviser assured the Chairman of the Senate Foreign Relations Committee, by letter dated September 14:

We anticipate that the provisions of the proposed EAA of 1994 and the interagency understandings about its implementation will satisfy these requirements. In short, in the process of developing this legislation, ACDA's role in the realms of nonproliferation and export controls will be strengthened as part of the President's decision to revitalize the Agency.

Nuclear-related Export Controls

It is worth reviewing the scope of the U.S. nuclear export control framework, in which Commerce-controlled items related to nuclear proliferation are only one part of an extensive and mature system. The U.S. nuclear export control system has worked well over the years and and has permitted the United States to exercise international leadership in this field.

Statutory authority for U.S. nuclear exports is contained in the Atomic Energy Act of 1954, as amended and the Nuclear Nonproliferation Act of 1978 (NNPA). The Nuclear Regulatory Commission licenses "big ticket" items such as reactors, major reactor components, nuclear fuel, and sensitive enrichment and reprocessing equipment and facilities. The Department of Energy licenses transfers of nuclear technology and equipment and services that would assist in the production of special nuclear materials. The Department of Energy also considers retransfer requests for NRC-licensed items that have already been exported. This system works well with approvals subject to specific criteria mandated by statute or regulation, much of which was pursuant to the NNPA. The NNPA significantly amended the Atomic Energy Act and also called for procedures for reviewing nuclear exports.

Through the 1980s, the United States encouraged other supplier states to adopt controls on nuclear dual-use items, and some did either through legal or administrative means. A major multilateral initiative was launched in late 1990, and completed very quickly. This speed was, in part, due to the discovery of Iraq's nuclear weapons program that demonstrated to supplier states the need to create a formal multilateral arrangement to control nuclear dual-use items. In April 1992, the now 28-nation Nuclear Suppliers Group adopted a dual-use control arrangement which included a set of guidelines and a 65-item control list. ACDA played a major role in the formulation and negotiation of this arrangement.

Conventional Arms Export Control

I want to digress briefly to outline ACDA's role in the control of conventional arms exports, because it has a direct and organic relationship to our expanded role in dual-use export control in recent years. Under the Arms Export Control Act (AECA) and executive order, the Secretary of State is responsible for policy direction and oversight of all arms transfer functions, and for controlling commercial exports of defense articles and services on the U.S. Munitions List.

ACDA's role in U.S. security assistance and arms transfers is set forth in section 511 of the Foreign Assistance Act, and sections 38(a)(2) and 42(a) of the AECA. These provisions require that decisions on military assistance, arms sales, and munitions licenses be coordinated with the Director of ACDA, and that the Director's opinion be taken into account on the extent to which such decisions might:

Section 36(b)(1)(D) of the AECA provides that the ACDA Director shall submit to Congress, upon request, evaluations of proposed arms sales according to the foregoing criteria. Also, under section 25 of the AECA, ACDA prepares on behalf of the Administration the arms control assessment of the President's annual security assistance program and budget proposals.

Other Dual-Use Export Controls

ACDA's long-standing statutory authority with respect to conventional arms transfers has clear relevance for dual-use export controls. Dual-use items by definition are those which have both civil and military applications, including those designated as "militarily critical technologies." The export of dual-use items can contribute to recipient countries' military and military-industrial capabilities. Indeed, as the distinction between military and dual-use technology becomes increasingly blurred, the need for more consistent approaches to export control regulation becomes more apparent. This has obvious implications for U.S. national security, defense, and arms control interests and policies, and establishes a solid basis for ACDA to participate in the development and administration of U.S. export controls on dual-use goods and technologies.

ACDA is a member of the NSC-chaired Interagency Working Group (IWG) on Nonproliferation and Export Controls, and its Sub-IWGs. We participate fully in the formulation and implementation of the full range of U.S. and multilateral policies in these areas. In addition to domestic export control laws and regulation, we assist in the preparation for and negotiations in the Nuclear Suppliers Group, the Zangger Committee, the Missile Technology Control Regime, the Australia Group, and the new post-COCOM multilateral export control arrangement.

ACDA is a charter member of the specialized staff-level export license review groups, i.e., the Sub-Group on Nuclear Export Coordination (SNEC), the Missile Technology Export Committee (MTEC), and the Chemical and Biological Weapons Control Working Group (SHIELD). It also participates in the Nuclear Export Violations Working Group (NEVWG) and the Missile Trade Analysis Group (MTAG). SHIELD, NEVWG and MTAG review intelligence about worldwide trade in CBW, nuclear, and missile-related technologies, respectively and generate demarches to interdict undesirable transfers. ACDA drafts most of the nuclear demarches, and serves as Executive Secretary of the MTAG. The MTAG and SHIELD also review worldwide missile and CBW-related export activities potentially sanctionable under U.S. law.

Agencies sometimes differ over whether particular export license applications should be approved. As a member of the Commerce-chaired Advisory Committee on Export Policy and cabinet-level Export Administration Review Board, ACDA has a voice in the adjudication of disputed cases in the escalation process. And as a member of the IWG, ACDA has an equal voice in overall dual-use export control policy determination and in deciding "policy kickout" cases.

The interagency understandings reached in connection with the drafting of the Administration's EAA will enable ACDA to extend its role to include dual-use exports subject to terrorism and regional stability controls. This is consistent with ACDA's existing authority under the AECA to review munitions exports to determine whether they would "support international terrorism." Moreover, among the criteria that ACDA applies to the evaluation of conventional arms transfers under the AECA are the possible effects of the export on regional tensions, regional military balances, and regional and international security. These concerns have direct implications for the "regional stability" controls exercised by Commerce, and provide a clear basis for ACDA to participate in the interagency review and adjudication of exports subject to such controls.

Thank you. I will be pleased to respond to any questions you may have.