Senate Governmental Affairs Committee Hearing: Proliferation of Weapons from Russia

June 5, 1997

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SEN. COCHRAN: The meeting of our subcommittee will come to order. We appreciate the attendance of our witnesses today at this hearing, which we're going to have today on the subject of proliferation, Russian case studies. It's one in a series of hearings that we have been having looking into the issues involving the proliferation of weapons of mass destruction, particularly nuclear weapons.

Last month in April we had a hearing looking at the question of Chinese actions which we consider very serious in terms of their involvement in selling technologies, components of weapons systems, and generally being at the center of a worldwide web of proliferation selling nuclear, biological, and chemical weapons technology as well as ballistic and cruise missiles to other nations.

Russia is also a key supplier of weapons of mass destruction technology and advanced conventional weapons to countries of concern to the United States. Moscow is in the process of constructing a nuclear reactor in Iran and has reached agreement in principle to sell up to three additional reactors to Tehran. Russia has also agreed to sell two nuclear reactors to India. Press reports have surfaced on sales of ballistic missile technology to Iran and Iraq.

While some of the specific Russian activities are classified, many of the details are available in the open press and it is upon those open sources that we have relied exclusively in preparing for today's hearing.

Russia's sale of weapons of mass destruction technology and advanced conventional arms take place in the context of severe economic and political stress in Russia. We know that workers are paid months late or not at all. Crime is a very serious problem. There are severe housing shortages.

So the combination of hunger, draft evasion, poor training and aging equipment all plague the Russian military, which remains one of the world's largest. Russia's premier defense facilities have not been immune to disruptions. Press reports indicating strategic missile facilities have suffered repeated power cut-offs in recent months because electric bills were not paid. During late 1996 thieves reportedly disrupted communications to operational strategic rocket forces units on numerous occasions by mining copper and other metals from communications cables.

In addition, late last year the director of a prestigious Russian nuclear laboratory became so distraught over the dire conditions at his facility that he committed suicide. Despite the danger posed by transfers of sensitive military technology, Russia's cash-starved nuclear and defense industries continue to pursue sales to rogue nations like Iran.

It is unclear how much control central government officials have over these sales. Senior Russian officials have approved some deals but Moscow appears unwilling or unable to halt other sales. At today's hearings we will explore how our government has approached the problem, as well as whether the approach is effective. We will also explore Moscow's record of adherence to its international non- proliferation commitments and what incentives and disincentives the United States should used to moderate Russia's proliferant behavior.

Our witnesses today are well suited to address these issues. Deputy assistant secretary for non-proliferation at the Department of State, Bob Einhorn, is here. He will be followed by a panel consisting of Dr. William Potter, director of the Center for Non-Proliferation Studies at the Monterey Institute for International Studies, who will discuss nuclear proliferation. And Dr. Richard Speare, an independent consultant and expert on the subject of Russian ballistic missile proliferation.

Secretary Einhorn, we appreciate very much your attendance. Before recognizing you, however, I'm going to yield to my good friend and colleague from Michigan, the distinguished ranking Democrat on the subcommittee, Carl Levin.



A Senator from Michigan, and
Ranking Member, Subcommittee on International Security,
Proliferation, and Federal Services
Senate Governmental Affairs Committee


SEN. CARL LEVIN (D-MI): Thank you, Mr. Chairman, and I want to join you in welcoming our witnesses today on the very important topic of Russian proliferation. I want to commend you again for this series of very, very important and significant hearings, Mr. Chairman. I only wish that after I give these few remarks I'd be able to remain, but I'm unable to now. We will be following this hearing very, very carefully, however, because of the importance of the subject.

Ever since the collapse of the former Soviet Union we've faced a very serious challenge in preventing the proliferation of weapons of mass destruction, particularly nuclear weapons and their materials, and chemical weapons. The great foresight of our former colleagues Senator Nunn and Senator Lugar created the cooperative threat reduction program in 1991. This program, which is commonly referred to as the Nunn-Lugar program, has made a significant difference in reducing the risk to the United States from the potential proliferation of former Soviet nuclear, chemical and biological weapons and materials.

The Nunn-Lugar cooperative threat reduction program has permitted the complete de-nuclearization of three former Soviet republics, Ukraine, Belarus, and Kazakhstan, which emerged with the inheritance of thousands of former Soviet nuclear weapons on their territory. It has permitted the elimination of thousands of warheads and hundreds of missiles and their launchers. This means that those weapons cannot threaten us again, and that is a tangible and direct benefit to our security.

The Nunn-Lugar program continues to reduce the threat to our country but there remains much more to be done. I believe there are additional areas for cooperative threat reduction with Russia and the other states of the former Soviet Union, and I would note that at least one of our witnesses today has some specific suggestions for how to expand that program to address additional proliferation threats. I hope that all of our witnesses will address the question of whether the Nunn-Lugar program can be improved or expanded to help reduce the most immediate and dangerous threat to the United States, and if so, how. Clearly, though, the Nunn-Lugar program cannot address all the proliferation problems that we faced with respect to Russia, and this hearing is going to examine some of the other issues.

We are working on a bilateral basis with Russia on proliferation issues and we've had some important successes as well as some notable challenges and problems. We need to understand the situation, determine what else we can and should do to improve it. We should be trying to find out what works and what will help.

One of the problems that we face with respect to Russia and proliferation, as I believe our witnesses have either said or would agree, is that Russia appears not to be capable of fully knowing of or controlling proliferant behavior. This seems due in part to the inexperience of the new governing systems in Russia and to the economic incentives for public and private entities to earn cash in a financially dire situation. Lawlessness and disorder seem to be too prevalent there. That means that sometimes the Russian government may not know about or be able to effectively prevent proliferant behavior, which is all the more reason to improve the situation as we're trying to do.

Russia needs to improve its ability and desire to root out and prevent proliferation. That may mean at times finding incentives for responsible behavior and disincentives for irresponsible behavior, whether it be government or private sector level. It also means that we should help encourage reform and democracy in Russia. But finally, it means being careful to avoid actions that will worsen the situation and threaten the security of this nation.

So Mr. Chairman, again I commend you for your initiative here and look forward to these hearings.

SEN. COCHRAN: Thank you very much, senator.

Secretary Einhorn, thank you again for being here. You may proceed.

MR. EINHORN: Mr. Chairman, thank you for the opportunity to testify before this subcommittee on the administration's nonproliferation agenda with Russia.

And with your permission I'll submit my prepared testimony for the record and proceed with brief opening remarks.

SEN. COCHRAN: Thank you very much. It will be included in full.



Deputy Assistant Secretary of State for Nonproliferation


MR. EINHORN: Thank you, Mr. Chairman. Given the weapons of mass destruction and other sensitive technologies it inherited from the Soviet Union, as well as its own international stature, Russia is clearly a key player in international efforts to prevent proliferation. Its cooperation is indispensable and its failure to cooperate potentially very harmful

Frankly, Russia's recent non-proliferation record is mixed. It shares with us a strong security interest in preventing the spread of weapons of mass destruction and other destabilizing technologies. But the current situation in Russia, including powerful pressures to export, the evolving relationship between central governmental authorities and an increasingly privatized industrial sector, and a relatively new and unproven export control system has led to questionable exports and cooperation with some countries of proliferation concern, particularly Iran.

On the positive side, Russia has been a supporter and key player in global non-proliferation regimes. For example, it strongly favored indefinite extension of the NPT, and the recent strengthening of the IAEA safeguard system to detect clandestine nuclear activities. It was a founding member of the nuclear suppliers group and of the Wassenaar arrangement, and it joined the missile technology control regime in 1995.

It has supported UNSCOM and IAEA efforts in Iraq. It signed the CTBT, the Comprehensive Test Ban Treaty last fall. And while it has not yet ratified the chemical weapon convention, its parliament says it will do so probably this fall, and has passed its chemical weapons destruction bill.

Russia has also showed responsibility in cooperating with us to address the proliferation risk posed by the large stocks of nuclear weapons and fissile materials it inherited from the Soviet Union. Senator Levin has just mentioned a number of these efforts under the Nunn-Lugar program just a few minutes ago.

Under these programs, hundreds of bombs worth of Russian highly enriched uranium have been converted into fuel for US nuclear power plants. With US assistance, hundreds of tons of weapons usable material are now subject to upgraded security measures at over 40 Russian sites. The US is helping build a storage facility at Mayak that will safely and securely house fissile materials from about 12,500 dismantled Russian nuclear weapons. Russia is working trilaterally with the US in IAEA to develop means of verifying that fissile materials declared excess to defense needs are not returned to nuclear weapons programs.

US and Russian law enforcement officials and scientists are co- ordinating their efforts to deal with the problem of nuclear smuggling. And through the International Science and Technology Centers over 13,000 former weapons scientists are engaged in peaceful scientific projects that reduce the risks of their being lured away by proliferators.

The difficulties we've had with Russia in the non-proliferation area have been in the area of exports to foreign countries. Russia recognizes the need to establish a strong export control system and has taken important steps in that direction, with some US assistance. But Russian export controls are new and clearly they need further strengthening. This still rudimentary control system is being severely tested by Russian exporters aggressively seeking to pursue market share and earn hard currency.

Our concerns have applied largely to Russia's cooperation with Iran. We remain opposed to Russia's project to build a nuclear power reactor in Iran. Indeed, we're opposed to any nuclear cooperation with Iran. We've raised our concerns forcibly and persistently at the highest levels and we believe that Moscow has limited the scope and pace of its planned cooperation.

For example, Russia's leadership has ruled out the transfer of gas centrifuge enrichment facility, heavy water moderated nuclear reactors and other technologies that are directly useful militarily. Nonetheless, we will watch this carefully and press for further curtailment.

We are especially concerned about reports of cooperation by Russian entities with Iran on long-range ballistic missiles. We take these reports very seriously. Iran's acquisition of a long-range missile delivery capability, coupled with its continued pursuit of nuclear weapons and other weapons of mass destruction would pose a grave threat to US forces and friends, and to regional stability in general.

We do not believe that Russia has transferred any long-range missiles to Iran, but Iran is now not giving priority to importing complete missiles. Rather, it is actively seeking various types of technical assistance and cooperation that would enable it to produce its own long-range missiles indigenously. We have raised this matter with Russia at the highest levels, including during President Clinton's recent meeting with President Yeltsin in Helsinki. The Russian leadership has told us that it does not support assistance to Iran's ballistic missile program. While we appreciate such assurances, we remain disturbed by the discrepancy between them and what reportedly is occurring. Given the far-reaching implications of this issue, we will continue to pursue it at the highest levels.

We are also concerned by reports that Russian entities may intend to transfer surface to air missiles to Iran. President Yeltsin pledged in 1994 that Russia would not enter into any new arms contracts with Iran and would conclude existing contracts within a few years. In 1995 Vice President Gore and Prime Minister Chernomyrdin formalized that commitment. Any transfers to Iran of advanced anti-aircraft missile systems would be inconsistent with that agreement.

We raised this issue with Russia in March at the Helsinki summit and President Yeltsin reaffirmed his commitment to the 1995 agreement. The US has not determined that Russia has transferred to Iran any advanced missiles, although we continue to monitor this very carefully.

In conclusion, Mr. Chairman, we believe the United States and Russia have a strongly shared security interest in preventing the spread of weapons of mass destruction and other sensitive goods and technologies. But Russia's ability and determination to pursue its commitment to non-proliferation may sometimes be eroded by a combination of powerful economic incentives to pursue foreign markets, the evolving nature of state controls in Russia, and Russia's relatively new understaffed and still unproven system of export controls.

Improved Russian economic performance and institutional reform will help alleviate these problems, but basic changes will not be achieved overnight. In the meantime, the Russian government must take effective steps to ensure a more accountable and conscientious approach to export control. It should better appreciate the risks of engaging in even seemingly benign cooperation with determined proliferators such as Iran.

Encouraging Russia to adopt a more effective and responsible approach to cooperation with foreign countries will remain one of the administration's highest non-proliferation priorities. We will continue to press our case at the highest levels. Pursuing our non- proliferation agenda with Russia will involve both incentives and disincentives, including the implementation of US sanctions laws whenever applicable.

However, the use of certain sticks such as cutting off or continuing our assistance programs to Russia would only be counter- productive. Not only would they be unlikely to achieve our non- proliferation goals, they would also undercut key programs to promote democracy and market reform, as well as to ensure that the process of disarmament takes place in as safe, secure and accountable a manner as possible.

Mr. Chairman, if I could just return to a little old business for just a few moments regarding Chinese export behavior because we discussed this the last time I was before the subcommittee. At that time I noted that the administration was concerned by reports of Chinese entities exporting to Iran chemical precursors, chemical production equipment and technology. I indicated at that time that we were actively considering these reports in light of US sanctions laws.

Since that time, and I'm sure you're aware of this, Mr. Chairman, on May 21st the United States imposed trade sanctions under the chemical and biological weapons control and warfare elimination act against five Chinese individuals, two Chinese companies and one Hong Kong company for knowingly and materially contributing to Iran's chemical weapons program. I just wanted to update you in the subcommittee on that development.

Thank you, Mr. Chairman.

SEN. COCHRAN: Thank you very much for your testimony and your assistance to our committee's inquiry. I was particularly happy that you brought up the subject of the Chinese action, action taken by our government in response to those sales. Immediately when I read the story I wondered whether there was any connection between that action and the hearings we had taken. Could you tell us whether we contributed to that?

MR. EINHORN: Well, Mr. Chairman, the concern expressed by you and members of the subcommittee was shared by us. We were all looking at similar facts and I think we came to similar conclusions.

SEN. COCHRAN: I notice that the Chinese reaction was not unexpected in that they protested and disagreed with your conclusions that there was any government knowledge or participation or culpability at all in the circumstances. Have you developed any further facts since that public reaction from the Chinese government?

MR. EINHORN: No, we haven't, Mr. Chairman. We hope to pursue this issue further with the Chinese government. We see the imposition of sanctions not simply in punitive terms. We see this action as a means of encouraging China to take firm steps to prevent these Chinese entities from engaging in such activity in the future. We hope to have the opportunity to work with the Chinese government to try to persuade them that it is in their interest to pursue such steps.

SEN. COCHRAN: In that connection with Russia and the situation that you mentioned, you called our attention and reminded us that Russia has joined the missile control technology regime in 1995, and one of the criteria for eligibility is establishing export controls or a structure to maintain control over what is and is not being sold to potential proliferators.

There's some question--I know you mentioned that it's still young and these are immature structures and controls in Russia now. Is that one of the reasons why you think there have been exports of materiel, weapons, material technology equipment to Iran that could be used in ways that seem to be violative of the provisions of the missile control technology agreement?

MR. EINHORN: I think perhaps there are a number of explanations, Mr. Chairman, but I think one of them clearly is that Russia's export control system is to this day inadequate to the task of controlling Russian firms adequately, especially in this area of missile technology.

SEN. COCHRAN: You mentioned Iran and you mentioned in your statement a trading relationship in weapons that has developed between Russia and China. Are there other countries as well where Russia has, to your knowledge, been involved in selling either missile technology or systems are other weapons of mass destruction or ingredients of them, elements of them that would concern us?

MR. EINHORN: You mentioned weapons of mass destruction. I genuinely believe, and I think it's the administration's shared judgment that Russia is not interested in seeing other countries acquiring weapons of mass destruction. Russians know that their security is not strengthened by the acquisition of these various destabilizing capabilities.

So I think they've been quite careful not to provide weapons of mass destruction, chemical weapons and nuclear weapons and so forth. Where we've had disagreement with the Russian federation is on the transfer of certain technologies, and we've differed on the contribution of that cooperation to sensitive weapons programs.

The Bushir (ph) reactor is a case in point. Here the Russians agreed to sell a 1,000 megawatt power reactor to Iran. They point out correctly that this reactor would be under safeguards of the International Atomic Energy Agency, and they believe, the Russians, that there is little or no risk of this reactor project contributing to an Iranian nuclear weapons capability.

We assess the situation differently. In our view this is a large reactor project. It will involve hundreds of Russians being in Iran, hundreds of Iranians or more being in Moscow, being trained. This large-scale kind of project can provide a kind of commercial cover for a number of activities that we wouldn't like to see, perhaps much more sensitive activities than pursuing this power reactor project.

It also will inevitably provide additional training and expertise in the nuclear field for Iran, Iranian technicians. In our view, given Iran's intention to acquire nuclear weapons, we don't want to see them move up the nuclear learning curve at all, and we believe this project will contribute to moving them up that curve.

I think the Russians assess the situation somewhat differently. They believe that the expertise acquired in the course of this project would not be critical or even important in contributing to Iran's aspirations to acquire nuclear weapons.

SEN. COCHRAN: I ask whether or not there were other countries where trading relationships existed, either with government firms or entities that would be subject to control and direction by the Russian government, or should be in order to comply with MTCR. Are there any such instances that you can tell us about?

MR. EINHORN: Well, there is an aggressive effort by Russian export organizations to find foreign markets for a variety of goods and technologies, arms as well as other kinds of sensitive technologies. Russia has looked to China as a market for arms sales. China is now the biggest purchaser of Russian arms. Russia is China's biggest supplier of conventional arms.

Now there's nothing wrong per se with international arms trade with the effort to provide for legitimate defense requirements, and in the case of Russia-China trade, we're not talking really about a proliferation concern because, after all, China is a have country. It possesses these weapons of mass destruction capability.

What is sometimes a basis for concern is when such transfer relationships involve items that might be -- put instability in a particular regional context, in this case the Asia Pacific region. So we monitor this kind of trade relations and on a case-by-case basis, we raise our concerns with the parties involved. So China is clearly a country that has an active trading relationship with Russia.

Also India has been a traditional market for Russian goods before the collapse of the Soviet Russian, indeed was a major trading partner. And in the last few years, Russia has been actively marketing its goods, including arms in India. You made reference earlier in your opening statement to an attempt by Russia to sell two power reactors to India. We have opposed that sale. We've opposed it frankly less because we think that the transfer would contribute materially to India's nuclear weapons program, then we think the transfer would be inconsistent with Russia's commitment as a member of the Nuclear Suppliers Group. As a member of the so-called NSG, Russia has committed not to engage in nuclear cooperation with countries that don't have IAEA safeguards on all of their nuclear activities. India, of course, does not have safeguards on all of its nuclear activities.

There's a provision in that commitment that says preexisting deals can go forward. Russia is attempting to grandfather an old 1988 USSR/India, government to government, agreement under that provision. In our view, this is not legitimately grandfathered. In 1988, there was no specific contract, no financial arrangements concluded. There's still no financial arrangements concluded, so we tell the Russians that this was not the kind of deal -- preexisting deal that can be grandfathered and that it should not go forward with the sale of power reactors to India. So even though the transfer itself probably does not involve substantial proliferation risks, because we doubt that the Indians, who have their own access to unsafeguarded plutonium, would actually divert plutonium from these safeguarded reactors. We nonetheless have urged Russia not to go forward.

But there are also other cooperative arrangements between Russia and India, and I believe you mentioned in your opening presentation, Iraq. On Iraq, we believe that the Russian government scrupulously adheres to the current embargo against Iraq. There's a very comprehensive sanctions regime that's applied by the UN Special Commission and the IAEA against Iraq to prevent Iraq from regenerating its sensitive capabilities. We believe that the Russians have not, at a governmental level, sought to circumvent that embargo -- those sanctions.

SEN. COCHRAN: Let me ask you about a specific incident though that occurred in November of '95. I'm told that Jordan intercepted a shipment of guidance components for long-range intercontinental missiles destined for Iraq at the Amman airport. You were asked about this at a committee meeting over on the House side, the National Security Committee on June 26th of last year, and you said we have no indication that the Russian government sanctioned this. My curiosity is, wouldn't this though be violative of the UN embargo, the UN Security Council embargo on Iran following the Gulf War, and wouldn't it also be a violation of the MTCR by Russia?

MR. EINHORN: You're correct, Mr. Chairman. Those gyroscopes, those guidance components that were found by UNSCOM, should not have been sent to Iraq. This was clearly a violation of the embargo. The question is who's responsible for this violation. Nothing since the testimony that you cited has changed our conclusion that this was not an act by the Russian government -- not a conscious act. These were very sensitive pieces of equipment, as you pointed out. They are guidance components for fairly long range strategic missile systems, so it's a very serious matter and we still haven't received the full report from the Russians on their investigation on how this happened. But what we do know of it leads us to the conclusion that this was a kind black market action -- a renegade action, and not the conscious decision of Moscow.

SEN. COCHRAN: Are you satisfied that the Russians are undertaking a serious investigation to get to the bottom of this and to find out who was responsible?

MR. EINHORN: We have no way to judge how thorough and conscientious the Russian investigation has been. I think by now they're overdue in reporting on the results of their investigation to UNSCOM, and we also would very much like to hear the results of that investigation and we've recently asked the Russians about it.

SEN. COCHRAN: Is there any provision in the MCTR or any of the other agreements that we have that would permit some other independent inquiry into this to get to the bottom of it, or does the sovereignty -- the relationship of the Russian government to its own citizens and business activities and other entities prohibit anybody else from looking into it?

MR. EINHORN: Well, you're right, Mr. Chairman. The MTCR is a kind of voluntary, informal sort of regime. There's no enforcement authority. The closest we have in this case is the UN itself, and the UN Special Commission, and I'm not privy to discussions that the UNSCOM chairman has had with senior officials in the Russian government about this case, but I think that's where the enforcement authority comes in, because after all the UN Special Commission is implementing the will of the Security Council and it's Resolution 687 on Iraq. I think that's where UNSCOM should be pursuing this strongly.

SEN. COCHRAN: When you say UNSCOM, you're talking about the UN Special Commission. That's the acronym for it.

MR. EINHORN: That's correct, Mr. Chairman.

SEN. COCHRAN: And that is the group that includes us. The US is a member of that commission. We have a representative at that commission, don't we?

MR. EINHORN: Well, the chairman is in effect an employee of the Security Council. He's currently, unless they've switched over, a Swede named Rolf Ekeus. The next one will be an Australian named Richard Butler. But these individuals are functioning as kind of international civil servants. The deputy chairman of UNSCOM happens to be an American.

SEN. COCHRAN: Are you satisfied with the progress that the UN Special Commission is making in cases like this to try to find out what the facts are when you suspect that there's been a violation of this regime? Should we try to do something that would provide another alternative if UNSCOM is not doing the job of getting all the facts out that you think should be brought out?

MR. EINHORN: Mr. Chairman, I think UNSCOM has done a heroic job in pursuing the will of the Security Council with Iraq. I think special praise needs to go to Ralph Arcaus for his very courageous action in pressing the Iraqi regime. He's been under some personal threat and risk and has basically ignored that risk in pursuing his mandate from the Security Council. He's been tenacious and the whole UN Special Commission has been tenacious. Where the fault lies is with Iraq and Saddam Hussein. They simply have not been prepared fully, as they are obliged to do by the UN Security Council.

Even today, after many inspections, many interrogations, its the considered view of the UN Special Commission that Iraq continues to conceal an operational missile capability. We believe, our people believe and UNSCOM also believes that Saddam is hiding some number of Scuds. And UNSCOM also believes that the Iraqi's may well be hiding warheads containing chemical and/or biological munitions for those Scud missiles. So, UNSCOM really deserves tremendous credit and continues to go at the Iraqis on this, but Iraq deserves full responsibility for not making a full accounting.

SEN. COCHRAN: Has there been any contribution to the investigation that Russia is conducting by the UNSCOM staff or the regime that they manage at the UN Security Council?

MR. EINHORN: I'm not aware of any, Mr. Chairman.

SEN. COCHRAN: Is there any evidence that Russia has prosecuted anybody or cited anybody, or taking anybody to task in any way at all for this sale of these guidance components to Iraq? Or the attempted sale to Iraq.

MR. EINHORN: I'm not aware that they have taken any action against perpetrators of this act, but I am pretty confident that UNSCOM has not found additional cases of such smuggling of prescribed equipment from Russia to Iraq since then.

SEN. COCHRAN: Do you know what our administration is doing? Were there any other departments of our government involved in any activities that would contribute to the cessation of that kind of smuggling or to the identification and prosecution of those who are responsible for violating the embargo that the UN Security Council has imposed on Iraq?

MR. EINHORN: Well the US government has made a major effort to support the UN Special Commission and the IAEA. In the division of labor, the IAEA action team has responsibility for detecting elements of Iraq's former nuclear weapons program. We give strong support. We provide information. We provide material support for those efforts to ferret out any evidence of prescribed activities or materials. So it's a major priority in the nonproliferation field for us.

SEN. COCHRAN: There was another event that Vice President Gore discussed with Prime Minster Chernomyrdin when he was here in February -- at least this was reported in the Los Angeles Times, where we had information that Russia had transferred SS-4 missile technology, including instructions on how to build the missile and components to Iran. And Prime Minister Chernamirden, according to this article, denied that Moscow had authorized the sale, but acknowledged that the action would violate Russia's pledge not to initiate new arms sales to Iran. Do you think this sale -- that there's been any further development in connection with this sale? Do you believe that sale was sanctioned by the Russian government, or was it an illicit or illegal transfer?

MR. EINHORN: Mr. Chairman, as I mentioned in my remarks and in my prepared statement, we take such report of Russian entities assisting Iran's long-range missile program very, very seriously. We follow up all of these reports and naturally we have our own intelligence information about such activity. We have pressed the Russian leadership at the highest level, and as I mentioned we have been told that it is not Russia's policy to assist Iran's long-range missile program.

But the problem is this -- there's a disconnect between those reassurances which we welcome, and what we believe is actually occurring. There's a disconnect. We have raised this with the Russians. We've provided them information available to us to demonstrate that we know what we're talking about, and we've urged them to investigate seriously and to prevent any activity that would be inconsistent with what they state is their own national policy.

SEN. COCHRAN: Have we made any specific suggestions about how Russia could impose a stricter export control regime over sensitive technology like this or ballistic missile component parts and technologies like this? Are we trying to assist them in figuring out to do a better job, if they say that's what their goal is? Are we providing -- we were assisting them in dismantling nuclear weapons that have been targeted at us, and this is all well and good, but is there any kind of technical assistance program in the form of structural regime -- a control regime that would do a better job dealing with these kinds of problems?

MR. EINHORN: Mr. Chairman, we have under the Nunn-Lugar program, made funds available for export control assistance to Russia and we have sought to interest the Russian government in a very serious technical exchange aimed at strengthening their capabilities in this area. And there's been some cooperation, but it hasn't gone very far. Not because of an iridescence on our part, but for a variety of reasons, I think the Russian government is reluctant for us to be too closely engaged in this effort. I think there's a certain resentment, a perception that we are throwing our weight around, that they see this as kind of condescending on our part. And in part, they may be embarrassed a bit at the rudimentary nature of their own export controls and reluctant to expose that fully to us.

So whatever set of reasons, they've been less willing than we have to engage in the kind of cooperation that you suggest, which we fully support.

SEN. COCHRAN: Let me ask you this. You talked about the Russian nuclear cooperation with India. There are recent reports of these missile deployments near the Pakistani-India border. They've been widely report, and it occurs to me that with given Russia's past history of transactions with India, weapons sales generally but in the nuclear program particularly, and China's closer relationship with Pakistan on the other hand. And the question about whether China is contributing to the development of a nuclear weapons program in Pakistan.

Are we on the verge of a conflict here that could involve a Russia-India partnership competing with a Chinese-Pakistani partnership, and have on our hands a nuclear weapons proliferation activity that could be so destabilizing and contribute to increased tensions in that part of the world so that our security interests are at risk? What's your reaction to that?

MR. EINHORN: Mr. Chairman, we share your concern about the prospect for a nuclear and missile competition in South Asia. I think the world has evolved quite a bit since the days when there was a very tight alignment between the outside countries and the states of South Asia. I think China even is seeking to improve its relations with India and to adopt a more evenhanded policy toward the two states of the subcontinent.

Also, Russia, while it does have an arms transfer relationship with India and a good relationship with India, is also seeking to broaden its relations. So I don't see the danger that outside powers will be drawn into any kind of conflict, but we are concerned that programs that are proceeding on both sides of the Indo-Pak border could lead to a destabilizing competition there. One of the most promising developments we've seen in a long, long time has been a resumption in recent months of the high level political dialogue between leaders of India and Pakistan. There have been a number of meetings in Mali and the Maldives. A few months ago the Pakistani Prime Minister, Nawaz Sharif, and the Indian Prime Minister, Mr. Guzrah (sp) had a positive meeting and we're looking forward to additional steps in reconciliation between the two countries.

We hope that these reports about missile activities will not have the effect of disrupting what is the most promising trend we've seen in a long, long time.

SEN. COCHRAN: Let me ask you one other question on that subject. It's related, I think. Russia and other members of the Nuclear Suppliers Group in 1992 agreed not to sell nuclear technology or nuclear materials that could be used to develop nuclear weapons to any states which had not accepted IAEA, International Atomic Energy Agency, safeguards for all their nuclear facilities. The question of the sale by Russia of the two nuclear reactors to India which you mentioned seem to violate that rule, or that commitment. Does it in your opinion, and has the administration attempted to develop a consensus among the other suppliers who make up this group about whether to do anything about it?

MR. EINHORN: As I mentioned earlier, Mr. Chairman, we don't believe that Russia can legitimately regard this deal as grandfathered under the terms of this agreement.

SEN. COCHRAN: I know that, but what are we going to do about it?

MR. EINHORN: Well, what we've done is raised this issue directly with the Russian government on a number of occasions, as well as raised it with other partners in the Nuclear Suppliers Group, and suggest that they raise it with the Russians to express their disapproval. We've found no one, by the way, willing to support Russia's interpretation of the grandfather provision of the full-scope safeguards commitment, and a number of our partners have approached Russia directly on it.

But if there's a saving grace in this story, it's that prospects actually for consummating this nuclear deal may be small. The Indian government may not be prepared ultimately to devote the very substantial resources to purchasing two large power reactors from Russia, and so even though both Russia and India take a very defensive, nationalistic approach whenever challenged about the deal, I think the actual likelihood of this deal materializing is rather small.

SEN. COCHRAN: Let me simply wind up by saying that I'm very pleased to hear you bring up the action that was taken by the administration with regard to the Chinese transfers of chemical weapons, potentially -- or ingredients for chemical weapons possibly, by these Chinese exporters. What I'm hopeful that we will see in the future is some determination about the identity of those in Russia who've been doing things that are just as dangerous to the rest of the world as what we saw happening in China, so that we can then impose sanctions, if not against the government which you chose not to do in the case of China, but directly against the firms and saying that we would not permit the purchase of any material or services or goods from these firms. I think that's the nature of the sanctions our government has imposed, specifically targeted to those businesses and those individuals.

It seems to me that that's what we ought to be doing a better job of with regard to Russian proliferation activity and smuggling from Russia of prohibited weapons grade material and technologies into Iran or into Iraq, and specifically Iraq, in violation of the UN sanctions. Do you expect that we'll be able to get enough information to be able to do something like that, and would you be able to tell the committee that that would be the hope and the goal of this administration to pursue that and to pursue that in an aggressive way?

MR. EINHORN: Mr. Chairman, I can assure the subcommittee that we will pursue very vigorously all information we have that Russian entities are acting in a way that's inconsistent with Russia's obligation. We have done that. We will continue to do that. We'll continue to press the Russians to investigate, and where applicable, we'll apply our laws. We have imposed sanctions on Russian entities on a number of previous occasions and that's a tool available to us, but we need to get the facts and we're pressing very hard on Russian authorities to try to get the facts.

SEN. COCHRAN: Well I appreciate your testimony and you're being here, and you're willingness to help us as we try to deal with this and try to decide whether or not the laws we have on the books are sufficient to protect our security interests in this proliferation area. Thank you very much, Secretary Einhorn.

MR. EINHORN: Thank you, Mr. Chairman.

SEN. COCHRAN: Our next witness is Dr. William Potter, and Richard Spear. Am I saying that right, I'm sorry. Richard Spear, who is a member of this panel on Russia and missile proliferation. We appreciate very much your being here and we want you to proceed with your presentation to the committee. I'm going to first call on Dr. Potter and then Dr. Spear. We have copies of your prepared testimony which we will have printed in the record in full, and we would encourage you to make whatever summary comments you think would be helpful to our understanding of these issues.

Dr. Potter, we'll start with you. You may proceed.



Center for Nonproliferation Studies, Monetery
Institute of International Studies


DR. WILLIAM POTTER: Thank you very much, Mr. Chairman for the opportunity to address this committee on the very important issue of the post-Soviet nuclear proliferation challenge. This is the fifth time in the past six years that I've prepared testimony on this theme for Congress, and as in the past, there remain more proliferation dangers than I can review in the time allotted to me. As you are aware, the main technical barrier to nuclear weapons proliferation, both for state actors and for sub-national terrorist organizations, has been the difficulty of obtaining weapons usable fissile material. I don't think there's any doubt that this barrier has been eroded as a consequence of the collapse of the Soviet Union and the increased vulnerability to diversion of the successor states vast inventory of nuclear weapons and inadequately safeguarded stock of highly enriched uranium and plutonium.

I believe that the Nunn-Lugar cooperative threat reduction program has made a major difference in containing many proliferation risks in the region. Having said that however, I believe that other serious dangers do remain and are deeply rooted in the very difficult economic, political and social conditions in the former Soviet Union. As such, I believe they are unlikely to be resolved until considerably more progress is made in stabilizing the economy and restoring public trust in governmental institutions, law and social justice.

Unfortunately, I doubt if these changes will occur quickly, and as a consequence I believe that the United States will continue to face a variety of nuclear threats from the former Soviet Union for the foreseeable future. Given the time constraints before us, I think rather than enumerate the many remaining proliferation challenges that one could identify, I'd rather focus on several of those which I think are perhaps somewhat less obvious and have received less attention, and then what I would propose to do is to identify a number of specific steps that the US government might take to mitigate the risks that I've identified.

The first challenge that I would like to highlight and one that I don't believe has received adequate attention is the risk posed by the presence of nuclear material outside of Russia. In November of 1994, it was widely assumed that with the successful conclusion of Project Sapphire, the United States had removed the last substantial quantity of highly enriched uranium from Kazakhstan. That now is known not to be the case. Rather in late 1995, Kazakhstan notified the IAEA that some 205 kilograms of highly enriched uranium remained at its nuclear research in site in Semipalatinsk. Although the weapons usable portion of that batch of material finally was removed to Russia this past fall, the unanticipated discovery of a cache of hundreds of kilograms of weapons usable material is, I believe, a useful reminder that we probably can expect to find further undeclared quantities of highly enriched uranium in the non-Russian successor states.

The likely locations I believe include Georgia, Kazakhstan, Uzbekistan, Belarus, Ukraine and Latvia, all of which either have or had research reactors fueled with highly enriched uranium. The second challenge I believe is for us to anticipate future cases of illicit nuclear trafficking. Although I think the West has generally been very lucky regarding nuclear leakage from the former Soviet Union, despite rather sensationalist headlines to the contrary, I don't think that we can count on that situation persisting.

In my prepared testimony, I identify four confirmed cases in which more than minuscule quantities of highly enriched uranium and plutonium have been exported from the former Soviet Union, another three cases in which HEU or plutonium were diverted from Russian nuclear facilities, but were seized prior to export, and then an additional four cases of diversion of export that were of proliferation concern, but for which we don't have quite as much hard evidence and so I put them in a second tier.

Rather than go over those points, I simply refer interested parties to the appendices of my prepared paper. But I would like to draw just one or two conclusions from those cases. I think perhaps the most striking about the proliferation significant cases involving seizures of materials is that much of the material appears to have been fresh fuel for Navy propulsion reactors. It's also the case that most of the suppliers of this material appear to have been insiders working at nuclear research institutes or Naval bases or having previously worked at such facilities. Now if the good news is that there have been relatively few cases, I think we also have to be concerned about several caveats, one being how confident should we be -- that we simply have not tested other cases which have transpired.

And secondly, I think we have to be concerned about the lesson from the missile area that may be applicable in the nuclear realm, and here I'm referring to the case that you already raised with Secretary Einhorn, where the UN Special Commission on Iraq clearly has evidence which indicates the strategic gyroscropes from dismantled Russian SLBMs were shipped to Iraq. I would also add as a concern, I think similar indications that there may be Ukrainian-Iraqi missile contacts and contracts. And I would also point to what I believe are disturbing and continuing largely unregulated trade by the post-Soviet states in nuclear-related dual use materials, such as zirconium and beryllium. These activities in an environment of nuclear material plenty, but nuclear worker poverty, cautions against attaching too much importance to the apparent loll in reported seizures of proliferation-significant materials in Europe.

I would also like to call attention to the challenge that we face in the sphere of nuclear terrorism. To date, little US nonproliferation assistance to the ex-USSR has been directed specifically to reducing terrorist threats at NIS nuclear facilities. These threats pertain not only to the seizure of nuclear materials, but also to attacks on or sabotage of civilian nuclear power plants and spent fuel storage sites. I'd like to emphasize that these are not hypothetical threats. In 1992, for an example, an employee of the Ignolena (sp) Nuclear Power Plant in Lithuania, planted a virus in the plant's computer system that could have led to a major accident.

The same plant in November of 1994 received two bomb threats, one of which involved organized crime and led to the shut down of the facility. More recently, a disenchanted employee of the Severodvinsk submarine facility, whose salary had not been paid, threatened to blow up a shop containing two nuclear reactors. Although Russia has taken some steps to heighten security of civilian nuclear plants, particularly in the wake of the conflict in Chechnya, most civilian nuclear facilities remain deficit in such basic defensive elements as intact perimeter fences, more than token armed guards, vehicle barriers, surveillance cameras, metal detectors at entrances and control cages.

Unfortunately, these gaps in perimeter defense are compounded by an approach to the terrorist threat that is fixated on Chechens. As the assistant director of a major Russian nuclear research center told me not long ago, there is little concern about perimeter defense against terrorists since, and I'm quoting, "Chechens look different than us and would be recognized before they could get close to the site." Even if they were recognized, it's problematic if much force could be marshaled quickly at the scene. Indeed I would argue and I don't say this facetiously, heavy fire power is much more visible at most banks, night clubs and fur stores in the former Soviet Union than at many nuclear facilities, and I say that having visited seven or eight such nuclear sites in the former Soviet Union.

If security of fissile material is suspect at nuclear facilities in the former Soviet Union, it's even more vulnerable in transport. These are problems that in part are due to the generic difficulty of safeguarding nuclear material or warheads, compounded by the frequency with which fissile material is moved both between facilities in Russia and also within facilities. One nuclear facility that I visited last year near Moscow for example, it was apparent that all transportation to and from that site involving fissile material was accomplished with a single truck, one which appeared to be an inviting target for a terrorist or a criminal group.

Safeguarding transfer of fissile material within many large nuclear complexes in Russia also is a serious problem given the frequency with which the material is moved about -- in some instances, in uncovered or unescorted handcarts. The ones that I observed happened to be black rather than red, but I think the image was nevertheless telling.

As troubling for nonproliferation efforts of nuclear smuggling, are an indication that in recent years Russia and the other pro-Soviet states have pursued improving state-sanctioned exports of nuclear technology equipment and nuclear related commodities. You've already noted the difficulties associated with Russian contracts to provide nuclear assistance to Iran, to assist in the development of China's nuclear program, and also to build two 1,000 megawatt power reactors in Southern India. I share your concern, particularly with the Iranian deal, because I believe if it is implemented, it definitely would be at odds with Russia's full scope safeguard commitments. And perhaps in the question and answer period I can provide a little bit more detail which would suggest how Russia in fact has revised its own internal nuclear export regulation to take account of this grandfather clause. Initially their regulation did not have this caveat in place.

High level political commitment to export controls also has been slow to materialize in Ukraine and the Baltic states, which only recently began to develop meaningful export control procedures and expertise. There have been a number of cases involving in these states for example in which sensitive dual use nuclear items were either exported in violation of established export control procedures, or due to the absence of such regulation. Unfortunately from the standpoint of nonproliferation, improving export controls remains a low priority, not only for Russia, but for most if not all of the post-Soviet states.

Finally, with respect to my short list of proliferation challenges, is the need to enhance the security of substrategic nuclear weapons in Russia. It's typically assumed in the West that notwithstanding shortcomings in the civilian nuclear sector, that physical security is high in the military domain. Although it may be higher in the military realm than at most civilian sites, I would argue that the situation is not good and in fact it's apt to deteriorate further before it gets better. Most vulnerable to theft are older, substrategic nuclear weapons that are relatively small in size and lack permissive action links to protect unauthorized use. Unfortunately, the security of substrategic nuclear weapons in Russia today is compromised by a number of things including the lack of adequate storage facilities to handle the influx of warheads, by the continuing turmoil, economic hardship, and general malaise within the armed forces -- and also by Russia's growing reliance upon nuclear weapons and tactical nuclear weapons in particular.

I am particularly concerned about the vulnerability of theft at these substrategic systems by disgruntled past or present Russian special operation soldiers who were trained to use atomic demolition weapons and may have special knowledge and even access to nuclear weapons storage depots. Tactical weapons for aircraft pose particular risks since they are not kept at the better guarded central storage sites. The problem of substrategic nuclear weapons is magnified by Russia's growing reliance on nuclear arms as its conventional forces deteriorate. I think this dependency is reflected in Russia's abandonment in 1993 of its no first-use nuclear policy, and in the open discussion among prominent Russian military and defense industry figures of the need to develop a new generation of nuclear munitions for tactical and battlefield use.

The dangers in this system is the compounded Moscow's reliance on a launch on warning nuclear strategy and by the deterioration of Russia's early warning system, large portions of which existed in other post-Soviet states. Having identified some of the problems, let me turn briefly to some steps that might be taken to reduce the difficulties. First, I believe the United States should seek to reduce the quantity of fissile material which must be protected in the number of sites where fissile material is stored. As part of a program of consolidation and elimination, I would recommend that the US should undertake to negotiate the purchase of all highly enriched uranium known to reside at research facilities in the non-Russia successor states.

Given the relatively small but nevertheless significant quantities of weapons useable material at sites in Belarus, Georgia, Kazakhstan, Latvia, Ukraine and Uzbekistan, that I calculate to be slightly under 200 kilograms of highly enriched uranium, a uranium buy up approach to the non-Russian republics represents I believe a low cost, high return, nonproliferation strategy. To the extent that ATU actually is being used by research facilities, the United States also should provide the small amount of money needed to convert the research reactor to run on low enriched uranium. Parenthetically I might note the principle obstacle to this HEU purchase plan is not resistance on the part of the successor states, but rather is the difficulty of gaining interagency agreement in the United States. This difficulty is the direct product of the interagency battles that were waged during the ultimately successful operation of Project Sapphire.

My second recommendation is to expand CTR cooperation in the area of reactor security. Nuclear power plants in the Soviet Union were not designed to confront current terrorist threats which could lead to a catastrophic accident with global consequences. More attention should be given under the Nunn-Lugar program to enhance reactor security as a part of the larger effort to strengthen international and national nuclear safeguards. At a minimum, current physical protection efforts need to be coordinated with work to upgrade the safety and security of the four dozen nuclear power reactors currently operating in five post-Soviet states.

My third recommendation is to pursue negotiated constraints on substrategic nuclear weapons. As you know, nuclear weapons of a non- strategic variety have not figured prominently in the arms control and disarmament agenda since the important Bush and Gorbachev initiatives in the fall of 1991. Yet it is precisely this category of nuclear weapons that poses the greatest risk in terms of vulnerability to theft, and to unauthorized use. A number of steps need to be taken including the codification and the legally binding treaty of the 1991 Bush-Gorbachev declarations on the withdrawal of substrategic weapons.

Finally, more attention must be given to sustaining those important nonproliferation initiatives that already have been begun in the former Soviet Union. I believe it's vital to US national security to continue to support the cooperative reduction program. It's now time however to confront the problem of sustainability and the issue of facilitating a rational transfer of responsibility for physical protection and material control activity of the United States to the NIS and especially to Russia. A step in the right direction I believe is a recently established safeguard training center in Obninz (sp), Russia, which will reinforce indigenous physical protection efforts by educating the new generation of specialists who will serve as both practitioners and instructors.

Much more, however, needs to be done to create incentives to the post-Soviet states to foster indigenous safeguard efforts and to sustain those activities once they have begun. Unfortunately, an influx of money alone will not solve that problem. A sustained educational effort is required to change attitudes and to instill a new nonproliferation and safeguard philosophy or culture. This is a task I believe for which non-governmental organizations are particularly well suited to perform. Let me conclude, therefore, by calling for much closer cooperation between the US government and the non-governmental community in the provision of such educational assistance in the pursuit of mutual nonproliferation objectives. Thank you.

SEN. COCHRAN: Thank you very much, Dr. Potter. When I was introducing our witnesses as I opened the session today, I did not mention that Dr. Speier has been in the administration and helped develop our missile control technology regime -- participated in monitoring that and is expert in nuclear nonproliferation treaty issues as well, having served in the government until 1994 when he retired and became an independent consultant. Dr. Speier, we welcome you and we appreciate very much your participation in our hearing today. You may proceed. DR. RICHARD SPEIER: Thank you, Mr. Chairman. It's a honor to testify on recent Russian actions affecting missile proliferation. In addition to my full statement which you have submitted to the record, Mr. Chairman, with your permission, I will submit a recent policy brief distributed in the last week by the Nonproliferation Policy Education Center, that gives an independent few on the same matters that I'll be discussing.

SEN. COCHRAN: That's good to have and we appreciate that. It will be included in the record. Thank you.



Independent Consultant on Proliferation


DR. SPEIER: Thank you. Mr. Chairman, we are fortunate to be living in a time of world peace, but what kind of a peace is it. Ambrose Bierce, the great American cynic defined peace as "a period of cheating between two periods of fighting." Mr. Chairman, there is a system of international rules and procedures called the Missile Technology Control Regime. The purpose of the MTCR is to limit the proliferation of missiles capable of delivering mass destruction weapons. Twenty-nine nations are now formal members of the MTCR. They include Russia, but it appears that there is some cheating going on. Is Russia cheating? If so, what should we do about it. I shall address these questions by first summarizing the key rules of the MTCR, then recent Russia actions, then implications for policy.

The MTCR is a non-treaty arrangement that has been in effect for 10 years. To understand its key rules, I must ask you, Mr. Chairman, to understand one phrase of MTCR's jargon, "Category I" systems. Category I systems are unmanned delivery vehicles that can send a 500 kilogram payload to a range of 300 kilometers. Category I systems are rockets and unmanned air vehicles, such as cruise missiles, but of any kind, civilian or military, as long as they meet the 500 kilogram, 300 kilometer parameters. Category I systems also include technology, production equipment, and certain major components. Category I systems include Scud missiles, as well as those of greater capability. Category I systems are the target of the MTCR's rules for export restraint.

Given this bit of jargon, the MTCR has three key rules. First, there is a strong presumption to deny exports of Category I systems, regardless of purpose. On the rare occasions when they are exported, the supplier government and not just the recipient, must take responsibility for insuring end use. Second, there is a strong presumption to deny exports of any missile intended for the delivery of mass destruction weapons, regardless of its range or payload. This denial rule extends to every item controlled by the MTCR, as long as that item is intended for the delivery of nuclear, biological, or chemical weapons.

And third, there is a flat prohibition against exporting complete production facilities, or complete production technology for Category I systems. In a nonproliferation regime, it makes no sense to create new suppliers of the most sensitive items. The United States in late 1990 has supplemented these rules with legislative sanctions against foreign actions that contribute to the proliferation of Category I systems. These sanctions have encourage export restraints by some governments, but by law the sanctions do not apply to transfers approved by any of the governments of the 29 members of the MTCR.

Given these rules of the MTCR, I shall now summarize relevant actions by Russia starting in 1993, the year that Russia formerly agreed to abide by the guidelines of the MTCR. In 1993, Russia was faced with US sanctions for the export of Category I rocket engines and their production technology, and so it made a deal with the US. Russia agreed in July of '93 to halt the transfer of the technology and to abide by the rules of the MTCR without yet becoming a full member of the regime. In return, the US agreed to make Russia a Space Station partner, and to allow US satellites to be launched by Russian rockets. But Russian transfer of rocket engine technology continued to go to India, although it was supposed to have ceased. It continued for another six weeks until all aspects of the agreement were formerly in place, resulting in the transfers being 60 to 80 percent completed.

In 1994 there are no public reports of Russian Category I exports in that year, but the US government, concerned about Russian activities involving China, India, Iran, Libya, North Korea and Syria, so the US refuses to approve full Russian membership in the MTCR. The criteria for MTCR membership as you yourself mentioned, Mr. Chairman, include the ability to control missile-related exports and the actual cessation of actions inconsistent with the MTCR. 1995 -- the US catches Russia aiding Brazil in the development of a Category I space launch vehicle, but the US waives the imposition of sanctions. Instead, the US agrees to support full Russian membership in the MTCR, presumably because Russia has met the criteria for membership.

In August, 1995, Russia become a full member. One month later in September, a Russian lieutenant general states publicly that if NATO expands eastward, Russia will export nuclear and missile items to Algeria, India, Iran and Iraq. Two months after that, in November, the missile guidance system that we've already discussed salvaged from missiles with ranges of thousands of kilometers is transferred from Russia to Iraq. US officials, as we've just heard, say that this transfer may not have been authorized by the Russian government, but we're still waiting for the results of an investigation. 1996 -- in January, well-connected Russians renew the threat to link US behavior to Russian restraints in missile exports.

In February, some six months after Russia has joined the MTCR, an official of the Russian Duma defense committee states that if NATO expands eastward, Russia will export missiles to China and India. By February, Russian firms are concluding contracts to help Iran produce ballistic missiles. In May, the US protests to Russia and Ukraine over talks to supply China with SS-18 ISBM technology. During this year, some unspecified entity in Russia makes an illegal export, so- called by the chairman of the Duma defense committee, of eight Scud launchers and 24 to 32 Scud missiles to Armenia. Mr. Chairman, it is one thing to talk about "loose nukes" where individuals may attempt to steal small quantities of plutonium in their coat pockets. But it is quite another thing to envision loose Scuds, where dozens of complete missiles and their launchers are illegally spirited out of Russian controls.

1997 -- Israeli officials report that Russia is helping Iran produce SS-4 type missiles and to test and SS-4 rocket engine. SS-4s have a range on the order of 2,000 kilometers, and transfers of their production technology are banned by the MTCR. Moreover, SS-4s can only be effective with mass destruction payloads. Israel also reports that Russia is willing to stop these transfers if Israel will enter an economic deal with Russia. In spite of this quid pro quo offer, a senior US source speculates that the transfer may be beyond the control of the Russian government. US official say, however, there is even stronger intelligence on other Russian Category I transfers to Iran, specifically transfers of Scud missile production technology, which are also banned by the MTCR.

Mr. Chairman, if these reports are substantially accurate, Russia has exported Category I missiles and has exported missile items intended for the delivery of mass destruction weapons, in spite of the MTCR's strong presumption to deny such exports. Russia may have exported complete Category I production technology to Iran in spite of the MTCR's flat prohibition against doing so. Russia is either incapable of controlling such exports, or is unwilling to control them or both, in spite of such capability and willingness being key criteria for membership in the MTCR, and the key element of the 1993 US-Russian agreement for space cooperation.

The policy implications are fourfold. One, space cooperation. Because Russia has violated the 1993 bargain, the US is no longer obligated to keep Russia as a Space Station partner or to allow Russian launches of Western satellites. Two, MTCR membership. Because Russia has failed to fulfill key criteria for MTCR membership, continued Russian membership is no longer in the interest of the regime. The regime has no procedures for expelling a member, but it may be appropriate for Russia itself to leave the regime until it is capable of and willing to abide by its rules. Three, sanctions. Because Russia is a member of the MTCR, current US law largely exempts it from missile-related sanctions, but Congress may want to consider whether such sanctions are necessary to change the cost-benefit calculus of Russian exports.

One way to apply sanctions would be to require presidential certification of Russian behavior consistent with the MTCR. Such certification could be a prerequisite for the continuation of space cooperation with Russia or other trade in MTCR-controlled items between the US and Russia. And four, intelligence. Because a key assumption of National Intelligence Estimate 95-19, was that Russia would not egregiously violate the MTCR, the conclusion of the NIE is that North America would not face missile threats from additional nations before the year 2010 needs to be reassessed. The NIE described exports from countries such as Russia as a "wildcard" and the independent panel reviewing the NIE criticized the assumption of Russian compliance.

The fact is that the Russian behavior I have described blows the NIE's assumptions to smithereens. Mr. Chairman, the US and Russia have a great many common interests. Moreover, the Russian federation is not a monolith. For these reasons, it is important to target US actions against those Russian entities benefiting from missile proliferation. It is important not to link other completely separate elements of our relationship to missile nonproliferation issues. But having said this, we are faced with four years of reports of Russian missile proliferation. We cannot afford to tolerate cheating against basic rules of international security. We need remedial action. Thank you, Mr. Chairman.

SEN. COCHRAN: Thank you, Dr. Speier, for your interesting testimony and for your suggestions about the possible steps that we can take to do something more effective about getting compliance with the obligations under the MTCR.

Let me ask Dr. Potter a couple of questions in connection with the testimony that you gave us about the security issue. You focused on that and the problem of having nuclear grade weapons material available in such a widespread region outside the Soviet Union. You named five or six separate nation states now, including Latvia I think, where this material is now located. Is the list that you give us an effort to identify areas where these nuclear materials can be easily stolen or at risk of being stolen? Or is this just a list of those places where nuclear material is available, but has a varying degree of security surrounding them? Are these all high risk in terms of security -- secured areas, or not? I want to be sure I understood what you were telling us today.

DR. POTTER: I think the first point to make is that it clearly is the case that the overwhelming bulk of weapons useful material is located in Russia. But having said that, it is nevertheless also the case that there is a significant quantity that resides outside of Russia. I guess my point is that if I were a would-be proliferator, would I necessarily go to the place where there was the most material, or would I turn to the place or places where the material was most assessable. I think in part the answer is the latter and I can identify in some specific places where I think material outside of Russia is not adequately safeguarded.

We have been concerned -- that is the United States government has been concerned for some time about a small quantity of weapons usable nuclear material in Tbilisi, Georgia. We have had discussions with the Georgian government and with the Russian government about how to get that material out of the country, but to date without any demonstrable effect. Unfortunately, there is also material that is weapons usable in the other states that I mentioned -- Belarus, Kazakhstan, Ukraine, Uzbekistan and Latvia. The vulnerability of that material varies from country to country.

My basic thesis is though that rather than continuing to invest a large amount of money in trying to make secure those limited number of facilities where there are discreet amounts of materials known to be present, it makes more sense to remove that material as a nonproliferation measure. My calculation is that there is about 191 kilograms, let's say, slightly under 200 kilograms of material that is known to exist in these states.

We have had such discussions, my Center has had discussions with the directors of some of these nuclear facilities who are quite prepared to see that material taken from them, if they are compensated in some fashion for the material. They are also quite prepared to see their reactors modified to run on low enriched uranium, which would not constitute a significant proliferation threat.

So, I think, while this will not solve the problem at large, namely, with respect to Russian material, it may help us to reduce the proliferation threats, that, nevertheless are real and, I would argue, to date have not received sufficient attention.

SEN. COCHRAN: One of the reasons that we are told that some of these rogue states are being slow in to efforts to develop nuclear weapons capability, is the difficulty and the cost of producing the fissile material.

And, what you're saying then, seems to me to be relevant to this question, and that is, is it likely that Iran would attempt -- since we know that they are embarking -- they seem to be -- it is reported by many that they are embarking upon a planned effort, to build nuclear weapons -- wouldn't they get there quicker if they were able to steal or purchase fissile material from Russian facilities or other facilities that are unsecured outside of Russia which you talk about? Could they successfully obtain fissile material in this way, do you think?

DR. POTTER: I think your question really directs attention to the great problem caused by the inadequate state of security of nuclear facilities in the former Soviet Union, and the fact that there is such a tremendous quantity of material in the post-Soviet states. I can respond specifically to the efforts that I'm aware of and involved on in at least one of the post-Soviet states, namely Kazakhstan. We do know -- the US government, to the best of my knowledge, is well acquainted with Iranian interest in nuclear material that was located in Kazakhstan, at least since 1993. Some of this information is related to the so-called Project Sapphire, or the successful effort to take out some 600 kilograms of HEU from the Olba (ph) metallurgy plant in Ust-Kamenogorsk, Kazakhstan.

One of the things that Americans who were involved in Project Sapphire discerned, was that in a room next to the room holding the highly enriched uranium in Ust-Kamenogorsk were a number of canisters that had Tehran addresses on them. It's believed, although I don't know this for a fact, but I've been told, that the American government believes that the canisters were filled with the dual-use nuclear- related material beryllium, which was produced in great quantities at this Ust-Kamenogorsk facility.

It's also suggested that there was at least contact between the Iranian government and the Kazakhstan nuclear facility, which had a large quantity of highly enriched uranium. It's also known that Iran was very much interested in the Octal (ph) Nuclear Power Facility, which is on the Caspian Sea, across from Iran -- that as early as 1993 the Iranian government was interested in establishing a consulate at this fast breeder reactor, or the city where this fast breeder reactor is located.

This is significant among other things, because approximately one ton of plutonium exists on site at this fast breeder reactor facility. And what is significant about this, in addition to the quantity, is that the material is in low-irradiated form, that is, it doesn't have the radiation barrier that is typical in most spent fuel.

There has been assistance provided by the US government to try to safeguard this material, but it's also the case that there is a major Iranian presence at this particular port facility. In fact, there is cooperation proceeding between Iran and Kazakhstan to develop the harbor in Octal. So these would be at least two examples which appears as if Iran has thought to establish contact in location of the former Soviet Union where nuclear material was present. It would suggest that the possibility of their acquiring material, although I have no information that would suggest that they have been successful in actually acquiring any material that would be of use from the standpoint of the development of a nuclear weapon.

SEN. COCHRAN: There has been a report in the Washington Times that Iran is using its civilian nuclear power program as a cover for acquiring technology and expertise that's necessary to enable it to build nuclear weapons. And also, we were told in the same report -- this was in 1994 -- that Iran was about eight to ten years away from fulfilling that objective. But the timetable could be shortened with foreign assistance. And I assume that foreign assistance is the kind of assistance that would include Russia's sale of a reactor and working with technicians and scientists in Iran to develop a alleged civilian nuclear power program in Iran.

Do you agree with that assessment, or do you have the background to tell us in your opinion whether you think that's on target with what the facts are, and whether or not the sale and participation by Russia in the Iran nuclear power program has weapons proliferation consequences? Is this a violation of the NPT, for example, in your view? And what should we be doing to try to insure compliance with NPT?

DR. POTTER: I think the issue of whether or not the Russian/Iranian nuclear deal constitutes a violation of the NPT turns upon the belief on the part of the Russian government that Iran is in fact intent upon pursuing a nuclear weapons program. If, in fact, the Russian government does not believe that Iran is pursuing a nuclear weapons program, then as a member in so-called good standing with the NPT, with international safeguards in place, there is nothing that legally precludes Russian provision of nuclear assistance to Iran. In fact, some would argue that under Article 4 of the NPT, a state has some obligation to provide nuclear assistance if a party is, in fact, in good standing.

I think the problem, though, is not so much the provision of power reactors that would use low enriched uranium, but rather is the assistance that Iran will get, in fact is getting, with respect to building a nuclear infrastructure. We're talking really about personnel training -- particularly, training that is taking place in Russia. Unfortunately, one might note that to some extent Russia here is carrying on where the US left off in the training of Iranian nuclear specialists.

I think that what is important for the US to do to try to redress this problem, is really to pursue a two-track policy. I think on the one hand we need to continue to try to persuade Russia to stop nuclear cooperation with Iran -- not because it is necessarily illegal, but because it's imprudent. It doesn't serve Russia's interests, it doesn't serve the international community's interest.

But I think, secondly, we have to also persuade Russia to require much more transparency over the different nuclear activities with which it's associated in Iran, and to try to create more stringent safeguards in that country. I think we also have to insist upon the return of the spent fuel that will be generated by these nuclear reactors to Russia. It would be, I think, very dangerous for the spent fuel to remain on sight where it could be reprocessed by Iran.

I think also, we need to encourage Russia to require Iran to accept more stringent IAEA safeguards, such as the so-called 93 plus 2 safeguards agreement, which includes environmental samplings, which would make it much more difficult for Iran to utilize the so-called civilian nuclear program for covert weapons purposes.

SEN. COCHRAN: Thank you very much.

Let me turn to Dr. Speier, and ask a few questions about the MTCR. You pointed out that Russia had not really lived up to its MTCR commitment. I was going to ask you that based on your knowledge of the things that have been done by Russia in terms of selling and transferring missile technology to Iran and Iraq. Do you think this is solid evidence that would justify us inviting them to withdraw as with one of your four suggestions, from MTCR, or what would that really accomplish, though? Isn't it better to have them under the tent, and working with them, possibly being influenced by our consensus among other nations, as well as the US? To change or modify its behavior, rather than to undergo the possible public embarrassment or humiliation, or whatever would be attendant to being expelled, in effect, even though you say there's no way to expel a member, but asking them to withdraw is sort of the same thing.

In other words, I'm questioning whether or not that might be an effective way to obtain a change, or modification in behavior. It seems to me that a more productive way of dealing with that would be to try to get at the facts more, and conclusively identify whose really actively involved in these violations. Is it the Russian government itself condoning what they know to be prohibited behavior under the MTCR? And if it is, shouldn't we do something to show our displeasure? Cancelling space station cooperation? Allowing them to spend up our satellites on their vehicles, space vehicles? What's your reaction to that?

DR. SPEIER: Those are very good questions, Mr. Chairman. First of all with respect to my certainty of the transfers that I've reported on -- as my full statement attempts to make clear, I've been drawing inclusively on information in the public domain. And I understand that this subcommittee will have the opportunity to have a briefing from the appropriate members of the intelligence community.

SEN. COCHRAN: That is correct. We do intend to have that session as well.

DR. SPEIER: And I defer to whatever facts they have agreed on. With respect to your very prescient question about the best way to influence Russia -- whether it's really better to ask them out of the MTCR or to keep them in there -- there are a number of advantages to MTCR membership that, unfortunately, provide opportunities for mischief-making. A member is a part of a very extensive and very sensitive information exchange among the other members that suggest opportunities to exploit the market that no one else is attempting to enter.

Membership also gives one a right of veto over changes in the regime. Membership, according to the practices of some members and the proposals, some proposals that are actually in Congress right now, a membership entitles one to greater access to missile technology. And finally, membership, as I mentioned, protects the member from the imposition of US sanctions. Now the question is, given the apparent inability or unwillingness of Russia to force the regime, do we want Russia to have these advantages? Is there much that Russia could be doing in the way of missile trade that she isn't already doing?

Those are some of the questions that I believe one would ask addressing the issue of membership.

SEN. COCHRAN: Now, you mentioned the transfer of Scud missiles and launchers from Russia to Armenia. I think you did. This was back about 1994 to 1996, I mean there's an indication that former Defense Minister -- the Wall Street Journal reported this -- Minister Grachev approved the sale of, or transfer of more than a billion dollars worth of conventional arms to Armenia from 1994 to 1996, including 32 Scud-B missile, ballistic missiles, and eight associated launchers. This was all in the Wall Street Journal.

That transfer seems to clearly violate Moscow's commitments to abide by the guidelines of the MTCR as well. The question that this raises along with the other report, the Washington Times report that we talked about, to Iran. Is it clausible that the Russian government be given all these facts? Itself was not aware of these activities? That's almost conclusive evidence that if it were an agreement that required the imposition of US sanctions under US law, there would be no question, it would seem to me, that in order to comply with the provisions of law, our government would be obligated to impose some kind of sanctions against Russia. Is there no sanction provision at all associated with the obligations of MTCR?

DR. SPEIER: First of all, with respect to the transfer from Russia to Armenia of the Scud missiles -- according to the actual statement of the Chairman of the Duma Defense Committee, that transfer took place in 1996 -- at the tail end of this 1994-1996 period. It took place in 1996, months after the Russians had formerly joined the MTCR. Could the Russian government have been unaware of this transfer? That is the assertion of the Chairman of the Duma Defense Committee, that it was an illegal transfer.

Is the US obligated to impose sanctions or does it have the authority to impose sanctions? There is one case in which one can impose missile related sanctions on an MTCR member, and that is if the transfer was not authorized by the member government, and if the member of government takes no step to prosecute the entities that did make the transfer. So if the Russian government sits on its hands in the case of a transfer like the one to Armenia, or a transfer like the one of the guidance systems to Iraq, than one could impose sanctions under existing law. There is that authority.

SEN. COCHRAN: What is your reaction to the exchange that I had with the Deputy Assistant Secretary of State about doing a more aggressive job of investigating to get to the bottom of who's responsible, what entities are involved in smuggling these prohibited weapons and elements of weapons to Iraq, so that we can target some sanctions -- as we've done in the case with China now -- as an example of our seriousness and the fact that we consider these very serious violations of the MTCR, and we are not going to tolerate this kind of action by Russian businesses or individuals. What other options do we have for doing a better job of getting the facts, or causing Russia to do a better job of getting the facts?

DR. SPEIER: Mr. Chairman, I think what we're talking about is the question of the cost benefit calculus of these exports. If there is a penalty to making the export, then they're less likely to be made than if they get a free ride. Unfortunately, the recent record of the application of missile related sanctions that are authorized by our law has not been very strong.

For the first two years of the law, from the end of 1990 to the end of 1992, missile related sanctions were imposed five times in two years. In the next four years, they have only been imposed twice in four years. One of those sanctions was a no-brainer against transfer between North Korea and Iran.

The other sanction was against China in 1993, and within a few months of the imposition of that sanction, 90 percent of the force of it was withdrawn by a Commerce Department interpretation that sanctions did not apply to US satellite launched on Chinese launch view. So we really haven't been to active in missile related sanctions in recent years.

If we were, we might see a different behavior on the part of these exporters. I think, certainly, if we make it clear that the 1993 bargain -- where Russia would abide by the MTCR in return for space stations and launch cooperation -- if we make it clear that we take that very seriously, and that it's in jeopardy as a result of this kind of behavior, there will be a great premium on the Russian aerospace firms and entities to avoid these kinds of exports.

SEN. COCHRAN: I got the impression from a former witness that there are a lot more smuggling activities going on between Russia and Iraq than have been publicly reported up to this point. We know about the component, the guidance components, that were intercepted in a Amman, Jordan, that were being shipped from Russia to Iraq, in violation of the United Nation Security Council sanctions.

But, and we know that Russia is saying that they are investigating that, but we've had no report on the results of that investigation. It seems to me, and I don't know -- I'm not an expert on what kind of authority this UNSCOM group has -- but it seems to me that in order to make it an effective enforcer of UN sanctions, that there has to be some investigative arm, there has to be some way to deal with the challenges that we face now.

If you know smuggling is going on, you can go on site, the IAEA can go on site and do inspections to see if safeguards are being adhered to in the light. But isn't there something missing here? What are the other options available to us? Do we try to force some change in the enforcement regime under the UN Security Council's authority? DR. SPEIER: Mr. Chairman, first of all with respect to the question of whether there is more smuggling going on. One incident in November of 1995, I think we should remember that the absence of evidence does not mean evidence of absence. We may not know about everything that is going on. But more than that, there have been reports of a Russian expert going where they shouldn't be going and helping countries develop missiles.

Part of the MTCR controls are to stop, but I've been told by a Russian official, recently, that perhaps these are retired Russian missiles making their own decisions to do that. So the transfer of technology can go on a pace without one finding guidance equipment at the bottom of the Tigress River.

But more than that you've twice raised the very important question of investigation, and how should we pursue them? I think, first of all, subcommittees should see what the intelligence community already knows. And make it's judgement about their ability to investigation. The problem may be either the lack of investigation or the lack of actions to follow up those investigations. I think, certainly, the actions in the form of sanctions have trailed off in recent years.

SEN. COCHRAN: That seems to be an option that you are suggesting or intimating that we ought to press the administration to consider. Is that an accurate impression that I've gotten from what you were saying?

DR. SPEIER: Investigations?

SEN. COCHRAN: No, sanctions.

DR. SPEIER: Sanctions?


DR. SPEIER: To the extent that there is authority under existing law. Absolutely. We've got to make it clear there, in Senator Glenn's words, we must take the profit out of proliferation. Right now it's a big money maker to do this. If you impose the right kinds of sanctions, it's a big money looser.

SEN. COCHRAN: Well I think both of you, I'd like to hear your reaction to this too. It seems to parallel a recent article in Foreign Affairs written by Michael Mendelbaum (sp) on the subject of US relations with Russia and China, and he says this, "While difficult the Russian/Chinese palace is to which United States objects, there not impossible to change. If an issue is important enough, the governments in Moscow and Bejing can impose their will. Irritants in American relations with Russia and China persist not only because the administrative capacity of each government is limited, but also because the issues at stake are not important enough for either government to muster the political capital and incur the cost necessary to remove them."

Now he's, I think, telling us that we've got to make it more politically attractive and economically attractive for Bejing and Moscow to take action. That's my impression. Dr. Potter, what do you get from that, do you agree with Michael Mendelbaum (sp)?

DR. POTTER: I do agree, although I guess I would, you know, add another, I guess, dimension to the problem here. I think that, and this is where I probably disagree with my good friend, Dick Speier, about the wisdom of trying to induce Russia to leave the MTCR. I'm very much concerned about the need to provide incentives to develop larger non-proliferation constituencies in problem countries, whether those countries be Russia, China, India, Pakistan, you pick your favorite country of concern. And I think that one probably does not assist the process of developing these constituencies by removing countries from international non-proliferation regimes.

On the contrary, I think, by engaging them in international routine, you create offices to provide budget, you attract individuals who develop a vested interest in various non-proliferation activity. I think there is not an adequate constituency in Russia, and the post- Soviet states; there's even a smaller constituency in China.

Unfortunately, these constituencies are not, I think, develop very quickly, and I'm not suggesting this is the only approach that one has to take, but I think that one needs to be cognizant of this fact. And I think, wherever possible when we can engage the country, it's useful to do so. So I would argue, for example, that even though there are a member of the post-Soviet states that are not directly involved in the export of nuclear material, a number of them are transshippers, we should try to bring those countries into the Nuclear Suppliers Group, because it would focus more government attention on important non-proliferation issues. So I think that while we both need to think about better ways to increase incentives and to provide this incentive, but also needs to think about the long term issue. And related to that, I think, is the key question of trying to deal with defense conversion in the former Soviet Union.

Unfortunately, I believe, as long as there is this strong economic incentive to sell basically anything to anyone for the right price, regardless of the development export control, you're not really going to be able to get a handle on the problem. Which is why I think, we also really need to focus first and foremost on stopping the -- or shoring up the nuclear material and the missile technology at the store.

The export control is important, but if it's going to be much more difficult to try to capture that material once it leaves the store. This is where I would invest my greatest investment.

SEN. COCHRAN: Dr. Speier. DR. SPEIER: I partially agree with Dr. Potter. First of all with respect to the Mendelbaum (sp) statement -- the statement as I heard you read it, Mr. Chairman, argues that we can influence the Russian and Chinese governments, if we put enough priority on it. But it's not clear that the problem in missile proliferation is just with the Russian government. The problem may be that it is so profitable for these Russian aerospace entities and military entities to make these exports, that they either attempt to influence the government to approve the export or they make them outside of the government's control.

What appropriate sanctions can do, such as putting the space station cooperation and the launch cooperation effort, they can do, is threaten to pull all the profit out of these deals and indeed make it very costly. And the same for other sanctions that we might impose.

So it's not a question of acting on the people who may have very good will in what is certainly a minimal central government in Moscow. There are other elements of the system that need to see the right combination of costs and benefits. This is, perhaps, where Dr. Potters comments and mine overlap.

As far as regime membership, the missile technology control regime and indeed a non-proliferation regime in general should not be viewed as a birthday party where everybody gets to come. There should be some serious requirements for ability and willingness to contribute to the cause of non-proliferation if one is going to be in that regime. And it's very questionable whether Russia right now qualifies.

SEN. COCHRAN: Well, this has been an excellent discussion, in my view, of some of the issues and the problems that we face in trying to do a better job of influencing conduct of nation states to try to hold down the spread of weapons of mass destruction. And that's the goal that we have in having these hearings, is to better understand the challenges and what some of the options are for government policies that will be more successful in dealing with the challenge.

There are other questions that will be submitted for the record, and we hope that witnesses will be able to respond for us, for the record. I know Senators Domenici, Levin and Glenn have indicated an interest in submitting questions for the record.

We also want to announce that our next hearing will be on the subject of Proliferation and US Export Control, and we will hold that hearing next Wednesday, June 11, at 9:30 a.m. Until then, this subcommittee will stand in recess.