U.S. Response:  Exports, Meet National Security

By William New

National Journal

WASHINGTON — With concern about national security creeping toward Cold War levels, the exporting activities of some of the most innovative and lucrative U.S. industries are coming under increased scrutiny (see GSN, Oct. 28).

“What we’re now seeing in the wake of Sept. 11 is that we have to be concerned not only about nation-states, but also about terrorist groups,” according to Kenneth Juster, Commerce Department undersecretary for the Bureau of Industry and Security, formerly called the Bureau of Export Administration.  BIS has oversight, with participation from other agencies, of controls on dual-use products.

Most interested parties agree that U.S. system for controlling exports of dual-use products needs updating.  The 1979 Export Administration Act, which requires licenses and imposes penalties, expired in 1994.  The government is currently operating under emergency powers established by presidential executive order, but the issue of how to proceed has been a stubborn problem.

In recent weeks, just as efforts to overhaul export controls appeared to be gaining steam, several Republicans on the House of Representatives explicitly tied fears of a buildup of weapons of mass destruction in nations such as Iraq and North Korea to the export of U.S. dual-use technologies.  Last week, the General Accounting Office published a report that highlights weaknesses in multilateral export control regimes.  It cited flaws that impede the regimes’ ability to prevent proliferation of nuclear, chemical, biological, and conventional weapons.

Another issue complicating the export 0control process is the need to control not just the technologies, but also the knowledge necessary to make and use them.  Transfers of technological know-how involving sensitive technologies to non-U.S. citizens are called “deemed exports.”  The system for controlling them is in sore need of reform, according to officials.

“License conditions for deemed exports are a mess,” said James Jochum, BIS assistant secretary, in a mid-October speech.  Commerce has floated a new set of conditions for deemed exports, and it is now working its way through the interagency review process.  Separately, the GAO published a report in September that found that deemed export controls contain vulnerabilities that could help China and other countries of concern.

China is the most frequently listed destination on export license applications — it appeared on 1,108 of the 11,001 export applications filed in fiscal 2002, according to a Commerce spokesman.  Commerce officials are negotiating with China to conduct spot checks to confirm that U.S. exports are used as they are licensed to be (see GSN, Oct. 31).

Some in the private sector are complaining that security efforts are slowing the approval process for China-bound exports.

“Since 9/11, all of the progress that was made with increased trade with China is being scrutinized,” said William Kroll, president and CEO of New Jersey-based Matheson Tri-Gas, which manufactures gases, chemicals, and equipment for high-tech industries.  “In my mind, they’re really putting the brakes on.”

According to Juster, Commerce is “not making licensing decisions on the basis of any preconceived notions, and we are not driven by any particular ideology,” he said in an interview with National Journal.  “We want to assist industry whenever we think it makes sense, and argue their case as persuasively and effectively as we can.  But we cannot simply lobby blindly for industry.”

Kroll said the U.S. government already puts companies at a disadvantage against international competitors, especially European companies, by unilaterally placing U.S. exports under greater scrutiny than those of other countries.  U.S. diplomatic efforts to get competing countries to increase control efforts and put their companies on the same footing as U.S. firms are not working, he said.

Juster said BIS advanced a proposal to expand the multilateral Australia Group, an international forum on chemical and biological materials, to control items that might be used by smaller scale chemical and biological weapons programs of interest to terrorists.  BIS also worked to make preventing terrorism an objective of the multilateral export control system known as the Wassenaar Arrangement.  The agreement is a voluntary arrangement that critics such as Representative Curt Weldon (R-Pa.) call ineffective.

BIS is taking other steps to improve export security, such as an initiative to stop illegal transshipment of goods in the Middle East and Asia and to strengthen enforcement practices.  The agency is also targeting the major shipping centers and the largest multimodal transportation companies.  The top 40 companies, such as FedEx and UPS, handle about 80 percent of the world’s commerce, a Commerce official said.  U.S. President George W. Bush has proposed an increase in the BIS budget from $68.9 million in fiscal 2002 to $100.2 million in fiscal 2003, the Commerce spokesman said.

Dan Hoydysh, co-chairman of the Computer Coalition for Responsible Exports, said it is in U.S. national security interests to promote the high-tech industry.

“We think having a healthy and vibrant computer industry that dominates the world in terms of technology is absolutely essential to maintaining military superiority,” because the industry creates innovative technologies that are then put to use in military power, he said.

There are three versions of the House bill to overhaul the Export Administration Act; the International Relations and Armed Services committees last year heavily amended the Senate’s bill.  This fall, intensive negotiations between the White House and House leadership came close to producing an agreement.  Key Republican Armed Services members, however, led by Weldon and Representative Duncan Hunter of California, complained in letters to House Speaker Dennis Hastert (R-Ill.) that they had been left out of the negotiations, throwing a political wrench into the process.

In the Oct. 8 letter, eight Armed Services Committee Republicans called for debate on the Export Administration Act bill to be postponed until next year to allow for more time to consider new threats facing the nation since Sept. 11.  “The U.S. needs a new EAA,” they wrote, “but we also need an export control regime that reflects a post-9/11 world in which terrorists and rogue states are relentlessly pursuing the dual-use technologies and materials necessary to build weapons of mass destruction, and developing ways to attack Americans and our interests abroad.”

The Sept. 26 letter criticized the changes made by the Senate and by the House International Relations Committee as diminishing the role of the defense secretary.

“The Senate bill is fraught with bureaucratic and technical changes that will lead to the decontrol of scores of high technology items,” the letter said.  It also charged that the bill would weaken standards for determining a product’s availability and whether it is mass-marketed.  The committee members argued that the bill would also allow foreign countries to ignore U.S. export enforcement mechanisms and said it “places our nation’s security in the hands of the Commerce Department.”

The letter said that Iraq’s ability to develop weapons of mass destruction grew out of its acquisition of European and American technologies.  “Now we’re paying the price for all that technology” that got out, Weldon said in an interview.  Weldon said the solution is to focus on companies with bad records and those that sell the most sensitive technologies.

Bill Reinsch, Juster’s predecessor in the Clinton administration and now president of the National Foreign Trade Council, said Weldon’s argument is to “build higher fences around a smaller number” of companies and focus on the “bad guys.”  The problem, Reinsch said, is that beyond fissile material and stealth technology, nobody agrees on what should be controlled.

For many in the high-tech industry, the primary concern is the continued use of a congressionally mandated measurement of computing power for controlling computer exports.  They say the measurement is outdated and cumbersome (see GSN, Aug. 6).

“There is a tremendous misunderstanding and mysticism about computing power,” said a computer industry source who stressed that it is impossible to control fast-changing computer technologies.  “American dominance in the computer field is really an entrepreneurial one, not a technological one.  Anyone, any country with a moderate degree of sophistication, can make a computer,” he added.  “Computers are increasingly interchangeable boxes.  It’s the solutions that matter.”

Bush made a campaign pledge to open the way to changing the computing-power measurement, which is known as MTOPS, or millions of theoretical operations per second.  The administration is divided on what the next computer control metric should be.  Commerce is discouraging use of another performance-based standard like MTOPS.

In January, Bush more than doubled the MTOPS threshold above which computers need a license for export to countries deemed risky, such as China, India and Russia.  Commercial computers for which licenses are sought have not yet caught up with that power level.  But industry is catching up with the separate control level set for microprocessors, and the administration is in the “fact-gathering” stage of considering to raise it, officials said.

A provision in the Senate-passed bill to update and renew the Export Administration Act, which the administration supports, would allow MTOPS to be replaced.  Despite new efforts this fall to dislodge the bill, however, it appears to have run aground again in the House.

For Kroll, industry is facing “sort of a perfect storm” — stronger security efforts, diminished stock values, and less political clout because of its declining fortunes.  That leaves their products vulnerable to maneuvering by those seeking political gain from sounding the security alarm, he said.

“Quite frankly, both government and industry have responsibilities,” said Juster, who has State Department and private sector legal experience.  “If you’re involved in exporting sensitive technology ... you always have the responsibility to make sure that the technology is not misused and cannot be used in ways that threaten U.S. national security.  I think that the events of Sept. 11 have brought this concern into focus.”

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Iraq:  Seeking Political Support, Bush Asserts Baghdad Link With Al-Qaeda

U.S. President George W. Bush Saturday alleged that Iraqi President Saddam Hussein has connections to al-Qaeda, calling Hussein a “dangerous man” and saying there have been known contacts between Hussein and terrorist organizations (see GSN, Sept. 26).

“We know the implications of him [Hussein] having a nuclear weapon,” Bush said during a political campaign stop in Blountville, Tenn.  “We know he’s had contacts with terrorists’ networks like al-Qaeda.”

Hussein “would like nothing more than to use an al-Qaeda-type network, if not al-Qaeda itself, to be the advanced army to utilize his training and his arsenal of weapons of mass destruction on his most hated enemy, the American people,” Bush said during a speech in Marietta, Ga. (Edith Lederer, Associated Press, Nov. 3).

U.S. Undersecretary of State John Bolton said Friday that Iraq has allowed al-Qaeda to operate within its borders.

“In terms of support for terrorism, we have established that Iraq has permitted al-Qaeda to operate within its territory,” Bolton said (Washington Times, Nov. 2).

Several European officials and experts, however, have said the evidence is lacking.

“We have found no evidence of links between Iraq and al-Qaeda,” said Jean-Louis Bruguiere, a French judge who has spent 20 years investigating Middle Eastern terrorism.  “And we are working on 50 cases involving al-Qaeda or radical Islamic cells.  I think if there were such links, we would have found them.  But we have found no serious connections whatsoever.”

European experts have said they have not yet seen any U.S. evidence of connections between Iraq and al-Qaeda, nor have they been able to independently prove such connections.  There is little reason to believe there could be any connection because Hussein represents the type of secular Arab leader that suspected terrorist mastermind Osama bin Laden has said he opposes, they said.

Talk of an Iraq-al-Qaeda connection is “nonsense,” a high-ranking German intelligence source said.  “Not even the Americans believe it anymore.”

“I have seen no link to al-Qaeda.  No one has demonstrated it to me,” said Baltasar Garzon, a Spanish magistrate who is prosecuting suspected al-Qaeda operatives in Madrid for the alleged involvement in the Sept. 11 attacks.  “And therefore we have to be very careful not to confuse the citizens.  One thing is that you don’t like the Iraqi regime, that Saddam Hussein is a dictator.  But there are many terrible dictators.  That’s not a reason to start a war with all the consequences it could have for millions of innocents.”

While there have been some signs that al-Qaeda operatives traveled through Iraq en route to other countries prior to the Sept. 11 attacks, there is much stronger evidence of al-Qaeda’s presence in other countries, including Pakistan, Syria, Yemen and Iran, according to European investigators.  Since the war in Afghanistan that overthrew the Taliban regime, Iran in particular has become a base for al-Qaeda operatives, according to French investigators.

Saudi Arabia, which is publicly a U.S. ally, has nonetheless been heavily involved in funding al-Qaeda and in the organization’s recruitment efforts, European investigators said (see GSN, Oct. 18).

“If connections to a country are going to be the rationale, the Americans would have to bomb Saudi Arabia,” a Spanish official said (Sebastian Rotella, Los Angeles Times, Nov. 4).

Saudi Arabia Refuses Use of Bases

Meanwhile, Saudi Arabia will not allow bases on its soil to be used during an attack on Iraq, nor will it grant the United States flyover rights, even if the United Nations approves military action, Saudi Foreign Minister Saud al-Faisal said yesterday.

“We will cooperate with the Security Council, but as to entering the conflict or using the facilities as part of the conflict, that is something else,” he said.

Chapter 7 of the U.N. charter says that U.N. members must implement any measure immediately according to international law, according to the Los Angeles Times.

“Our policy is that if the United Nations takes a decision on Chapter 7, it is obligatory on all signatories to cooperate — but that is not to the extent of using facilities in the country or the military forces of the country,” al-Faisal said.

While the U.S. Defense Department has said it could conduct an attack on Iraq without the use of Saudi bases and airspace, Pentagon planners have said it will be more difficult to do so.

“We can live without Saudi bases, but it obviously makes it tougher,” a U.S. military official said.  “If they don’t at least give us flyover rights, it’s going to be a lot more complex moving supplies and people over there.”

Some Pentagon officials have said the Saudi position is merely diplomatic posturing.  While every Middle Eastern country has publicly rejected the idea of a U.S.-led attack on Iraq, several, including Saudi Arabia, have allowed the United States to conduct military preparations on their territory, according to the Times.

“When push comes to shove, some arrangement will be worked out with Saudi Arabia,” said Owen Cote, a military analyst at the Massachusetts Institute of Technology (Esther Schrader, Los Angeles Times, Nov. 4).

Kuwait Allows Use of Its Bases              

Saudi neighbor Kuwait has said the United States would be allowed to use its military bases in the event of a U.N.-sanctioned attack on Iraq, Reuters reported today (see GSN, Sept. 27).  The Kuwaiti military, however, will not take part in a military campaign against Iraq, Kuwaiti Foreign Minister Sabah al-Ahmad al-Sabah said today.

“If a (U.N. Security Council) resolution is issued, the bases will be used, but not the Kuwaiti military,” al-Sabah said (Reuters, Nov. 4).

U.N. Debate

At the United Nations, there will probably be no vote on a U.S. draft resolution on Iraq until later this week because of the time needed to revise the draft and to have the U.N. Security Council make comments, U.S. officials said (see GSN, Nov. 1).

Security Council negotiations last week were “productive” in developing a resolution that would satisfy French and Russian concerns, White House press secretary Ari Fleischer said.  “Talks are continuing along,” he said Saturday (Lederer, Associated Press).

For further information, see:

UNMOVIC

U.N. Resolution 687 (Sanctions Regime)

U.N. Resolution 1409 (“Smart Sanctions”)

U.S. State Department Fact Sheet on Iraqi Sanctions Revisions

IAEA Iraq Action Team

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U.S. Response:  Pentagon Completes Playbooks for WMD Scenarios

By Bryan Bender
Global Security Newswire

WASHINGTON — The U.S. Defense Department has completed a set of “playbooks” outlining how government authorities should deal with a variety of terrorist and other scenarios involving weapons of mass destruction and mass casualties, according to a senior Pentagon official.

Stephen Younger, director of the Pentagon’s Defense Threat Reduction Agency, said yesterday the series of response plans — first ordered during the Clinton administration — have been approved and are being circulated among key government agencies.

The playbooks are designed to “identify the hard problems” in dealing with a catastrophic terrorist attack, he told a nuclear, chemical, and biological defense conference sponsored by Aviation Week.

Some of these problems include deciding which agency would have the authority to order a quarantine in the event of a biological attack, what happens when conflicting orders are given in the immediate aftermath of an attack, or whether the National Guard, likely to be called in to help restore order, can make law enforcement decisions.

Younger, in providing a WMD threat assessment, said the high probability that terrorists will use nuclear, chemical or biological weapons in future attacks makes adequate preparations essential.

“You have to exercise, exercise, exercise,” he said, referring to the need for government agencies, at the federal and local level, to continuously conduct dry runs of a variety of potential terrorist scenarios inside the United States and abroad.

A successful WMD attack, he said, would be a “civilization-changing” event.

Military and Civilian Threats Differ

Younger believes the threat posed by weapons of mass destruction is distinctly different for the military and civilian populations.

In military terms, nuclear weapons pose the greatest threat, Younger said, because no effective defenses remain once a nuclear bomb is detonated in a city or on the battlefield.  Nuclear weapons are the ultimate equalizer for a conventionally weaker adversary such as Iraq or North Korea that is seeking to challenge U.S. military primacy, or for groups such as al-Qaeda seeking to defeat U.S. military power.

He expressed his personal belief that in the event of a U.S. military attack, Iraqi President Saddam Hussein would unleash his WMD arsenal against invading U.S. troops.  “They will” use chemical or biological weapons on the battlefield, he said.

Domestically, Younger says he worries more about a chemical or biological attack than a nuclear attack.  First, he believes that despite widespread security concerns at former Soviet nuclear weapons and facilities, a nuclear weapon is still extremely difficult to acquire or develop.  Moreover, terrorists lack the state infrastructure historically required to build a nuclear weapon, he added.

Yet, chemical and biological weapons are much more widely available to potential terrorists seeking to strike U.S. domestic targets, he said.

He cited the unsolved anthrax attacks as an example.  “This is someone who knows how to make anthrax as well as it can be made,” he said of the sophistication of the spores and the mail delivery system.  It took “great skill” to make and deploy it in a form that resulted in an “explosion” of anthrax spores when the tainted envelopes were opened.

“It was not made in someone’s basement,” he said.  Asked if there might have been a state sponsor of the anthrax attacks, Younger said, “We simply don’t know.”

With the proliferation of high-speed desktop computers, developing deadly pathogens will only become easier for nonstate actors such as terrorist groups, Younger said.

On the chemical threat, Younger said the transport of chemicals throughout the United States on a daily basis could be an attractive way for terrorists to acquire WMD materials.  For example, he noted that the deadly chemical phosgene — used in a variety of industrial activities — is shipped in 100-ton quantities.  “I worry about that,” he said.

He said he worries the least, however, about a radiation dispersal device, or dirty bomb, because it would largely cause panic and economic dislocation rather than a large number of casualties.  “They are weapons of terror.”

A Rising Scale of Violence

For the most part, terrorists have not yet unleashed weapons of mass destruction.  Younger said some experts believe terrorists have not done so because violent personalities seek the immediate explosive effect of a conventional attack, while others believe they do not want to alienate their constituency.

Younger believes, however, they have not been used because groups such as al-Qaeda are mounting attacks on an ascending scale of violence.  The organization strives to make each attack more violent and cause more casualties.  Weapons of mass destruction are the next step on that scale, he warned.

Weapons of mass destruction are “the greatest threat to the national security of the United States,” he said.

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Iraq:  United States to Revise Draft U.N. Resolution

The United States is preparing to revise its U.N. draft resolution on Iraq to better reflect the views of France and Russia without compromising on key points, a move that will delay U.N. Security Council action until at least the middle of next week, a senior U.S. official said yesterday (see GSN, Oct. 31).

It would take the United States about two days to revise its draft resolution, at which point diplomats would consult with their respective governments, the official said.  Discussions on the revised resolution would not occur until next week, with a vote delayed until the middle of next week or later, the Associated Press reported (Barry Schweid, Associated Press/Philadelphia Inquirer, Nov. 1).

U.N. Debate

Senior British diplomats also have indicated that the Security Council could vote on a new resolution on Iraq within the next two weeks, the Financial Times reported today.

Discussions among the U.S., British, French and Russian foreign ministers are believed to have created enough support for a new resolution that requires the United Nations to “consider” what actions to take if Iraq violates the resolution.

“Activity has been so intense in recent days that you might have thought the French, British and American foreign ministers were Iraq desk officers,” a British diplomat said.

The United States and France, which have often opposed each other during the debate on the resolution, have reduced their differences over its text, according to British officials.  French officials, however, said the language was still unacceptable and that France would find it difficult to approve a resolution not also supported by Russia and China.

Lingering differences between the United States and France on the language of the resolution have reached a point where there is less urgency in ending the debate, a British Foreign Office official said.

“The differences in the Security Council have now been narrowed down to such an extent that [U.S. Secretary of State] Colin Powell and [British Foreign Secretary] Jack Straw do not feel we have to pile the pressure on to get the resolution approved this week,” the official said.  “We are prepared to let things run for a bit longer” (Blitz/Hoyos, Financial Times, Nov. 1).

For further information, see:

UNMOVIC

U.N. Resolution 687 (Sanctions Regime)

U.N. Resolution 1409 (“Smart Sanctions”)

U.S. State Department Fact Sheet on Iraqi Sanctions Revisions

IAEA Iraq Action Team

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Iraq:  White House Says the Time Is Now for Vote on Resolution

With U.N. Security Council talks on Iraq set to resume this week amid continuing disagreement among the council’s permanent members on what a new resolution should look like, U.S. President George W. Bush’s administration today signaled that a vote could be near on a U.S. resolution formally submitted Friday (see GSN, Oct. 25).

“The time has come for people to raise their hands and cast their vote,” White House spokesman Ari Fleischer said.  “It is coming down to the wire.  This is important.  The United Nations has debated this now long enough” (Reuters/Yahoo.com, Oct. 28).

Fleischer’s remarks followed Bush’s warning over the weekend that Washington “in the name of peace will lead a coalition to disarm” Iraqi President Saddam Hussein if “the United Nations won’t act” and “Saddam Hussein will not act” (Reuters/MSNBC.com, Oct. 27).

Permanent council members France, Russia and China have indicated they want language that gives Iraq a greater chance to comply with demands for weapons of mass destruction inspections than would be possible under U.S. proposals (Edith Lederer, Associated Press/Yahoo.com, Oct. 28).

As the U.S. resolution was introduced Friday, U.S. diplomats made it clear they could call for a vote at any time on the measure (Julia Preston, New York Times, Oct. 26).  The move was met with the submission of informal texts by France and Russia.  France also reversed a previous stance by announcing Saturday that it could formally introduce its own resolution, but Foreign Minister Dominique de Villepin added that Paris will “try to work with the Americans on the basis of the text they have proposed” (Elaine Sciolino, New York Times, Oct. 27).

The United Kingdom, Singapore, Norway, Bulgaria, Colombia and Mauritius are said to be likely to vote with the United States, which would leave Washington short of the nine votes it needs.  Along with France, Russia and China, opponents of the U.S. text include Ireland, Mexico, Syria, Guinea and Cameroon, according to the Financial Times (Carola Hoyos, Financial Times, Oct. 26).  The New York Times, though, reported that some diplomats said Guinea could support the United States (Preston, New York Times).

U.S. Secretary of State Colin Powell acknowledged Saturday that a council vote could go against the United States (Hutcheson/Hayward, Miami Herald, Oct. 27).

The council was to hear today from chief U.N. weapons inspector Hans Blix and the International Atomic Energy Agency’s head, Mohamed ElBaradei (see GSN, Oct. 23; Lederer, AP/Yahoo.com).

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U.S. Response:  Tougher Export Control Regimes Needed

By David McGlinchey
Global Security Newswire

The U.S. State Department should develop a strategy to strengthen multilateral export controls designed to prevent the spread of weapons of mass destruction, according to a General Accounting Office report released last week (see GSN, Sept. 26).

Multilateral export control regimes have successfully limited the export of weapons — particularly to “countries of concern” — but a number of shortfalls leave them unable to address some proliferation issues, the report says.

The Missile Technology Control Regime, the Nuclear Suppliers Group, the Wassenaar Arrangement and the Australia Group have had an impact on weapons proliferation, including by increasing the cost of attaining chemical weapons worldwide and by stunting missile programs in Argentina, Brazil and Egypt.

Member nations, however, are not sharing information about export denials and approvals, preventing a complete picture of the regimes’ effectiveness.  Countries are also taking harmfully long periods of time to adopt export control changes into their own laws, and once this does occur the regulations are being applied differently worldwide, according to the GAO.

“This lapse of time might allow proliferators seeking sensitive items to exploit disparities in regime members’ control lists,” the report says.

Export controls are also suffering because countries join the regimes without effective export control systems in place — the United States has identified Argentina, Belarus and Russia as offenders, according to the report.

Any effort to reform the regimes, however, would face imposing hurdles, the GAO says.

One member can stop a change in a regime, resulting in a “difficult process of making consensus-based decisions,” the report says.  The regimes are voluntary, meaning the groups cannot act against blatant violations such as Russia’s sale of nuclear fuel to India (see GSN, April 30).  Earlier this year, the Australia Group adopted stricter controls over chemical and biological weapons but there is no penalty for not adhering to them (see GSN, June 21).

The report also noted that changing technology makes it difficult to maintain current control lists.

“Secondary proliferation,” poses another significant risk to the regimes, as nonmember countries develop the technology to produce weapons of mass destruction.  The GAO singled out North Korea for its export of ballistic missile technology.

The report recommends the U.S. secretary of state develop a strategy to improve the regimes, report all U.S. denials of export licenses and establish criteria for reviewing the regimes.  The secretary should also work with other member nations to toughen the regimes, and as part of that effort the United States should “increase information sharing, improve the consistent adoption and implementation of export controls, and assess ways to overcome organizational obstacles to reaching decision and enforcing members’ compliance with their regime commitments,” the report says.

For further information, see:

Australia Group Web Site

Australia Group Control List

Australia Group Participants

U.S. State Department MTCR Summary

Wassenaar Arrangement Web site

Wassenaar Participating States

Pentagon Executive Summary on Wassenaar

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