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BASIC TRENDS IN THE DEVELOPMENT OF MECHANISMS FOR CONTROLLING THE EXPORT OF DUAL-USE PRODUCTS

General Remir F. Stepanov (retired)

Head of Department, International Fund for Social and Economic Reform

Former Director of Export Control, USSR

A process of re-examination is currently under way regarding concepts and views on many regional and global problems of our planet and the role of various countries and blocs in today's rapidly changing world. We are witnessing the formation of structures of the new world order based on cooperation and greater trust. Greater attention is thus being focused on the search for means of resolving problems of the nonproliferation of weapons of mass destruction (nuclear, chemical, and biological weapons, as well as their delivery vehicles, particularly missiles). The further spread of these weapons could lead to an increase in the destructive consequences of regional conflicts and to a greater risk of global catastrophe. Graphic confirmation of this point was provided by the war in the Persian Gulf.

Under present conditions, export control is one of the basic instruments by which various decisions regarding the nonproliferation of weapons of mass destruction are carried out in practice. This report will review problems associated with improving export control with regard to the nonproliferation of various types of weapons of mass destruction. In addition, this report details the reasons why our country should participate in international control mechanisms and formulates proposals for the development of a strategic regulation system in Russia.

SPHERES AND FORMS OF INTERNATIONAL AND DOMESTIC CONTROL

Control of weapons of mass destruction can be divided into three main areas: nuclear weapons and their components, chemical and biological weapons, and missiles and the technology used in their manufacture.

The nonproliferation of nuclear weapons is primarily ensured by means of international and national controls over the export of nuclear materials and technologies. Eight nations, including the USSR, the United States, and Great Britain, agreed in 1974 to establish controls on exports of nuclear materials. In connection with this agreement, the signatories drew up a list of controlled materials, equipment and other components used for the creation of nuclear weapons. Subsequently added to this list were components of gas centrifuges, which are used in uranium enrichment. As a result of mutual consultations, 50 nations have now developed "Guiding Principles for Nuclear Exports" and officially have declared their intention to follow these guidelines. Under existing



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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences BASIC TRENDS IN THE DEVELOPMENT OF MECHANISMS FOR CONTROLLING THE EXPORT OF DUAL-USE PRODUCTS General Remir F. Stepanov (retired) Head of Department, International Fund for Social and Economic Reform Former Director of Export Control, USSR A process of re-examination is currently under way regarding concepts and views on many regional and global problems of our planet and the role of various countries and blocs in today's rapidly changing world. We are witnessing the formation of structures of the new world order based on cooperation and greater trust. Greater attention is thus being focused on the search for means of resolving problems of the nonproliferation of weapons of mass destruction (nuclear, chemical, and biological weapons, as well as their delivery vehicles, particularly missiles). The further spread of these weapons could lead to an increase in the destructive consequences of regional conflicts and to a greater risk of global catastrophe. Graphic confirmation of this point was provided by the war in the Persian Gulf. Under present conditions, export control is one of the basic instruments by which various decisions regarding the nonproliferation of weapons of mass destruction are carried out in practice. This report will review problems associated with improving export control with regard to the nonproliferation of various types of weapons of mass destruction. In addition, this report details the reasons why our country should participate in international control mechanisms and formulates proposals for the development of a strategic regulation system in Russia. SPHERES AND FORMS OF INTERNATIONAL AND DOMESTIC CONTROL Control of weapons of mass destruction can be divided into three main areas: nuclear weapons and their components, chemical and biological weapons, and missiles and the technology used in their manufacture. The nonproliferation of nuclear weapons is primarily ensured by means of international and national controls over the export of nuclear materials and technologies. Eight nations, including the USSR, the United States, and Great Britain, agreed in 1974 to establish controls on exports of nuclear materials. In connection with this agreement, the signatories drew up a list of controlled materials, equipment and other components used for the creation of nuclear weapons. Subsequently added to this list were components of gas centrifuges, which are used in uranium enrichment. As a result of mutual consultations, 50 nations have now developed "Guiding Principles for Nuclear Exports" and officially have declared their intention to follow these guidelines. Under existing

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences agreements, the states which export nuclear materials and technologies have instituted their own domestic measures to control these shipments. AUSTRALIA GROUP In 1984, Australia, Belgium, Canada, Denmark, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Switzerland, Great Britain and the United States joined together to form the Australia Group, which aims to limit the proliferation of chemical and biological weapons. A representative from the European Community also participates in the group's activities. The aforementioned nations have drawn up a list of components which can be used in the production of toxic substances. This list consists of 50 items and is intended to inform firms operating in Australia Group member-countries of the fact that these chemicals can be used to produce both civilian and military products (such as chemical weapons). Nevertheless, the Australia Group has not created any effective international control mechanism. Our country does not participate in its work on an official basis. CONTROL OF MISSILE PROLIFERATION Control of missile proliferation has a very short history. In April 1987, the United States, Great Britain, France, West Germany, Canada, Japan and Italy established a committee for the control of missile proliferation and agreed to basic control principles, which were set forth in a document entitled the Missile Technology Control Regime (MTCR). This committee was subsequently joined by Australia, Belgium, Denmark, Spain, New Zealand, Norway, the Netherlands and Luxembourg. A total of 16 nations currently participate in the effort to control missile technologies. Furthermore, the United States also carries on a unilateral control over a broader list of missile technologies than that of the above countries. Our country is not presently among the participants in the international missile control regime. However, the international and national control systems currently in place have not managed to prevent the proliferation of weapons of mass destruction, primarily because the existing control mechanisms do not cover all issues of vital significance in the area of nonproliferation. For example, the MTCR includes only missiles themselves, essentially ignoring missile technologies used in civilian space programs that might also have broad military applications. It must be noted that practically all missile technologies have civilian and military uses. The control mechanisms existing in foreign countries are also imperfect. Due to the fact that some agencies charged with export control make export expansion their top

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences priority and view control as a secondary factor, many export control services remain understaffed and continue to experience financial shortfalls. As for the position of Western firms actively engaged in making illegal shipments, one reason for this situation is that the punishment for violating export control regulations is too small in comparison with the profits obtained through these deals. As a result, the strategic regulation of exports has not managed to check the increasing transfer to developing countries of technologies used in the production of weapons of mass destruction. It is now known that 267 major foreign firms were involved in the build up of Iraq's military potential alone. A total of 97 private companies from Germany sold modem weapons and military technologies to Iraq, along with 31 companies from Great Britain, 23 from Austria, 22 from the United States, and 19 from France. Firms from other Western European countries, Japan, China, India, South Africa, Brazil, Argentina, and Egypt also became involved in this profitable business. German firms, generally operating through Switzerland, have supplied a wide range of nuclear materials, equipment, and technologies to India, Pakistan, and South Africa. Brazil has created the Sonda-4 missile, which has a range of about 600 kilometers, with assistance from German firms as well. Pakistan has begun producing missiles with technical help from France and the United States. Operating illegally through Romania, Israel has obtained heavy water from Norway. These are but a few examples. Similar shipments have also been made from our country. All of this has led to the accelerated proliferation of weapons of mass destruction. Although there are officially still only five nuclear powers in the world (the United States, Russia as successor to the USSR, Great Britain, France, and the People's Republic of China), information on the existence of nuclear weapons in other countries is so contradictory that estimates of the number of members of the "nuclear club" range from nine to as high as thirteen, according to some data. Based on current assessments, this club already includes Israel, India, Pakistan, South Africa, and even Argentina, Iran, North Korea, and Taiwan. In addition to the aforementioned countries, specialists believe that there are at least ten more countries which could produce nuclear weapons in the next few years. At the start. of the twenty first century, 30-40 nations will have nuclear arms production capability, half of which will be Third World countries. By mid-1991, only four states officially possessed chemical weapons: the former USSR, the United States, Iran, and Iraq. However, according to a report from the U.S. Agency for Arms Control and Disarmament, almost twenty more countries are suspected of having chemical weapons or trying to obtain them. There may be around ten more nations in this group by the end of the century. The proliferation of chemical weapons is facilitated by the fact that high technology is not required for their manufacture. Given such a course of events, as soon as the beginning of the next century we could see a notable increase in the number of countries with nuclear missiles and chemical weapons. As a result, the military-political situation in the world would be

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences exacerbated, instability would increase, and the likelihood of nuclear confrontations would rise. Therefore, foreign countries have recently been taking additional measures to improve strategic export regulation. For instance, on the initiative of the United States. and Japan, 26 nations organized the Group of Nuclear Materials and Dual-Use Equipment Suppliers in March 1991. This group is currently compiling a list of technologies which are prohibited for export. The list is expected to be in final form in February 1992. The measures which have been taken at the international and national levels have already led to a certain reduction in the pace of a number of developing countries' programs for the production of weapons of mass destruction. RUSSIA AND MISSILE PROLIFERATION Our country has yet to participate in any specific or practical fashion in the aforementioned measures aimed at strengthening the regime for the nonproliferation of missile and chemical weapons. Meanwhile, the transformation of the Soviet Union into the Commonwealth of Independent States (CIS) might even accelerate the spread of weapons of mass destruction. Let us recall that in the 1980s, the USSR proposed the creation of an international mechanism similar to the International Atomic Energy Agency as a possible means of addressing the missile question. This mechanism would prohibit missile proliferation, but at the same time would also not prevent interested countries from obtaining missiles for peaceful purposes. A number of missile-exporting nations have been holding consultations on this question since 1987. As noted above, the proliferation of weapons of mass destruction is primarily based on illegal sales of the technologies used in their production, as well as certain parts and components, by foreign private companies. Under the current conditions of ongoing privatization, this is becoming a critical problem for our country as well. Furthermore, it is also complicated by the fact that the newly created government bodies in the Newly Independent States lack sufficient experience in regulating the export activities of private enterprises in the area of military equipment and weapons. As previously noted, export control with the aim of curbing the further proliferation of weapons of mass destruction is today a topic of serious consideration in Western countries. In this regard, it appears that the CIS must also develop and set forth its position on this fundamental question as soon as possible. Mental inertia is creating a situation in which many in our own government and abroad do not fully realize the danger of the impending uncontrolled proliferation of today's destructive types of weapons. If we do not resolve the problems of nonproliferation with the means currently at our disposal, and if we find no other way of neutralizing new members of the "nuclear missile club" except by creating an anti-missile defense system ("highly accurate" or otherwise) on our own or with the NATO countries, the CIS will be placed in a very difficult economic position. Setting up an anti-missile

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences defense system capable of protecting the entire territory of the former Soviet Union would require enormous expenditures and could bring about further exacerbation of the country's socioeconomic problems. Considering all these factors, it is necessary first of all to maintain and strengthen the unified system existing under the former Soviet Union for export control over shipments of weapons of mass destruction and the technologies for their manufacture. At the same time, it would be advisable to ensure a sufficient degree of control throughout the territory of the former USSR. This would be in the interests of both members of the CIS and sovereign states which are not members, as the further uncontrolled proliferation of weapons of mass destruction could result in decreased security for all of them. Foreign experience attests to this fact. For instance, in connection with their plan to create a common market in 1993, the countries of the European Community have raised the question of forming a unified control system. Therefore, it is envisioned that a fully justifiable insertion be made in the text of the treaty on economic cooperation within the CIS calling for unified export control over shipments of weapons and the technologies used in their manufacture. Within the new framework and on the basis of critical consideration of accumulated export control experience in the West, it is also essential that we improve our own control services charged with ensuring the nonproliferation of strategic weapons. The experience of foreign countries in recent years convincingly attests to the fact that export control instituted only at the national level is insufficiently effective. Therefore, while striving for the expansion of foreign economic ties, we must now consider establishing a two-tier export control system, both at the national level and within each enterprise. This system must be focused primarily on goods and technologies used to produce nuclear missiles and chemical weapons. Meanwhile, without comprehensive multilateral agreements, preventing the further proliferation of weapons of mass destruction will obviously be impossible in practice. Representatives of Western governments are increasingly stressing their interest in joint activities. It is in the interest of the new Commonwealth of Independent States to accept the proposals which have been made. However, in doing so we must ensure that such cooperation does not antagonize the developing countries. The inclusion of our country in international export control regimes should be combined with active efforts on disarmament, as the intensification of export control in conjunction with the weakening of disarmament efforts would likely evoke a negative reaction from the developing nations. It should also be stated that multilateral export control would not hinder the transfer of technologies and goods for civilian uses. In Western countries, there is currently a broad discussion under way about what the export control system should be and what mechanisms should be put into play in order to deal with problems of nonproliferation. Specifically, it has been proposed that existing international regimes for the control of weapons of mass destruction be strengthened to ensure that transfers of modem varieties of these weapons are monitored.

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences A new monitoring mechanism could even be created if necessary. However, it is our view that resolving the problem of nonproliferation is hardly possible without creating a representative international organ under the aegis of the United Nations Security Council. This body, which would include primarily such countries as the United States, the CIS, Great Britain, France, Germany, Japan, China, and Italy, would be charged with coordinating the activities of existing systems for the control of nuclear, chemical and missile weapons and facilitating communications with national control systems, including at the enterprise level. In discussing the future nonproliferation mechanism, Western research studies often express opinions on the participation of COCOM in the process of strategic regulation aimed at preventing the spread of weapons of mass destruction. COCOM members include the United States, Great Britain, France, Germany, Canada, Italy, Spain, Portugal, Belgium, the Netherlands, Luxembourg, Denmark, Norway, Greece, Turkey, Japan, and Australia. This export control system was created and developed as an auxiliary instrument to NATO intended to regulate shipments to the CIS and allied states of goods and technologies which might be used to strengthen their military potential. Let us recall that COCOM focuses its control efforts in three main areas: weapons and military equipment; machines and equipment necessary to produce or utilize nuclear energy; and dual-use goods and technologies. According to existing information, the United States has raised the question of expanding COCOM's sphere of operations by adding arms proliferation control to its list of responsibilities. We believe that today it is expedient to speak not of the expansion of COCOM's sphere of operations, but of its transformation into an operating arm of the above-proposed UN-sponsored international body which would be charged with handling weapons proliferation issues. Furthermore, if the CIS is truly integrated into the world economy, there will be no more need for many of the functions which COCOM currently performs. According to studies conducted by foreign and Russian specialists, this committee represents a well-organized system which has operated rather effectively over a long period of time and has amassed significant experience. Changing the functions of COCOM would permit a certain easing of export controls with regard to firms which supply our country with modem technologies and goods. It is envisioned that the new international body would have both a mechanism to allow on-site inspections to uncover violations of the weapons nonproliferation regime and an effective system for ensuring compliance. A certain amount of experience has already been gained in compliance assurance and inspections of nuclear missile and chemical weapons sites, including efforts to ascertain Iraq's military potential. BASIC CONCLUSIONS AND RECOMMENDATIONS Existing international and national controls over the export of nuclear materials and technologies, chemical elements and missile technologies—our primary means of

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences ensuring the nonproliferation of weapons of mass destruction—have demonstrated their low level of effectiveness. In addition, current efforts to prevent the further spread of weapons of mass destruction are insufficiently coordinated among such countries as the United States, the CIS, Great Britain, France, Germany, China, and Japan. This same lack of coordination is evident at the national level, among the various agencies which carry on control-related activities. The control mechanisms themselves are imperfect. They are not always focused on goods and technologies which can be directly and productively used to create weapons of mass destruction. Existing export controls have been unable to prevent the increasing transfer of technologies for the production of nuclear missiles and chemical weapons, primarily from large Western European or American military-industrial companies to the developing countries. This has led to the accelerated proliferation of weapons of mass destruction. This process has begun to take on a qualitatively new character. Whereas in the early 1980s developing countries largely bought finished products (various types of weapons of mass destruction), in the second half of the decade they began relying primarily on the acquisition of technologies to manufacture these weapons themselves. Thus, in the period 1985-1991 alone, 26 nations acquired missile technologies and initiated their own programs for building these types of weapons. Of the 22 countries which have ballistic missiles (besides the CIS, the United States, Great Britain, France, Germany and China), 15 more will be capable of producing them independently by the end of the century. A similar situation is developing with regard to nuclear and chemical weapons as well. The transformation of the Soviet Union into the Commonwealth of Independent States might accelerate the proliferation of weapons of mass destruction, as there is still the possibility of the appearance of additional newly independent countries with nuclear missiles, chemical and bacteriological weapons, and the technologies for their manufacture. First, this would increase the number of potential weapons technology suppliers. Second, it would complicate the joint decision-making process. We believe that under changing world conditions, the nonproliferation of weapons of mass destruction will be no less important than issues regarding further strategic arms reduction. In this regard, nonproliferation must be accorded higher priority in the policies of our country and of the leading nations of the world. The nonproliferation of weapons of mass destruction must hence be viewed as the most important element in the national security of the Commonwealth of Independent States. In order to work out a general policy both on export control and on the nonproliferation of weapons of mass destruction, it would be expedient to create a special body including representatives of all the states in the CIS and a number of other agencies. This body must have sufficient financial, material, and human resources and be focused primarily on goods and technologies directly used in the manufacture of weapons of mass destruction. Considering the experience of foreign agencies and the significance of the problems with which it will deal, this intergovernmental body should be under the direct jurisdiction of the country's president.

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Dual-Use Technologies and Export Administration in the Post-Cold War Era: Documents from a Joint Program of the National Academy of Sciences and the Russian Academy of Sciences In our view, it is vitally important to develop and pass a law on export control, that is generally analogous to existing American legislation on this topic. The law must clearly define the spheres and forms of strategic regulation, including in the area of weapons of mass destruction. It must also divide and assign authorities and functions to the various governmental bodies in the CIS. This will also increase the international standing of our country and make our foreign partners more willing to work with us on resolving rather delicate questions. It would be advisable to publish the export control lists so that they might be used by our manufacturers in their day-to-day export business. In the international arena, the CIS must engage in active cooperation with the leading countries and declare its willingness to participate as an equal partner in existing multilateral export control mechanisms regarding weapons of mass destruction. This is particularly important in view of the fact that many Western specialists view our country's participation in the multilateral control system for weapons nonproliferation as one condition for easing the export regime on shipments of up-to-date types of equipment to the CIS. It appears that such an initiative on our part would be greeted with satisfaction, since Western nations interested in coordinating their nonproliferation activities with the CIS are currently discussing various ways of improving export controls on weapons of mass destruction. A possible first step might be a declaration of willingness to take part in joint activities to improve the effectiveness of existing export control regimes regarding nuclear, chemical and missile weapons. We believe that the CIS should support the idea of creating a body under the aegis of the UN Security Council to address the nonproliferation of nuclear missiles and chemical and bacteriological weapons. This body must include an inspection mechanism, as well as an effective means of ensuring compliance. COCOM might be used as the operating arm of this Security Council organ. Finally, we must remember that the West and particularly the United States will be closely monitoring the actions of the CIS in this area and modifying their own policies in accordance with what they observe. This being the case, an insufficiently responsible approach to the question of strategic regulation will ultimately hinder the integration of our country into the world economy. It is therefore in our interest to study carefully and utilize the experience amassed in similar export regulation efforts in the West in order to strengthen our own control services.