Nonproliferation
Strategy Needed to Strengthen Multilateral Export Control Regimes Gao ID: GAO-03-43 October 25, 2002Multilateral export control regimes are consensus-based, voluntary arrangements of supplier countries that produce technologies useful in developing weapons of mass destruction or conventional weapons. The regimes aim to restrict trade in these technologies to keep them from proliferating states or terrorists. The United States seeks to improve the effectiveness of these regimes. GAO was asked to (1) assess weaknesses of the four regimes and (2) identify obstacles faced in trying to strengthen them.
GAO found weaknesses that impede the ability of the multilateral export control regimes to achieve their nonproliferation goals. A key function of each regime is to share information related to proliferation. Yet the regimes often lack even basic information that would allow them to assess whether their actions are having their intended results. The regimes cannot effectively limit or monitor efforts by countries of concern to acquire sensitive technology without more complete and timely reporting of licensing information and without information on when and how members adopt and implement agreed-upon export controls. For example, GAO confirmed that at least one member, the United States, has not reported its denial of 27 export licenses for items controlled by the Australia Group. Several obstacles limit the options available to the United States in strengthening the effectiveness of multilateral export control regimes. The requirement to achieve consensus in each regime allows even one member to block action in adopting needed reforms. Because the regimes are voluntary in nature, they cannot enforce members' compliance with regime commitments. For example, Russia exported nuclear fuel to India in a clear violation of its commitments, threatening the viability of one regime. The regimes have adapted to changing threats in the past. Their continued ability to do so will determine whether they remain viable in curbing proliferation in the future.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-43, Nonproliferation: Strategy Needed to Strengthen Multilateral Export Control Regimes
This is the accessible text file for GAO report number GAO-03-43
entitled 'Nonproliferation: Strategy Needed to Strengthen Multilateral
Export Control Regimes' which was released on October 25, 2002.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products‘ accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
Report to Congressional Committees:
United States General Accounting Office:
GAO:
October 2002:
NONPROLIFERATION:
Strategy Needed to Strengthen Multilateral Export Control Regimes:
GAO-03-43:
Contents:
Letter1:
Results in Brief:
Background:
Multilateral Export Control Regimes Have Helped Set Standards and Stem
Proliferation:
Weaknesses Could Limit Regimes‘ Effectiveness:
Obstacles to Strengthening Export Control Regimes:
Conclusion:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: List of Members of Multilateral Export Control
Regimes:
Appendix III: Reporting Practices of Multilateral Export Control
Regimes:
Appendix IV: Comparison of Control Lists of Multilateral
Export Control Regimes:
Appendix V: Some Factors Considered in Accepting New
Members to Regimes:
Appendix VI: Comments from the Department of Commerce:
Appendix VII: Comments from the Department of Energy:
Appendix VIII: Comments from the Department of State:
GAO Comments:
Appendix IX: GAO Contact and Staff Acknowledgments:
GAO Contact:
Acknowledgments:
Tables:
Table 1: Purposes of the Multilateral Export Control Regimes:
Table 2: Denial Reporting Distribution Times and Procedures for Each
Regime:
Table 3: Regime Control Lists and Items: Australia Group:
Table 4: Regime Control Lists and Items: MTCR:
Table 5: Regime Control Lists and Items: Nuclear Suppliers Group:
Table 6: Regime Control Lists and Items: Wassenaar Arrangement:
Figures:
Figure 1: U.S. Export Denials Reported to Regimes Since 1996:
Figure 2: Denial Notifications for All Regimes, by Country (Total
Denials: 951):
Abbreviations:
MTCRMissile Technology Control Regime
WMDweapons of mass destruction:
United States General Accounting Office:
Washington, DC 20548:
October 25, 2002:
The Honorable Jesse Helms
Ranking Minority Member
Committee on Foreign Relations
United States Senate:
The Honorable Fred Thompson
Ranking Minority Member
Committee on Governmental Affairs
United States Senate:
The advent of global terrorism has heightened concerns about the long-
standing threat of proliferation of weapons of mass destruction. The
Under Secretary of State for Arms Control and International Security
stated recently that preventing the next wave of terrorist acts
requires, above all, effective use, improvement, and enforcement of the
multilateral tools at U.S. disposal, including export control regimes.
Multilateral export control regimes[Footnote 1] are voluntary,
nonbinding arrangements among like-minded supplier countries that aim
to restrict trade in sensitive technologies to peaceful purposes.
Regime members agree to restrict such trade through their national laws
and regulations, which set up systems to license the exports of
sensitive items.
The four principal regimes are the Australia Group, which focuses on
trade in chemical and biological items; the Missile Technology Control
Regime (MTCR); the Nuclear Suppliers Group; and the Wassenaar
Arrangement, which focuses on trade in conventional weapons and related
items with both civilian and military (dual-use) applications. The
United States is a member of all four regimes. Regime members conduct a
number of activities in support of the regimes, including (1) sharing
information about each others‘ export licensing decisions, including
certain export denials and, in some cases, approvals; (2) adopting
common export control practices and control lists of sensitive
equipment and technology into national laws or regulations.
Because of your interest in efforts to strengthen the multilateral
export control regimes, this report (1) describes their
accomplishments, (2) assesses their weaknesses, and (3) identifies
obstacles that the United States faces in trying to strengthen them. To
address these issues, we reviewed analyses prepared by the Departments
of State, Commerce, Defense, and the intelligence community, and
studies prepared by nonproliferation specialists in academia. We also
reviewed regime documentation, including export denial and approval
information, and met with regime representatives in Paris, France
(MTCR); Vienna, Austria (the Nuclear Suppliers Group and the Wassenaar
Arrangement); and Canberra, Australia (the Australia Group). We also
interviewed officials of the governments of Australia, Austria, Canada,
France, Japan, the Netherlands, New Zealand, and the United Kingdom,
and received written responses to questions we provided to the
governments of Canada, Japan, Germany, Russia, and Hong Kong.
Results in Brief:
Nonproliferation experts credit the Australia Group, the MTCR, the
Nuclear Suppliers Group, and the Wassenaar Arrangement with several
accomplishments. The regimes have helped set international standards
for limiting exports of sensitive items and helped stem proliferation
in particular countries of concern. For example, the Nuclear Suppliers
Group established new controls for items with both nuclear and
nonnuclear uses in the aftermath of the Persian Gulf War and
revelations of Iraq‘s nuclear weapons development program. The
Australia Group has helped raise the costs of attaining a chemical
weapons capability by cutting off sources of supply and forcing
proliferators to use less efficient means to produce chemical weapons.
The MTCR helped stop or delay development of missile programs in
Argentina, Brazil, and Egypt. However, because national governments use
a variety of other policy tools to combat proliferation, it is not
possible to attribute these accomplishments exclusively to the regimes.
We identified several weaknesses in regime activities that could hinder
their goal of curbing proliferation of sensitive items and
technologies. First, not all regime members share complete and timely
information on their export licensing decisions, including denials and
approvals of exports. For example, the United States did not report any
of 27 export denials to the Australia Group between 1996 and 2001, as
expected under regime procedures. Also, about half of the members of
the Wassenaar Arrangement--the only regime with reporting time frames-
-did not submit their export denials on time. Second, several factors
complicate the regime goal of applying export controls consistently. It
takes some members as much as 1 year to adopt agreed-upon changes to
control lists into their national laws or regulations. This lapse of
time might allow proliferators seeking sensitive items to exploit
disparities in regime members‘ control lists. In addition, we found
significant differences in how regime members implement agreed-upon
controls, such as those for high performance computers. Finally, export
controls cannot be applied consistently until countries joining regimes
have effective export control systems in place. According to the U.S.
government, at least three countries--Argentina, Belarus, and Russia--
did not have effective control systems in place when they became
members of certain regimes.
The U.S. government faces a number of interrelated obstacles in trying
to strengthen the effectiveness of multilateral export control regimes.
First, the difficult process of making consensus-based decisions limits
options for reforming the regimes. Under the current process, a single
member can block regime decisionmaking. Second, the voluntary and
nonbinding character of the regimes means they have no explicit tools
to enforce members‘ compliance with their nonproliferation commitments.
For example, the Nuclear Suppliers Group had no direct means to impede
Russia‘s export of nuclear fuel to India, an act that the U.S.
government said violated Russia‘s commitment to that regime. Third, the
rapid pace of technological change in a globalized economy makes it
difficult to keep control lists current because these lists need to be
updated more frequently. Fourth, ’secondary proliferation,“ the growing
capability of nonmember countries to develop technologies used for
weapons of mass destruction and trade them with other countries of
concern, undermines the regimes‘ ability to prevent proliferation. For
example, North Korea has exported significant ballistic missile-related
equipment, components, materials, and technical expertise to countries
of concern, including Iran. Finally, the U.S. government has no
specified or agreed-upon criteria for assessing the regimes‘
effectiveness, despite the stated goal of strengthening their
effectiveness.
We are recommending that the Secretary of State, as the lead U.S.
policy representative to the multilateral export control regimes, take
steps to establish a strategy to strengthen these regimes. As part of
this effort, the Secretary should work with other regime members to
increase information sharing, improve the consistent adoption and
implementation of export controls, and assess ways to overcome
organizational obstacles to reaching decisions and enforcing members‘
compliance with their regime commitments. We are also recommending that
the Secretary (1) report U.S. denials of all export licenses for items
controlled by a multilateral export control regime and (2) establish
criteria for assessing the effectiveness of the regimes.
In commenting on our draft report, the Department of Commerce agreed
with our findings, conclusions, and recommendations. In its written
comments, the Department of Energy indicated that it had no comments on
the report. The Department of Defense declined to provide written
comments. The Department of State said that it will give due regard to
our recommendation to establish a strategy for enhancing the
effectiveness of the multilateral export control regimes as part of a
recently announced review of the regimes ordered by the President.
However, State asserted that our report overall did not reveal any
shortcomings of nonproliferation significance. In fact, our report
highlighted the inability of the regimes to enforce Russia‘s compliance
with its regime commitments, a matter of major nonproliferation
significance. We also identified several key weaknesses in regime
processes that undermine regime effectiveness.
Background:
Multilateral export control regimes are a key policy instrument in the
overall U.S. strategy to combat the proliferation of weapons of mass
destruction and conventional weapons. Current U.S. policy calls for
enhanced multilateral cooperation of all key policy instruments--
international treaties, multilateral export control regimes, export
controls, and security assistance to other countries--in the war
against terrorism and the proliferation of weapons of mass
destruction.[Footnote 2]
The multilateral export control regimes are voluntary, nonbinding
arrangements among like-minded supplier countries that aim to prevent
the spread of WMD and missile technology and equipment by restricting
trade in sensitive technologies to peaceful purposes. While countries
make no legally binding commitments in joining them, participating
countries undertake a political commitment to abide by the goals and
principles of the regime. The regimes operate on the basis of consensus
of all members and decisions on how to implement and interpret regime
decisions are left to the national discretion of each member. The
Australia Group, the MTCR, and the Nuclear Suppliers Group focus on
trade related to WMD and their delivery systems and are referred to as
WMD regimes; the Wassenaar Arrangement focuses on trade in conventional
weapons and related dual-use items.
Specifically, the Nuclear Suppliers Group and the Australia Group seek
to ensure that trade in controlled items does not contribute to nuclear
or to chemical or biological weapons proliferation (see table 1). The
MTCR seeks to limit the spread of missile-related equipment and
technology. The Wassenaar Arrangement aims to contribute to
international security and stability by promoting greater
responsibility and transparency in arms and sensitive dual-use goods
and technology transfers. None of the regimes identify specific
countries as targets. Collectively, however, the regimes strive to
stop, slow, or increase the cost and risk of detection efforts by
countries‘ of concern to acquire sensitive technologies and
capabilities.
Table 1: Purposes of the Multilateral Export Control Regimes:
Regime: Nuclear Suppliers Group; Year established: 1975; Purpose: To
ensure that nuclear trade for peaceful purposes does not contribute to
the proliferation of nuclear weapons or explosive devices while not
hindering such trade.; Precipitating event: India‘s 1974 nuclear
explosion; Number of members: 40.
Regime: Australia Group; Year established: 1985; Purpose: To ensure
that the industries of the participating countries do not assist,
either purposefully or inadvertently, states seeking to acquire a
chemical and biological weapons capability.; Precipitating event: Iraqi
use of chemical weapons against Iran; Number of members: 33.
Regime: MTCR; Year established: 1987; Purpose: To limit the risks of
proliferation of weapons of mass destruction (i.e., nuclear, chemical,
and biological weapons), by controlling transfers that could make a
contribution to delivery systems (other than manned aircraft) for such
weapons.; Precipitating event: Missile developments in the late 1970s
and early 1980s; Number of members: 33.
Regime: Wassenaar Arrangement; Year established: 1996; Purpose: To
contribute to regional and international security and stability, by
promoting transparency and greater responsibility in transfers of
conventional arms and dual-use goods and technologies, thus preventing
destabilizing accumulations.; Precipitating event: Dissolution of the
Coordinating Committee for Multilateral Strategic Export Controls;
Number of members: 33.
Sources: Australia Group, Nuclear Suppliers Group, MTCR, and Wassenaar
Arrangement.
[End of table]
As highlighted in table 1, three of the regimes were created in
response to major proliferation events. The Nuclear Suppliers Group was
established in 1975 after India--a nonnuclear weapons state--tested a
nuclear explosive device in 1974 and was strengthened after the1991
Gulf War and revelations of Iraq‘s efforts to develop weapons of mass
destruction. The Australia Group was established in 1985 as a response
to the use of chemical weapons in the Iran-Iraq War, and the MTCR was
established in 1987 in response to missile developments in the 1970s
and 1980s. The Wassenaar Arrangement, in contrast, was created in 1996
after the dissolution of its Cold War predecessor[Footnote 3] to
include conventional technologies not covered by the other regimes.
The regimes also share overlapping memberships of between 33 to 40
states that are generally suppliers of sensitive technologies. All
regimes except the Wassenaar Arrangement have added new members in
recent years. Specifically, 28 states are members of all 4 regimes.
Although China is a major supplier, it is not a member of any of these
regimes but has declared its commitment to abide by the original 1987
guidelines and parameters of the MTCR. In addition, China has joined a
multilateral nuclear export control group called the Zangger
Committee.[Footnote 4] See appendix II for a list of the members of
each regime.
All the regimes have discussed ways to address terrorism since
September 11, 2001, and are still considering what more to do. For
example, the Australia Group added counterrorism as an official purpose
of the regime and added a number of items to its control list in an
effort to control the types of items that terrorists, rather than
states, would seek to develop chemical or biological weapons. These
items included toxins, biological equipment, and the transfer of
knowledge. The Wassenaar Arrangement amended its guidelines to add
language exhorting its members to continue to prevent the acquisition
of conventional arms and technologies by terrorists. The Nuclear
Suppliers Group is considering proposals to provide more guidance to
governments for reviewing export licenses for terrorism-related
concerns. MTCR members in September 2002 announced that they will
further study how possible changes to the MTCR guidelines and control
list may contribute to limiting the risk of controlled items and their
technology falling into the hands of terrorists.
Multilateral Export Control Regimes Have Helped Set Standards and Stem
Proliferation:
Nonproliferation experts credit the Australia Group, the MTCR, the
Nuclear Suppliers Group, and the Wassenaar Arrangement with several
accomplishments. These include helping set international standards for
limiting exports of sensitive items and helping stem proliferation in
particular countries of concern. Because the multilateral export
control regimes are only one of several policy tools that national
governments use to combat the proliferation of weapons of mass
destruction and advanced conventional weapons, it is difficult to
attribute accomplishments exclusively to the regimes.
Setting International Standards for Exports of Sensitive Items:
Each regime has helped set international standards for how countries
should control exports of sensitive technology.
* In 1978, the Nuclear Suppliers Group published the first guidelines
governing exports of nuclear materials and equipment. These guidelines
established several requirements for the members to apply, including
the application of International Atomic Energy Agency safeguards at
facilities using controlled nuclear-related items. Subsequently, in
1992, the Nuclear Suppliers Group broadened its guidelines by requiring
that members insist on full-scope safeguards as a condition of supply
for their nuclear exports. Full-scope safeguards require a country to
have an agreement with the International Atomic Energy Agency to apply
inspection and monitoring procedures for all nuclear facilities in a
country, not only those receiving a particular nuclear item from a
supplier. The Nuclear Suppliers Group, in the aftermath of the Persian
Gulf War and revelations of Iraq‘s nuclear weapons development program,
also created a dual-use control regime, which established new controls
for items with nuclear and nonnuclear uses that do not trigger a
requirement for international safeguards when exported.[Footnote 5]
* In 1985, the Australia Group convened its first meeting to begin
coordinating national policies aimed at restricting the proliferation
of chemical weapons and related dual-use items. In addition, in June
2002, the Australia Group adopted a provision in its new guidelines for
licensing sensitive chemical and biological items that made it the only
regime to require its members to adopt ’catch-all“ controls. ’Catch-
all“ controls authorize a government to require an export license for
items that are not on control lists but that could contribute to a WMD
proliferation program if exported. Furthermore, the Australia Group
added controls on technology associated with dual-use biological
equipment, as well as controls on the intangible transfer of
information and knowledge that could be used for chemical and
biological weapons purposes.
* In 1987, the MTCR established guidelines and a control list of items
as the first international standard for responsible missile-related
exports, according to Department of State officials. In addition, from
1999 to 2001, MTCR developed an International Code of Conduct intended
to create a voluntary political commitment, open to all countries,
against ballistic missile proliferation. The code--scheduled to be
launched by the Netherlands on behalf of the European Union--is to
consist of a set of broad principles, general commitments, and modest
confidence-building measures and is intended to supplement the MTCR.
* In 1996, the Wassenaar Arrangement was successfully established to
succeed the Coordinating Committee for Multilateral Strategic Export
Controls despite the opposition of some countries, according to
nonproliferation specialists. One notable accomplishment of the
Wassenaar Arrangement is the successful development of an agreement
among its members for guidelines on shoulder-fired missiles, such as
the Stinger, according to State Department officials. Although the
former head of the Wassenaar Secretariat stated that the achievements
of the Wassenaar Arrangement are limited and that ’there have been no
spectacular results,“ he stated that the situation would be worse
without the Arrangement.
Stemming Proliferation in Countries of Concern:
The export control regimes have helped stop, slow, or raise costs to
countries of concern of WMD, according to nonproliferation experts. For
example, the MTCR helped reduce the number of countries with ballistic
missile programs, according to Department of State officials.
Specifically, the MTCR contributed to ending sensitive ballistic
missile programs in a number of countries, including Argentina, Brazil,
Egypt, South Africa, and Taiwan. The MTCR also may have helped slow
missile development in India, Iran, Israel, North Korea, and Pakistan,
whose missile programs might have been further along or more advanced
in the absence of the regimes, according to nonproliferation experts.
Similarly, the Nuclear Suppliers Group helped convince Argentina and
Brazil to accept full-scope safeguards on their nuclear programs and
end nuclear activities without safeguards in exchange for expanded
access to international cooperation for peaceful nuclear
purposes.[Footnote 6]
Regimes generally have helped raise the costs to proliferators of
acquiring sensitive technologies, according to nonproliferation
experts. They have induced most major suppliers to responsibly control
their exports and have significantly reduced the availability of
technology and equipment available to programs of concern, according to
a Department of State official. Moreover, regime members have made it
more difficult, more costly, and more time consuming for proliferators
to obtain the expertise and material needed to advance their programs.
The regimes‘ efforts have caused delays, forced proliferators to use
elaborate procurement networks, and forced them to rely on older, less
effective technology, according to the official. For example, the
Australia Group may have raised the cost of attaining an offensive
chemical weapons capability by eliminating some sources of supply,
according to nonproliferation experts and regime public statements.
They noted that, as a result, some countries of concern have stopped
pursuing the acquisition of chemical weapons.
Weaknesses Could Limit Regimes‘ Effectiveness:
We identified several significant weaknesses in the activities of the
regimes that could limit their ability to curb proliferation.
Specifically, we found that regime members do not (1) share complete
and timely export licensing information or (2) harmonize their export
controls promptly to accord with regime decisions.
Members Do Not Report Complete and Timely Information to Regimes:
We found deficiencies in the sharing of export licensing information
between regime members.[Footnote 7] These deficiencies could hamper the
ability of regime members to factor key information about potential
proliferators into their export licensing decisions. For example, we
found that regime members may not always share complete information in
reporting export denials to the regimes. In addition, reporting
information on export denials for Wassenaar Regime members is generally
slow. Other regimes have not set deadlines for their members to report
such information and cannot determine how long it takes members to
report. Furthermore, three regimes do not collect export information
that would enable members to consult with each other before approving
licenses for exports that other members have denied. Members lack such
information because most regimes do not expect members to report
approvals of export licenses. Finally, only two regimes use electronic
data sharing systems to post and retrieve data. As a result, we found
significant delays in regime members‘ ability to access information
quickly for those regimes lacking this capability.
Members May Not Always Share Complete Information:
All four regimes expect members to report denials of export licenses
for controlled dual-use items. By sharing information about the
licenses it has denied, a regime member helps other members avoid
inadvertently undercutting its export licensing decisions and provides
regime members with more complete information for reviewing
questionable export license applications.[Footnote 8] Appendix III
describes the export denial reporting procedures for each regime.
Despite the expectation to report export denials, the United States did
not notify the Australia Group between 1996 and 2002 that the U.S.
government denied 27 licenses to export Australia Group-controlled
items to such countries as China, India, and Syria. Fifteen of these
licenses involved chemicals that could be used for precursors for toxic
chemical agents and the remaining licenses involved other chemical or
biological equipment and technology. In contrast, the United States
reported multiple denials to each of the other regimes in the same
period (see fig. 1). The Department of State said that the United
States was not required to report these denials to the Australia Group
because the U.S. government denied them for reasons other than chemical
and biological weapons nonproliferation purposes.[Footnote 9] However,
officials of the Australia Group Secretariat disagreed with this
assertion. They stated that Australia Group members should notify the
Australia Group Chair whenever they deny licenses to export Australia
Group-controlled items, including those controlled under another
regime. Reporting such denials, they stated, would help the Australia
Group maintain its effectiveness, ensure that other members‘ denials
are not undercut, monitor and analyze export trends, and promote
compliance with regime commitments. Furthermore, in its technical
comments on this report, the Department of State agreed that sharing
information about export licenses is a valuable element of information-
sharing efforts, but State could not explain why it did not share these
27 denials under the regime‘s broader information exchange activities.
Figure 1: U.S. Export Denials Reported to Regimes Since 1996:
[See PDF for Image]
Source: GAO analysis of Department of State data.
[End of Figure]
We found that member states may not be providing complete information
regarding their export denials. We were unable to definitively
establish the reasons why other nations have not reported denials
because we do not have access to their export licensing data. However,
our analysis of the denial reporting data available to us also reveals
that a significant percentage of each regime‘s membership has never
reported any denials. We found that the percentage of members in each
regime that have never reported export denials ranged from 45 percent
in one regime to 65 percent in another.
U.S. and foreign officials could not explain why some regime members
have never reported any denials. Although a 2000 analysis of one
regime‘s denial reporting recommended an evaluation to determine why
members were submitting few denial notifications, we saw no evidence
that the regime had conducted such an analysis. They speculated that
some members do not do so because they (1) do not receive many export
license applications for controlled items or (2) have not denied any
applications. Also, several countries, including Australia, France, and
Japan, informally discourage exporters from applying for licenses that
those governments believe they likely would deny, according to U.S.,
foreign government, and regime officials. Because such ’informal
denials“ are not reported to the regimes, they do not alert other
regime members that a potential country of concern may be seeking an
item.
When denial notifications are aggregated for all regimes, three
countries accounted for 66 percent of all denial notifications. The
United States, relative to other regime members, has reported a large
percentage of export denials to each of the regimes. Figure 2 shows the
percentage of denial notifications by country aggregated for all the
regimes.[Footnote 10]
Figure 2: Denial Notifications for All Regimes, by Country (Total
Denials: 951):
[See PDF for Image]
[A] References to particular country names, other than the United
States, are omitted for reasons of classification.
Source: GAO analysis of Department of State data.
[End of Figure]
Denial Reporting Is Slow for Many Wassenaar Members, but Timeliness
Cannot Be Assessed for Other Regimes:
All four regimes generally expect members to report denials of export
licenses for controlled dual-use items in a timely fashion.[Footnote
11] Prompt export denial reporting can help ensure that a country of
concern cannot ’shop around“ after being denied a license by a regime
member. According to the chair of one regime, even a month‘s delay in
sharing such information would provide a country of concern with more
than enough time to shop around for another source of a sensitive item.
The Wassenaar Arrangement is the only regime to have set deadlines for
its members‘ denial reporting (see app. III), but reporting by members
is slow. Members are expected to report denials of the more sensitive
dual-use items on its control lists no later than 60 days after the
date of the denial; denial notices for less sensitive items--over 75
percent of dual-use items on Wassenaar control lists--are expected to
be reported in an aggregated format every 6 months. We found that the
Wassenaar Arrangement‘s members submit these denial notifications on
schedule only about 36 percent of the time.[Footnote 12] However, the
Wassenaaar Arrangement Secretariat stated that a valid picture of
denial or other notifications can be gained only when all the
notifications are entered into the database, an action that is still in
process. The Secretariat noted that any analysis done on the
notifications before this milestone has been achieved would be flawed
and open to later revision once the data is entered into the database
correctly in early 2003.
U.S. government officials said that one reason that U.S. denial
reporting to regimes may not be timely is because the U.S. government
does not report export denials until after an exporter completes or
foregoes an appeal of the denial. In response to our enquiries, the
officials from the Department of Commerce‘s Bureau of Industry and
Security recommended to the Department of State in August 2002 that the
United States report all denials to the appropriate regime at the time
that the exporter is first officially notified of the intent to deny
the license application. In comments on a draft of this report, the
Department of State said that it proposed to the Department of Commerce
that it either should seek the exporter‘s agreement to forego appeals
or that the U.S. government should circulate a ’denial on inquiry“
notification to the regime until the export application is final.
Other regimes have not set deadlines for reporting and, furthermore,
cannot determine the amount of time that elapses between the date a
government makes a denial and reports it to the regime, thus
undermining the value of the reporting system. We could not determine
the time it takes for Australia Group or Nuclear Suppliers Group
members to report export denials because their members do not report
dates of export denials uniformly. For example, a Nuclear Suppliers
Group member may report its denial ’notification date“ as either (1)
the actual date that it denied the export or (2) the date it
transmitted the denial to the regime. Similarly, we could not determine
precise MTCR denial reporting times because the MTCR export denial data
maintained by the Department of State records only the month of the
denial. U.S. and foreign government officials agreed that denial
reporting for the regimes needs to be more timely to improve regime
effectiveness.
Not Sharing Information on Approved Exports Hampers Regimes:
Access to information on a member‘s decisions to approve exports to
nonmembers would help other regime members identify possible
proliferation patterns and determine whether specific exports had
undercut any of their license denials. However, only one regime, the
Wassenaar Arrangement, expects its members to share information on
approved export licenses. Because the Wassenaar Arrangement aims to
prevent destabilizing accumulations of weapons and sensitive dual-use
technologies in regions around the world, it gathers information about
approved dual-use exports for items on its more sensitive control lists
and about transfers of conventional weapons. However, according to U.S.
officials, the Wassenaar Arrangement gathers this information only once
every 6 months and aggregates it to a degree that it cannot be used
constructively to identify (1) undercuts of license denials, (2) items
approved and transferred, and (3) recipients of the items. Consistent
with this theme, we reported in April 2002 that approval reporting of
certain semiconductor manufacturing equipment lacks enough detail to
reveal the equipment‘s capabilities or intended end use and is of
little practical use for determining the semiconductor manufacturing
capability of the country to which the equipment is exported.[Footnote
13]
The Australia Group, the MTCR, and the Nuclear Suppliers Group each
have a formal ’no undercut“ policy. This policy sets an expectation
that whenever a member reports an export denial to a regime, no other
member will export a similar item without first consulting with the
member who denied it. However, these regimes do not share information
on the licenses that they approve, making it difficult to assess
whether the ’no undercut“ expectation is being met. To address this
weakness, the United States proposed in May 2002 that the Nuclear
Suppliers Group require its members to begin reporting approval
information. Department of State officials said members discussed the
feasibility of this proposal in September 2002, but could not say if or
when this proposal would be implemented because of members‘ concerns
about reporting proprietary information. One Department of State
official said that the regimes do not need to share this information to
identify undercuts because the members are ’self-policing“ and their
adherence to the ’no undercut“ policy is based on trust.
Only Two Regimes Use Electronic Data Systems to Send and Retrieve
Information on Denied Exports:
Two regimes, the Nuclear Suppliers Group and the Wassenaar Arrangement,
have established electronic information systems for nearly instant,
world-wide communications that can help to improve the timeliness and
quality of information sharing, especially export denial reporting. The
Nuclear Suppliers Group Information Sharing System (NISS) was
originally set up around 1993, according to a Los Alamos National
Laboratory official. The Wassenaar Arrangement Information System
(WAIS), operational for most members since January 2002, allows
participating countries to post export denial notices almost as soon as
the participating government issues the denial.[Footnote 14] The
Australia Group has investigated setting up its own system and, in
2001, inquired about the NISS. However, it has not made a commitment to
move to an electronic information and document management system.
Department of Commerce officials stated that the U.S. government has
some concerns about the security of information on an electronic system
for this regime and the MTCR since much of the data to be shared would
be classified.
As shown in table 2, the average time for regimes to distribute export
denials, once received from their members, ranges from as little as 2
days for the Nuclear Suppliers Group to as much as 30 days for the
MTCR. The members of both the Nuclear Suppliers Group and Wassenaar
Arrangement have the capability to post their denial notices as soon as
member governments officially issue the denials.
Table 2: Denial Reporting Distribution Times and Procedures for Each
Regime:
Regime: Australia Group; Frequency regimes report denied exports to
members: Weekly; Media for regimes to report denied exports: Paper
(physically delivered).
Regime: MTCR; Frequency regimes report denied exports to members:
Monthly; Media for regimes to report denied exports: Paper (physically
delivered).
Regime: Nuclear Suppliers Group; Frequency regimes report denied
exports to members: 2 days (average); Media for regimes to report
denied exports: Electronic E-mail system.
Regime: Wassenaar Arrangement; Frequency regimes report denied exports
to members: Not available[A]; Media for regimes to report denied
exports: Electronic E-mail system.
[A] Frequency could not be determined because of data limitations noted
by the Wassenaaar Arrangement Secretariat.
Source: GAO analysis of Department of State data.
[End of table]
We observed significant differences in timeliness of report
distribution to memberships and data retrieval among the regimes using
electronic information systems and those not using them. State
Department officials retrieved documents and export denial
notifications that we requested from the NISS and the WAIS electronic
systems in minutes. In contrast, State officials provided us with the
same type of information for the MTCR and the Australia Group 6 months
after we requested it. State officials said that this took so long
because they had to manually search drawers of paper files and that new
staff could not readily find documents filed by staff who were on
leave. In addition, Department of State and Energy officials showed us
how they could search the NISS in various ways to identify patterns of
proliferators and evidence of countries of concern shopping for
controlled items among several regime members.
The electronic information systems also provide more uniform data.
Before the WAIS, the use of paper systems meant that denial reports
arrived at the Wassenaar Arrangement Secretariat in a variety of
formats, with individual data fields often presented in noncomparable
ways among members, according to government and Secretariat officials.
Member countries are more likely to provide uniform and comparable data
that can be more easily analyzed because the electronic forms have
reporting fields that must be filled in correctly before submission.
Differences in How Members Implement Export Controls Can Undermine the
Regime Goal of Harmonization:
Harmonization, a goal shared by each regime, refers to efforts by
regime members to review and agree upon common control lists of
sensitive items and technologies and approaches to control them. (See
app. IV for a description of the control lists developed by each regime
and examples of the items on each list.) However, several factors
undermine this goal. First, regime members may control an item
differently because some members take significantly longer than others
to adopt agreed-upon regime changes into their national laws or
regulations. In addition, only one regime tracks whether its members
have adopted regime control list changes; none of the regimes tracks
when these changes are implemented. Second, in some cases, there are
significant differences in how members implement the same export
controls that may reduce the effectiveness of common nonproliferation
efforts. Finally, export controls cannot be applied consistently until
countries joining regimes have effective export control systems in
place. According to the U.S. government, at least three countries--
Argentina, Belarus, and Russia--did not have effective control systems
in place when they became members of certain regimes.
Some Members Take Longer Than Others to Adopt Agreed-upon Changes:
Each regime member is expected to adopt and implement control list
changes consistently, subject to its national discretion. If agreed-
upon changes to control lists are not adopted at the same time,
proliferators could exploit these time lags to obtain sensitive
technologies by focusing on regime members that are slowest to
incorporate the changes. Only the Australia Group attempts to identify
if members adopted the most recently agreed-upon controls in their
domestic regulations and laws, although it does not track the dates
that members do so. Based on our analysis, we found some significant
differences among members in the time taken to adopt agreed-upon
control list changes into their national laws or regulations. In the
case of the Wassenaar Arrangement, the European Union adopted December
2000 plenary changes within 3 months, whereas the United States did not
adopt all these changes into export regulations until 15 months later
(March 2002.)[Footnote 15] In comparison, the European Union[Footnote
16] adopted Nuclear Suppliers Group plenary changes within a year of
the Nuclear Suppliers Group plenary, and Japan adopted regulations for
all regime changes within 6 months. Department of Commerce officials
explained that the U.S. regulatory process is more comprehensive and
thorough than that of some other regime members, thus requiring a
longer time for the United States to adopt regime changes. Other regime
members adopt the texts of regime control changes verbatim, while the
United States also explains in its regulations the purpose behind the
regulatory change and how it will affect the exporter, according to the
officials.
Significant Differences Found in Members‘ Implementation of Controls:
Once regime members have adopted similar changes to export control
lists or practices, these changes can be undermined by variations in
how member states implement them. The Assistant Secretary of Commerce
for Export Administration emphasized the importance of minimizing these
differences when he said in October 2001 that member countries
implement agreed-upon control lists differently with a substantial
degree of national discretion. For example, the United States has said
that its export controls on high-performance computers, which use a
measure of computer performance to indicate when an export license is
required, are consistent with those of Wassenaar Arrangement controls.
Both the U.S. and Wassenaar Arrangement control thresholds are set at
28,000 millions of theoretical operations per second (MTOPS); computers
above this level would require a license for export.[Footnote 17]
However, the United States also maintains a ’license exception“ to this
threshold. In January 2002, the President announced that this control
threshold would increase from 85,000 MTOPS to 190,000 MTOPS; only
computers above this higher threshold to be exported to countries such
as China, India, and Russia would require a license. As a result of
this practice and of U.S. resistance to members‘ efforts to remove or
revise the current performance measure for computers, several Wassenaar
members have accused the United States of unilateral action at odds
with regime harmonization goals. Department of State officials
expressed concern that continued U.S. resistance without adequate
justification would cause some countries to unilaterally remove items
from their national control lists.[Footnote 18] According to the
Department of Commerce, the United States and the other Wassenaar
Arrangement members agreed to raise computer control levels from 28,000
to 190,000 MTOPS at a September 2002 Wassenaar meeting, 8 months after
the United States had changed its license exception control level.
Differences in how members implement agreed-upon export controls may
become an issue for the Australia Group as well. The Australia Group‘s
June 2002 Plenary agreed to require its members to adopt ’catch-all“
controls--controls that authorize a government to require an export
license for items that are not on control lists but that could
contribute to a WMD proliferation program if exported--and to make this
requirement an attachment to its new guidelines. The United States has
encouraged countries to adopt catch-all controls as a way of
strengthening nonproliferation efforts.[Footnote 19] However, while
most members of the WMD regimes have adopted catch-all controls,
significant differences over how members implement them raise questions
about their effectiveness in stopping proliferation. For example, under
some countries‘ catch-all controls, the government must show that an
exporter had absolute knowledge that an export would support a WMD
proliferation activity to require a license or to prosecute a violation
of law. Under other countries‘ catch-all controls, such as those of the
United States, the government needs to show only that an exporter knew
or suspected that an export would support a WMD proliferation activity.
A 2001 Department of Commerce report affirmed that different countries‘
standards complicate law enforcement cooperation, and Commerce noted
that even the United States faces challenges in enforcing catch-all
controls on dual-use goods because it is difficult to detect,
investigate, and prosecute cases under the U.S. catch-all provision
standard.[Footnote 20]
Lack of Effective Export Control Systems Weakens Harmonization Efforts:
Regimes consider the implementation of an effective national export
control system a criterion for a country‘s membership eligibility but
in three cases have admitted members that did not meet this criterion.
(See app. V for some factors to consider when evaluating a prospective
member to each regime.) Without an effective export control system,
members cannot ensure that they are implementing agreed-upon controls
consistently. While regime bodies, such as the chair or secretariat, do
not evaluate the export control systems of prospective members,
individual members, including the United States, have done so for each
prospective member.
Russia, Argentina, and Belarus did not have effective export control
systems in place at the time of their admission to regimes, according
to U.S. government officials and documents.
* Russia does not yet have an effective export control system in place,
according to U.S. government officials, even though it is a member of
three regimes. The Soviet Union, Russia‘s predecessor, was a founding
member of the Nuclear Suppliers Group. Russia also joined the Wassenaar
Arrangement when it was established in 1996. In June 2002, the
Assistant Secretary of State for Nonproliferation stated that Russia‘s
implementation and enforcement of its export controls remain a cause of
concern. An unclassified January 2002 report by the Director of Central
Intelligence stated that passing export control legislation will have
little impact on key weaknesses of the Russian export control system,
such as weak enforcement and insufficient penalties for
violations.[Footnote 21] According to some U.S. and foreign government
officials, it is better to have certain countries such as Russia in the
regimes in order to influence their export controls and behavior or for
other foreign policy reasons.
* Argentina did not have in place an effective export control system
when it joined the Wassenaar Arrangement in 1996. Recognizing that
Argentina did not have export controls over dual-use items and had not
adopted the Wassenaar Arrangement control list as late as 1999, the
United States urged Argentina to pass appropriate legislation.
Argentina eventually passed legislation to adopt dual-use export
controls, which went into effect in June 2000.
* Belarus had export controls in place but was not adequately enforcing
them when it became a member of the Nuclear Suppliers Group in fiscal
year 2000, according to the Department State. However, the Department
of State noted that at the time Belarus joined that regime, State still
had concerns that Belarus was not adequately enforcing certain
conventional arms-related controls. Regime members sometimes accept or
reject a particular country‘s membership for political reasons,
according to U.S. and foreign government officials.
Obstacles to Strengthening Export Control Regimes:
The U.S. government faces a number of interrelated obstacles in trying
to strengthen the multilateral export control regimes. First, and most
significant, efforts to strengthen the regimes have been hampered by a
requirement to reach consensus among all members about every decision
made and by the inability to enforce compliance with commitments in
arrangements that are voluntary and nonbinding. Second, the rapid pace
of technological change and the growing trade of sensitive items among
WMD proliferators complicates efforts to harmonize export controls and
keep control lists current. Third, the U.S. government has no specified
or agreed-upon criteria for assessing regimes‘ effectiveness.
Need for Consensus and Voluntary Nature of Regimes Limit Prospects for
Change:
U.S. and foreign government officials and nonproliferation experts all
stressed that the regimes are consensus-based organizations and depend
on the like-mindedness or cohesion of their members to be effective.
However, regimes have found it especially difficult to reach consensus
on such issues as making changes to procedures and control lists and
identifying countries to be targets of the regimes. In addition, many
U.S. and foreign government officials said that members‘ compliance
with regime commitments cannot be enforced because the multilateral
export control regimes are voluntary, nonbinding groups.
Consensus Process Makes Decision-Making Difficult:
A single member‘s objection can stalemate a regime decision. For
example, Russia has impeded consensus on several issues in the three
regimes to which it belongs--MTCR, Nuclear Suppliers Group, and the
Wassenaar Arrangement--according to several nonproliferation experts.
These issues included broadening information in denial notifications
and obtaining greater transparency into deliveries of small arms and
light weapons. One government stated that it is easier to reach
consensus in the Australia Group because Russia is not a member. On the
other hand, State and Commerce Department officials said that the need
for consensus-based decision-making can work to the U.S. advantage
because it prevents a regime from adopting proposals that the United
States might oppose.
The regimes also have found it difficult to reach consensus on
designating countries that could be targets of the regimes and,
therefore, would not receive exports listed on the regimes‘ control
lists. Some members support the idea of designating target countries
and have proposed countries to be named, while other members disagree.
For example, repeated efforts by Wassenaar Arrangement members to
identify specific countries of concern or even regions of unrest have
failed because of a lack of consensus. Instead, each regime member
determines which countries are of concern to it when implementing its
national export controls. Nonetheless, according to the Department of
State, there is broad agreement that states whose behavior is a cause
for serious concern--Iran, Iraq, Libya, and North Korea--will be dealt
with firmly by Wassenaar members.
As an alternative to designating regime targets, the Nuclear Suppliers
Group has established conditions for supply of nuclear and nuclear-
related, dual-use items. For example, members of the regime have agreed
to supply nuclear equipment and material only to countries that have in
place a full scope safeguards agreement with the International Atomic
Energy Agency for all facilities in the country and only upon
assurances that adequate physical protection will be maintained on the
supplied items. Thus, countries that do not meet these conditions in
effect become targets of the regime.
Regimes Lack Means to Enforce Compliance with Commitments:
The Under Secretary of State for Arms Control and International
Security stated in May 2002 that U.S. nonproliferation policy goals are
to stop the development of WMD and ensure compliance with existing arms
control and nonproliferation treaties and commitments. Noncompliance
can undermine the efficacy and legitimacy of these regimes, according
to the Under Secretary.
However, the regimes do not have their own means to monitor and enforce
members‘ adherence to regime commitments. Instead, they rely on
diplomatic pressure to influence compliance or the occasional
intelligence information from member states to identify activities that
might be inconsistent with regime commitments. According to the
Department of State, in the most clear and serious example of a
violation of regime nonproliferation commitments, Russia shipped
nuclear fuel to the Tarapur power reactors in India in January 2001. As
a Nuclear Suppliers Group member, Russia is committed to refraining
from nuclear cooperation with any country that lacks comprehensive
International Atomic Energy Agency safeguards on all its nuclear
facilities. India, which has a nuclear weapons program, does not have
such safeguards on all its facilities, although it does have safeguards
on the Tarapur reactors. Although Russia justified the fuel supply to
Tarapur based on a safety exemption to this commitment, 32 of 34
Nuclear Suppliers Group members declared at a special meeting in
December 2000 that this shipment would be inconsistent with Russia‘s
commitments to the Nuclear Suppliers Group. The fuel transfer occurred,
nonetheless. Several countries and the European Union sent demarches
(diplomatic notes) to Russia protesting the sale. The Department of
State issued a February 2001 public statement that ’condemned Russia‘s
disregard of its Nuclear Supplier Group commitments and urged Russia to
live up to its nonproliferation obligations.“:
Based on publicly available information, we found examples of other
questionable exports by Russia involving nuclear exports to Iran and
missile technology exports to Iran, India, China, and Libya. While
these cases were more ambiguous than the Tarapur case, they also raise
concerns over Russia‘s compliance with its commitments. In addition,
the Department of State has provided at least 34 demarches to 11 other
members of the regimes from 1998 to 2002, questioning whether their
proposed exports were consistent with regime commitments.
Several U.S. and foreign government officials said that members‘
compliance with regime commitments cannot be enforced for several
reasons. First, according to the Department of State, it is difficult
to apply the concept of enforcement to informal political commitments,
such as the export control regimes. Second, members‘ commitments to the
regimes are sometimes vague or left to the interpretation of each
member state. Third, officials of several governments stated that it is
difficult to identify when a foreign government is not complying with
its commitments because knowing whether an illicit technology transfer
occurred with or without prior government knowledge is sometimes
impossible. Fourth, it is difficult to encourage countries to comply
with their regime commitments because there is disagreement over which
states are countries of concern, according to some foreign government
officials.
Technological Change and Growing Supply of Sensitive Items from
Proliferators Complicates Efforts to Harmonize Export Controls:
The rapid pace of technological change in a globalized world economy
complicates efforts to keep control lists current because these lists
need to be updated more frequently. The current world economy is
characterized by rapid technological innovation, globalization of
business, and the internationalization of the industrial base,
according to a 2001 study.[Footnote 22] The globalization of defense
and commercial production activities has made advanced military
capabilities and related commercial goods and technologies more widely
available to many countries or subnational groups. This has narrowed
the technology gap between the United States and other
nations.[Footnote 23]
Rapidly evolving technologies have particularly impacted such areas as
high-performance computers, semiconductor manufacturing, and
information technologies. Several industry representatives and U.S. and
foreign government officials said that legislative or regulatory
changes modifying or removing items from control lists that no longer
can be effectively controlled cannot keep pace with rapid technology
changes. As a result, the Wassenaar Arrangement, which seeks to control
items in these technologies, has experienced prolonged discussion and
disagreements over how or even whether to maintain such items as high
performance computers on its control lists. In addition, MTCR members
have disagreed on revising parameters of items to control, such as
cruise missiles and unmanned aerial vehicles, allowing some members to
seek controversial cruise missile sales to nonmembers.
In addition, the trade of controlled items among nonmember countries
with indigenous WMD programs undermines regime efforts to effectively
restrict the exports of sensitive goods and technology. Government
officials of each of the regimes expressed their concern over
’secondary proliferation,“ the growing capability of proliferators to
develop WMD technologies and trade them with other countries of
concern. Traditional recipients of WMD and missile technology such as
India, Pakistan, North Korea, and Iran could emerge as new suppliers of
technology and expertise to countries of concern, according to an
unclassified 2002 report by the Director of Central Intelligence. They
are not members of multilateral export control regimes and do not
adhere to their standards. For example, North Korea has exported
significant ballistic missile-related equipment, components,
materials, and technical expertise to countries in South Asia, North
Africa, and the Middle East, including Iran. In August 2002, the Under
Secretary of State for Arms Control and International Security called
North Korea ’the world‘s foremost peddler of ballistic missile-related
equipment, components, materials, and technical expertise.“ To counter
this trend, officials of some regime member states expressed a desire
to have all supplier countries join the regimes to encourage them to
conform to regime standards and limit the proliferation of sensitive
technologies. Other officials recognized, however, that such countries
would not satisfy membership criteria and would run the risk that the
cohesiveness of like-minded memberships would be eroded.
Lack of Explicit Criteria Poses Obstacles to Strengthening Regimes:
Neither the U.S. government, member governments in the regimes whom we
contacted, nor the regimes have established explicit criteria for
assessing the regimes‘ effectiveness. Nonetheless, the U.S. government
has an established policy of strengthening the effectiveness of the
multilateral export control regimes.[Footnote 24] Various U.S.
government officials, including the President and the under secretaries
and assistant secretaries of State and Commerce have stated the policy
in public speeches or in written testimony before Congress.
Furthermore, while neither these governments nor regimes made any
evaluation of the regimes‘ effectiveness, they have asserted that the
regimes are effective.[Footnote 25] The importance of developing
criteria to assess regime effectiveness is underscored by the Export
Administration Act of 2001.[Footnote 26] Pending before the Congress at
the time of this report, this act would require monitoring of and
annual reporting on the regimes‘ effectiveness.
Some U.S. and foreign government officials noted several possible
limitations to an effort to assess the effectiveness of the regimes.
First, multilateral export control regimes could not be assessed
separately from the entire nonproliferation system, including national
export enforcement systems and treaties. Second, demonstrating the
effectiveness of the regimes would depend on being able to prove that
the international community would be worse off without the regimes than
with them. Third, several government officials and industry
representatives noted that the mission, obligations, and political
commitment of the Wassenaar Arrangement are not as clear as those of
the other regimes. Thus, assessing the effectiveness of this regime
would be especially problematic.
Notwithstanding these possible limitations to an effort to assess the
effectiveness of the regimes, some foreign and U.S. government
officials have proposed criteria to do so. The proposed criteria
include the following:
* clarity of each regime‘s mission, obligations, and political
commitment;
* quality, quantity, and timeliness of regime information exchanged,
including denial notifications;
* strength of no-undercut provisions;
* willingness and ability of the regime to adapt its practices and
common control lists to deal with new proliferation challenges;
* number of participants and level of their participation;
* level of compliance with regime standards;
* existence of guidelines for licensing and enforcement; and:
* criticism from nonmembers--specifically proliferators--as evidence
of a regime‘s effectiveness.
Conclusion:
Strengthening multilateral export control regimes would help them
better meet the U.S. national security objective of preventing the
proliferation of weapons of mass destruction and conventional weapons
to countries of concern and terrorists. A key function of each regime
is sharing information related to proliferation. Yet the regimes often
lack even the basic information that would allow them to assess whether
their actions were working as intended. The regimes cannot effectively
limit or monitor efforts by proliferators to acquire sensitive
technology without more complete and timely reporting of licensing
information and without more information on when and how members adopt
and implement agreed-upon controls. Addressing these deficiencies would
enhance the regimes‘ ability to accomplish their nonproliferation
goals. However, the consensus-based and voluntary nature of these
regimes poses organizational and political obstacles to implementing
needed reforms. In addition, the lack of explicit criteria to assess
regime effectiveness will make it difficult to determine the success of
any effort to strengthen the regimes. While the regimes have adapted to
changing threats or conditions in the past, their continued ability to
do so may determine whether the regimes remain viable in curbing
proliferation in the future. However, the United States lacks a
coherent strategy to address the regimes‘ common weaknesses and
overcome the organizational and political obstacles to strengthening
their effectiveness.
Recommendations for Executive Action:
To help the multilateral export control regimes achieve their stated
goals and objectives, we recommend that the Secretary of State
establish a strategy to work with other regime members to enhance the
effectiveness of the multilateral export control regimes. This strategy
should identify steps regime members should take to:
(1) improve information-sharing by:
* establishing clearly defined standards for reporting export denials
on a more complete and timely basis;
* sharing greater and more detailed information on approved exports of
sensitive transfers to nonmember countries; and:
* adopting automated information-sharing systems in the MTCR and
Australia Group to facilitate more timely information exchanges.
(2) adopt and implement agreed-upon regime changes to export controls
more consistently by:
* setting guidelines for when each regime member should adopt control
list changes into national laws and regulations and making this
information available to all members;
* tracking when members adopt regime changes into national law and
regulations and making information on the timing and content of these
changes available to the membership;
* establishing minimal standards for an effective national export
control system; and:
* periodically assessing each member‘s national export control system
against these standards and reporting the results of these assessments
to the regime;
(3) identify potential changes in policies and procedures by:
* assessing alternative processes for reaching decisions,
* evaluating means for encouraging greater adherence to regime
commitments, and:
* conducting an annual self-assessment of regime effectiveness.
To ensure that the United States is reporting all relevant information
to the multilateral export control regimes, as expected, we recommend
that the Secretary of State report U.S. denials of all export licenses
for items controlled by a multilateral export control regime at the
time the exporter is informed of the U.S. government‘s intent to deny
an export license.
To enable the U.S. government to better implement its policy of
strengthening the effectiveness of the multilateral export control
regimes, we also recommend that the Secretary of State establish
criteria to assess the effectiveness of the multilateral export control
regimes.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Secretaries of Commerce,
Defense, Energy, and State for their review and comment. We received
written comments from the Departments of Commerce, Energy, and State
that are reprinted in appendixes VI, VII, and VIII. The Department of
Defense declined to provide us with written comments. The Department of
State also provided us with technical comments, which we incorporated
as appropriate.
The Department of Commerce agreed with our findings, conclusions, and
recommendations. Commerce agreed that strengthening the multilateral
export control regimes would serve U.S. national security objectives.
In its written comments, the Department of Energy indicated that it had
no comments on the report. The Department of State said that it will
give due regard to our recommendation to work with other regime members
to establish a strategy for enhancing the effectiveness of the
multilateral export control regimes. State also agreed with our
conclusion that information sharing of export licensing is an important
element of regime activity.
However, State asserted that our report overall did not reveal any
shortcomings of nonproliferation significance. In fact, our report
highlighted the inability of the regimes to enforce Russia‘s compliance
with its regime commitments, a matter of major nonproliferation
significance. Our report also identified several specific weaknesses in
the processes the regimes use to share information about each other‘s
licensing decisions and to implement regime decisions. Weaknesses in
regime processes undermine the regimes‘ effectiveness in meeting
nonproliferation purposes.
We are sending copies of this report to appropriate congressional
committees and to the Secretary of Commerce, Secretary of Defense,
Secretary of Energy, and Secretary of State. Copies will be made
available to others upon request. In addition, this report will be
available at no charge on the GAO Web site at http://www.gao.gov.
Please contact me at (202) 512-8979 if you or your staff has any
questions concerning this report. A GAO contact and staff
acknowledgments are listed in appendix IX.
Joseph Christoff, Director
International Affairs and Trade:
[End of section]
Appendix I: Scope and Methodology:
To describe accomplishments of the multilateral export control regimes,
we reviewed analyses and documents prepared by the Departments of
State, Commerce, Defense, the intelligence community, and
nonproliferation specialists in academia. We also reviewed the database
of the Monterey Institute for International Studies. Also, we reviewed
plenary, working group, and information exchange documents of the
Australia Group, MTCR, Nuclear Suppliers Group, and Wassenaar
Arrangement. We met with officials of the Departments of State,
Commerce, Defense, and Energy, and the intelligence community in
Washington, D.C.; the Department of Energy‘s Los Alamos National
Laboratory in Los Alamos, New Mexico; and the Center for
Nonproliferation Studies of the Monterey Institute for International
Studies in Monterey, California. We also met with officials of the
governments of Australia, Austria, Canada, France, Japan, the
Netherlands, New Zealand, and the United Kingdom. In addition, we
received written responses to questions we provided to the governments
of Canada, Japan, Germany, Russia, and Hong Kong. Also, we met with
representatives of the points of contact for the MTCR in Paris, France;
and the Nuclear Suppliers Group in Vienna, Austria; the Secretariats of
the Australia Group in Canberra, Australia; and of the Wassenaar
Arrangement, including the Director General, in Vienna, Austria. Also,
we interviewed representatives of American companies from the Alliance
for Network Security, American Electronics Association, Association for
Manufacturing Technology, American Chemistry Council, and Nuclear
Energy Institute. We also met with representatives of the International
Atomic Energy Agency and the Zangger Committee in Vienna, Austria; and
of the Organization for the Prohibition of Chemical Weapons in The
Hague, The Netherlands, to identify the relationship between the
regimes and those organizations.
To assess weaknesses of the multilateral export control regimes, we
analyzed documents and studies noted above and met with officials and
representatives of the previously mentioned governments and
organizations. In addition, we reviewed listings of denial
notifications for all the regimes and approval notifications for the
Wassenaar Arrangement to try to identify timeliness and completeness of
reporting. In trying to identify the amount of time for members to
report denials to each regime, we learned that the regimes do not
maintain this data in a manner that allows such an analysis. The
Department of State confirmed this limitation in July 2002. We analyzed
and compared both the means and frequency with which regime points of
contact or secretariats distribute the export denial and, in the case
of the Wassenaar Arrangement, approval notifications to the membership.
We also identified which countries have and have not reported export
denials and the percentages of export denials for each country that has
reported them. We also reviewed regulations of the governments of the
United States, Japan, and the European Union to determine the time it
took to incorporate the most recent changes from the regimes into
regulations.
To identify obstacles that the United States faces in strengthening the
regimes, we analyzed the documents and studies noted above and met with
officials and representatives of the noted governments and
organizations. We could not fully assess how regime members comply with
their commitments or how well efforts to encourage compliance work
because of limited access to key Department of State data. Even though
22 U.S. Code Section 2593a requires a report to the Congress each
January discussing compliance of countries with various arms control
agreements, including the MTCR, the 2000 and 2001 reports have not yet
been provided to Congress; and the Department of State declined to
provide us access to the report drafts. Consequently, we could not
review the reports to determine how other countries are complying with
this regime. In addition, we could not fully assess how diplomatic
pressure has worked overall to stop questionable transfers of items to
nonmember countries for two reasons. The Department of State could not
tell us (1) how many demarches in total the United States has provided
to other regime members and (2) whether the questionable transfers that
the demarches protested were or were not stopped in each case. Although
State provided us with about 100 demarches concerning questionable
exports from 1998 to 2002, officials from the Departments of Defense
and Commerce indicated that the United States delivered an estimated
100 demarches to MTCR members alone, in 2001.
We channeled all requests for regime information and documentation
through the Department of State and experienced significant delays in
obtaining these documents from the Department. After presenting State
with an initial document request in September 2001, we reduced the
scope of that request in October 2001 to accommodate State‘s concerns
about the size of the request. In response to the revised request, one
State office provided requested documents by December 2001 and was
prompt in fulfilling our subsequent requests for documents.
Nonetheless, we continued to experience delays from all other State
offices in receiving access to documents over the next 7 months. State
officials attributed these delays to the Department‘s time-consuming
process of reviewing every document multiple times before agreeing to
provide us with access.
We performed our work from August 2001 to September 2002 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: List of Members of Multilateral Export Control Regimes:
Table 3:
Country: Argentina; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Australia; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Austria; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Belarus; Australia Group: ²; Australia Group: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 1.
Country: Belgium; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: ²; Number of Regimes:
4.
Country: Brazil; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 2.
Country: Bulgaria; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 3.
Country: Canada; Australia Group: [Empty]; MTCR[A]: ²; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Cyprus; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 2.
Country: Czech Republic; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: Denmark; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Finland; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: France; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: ²; Wassenaar Arrangement: [Empty]; Number of Regimes:
4.
Country: Germany; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Greece; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Hungary; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Iceland; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 2.
Country: Ireland; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Italy; Australia Group: ²; MTCR[A]: [Empty]; Nuclear Suppliers
Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of Regimes: 4.
Country: Japan; Australia Group: [Empty]; MTCR[A]: ²; Nuclear Suppliers
Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of Regimes: 4.
Country: Kazakhstan; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 1.
Country: Latvia; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 1.
Country: Luxembourg; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: Netherlands; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: New Zealand; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: ²; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Norway; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Poland; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Portugal; Australia Group: ²; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Romania; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 3.
Country: Russia; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 3.
Country: Slovakia; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 3.
Country: Slovenia; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: ²; Wassenaar Arrangement: [Empty]; Number of Regimes:
1.
Country: South Africa; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 2.
Country: South Korea; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: Spain; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Sweden; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Switzerland; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: Turkey; Australia Group: [Empty]; MTCR[A]: [Empty]; Nuclear
Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty]; Number of
Regimes: 4.
Country: Ukraine; Australia Group: ²; MTCR[A]: ²; Nuclear Suppliers
Group: ²; Wassenaar Arrangement: [Empty]; Number of Regimes: 3.
MTCR[A]: Australia Group Country : : [Empty]; Nuclear Suppliers Group:
Australia Group Country : : [Empty]; Wassenaar Arrangement: Australia
Group Country : : [Empty]; Number of Regimes: Australia Group Country :
: [Empty].
MTCR[A]: Australia Group Country : : [Empty]; Nuclear Suppliers Group:
Australia Group Country : : [Empty]; Wassenaar Arrangement: Australia
Group Country : : [Empty]; Number of Regimes: Australia Group Country :
: [Empty].
Country: United Kingdom; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: United States; Australia Group: [Empty]; MTCR[A]: [Empty];
Nuclear Suppliers Group: [Empty]; Wassenaar Arrangement: [Empty];
Number of Regimes: 4.
Country: Total; Australia Group: 33; MTCR[A]: 33; Nuclear Suppliers
Group: 40; Wassenaar Arrangement: 33; Number of Regimes: [Empty].
Legend: :
represents the regimes applicable to each listed country.
[A] Countries pledging to abide by MTCR guidelines include the People‘s
Republic of China, Israel, Romania, and Slovakia.
Sources: Center for International Trade and Security, Nonproliferation
Export Controls: A Global Evaluation, 2001 and the Australia Group,
Nuclear Suppliers Group, MTCR, and Wassenaar Arrangement.
[End of table]
[End of section]
Appendix III: Reporting Practices of Multilateral Export Control
Regimes:
Regime: Australia Group; Denied exports reported: Yes; Expected time
frames for members
to report denied exports: No; ’No undercut“ policy in effect: Yes.
Regime: MTCR; Denied exports reported: Yes; Expected time frames for
members
to report denied exports: No; ’No undercut“ policy in effect: Yes.
Regime: Nuclear Suppliers Group; Denied exports reported: Yes; Expected
time frames for members
to report denied exports: No; ’No undercut“ policy in effect: Yes.
Regime: Wassenaar Arrangement; Denied exports reported: Yes; Expected
time frames for members
to report denied exports: Yes[A]; Aggregate denials within 90 days of
6-month reporting period;; Individual denials within 30 days but no
longer
than 60 days from date of denial; ’No undercut“ policy in effect: No.
[A] The Wassenaar Arrangement calls for two types of export denial
reporting: export denials in aggregate form for less sensitive (basic)
items (about 76 percent of items) on the dual-use control list and
individual export denials for sensitive items (about 24 percent of
items) on the dual-use control list.
Source: GAO analysis based on guidelines of regimes.
[End of table]
[End of section]
Appendix IV: Comparison of Control Lists of Multilateral Export Control
Regimes:
Each regime and treaty-related organization maintains lists of
sensitive items to be monitored and controlled, but the purpose and
composition of each list differs. The Chemical Weapons Convention list
of chemicals was intended to be as comprehensive as possible, primarily
related to countries‘ declarations and destruction of their chemical
weapons; and its provisions on transfers have a different goal from
that of the Australia Group, according to officials of the Organization
for the Prohibition of Chemical Weapons. Also, 20 Australia Group
chemicals are not on the Chemical Weapons Convention list, although
families of chemicals are listed. Finally, the Chemical Weapons
Convention list does not focus on chemical equipment and transfers, but
the Australia Group list does.
Table 4: Regime Control Lists and Items: Australia GroupA:
Description of List Items: * 54 dual-use chemical precursors; * Dual-
use chemical weapons-related production equipment; ; ; ; ; * 94
pathogens and toxins that affect humans, livestock animals, and/or food
plants; * Dual-use biological production equipment; Examples of Items
on the List: Chemical:; * Thiodiglycol; * Reaction vessels, reactors,
or agitators; * Heat exchangers or condensers; * Multiwalled piping; ;
Biological:; * Ebola virus; * Bacillus anthracis; * Centrifugal
separators; * Aerosol inhalation chambers.
[A] The United States had not yet published regulations incorporating
changes from the June 2002 Australia Group plenary at the time of this
report. The changes include the addition of eight toxins to the
biological agents core list. The new total will be 102 once revised
regulations have been issued.
Source: Australia Group.
[End of table]
Table 5: Regime Control Lists and Items: MTCR:
Description of List Items: MTCR equipment and technology annex:; ; *
196 items in two categories. Category I Annex items include complete
missile systems, as well as major subsystems such as rocket stages,
engines, guidance sets, and reentry vehicles and are rarely licensed
for export. Transfers of production facilities for Category I items are
prohibited absolutely. Category II Annex items include other missile
related components, including cruise missiles and unmanned aerial
vehicles, not covered in Category I.; Examples of Items on the List:
Category I--complete missile systems, as well as major subsystems:; *
Individual rocket stages; * Reentry vehicles; * Solid or liquid fuel
rocket engines; * Guidance sets; * Thrust vector controls; * Warhead
safing, arming, fuzing, and firing mechanisms; ; Category II--other
missile related components:; * Propulsion components; * Propellants and
constituents; * Propellant production technology and equipment; *
Missile structural composites: production technology and equipment; *
Avionics equipment; * Reduced observables technology, materials, and
devices.
Source: MTCR.
[End of table]
Table 6: Regime Control Lists and Items: Nuclear Suppliers GroupA:
Description of List Items: * Part 1 guidelines provide an annexed list
(’Trigger List“) of 89 items of nuclear materials and equipment that if
exported require that the recipient country have in place a full-scope
safeguards agreement with the International Atomic Energy Agency; ; ; ;
* 67 items in part 2 consisting of exports of nuclear-related,
dual-use equipment, materials, and related technology; Examples of
Items on the List: Part 1--; * Special fissionable material; * Nuclear
reactors and equipment; * Plants and equipment for reprocessing
irradiated fuel elements; * Plants and equipment for separation of
uranium isotopes; ; Part 2--; * Machine tools; * Materials (beryllium);
* Lasers, laser amplifiers, and oscillators; * Flash x-ray equipment.
[A] The Nuclear Suppliers Group maintains two lists of controlled
items: a list of items, called the ’Trigger List,“ whose export would
require international safeguards to all nonnuclear weapons states; and
a list of dual-use items. In contrast, the Zangger Committee maintains
only a Trigger List of items whose export would require international
safeguards, such as inspections and monitoring equipment, to nonnuclear
weapons states that have not signed the Nuclear Nonproliferation
Treaty. In 1971, a group of nuclear supplier countries known as the
Zangger Committee came together to agree on how to implement and
consistently interpret their obligations under Article III.2, a
provision of the Nuclear Nonproliferation Treaty. Memberships of both
regimes are similar; a significant difference is that China is a member
only of the Zangger Committee. We did not review the activities of the
Zangger Committee except as they relate to the Nuclear Suppliers Group.
Source: Nuclear Suppliers Group. :
[End of table]
Table 7: Regime Control Lists and Items: Wassenaar Arrangement:
Description of List Items: * 541 items in Appendix 5 List of Dual-Use
Goods and Technologies Wassenaar Arrangement List 1; ; ; ; ; ; ; * 196
items in Munitions List; * 7 items in Appendix 3 Specific Information
Exchange on Arms; Examples of Items on the List: Dual-use List; *
General purpose integrated circuits; * Optical fibre communication
cables, optical fibres and accessories; * Marine acoustic systems,
equipment, and specially designed components; * Solid rocket propulsion
systems; ; Munitions List--; * Bombs, torpedoes, rockets, missiles, and
related equipment and accessories, specially designed for military use;
* ’Military explosives“ and fuels, including propellants, and related
substances; * Vessels of war, special naval equipment and accessories,
as follows, and components therefore, specially designed for military
use; * ’Aircraft,“ unmanned airborne vehicles, aero-engines and
’aircraft“ equipment, related equipment and components, specially
designed or modified for military use.
Source: Wassenaar Arrangement.
[End of table]
[End of section]
Appendix V: Some Factors Considered in Accepting New Members to
Regimes:
Groups: Australia Group; Some factors to consider in reviewing
potential members: * Applicant must demonstrate an established,
effective, and legally based system of national export controls;; * Be
a member in good standing of the Biological and Toxins Weapons
Convention and Chemical Weapons Convention;; * Demonstrated compliance
with all multilateral treaties banning chemical and biological weapons
activities..
Groups: MTCR; Some factors to consider in reviewing potential members:
Whether a prospective new member; * has a legally based effective
export control system that puts into effect the MTCR Guidelines and
procedures;; * administers and enforces such controls effectively;; *
demonstrates a sustained and sustainable commitment to
nonproliferation;; * would strengthen international nonproliferation
efforts..
Groups: Nuclear Suppliers Group; Some factors to consider in reviewing
potential members: * Enforcement of a legally based domestic export
control system that gives effect to the commitment to act in accordance
with the Nuclear Suppliers Group Guidelines;; * Ability to supply items
(including items in transit) covered by the annexes to Parts 1 and 2 of
the Nuclear Suppliers Group Guidelines;; * Adherence to the Guidelines
and action in accordance with them;; * Adherence to and compliance with
one or more of various nonproliferation treaties, including the Nuclear
Nonproliferation Treaty or equivalent international nuclear
nonproliferation agreement;; * Support of international efforts towards
nonproliferation of WMD and of their delivery vehicles..
Groups: Wassenaar Arrangement; Some factors to consider in reviewing
potential members: * A state‘s adherence to fully effective export
controls;; * Whether a state is a producer/exporter of arms or
industrial equipment, respectively;; * A state‘s nonproliferation
policies, control lists, and, where applicable, guidelines of the
Nuclear Suppliers Group, the MTCR and the Australia Group; and through
adherence to the Nuclear Nonproliferation Treaty, the Biological and
Toxicological Weapons Convention, the Chemical Weapons Convention and
(where applicable) START I, including the Lisbon Protocol..
Sources: Unclassified sources are the State Department Web site http:/
/www.state.gov/t/np/rls/fs/
2001/3528.htm; MTCR Web site http://www.mtcr.info/english/
partners.html; International Atomic Energy Agency Web site http://
www.nuclearsuppliersgroup.org/member.htm; and Wassenaar Arrangement
Web site http://www.wassenaar.org/docs/IE96.html.
[End of table]
[End of section]
Appendix VI: Comments from the Department of Commerce:
UNITED STATES DEPARTMENT OF COMMERCE Assistant Secretary for Export
Administration Washington, D.C, 20230:
October 11, 2002:
Mr. Joseph Christoff:
Director, International Affairs and Trade U.S. General Accounting
Office Washington, D.C. 20548:
Dear Mr. Christoff:
This is in response to your Septernber 30, 2002 request for Department
of Commerce comments on the General Accounting Office (GAO) draft
report entitled Nonproliferation: Strategy Needed to Strengthen
Multilateral Export Control Regimes We appreciate the opportunity to
comment on the draft report.
The Department of Commerce agrees that strengthening the multilateral
export control regimes would serve U.S. national security objectives_
The Department of Commerce also agrees with the GAO recommendations
that improved information sharing, consistent adoption and
implementation of export control systems, and assessing; ways to
overcome obstacles to reach decisions as well as enforcing member
compliance with regime commitments would strengthen the regimes.
The Department of Commerce will continue to work with. the Department
of State, as well as the Department of Defense and the Department of
Energy, to implement a coordinated and comprehensive U.S. strategy to
strengthen the multilateral export control regimes.
Thank you for the opportunity to provide comments on the draft report.
Our specific comments are enclosed. If you have any furlher questions,
please do not hesitate to contact me at:
(202) 482-5491, or contact Ms. Julissa Hurtado at (202) 482-8093.
Sincerely,
James J. Jochum:
Assistant Secretary for Export Administration:
Signed by James J. Jochum:
cc: Steve Lord:
Enclosure:
[End of section]
Appendix VII: Comments from the Department of Energy:
Department of Energy National Nuclear Security Administration
Washington, DC 20585:
October 15, 2002:
Mr. Joseph Christoff Director International Affairs and Trade U. S.
General Accounting Office Washington, D.C. 20548:
Dear Mr. Christoff.
The General Accounting Office provided the National Nuclear Security
Administration (NNSA) with a copy of its draft report GAO-03-43,
’NONPROLIFERATION: Strategy Needed to Strengthen Multilateral Export
Control Regimes.“ We have reviewed the report and understand GAO is
recommending that the Department of State should establish a strategy
to strengthen the Multilateral Export Control Regimes. NNSA, on behalf
of the Department of Energy, appreciates the efforts of the General
Accounting Office and has no comments to the report as written.
Sincerely,
Anthony R. Lane:
Associate Administrator for Management and Administration:
Signed by Anthony R. Lane:
[End of Section]
Appendix VIII: Comments from the Department of State:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
United States Department of State Washington, D. C. 20520:
OCT:
Dear Ms. Westin:
We appreciate the opportunity to review your draft report,
’NONPROLIFERATION: Strategy Needed to Strengthen Multilateral Export
Control Regimes,“ GAO-03-43, GAO Job Code 320073.
The Department‘s comments are enclosed for incorporation, along with
this letter, as an appendix to the GAO final report.
If you have any questions regarding this response, please contact
Pamela Roe, Deputy Director, Office of Chemical, Biological and Missile
Affairs, Bureau of Nonproliferation on (202) 647-4931.
Sincerely, l:
Christopher B. Burnham:
Assistant Secretary of Resource Management and Chief Financial Officer:
Signed by Christopher B. Burnham:
Enclosure:
As stated.
cc: GAO/IAT - Mr. Christoff State/OIG - Mr. Berman State/NP - Mr. Van
Diepen:
Ms. Susan S. Westin, Managing Director, International Affairs and
Trade, U.S. General Accounting Office.
Department of State Comments on GAO Draft Report:
NONPROLIFERATION: Strategy Needed to Strengthen Multilateral Export
Control Regimes GAO-03-43:
Department of State comments are set forth in detail. Department
officials are prepared to discuss and elaborate on these comments in
person at any time.
The Department of State appreciates the opportunity to comment on the
GAO‘s report entitled ’Nonproliferation: Strategy Needed to Strengthen
Multilateral Export Control Regimes.“ We were gratified to see that
GAO‘s thorough research into the workings of the four regimes did not
reveal any shortcomings of nonproliferation significance. Your report
contained three broad recommendations to help the Secretary of State
establish a strategy to work with other regime members to enhance the
effectiveness of the multilateral nonproliferation regimes. We intend
to give due regard to GAO‘s recommendations in the recently-begun
review of the WMD/missile nonproliferation regimes ordered by the
President. Our specific comments to those recommendations follow.
(1) Improving information sharing:
Regarding the report‘s conclusion that ’regimes cannot effectively
limit or monitor efforts by countries of concern to acquire sensitive
technology without more complete and timely reporting of licensing
information and without information on when and how members adopt and
implement agreed-upon export controls,“ the Department believes that
the regimes are effectively limiting acquisition of controlled items by
proliferators. For example, regime-member countries have put in place
export controls covering listed items. These controls have made an
important contribution to inhibiting acquisition of WMD and missiles.
Almost all regime members have national catch-all controls that they
use to help prevent otherwise non-controlled exports from assisting
weapons programs. As such, regime members (except for Russia) are not
significant contributors to proliferation and, in fact, have helped
delay such proliferation --a central accomplishment of the regimes as
they currently operate. Instead, proliferators must look to other, non-
regime, suppliers to obtain materials and equipment - often of less
than optimum quality. In fact, the great majority of acquisition of
regime-listed items by programs of concern occurs from and between non-
member countries such as China and North Korea.
The report deals extensively with the important role information
sharing on export licensing decisions plays in efforts to curb the
spread of WMD and missile equipment and:
technology. The Department believes that another and even more valuable
aspect of information sharing within the regimes concerns sharing
information on trends in proliferation, trends in proliferator
procurement, the use of front companies and brokers, and end-users of
concern. Such exchanges sensitize regime members to proliferation
issues of concern and provide the ’big picture“ about weapons
procurement. Officials gain a better understanding about issues of
priority concern, which lays the groundwork for future cooperation
through diplomatic channels or other forms of interdiction cooperation
aimed at impeding specific transfers of concern. While sharing
information about export licenses is valuable, the broader information
sharing described above is a large and, in our view, more important
element of the regimes‘ information exchange efforts.
Regarding sharing more complete information on export license denials,
the Department notes that the AG and MTCR have a standard format for
denial notifications which ensures uniform data is circulated to regime
participants. The Department does not necessarily see the
nonproliferation utility in sharing with regime members information on
approved U.S. exports of regime-listed items to non-members.
(2) Adopting and implementing agreed-upon regime changes to export
controls more consistently:
The Department is not aware of any instance in which time lags have
resulted in proliferators obtaining controlled items from regime
members as suggested in the report. Also, our expectation, validated by
long-standing practice, is that regime members share similar concerns
about the proliferation threat, that they scrutinize export license
applications for nonproliferation concerns, and that they would be
alert to the same kinds of concerns in reviewing licenses.
The report also discusses differences found in participants‘
implementation of regime controls, and questions the effectiveness of
catch-all controls as a nonproliferation tool. From the Department‘s
perspective, experience shows that the presence of catch-all controls
has been a critical factor in inhibiting proliferators‘ attempts to
acquire unlisted items; there is no question about their effectiveness.
Differences in implementation are a necessary result of differences in
individual countries‘ legal and political systems in coping with the
novel, non-list-based requirements of catch-all controls.
It has been our experience that it is much more important that
countries have catch-all controls, than they have controls implemented
exactly the same way.
(3) Identifying potential changes to policies and procedures:
The report takes issue with the consensus decision making process of
the regimes, asserting that it hampers the adoption of decisions and
reduces the potential effectiveness of the groups. We would note that
while achieving consensus in the regimes can be difficult, consensus
also ensures that ill-conceived proposals that could inadvertently harm
U.S. interests are not adopted.
In response to the recommendation that the regimes conduct annual
effectiveness self-assessments, the Department notes that at annual
plenaries, each regime routinely scrutinizes its relevance, impact, and
progress in stemming proliferation. Control lists are constantly
evaluated and updated to take into account trends in proliferation and
acquisition. The nonprolfieration regimes also routinely discuss (and
in many cases adopt) a wide variety of policy proposals designed to
strengthen their effectiveness in fighting proliferation. In effect,
annual self-assessments already occur, but perhaps not in as systematic
a manner as the GAO would like to see. However, we intend to give due
regard to GAO‘s recommendations in the recently-begun review of the
regimes ordered by the President.
The following are GAO‘s comments on the Department of State letter
dated October 16, 2002.
GAO Comments:
1. The Department provided examples of the commitments that governments
make when they become members of the multilateral export control
regimes. However, simply listing the types of export control
commitments these members make says nothing about how these commitments
are implemented in practice and whether they are effective. Therefore,
it is unclear how State can contend that regime members are effectively
implementing regime commitments.
2. We agree with State that proliferators must often look to nonregime
suppliers to obtain materials and equipment and discussed this issue in
our report.
3. We agree that it is important for regime members to share
information on trends in proliferation, procurements, the use of front
companies, and end users of concern. We also believe that it is
important to collect and share comprehensive licensing information on
sensitive export transfers and denials--the building blocks for
assessing these broader trends.
4. The Department stated that it sees no utility in sharing increased
information about export approvals to nonregime members. This statement
is inconsistent with its current policy and practice. For example, on
October 11, 2002, the Deputy Assistant Secretary of State for
Nonproliferation stated that regime members should share more
information on export approvals to facilitate monitoring of regime
member compliance with their ’no undercut“ commitments. Moreover, the
U.S. government has led efforts to increase this type of information
sharing in two regimes. The Wassenaar Arrangement already expects
members to share information on export approvals, and the U.S.
government submitted a proposal to the Nuclear Supplier‘s Group in 2002
that would provide for reporting export approvals.
5. None of the regimes systematically tracks the time regime members
take to implement agreed-upon changes in their control lists. In the
absence of this tracking, State cannot demonstrate that time lags have
not resulted in proliferators‘ obtaining controlled items or that the
time lags could not contribute to proliferation.
6. We agree that catch-all controls have been a critical factor in
inhibiting proliferators‘ attempts to acquire items not on regime
control lists. However, as noted in our report, different country
standards hamper effective implementation and complicate law
enforcement cooperation.
7. Our report already acknowledges that decisions based on consensus
are a double-edged sword. As we noted, while the need for consensus
hampers the adoption of important decisions, it can also prevent regime
members from adopting a position that the United States opposes.
8. During our review, we did not identify any systematic or formal
assessments of regime effectiveness routinely conducted by the regimes
or their members. Rather, regime statements sometimes assert the
effectiveness of the regimes but, as we reported, have established no
agreed upon criteria against which these assertions can be assessed.
[End of section]
Appendix IX: GAO Contact and Staff Acknowledgments:
GAO Contact:
Stephen Lord (202) 512-4379:
Acknowledgments:
In addition to the individual named above, Jeffrey D. Phillips, Eugene
Beye, Lynn Cothern, Nanette Ryen, and Richard Seldin made key
contributions to this report.
GAO‘s Mission:
The General Accounting Office, the investigative arm of Congress,
exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO‘s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO‘s Web site (www.gao.gov) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as ’Today‘s Reports,“ on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select ’Subscribe to daily E-mail alert for newly
released products“ under the GAO Reports heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. General Accounting Office
441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone: Voice: (202) 512-6000
TDD: (202) 512-2537
Fax: (202) 512-6061
:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470
:
Public Affairs:
Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800
U.S. General Accounting Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
FOOTNOTES
[1] Multilateral export control regimes are referred to as either
’regimes“ or ’arrangements,“ and the countries invited to participate
in them are variously referred to as ’members,“ ’participants,“ or
’participating states.“ In this report, we use the term ’regimes“ and
refer to participating countries as ’members.“
[2] This position was advanced by the Under Secretary for Export
Administration, Department of Commerce, Bureau of Industry and Security
(September 18, 2001, and February 26, 2002) and by the Under Secretary
of State for International Security and Arms Control (May 6, 2002). See
U.S. General Accounting Office Weapons of Mass Destruction: Assessing
U.S. Policy Tools for Combating Proliferation, GAO-02-226T (Washington,
D.C.: Nov. 7, 2001) for a description of these other policy tools.
[3] The Coordinating Committee for Multilateral Strategic Export
Controls was created in 1949 to control the transfer of militarily
useful technology to the Warsaw Pact countries. The end of the Cold War
in 1989 and the collapse of the Soviet Union in 1992 ended the
rationale for the Coordinating Committee control regime. In 1993, the
Coordinating Committee members agreed to abolish the organization and
establish a new multilateral regime. In 1996, representatives of the 33
founding member nations agreed to the Initial Elements of the Wassenaar
Arrangement on Export Controls for Conventional Arms and Dual-Use Goods
and Technologies.
[4] The Zangger Committee, established in 1971 to consider the
provisions of article III.2 of the Nuclear Nonproliferation Treaty,
maintains a list of nuclear items that is similar to the Nuclear
Suppliers Group‘s part 1 guidelines. We did not review the activities
of the Zangger Committee, except as they relate to the Nuclear
Suppliers Group.
[5] Previously, the Nuclear Suppliers Group control list included
nuclear equipment and material, the export of which would trigger a
requirement that International Atomic Energy Agency safeguards apply to
the recipient facility.
[6] Full-scope safeguards are International Atomic Energy Agency
safeguards on all facilities in a country that receive controlled
nuclear material and equipment.
[7] We recognize that regimes also share information on trends in
proliferation, trends in proliferator procurement, the use of front
companies and brokers, and end users of concern. Such exchanges
sensitize regime members to proliferation issues of concern and provide
the ’big picture“ about weapons procurement, according to the
Department of State.
[8] As part of their ’no undercut“ policy, three regimes specifically
oblige their members to consult with members who have denied a license
before approving a similar export. The Wassenaar Arrangement does not
include this type of ’no-undercut“ policy. Thus, members have no
obligation to consult before exporting items denied by other members,
but are expected to inform members after they undercut another‘s
denial.
[9] State Department officials indicated that 5 of the 27 export
denials concerned the same end users in previous notifications to the
Australia Group. The officials provided written documentation for an
additional 13 denials showing that they were reviewed for chemical and
biological weapons proliferation concerns. However, they could not
explain why these denials were not reported to the regime.
[10] Data cover different time periods because regimes began reporting
denial notifications at different times. Members also report denials
under ’catch-all“ authority--which allows governments to require
licenses for items not on control lists that might contribute to WMD
proliferation if exported--but this activity is only voluntary.
[11] For example, the Nuclear Suppliers Group expects members to report
denials of items on its Dual-Use Control List. Nuclear Suppliers Group
guidance states governments should provide ’prompt“ notification to
other governments of decisions not to authorize a transfer of
equipment, material, or related technology identified in the guidance.
[12] The reporting data that we reviewed covers a period from 1997
through 2001, before a new electronic information-sharing system became
operational for most members.
[13] U.S. General Accounting Office, Export Controls: Rapid Advances in
China‘s Semiconductor Industry Underscore Need for Fundamental U.S.
Policy Review, GAO-02-260 (Washington, D.C.: April 19, 2002).
[14] We did not independently assess the operations and effectiveness
of either the NISS or WAIS systems. Department of State officials told
us that the WAIS is experiencing certain limitations, but that these
will be addressed in subsequent modifications to the system.
[15] The European Union adopted December 2000 Wassenaar Arrangement
changes in March 2001 and the United States adopted these changes in
the following phases: (1) revisions on microprocessors, graphic
accelerators, and external interconnects adopted April 9, 2001; (2)
revisions on eight categories of items adopted January 3, 2002; (3)
revisions on computers adopted March 8, 2002.
[16] As of September 2002, the European Union had 15 member states.
[17] Computer exports to countries that are state sponsors or terrorism
require a license for computers above 6 MTOPS.
[18] See U.S. General Accounting Office, Export Controls: More Thorough
Analysis Needed to Justify Changes to High Performance Computer
Controls, GAO-02-892 (Washington, D.C.: August 2, 2002).
[19] In 1998, 21 of 29 respondents to a U.S. survey distributed to the
then-35 Nuclear Suppliers Group members indicated that they had ’catch-
all“ controls in place. The report noted that at least three of the six
members that did not respond also had ’catch-all“ controls. In 1999, 22
of the 29 respondents to a U.S. survey distributed to the then-32 MTCR
members noted that they had ’catch-all“ controls in place.
[20] Foreign Policy Report, 2001 (U.S. Department of Commerce,
Washington, D.C.)
[21] Unclassified Report to Congress on the Acquisition of Technology
Relating to Weapons of Mass Destruction and Advanced Conventional
Munitions, 1 January through 30 June 2001 (Washington, D.C.). The
report noted that, during 1998 to 1999, the Russian government stated
that it had obtained convictions for unauthorized technology transfers
in three cases. The report referred to Russian press accounts of cases
in which advanced equipment was described erroneously in export
documentation and exported, and cases in which enterprises sometimes
falsely declared goods to avoid taxes.
[22] Study Group on Enhancing Multilateral Export Controls For US
National Security: Final Report, April 2001 (The Henry L. Stimson
Center, Washington, D.C.).
[23] We reported on this phenomenon in our report, U.S. General
Accounting Office, Export Controls: Rapid Advances in China‘s
Semiconductor Industry Underscore Need for Fundamental U.S. Policy
Review, GAO-02-260 (Washington, D.C.: April 19, 2002).
[24] The Under Secretary of Commerce for Industry and Security publicly
announced in September 2001 that the effectiveness of the regimes would
be strengthened by
(1) improving timeliness and content of required reporting, (2)
adopting a formal denial consultation procedure, and (3) adopting
’catch-all“ controls.
[25] Although the Wassenaar Arrangement has a process for assessing the
Arrangement every 3 years, its 1999 assessment produced many proposals
for improving the Arrangement but no evaluation of the arrangement‘s
effectiveness.
[26] S. 149, Section 501 (b) and H.R. 2581, Section 501 (b).
GAO‘s Mission:
The General Accounting Office, the investigative arm of Congress,
exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO‘s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO‘s Web site ( www.gao.gov ) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as ’Today‘s Reports,“ on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select ’Subscribe to daily E-mail alert for newly
released products“ under the GAO Reports heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. General Accounting Office
441 G Street NW,
Room LM Washington,
D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S.
General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.
20548:
