Mr. Chairman and Members of the Committee: I welcome the opportunity to testify before you on behalf of the State Department
on the important subject of our proliferation concerns with Russia and China.
Non-proliferation is not just one of many issues in U.S. policy, but rather,
as the President and many others have said, it is a cardinal issue, one on
which we have to "get it right." It's fused in many ways to our effort to root
out terrorism and to stop the flow of dangerous materials to countries that
support terrorism and/or threaten key U.S. interests. Both Russia and China
have helped in important ways in the fight against terrorism in the wake of
the September 11 attacks, yet differences remain between us on critical non-proliferation
issues. I would like to outline our concerns and describe some steps we have
been taking to deal with the problems. I have just returned from a trip to
Europe. I was delighted to hear from a senior official at the EU (European
Union) that they share our view that proliferation is one of two galvanizing
threats confronting Europe. We are working to translate that understanding
into more effective action that will complement and supplement the many activities
the U.S. is pursuing. Let me turn first to Russia, addressing your questions as follows: (1) What
are our current proliferation concerns with Russia? (2) How does Russia participate
in multilateral export control agreements? (3) How successfully has Russia
implemented its agreements and enforced domestic regulations? (4) What assistance
is the U.S. providing to Russia? Proliferation Concerns Any discussion of Russia needs to be put in perspective. The relationship is
in the process of massive transformation from the adversarial relationship
of the Cold War. The President's visit in May cemented important parts of the
strategic arrangement we seek to leach with Russia. In addition to the treaty
that Presidents Bush and Putin signed on reducing strategic offensive weapons,
the Presidents also agreed to intensify efforts to combat the spread of weapons
of mass destruction. Two days later, NATO initiated a new NATO-Russia Council
that will help implement this undertaking. We remain t concerned, however,
that Russian entities are providing proliferant states with technology related
to weapons of mass destruction (WMD) and missiles. Russia's cash-strapped defense, biotechnology, chemical, aerospace, and nuclear
industries profit from exports and transfers to states on our list of state
sponsors of terrorism. Some Russian universities and scientific institutes
have shown a willingness to earn needed revenues by providing WMD-related or
missile-related teaching and training for foreign students. We have engaged in high-level efforts to halt Russian sales to the proliferants.
President Bush was quite direct in his conversation with President Putin last
month. We have offered Moscow lucrative incentives to end sensitive cooperation
with Iran and made clear that failure to do so will limit the scope of the
new strategic framework we seek to build with Russia. Moscow's response to
our efforts has been mixed. Russia updated its export control laws in 2001
and has limited some particularly dangerous exports. However, Russian entities
continue to engage in a broad array of cooperative projects which aid the WMD
and missile programs of countries of concern, as well as to sell these countries
advanced conventional weapons (ACW). We also have made clear to Russia that
it must take enforcement action to stop assistance to proliferators -- and
that does not mean just Iran. If Russian action does not terminate such assistance,
U.S. sanctions may be required. Participation in Multilateral Export Control Agreements Our bilateral differences notwithstanding, the United States and Russia have
worked for more than 30 years in support of the Nuclear Non-proliferation Treaty
(NPT). Last fall, Presidents Bush and Putin reaffirmed their mutual commitment
to the Biological Weapons Convention (BWC) and the Chemical Weapons Convention
(CWC), and endorsed efforts to strengthen the NPT. In Moscow two weeks ago,
Presidents Bush and Putin called on all countries -- meaning Russia and the
United States as well -- to strengthen and strictly enforce export controls,
interdict illegal transfers, prosecute violators, and tighten border controls
to prevent and protect against proliferation. It goes without saying that conformance
to treaties like the NPT, CWC, and BWC cannot be only a matter of degree. Russia is a member of several of the multilateral export control regimes, including
the Nuclear Suppliers Group (NSG), Missile Technology Control Regime (MTCR)
and Wassenaar Arrangement. It is not a member of the Australia Group (AG),
but controls the items on the AG control lists. In 1998 Russia adopted "catch-all"
controls to cover unlisted items destined for WMD/missile programs, and in
1999 passed the Federal Law on Export Controls, which created a comprehensive
basis for controlling items of proliferation concern. The Russian government
has since enacted a number of implementing regulations under the new law, revamped
the export control administration, expanded and updated its control lists and
provided new authorities for punishing violations. The framework for Russia's export control license procedures appears to be
similar to that in the United States. Representatives of relevant agencies
and ministries review all license applications and participate in an interagency
Export Control Commission, chaired at lower levels by the Department of Export
Control in the Ministry of Economic Development and Trade. Ultimate authority
as to whether to approve or deny a license resides with the President, and
by his delegation, the head of the cabinet-level Export Control Commission
chaired by the Prime Minister. Implementation Notwithstanding this export control framework, implementation and enforcement
remains insufficient. The Russian government on occasion has taken steps to
investigate alleged violations. However, proliferators continue to have access
to a wide range of sensitive technologies from Russian entities. In some cases
official Russian export policy is contributing to the proliferation threat,
such as with the decision to proceed with nuclear power plant cooperation with
Iran. Russian exports related to WMD and missiles to proliferate states take place
in a complex environment. Strong economic motivation for enterprises to increase
exports vie with mixed enforcement of export controls, a level of official
corruption, and governmental policies that often confuse rather than clarify
what is permissible and what is not. Russia's policy on such exports is generally
to interpret its non-proliferation commitments narrowly. In selling uranium
fuel to India in the face of overwhelming opposition from the Nuclear Suppliers
Group, Russia made decisions contrary to the guidelines. Moscow also tends
to downplay the threat posed by proliferant weapons programs and to express
the belief that the limited technological capability of proliferant states
will prevent them from developing WMD and missiles. That view is shortsighted
and dangerous. U.S. Assistance We have been working with the Russian government for several years to help
strengthen its export controls and enforcement. This assistance played a significant
role in creating the legal foundation for export controls that is now in place
in Russia. It was a catalyst for industry government outreach programs that
educate Russian companies about their obligations under Russia's export control
system. U.S. assistance has also funded installation of radiation detection
equipment at a number of key transit and border sites throughout Russia to
detect and interdict illicit nuclear transfers. With the legal and regulatory
basis for Russia's export controls now essentially in place, our assistance
efforts are increasingly focusing on enforcement efforts and working with customs
and law enforcement officials on combating illicit transfers. Ultimately, the Russian government must demonstrate the political will and
devote the necessary priority and resources to use these capabilities effectively
to stop illicit transfers, as well as to set responsible policies for what
constitutes legitimate transfers. It has not yet done so. We will continue
to press Moscow for this commitment. And now I would like to turn to China, addressing your questions in the following
order: (1) In what way does China participate in multilateral export control
agreements? (2) What are our current non-proliferation concerns with China?
(3) How successfully has China implemented its multilateral export control
agreements? (4) What assistance is the U.S. providing to China? Participation in Multilateral Export Control Agreements Like Russia, China is a party to the key treaties to prevent the proliferation
of weapons of mass destruction, acceding to the Biological Weapons Convention
in 1984, the Non-proliferation Treaty in 1992, and ratifying the Chemical Weapons
Convention in 1997. As a relative newcomer to non-proliferation, China's policies
are still evolving and, aside from the related Zangger Committee, China does
not belong to any of the multilateral export control regimes. China remains the only member of the Zangger Committee that is not also a member
of the Nuclear Suppliers Group, which requires full-scope safeguards as a condition
of nuclear supply to non-nuclear weapon states. China has not yet been willing
to accept the full-scope safeguards policy, although it has expressed some
interest in joining the NSG. China's nuclear export control regime applies not only to Zangger Committee
Trigger list items, but also to so-called dual-use items that have both civilian
and military applications. For transfers of both Trigger and dual-use items
to a non-nuclear weapons state (NNWS), China requires nuclear non-proliferation
assurances. In May 1997, China's State Council approved a circular notice to
government and industry requiring strict implementation of China's nuclear
export policy of not assisting other countries to acquire nuclear weapons.
In September 1997 China promulgated nation-wide nuclear export control regulations
accompanied by a list of controlled nuclear items which is identical, the Chinese
informed us, to the Nuclear Suppliers Group Trigger List. In June 1998 China's
State Council promulgated regulations, on control of nuclear dual-use items
and related technology. Proliferation Concerns We continue to have concerns about Chinese non-proliferation behavior. In particular,
we want to ensure that Beijing fully lives up to its May 1996 commitment not
to provide assistance to any unsafeguarded nuclear programs and facilities.
In October 1997, China gave the United States assurances regarding its nuclear
cooperation with Iran. China agreed to end cooperation with Iran on supplying
a uranium conversion facility (UCF) and to end further cooperation after completing
within a reasonable period of time two existing projects -- a zero-power reactor
and a zirconium production plant. We will continue to evaluate whether subsequent
interactions between Chinese and Iranian entities are consistent with the Chinese
"no new nuclear cooperation" pledge. With regard to chemical and biological weapons, China is a Party to the Biological
Weapons Convention and the Chemical Weapons Convention. But China's chemical-related
export controls are not yet up to the Australia Group standard and only cover
10 of the 20 Australia Group-listed items not also on the CWC schedules. Chinese
officials have told us they plan shortly to increase coverage to reach the
Australia Group standard. This would be a welcome improvement. However, loopholes
remain in Chinese controls and enforcement. Since 1997 the U.S. has imposed
sanctions on 13 Chinese entities under the Chemical and Biological Weapons
Control and Warfare Elimination Act of 1991 and the Iran Nonproliferation Act
of 2000. In November 2000, China committed not to assist, in any way, any country in
the development of Missile Technology Control Regime (MTCR) Annex-listed ballistic
missiles, to improve and reinforce its export control system, and to publish
at an early date a comprehensive missile-related export control list and related
regulations. However, China has failed to fully implement its commitments.
Chinese entities have recently provided Pakistan with missile-related technical
assistance. In addition, firms in China have provided dual-use missile-related
items, raw materials, and/or assistance to several other countries of proliferation
concern -- such as Iran, North Korea, and Libya. In September 2001, the U.S.
imposed missile sanctions on Chinese and Pakistani entities for their involvement
in the transfer of MTCR Annex Category II items that contributed to Pakistan's
MTCR Annex-listed ballistic missile program. We have had discussions, including
by President Bush this spring in Beijing, concerning China's failure to implement
fully its November 2000 commitments. Implementation There is a continuing gap between the commitments China has made and its implementation
of these commitments. We remain concerned about gaps and loopholes in Chinese
export controls, as well as by exports by entities with and without government
concurrence. China still has not promulgated all the laws and regulations that
would implement the non-proliferation policy that Chinese officials at every
level say is China's policy. There will be no horse trading. Our view is very
clear. If China's policy is as it describes -- opposition to proliferation
-- then it needs to put the tools in place and use them effectively. U.S. Assistance The U.S. has taken modest steps to help the Chinese identify problems in their
export control systems. The Department of Commerce (DOC) has conducted a seminar
on U.S. export control regulations for the Ministry for Trade and Economic
Cooperation (MOFTEC), the Ministry of Foreign Affairs (MFA) and the U.S. and
Chinese business communities in China. It has also brought MOFTEC officials
to the U.S. to exchange views with DOC export control officials. A Final Word The message is same for our oldest friends and our newest: as in the war on
terrorism, one cannot be neutral. Results, not words, are the means by which
we can measure China's, Russia's, or indeed any other country's commitment
to the effort to stem proliferation. President Bush made clear at the time
of the Beijing summit that China's fulfillment of its non-proliferation commitments
would be an important factor in determining how far the new U.S.-China relationship
can develop. He said the same thing to the Russians in Moscow in May. We will
rely on international treaties and multilateral agreements. We will work actively
with friends and allies, as I discussed last week in Vienna, Berlin, and Brussels
at the EU and NATO. But we will also work bilaterally and, when necessary,
unilaterally to stop the flow of weapons and technologies that constitute a
direct threat to the U.S., our forces stationed abroad, our allies, and our
friends.