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Testimony: Iran, Weapons Proliferation, Terrorism and Democracy

By Gary Milhollin

Testimony of Gary Milhollin

Professor Emeritus, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control

Before the Committee on Foreign Relations
United States Senate

May 19, 2005

I am pleased to appear today before the Senate Committee on Foreign Relations to discuss Iran’s nuclear program. I direct the Wisconsin Project on Nuclear Arms Control, an organization here in Washington that maintains a web site specifically devoted to monitoring Iran’s mass destruction weapon efforts, www.IranWatch.org, to which I would like to refer the committee for additional information and analysis on Iran. In accordance with the Committee’s request, I will concentrate my remarks upon the present negotiations Iran is conducting with Britain, France and Germany.

First, I would like to point out that the deal struck among these countries in November should be seen as a tactical step. It was intended to buy time, and to provide an opening for continued talks. It should not be seen as a answer to the overall strategic question posed by Iran’s nuclear effort. The aim of the Europeans was to get Iran to freeze its uranium enrichment and plutonium processing work while negotiations went forward. The Europeans saw this as the best chance of working toward a long-term solution. That solution would be some arrangement in which Iran received economic and security benefits in exchange for giving up its plans to enrich uranium and produce plutonium. Both enriched uranium and plutonium are used to fuel nuclear weapons, and Iran does not need to produce either domestically to run its civilian nuclear energy program.

The parties to these negotiations still seem far apart. In March, Iran proposed that it be allowed to resume processing uranium at its conversion plant by July, be allowed to install and operate 3,000 centrifuge machines, and be allowed to manufacture thousands more while receiving benefits such as additional nuclear reactors that the Europeans would supply. This is directly opposed to the stated European position, which is that Iran would have to give up uranium enrichment as part of any overall solution.

If Iran could operate 3,000 centrifuge machines, it would allow Iran to master the enrichment process, bringing it a step closer to being able to produce nuclear weapons. In addition, the machines themselves might be able to produce enough enriched uranium for two or three nuclear weapons per year if configured to do so. Iran asserts that it will only produce low enriched uranium and will immediately make it into fuel for its reactor at Bushehr. Iran, however, has already contracted with Russia to supply this reactor’s fuel. Thus, it is hard to see what peaceful purpose the enrichment process would serve. Iran itself has admitted that its enrichment effort “cannot be justified on economic grounds,” according to a leaked European summary of the negotiations.

Since the talks began last December, Iran has been threatening to resume enrichment. Britain, France and Germany have replied that if Iran does so, they will support the U.S. effort to refer the matter to the U.N. Security Council. They made this clear in a March letter to the European Union. At the present moment, it is difficult to predict how the standoff will end. If the Europeans are steadfast in their opposition to enrichment, Iran will have to decide how long to abide by the present suspension.

If the suspension continues, it could begin to resemble the one that existed after the “Agreed Framework” was reached between the United States and North Korea in 1994. Like Iran, North Korea agreed to freeze its production of fissile material, while retaining the ability to restart production at any time. The question was how long North Korea would decide to keep the freeze in place. That same question is now facing Iran. The answer may depend on two things: how much the suspension is slowing Iran’s nuclear progress, and how much Iran thinks it will suffer by being referred to the Security Council.

To push forward its enrichment effort, Iran must finish converting its existing supply of natural uranium to uranium hexafluoride (UF6), suitable for feeding into centrifuges. It must also manufacture, install, test and operate a centrifuge cascade in order to produce enriched uranium. Is Iran technically ready to do that? If not, then extending the present suspension is not costly. If Iran is ready, then the pressure will build to end the talks unless they produce substantial benefits. Iran has already produced several tons of UF6 and has tested a ten centrifuge cascade using UF6. Judging from the insistence of the Iranians on finishing the conversion process, it appears that the delay is beginning to pinch.

But to end the talks means facing the Security Council. The United States and Europe can be expected to push for a resolution calling on Iran to reinstate the suspension. There already appears to be widespread support for such a resolution. If the resolution passes and Iran does not comply, then a subsequent resolution might require Iran to suspend. Failing to suspend at that point would put Iran in defiance of the Security Council, a position Iran would not relish. Defiance might lead to the imposition of sanctions, mild at first, but then possibly more severe. It is a progression that Iran would have to consider carefully before deciding to trigger it.

There are also risks for the United States and Europe. It could be counter-productive to send Iran to the Security Council without a good prospect that effective action will be taken. If the council does little or nothing, it would show that states in violation of the Nuclear Nonproliferation Treaty do not bear any real cost. That could be the lesson Iran has already learned from North Korea’s recent referral. The Council endorsed six-party talks with North Korea but has not voted any punitive measures. A repeat performance with Iran would deal a major blow to the treaty.

An oil embargo or other trade sanctions would impose the most severe burden on Iran, but there is little chance that such measures would be adopted unless Iran does something to provoke worldwide outrage, such as conducting more secret nuclear work, or producing nuclear weapon components, or dropping out of the Nuclear Nonproliferation Treaty. Absent such a provocative act, the political will to vote strong sanctions probably does not exist, especially on the part of veto-wielding members such as Russia and China.

Therefore, it is time to ask where this chain of events is likely to take us. First, there seems to be little doubt that Iran has a nuclear weapon in mind. All of its actions so far point in that direction. For eighteen years it has been deceiving the International Atomic Energy Agency in order to run a secret and illegal effort to produce nuclear material that is not needed for Iran’s civilian energy program, but is needed for atomic bombs. If this activity were only for peaceful purposes, as Iran says, why break the rules and do it secretly? And why spend money for something that is not needed for civilian energy? The activity includes building a 40 megawatt heavy water reactor, which happens to be larger than needed for research, but too small to make electricity, and just right for producing bomb-quality plutonium. Indeed, most countries with this sort of reactor are using it to make bombs, including India, Israel and Pakistan. The IAEA has also documented Iran’s experiments with polonium, a specialized material that can serve as a neutron initiator in fission bombs, and Iran has been observed shopping for the high-precision switches that can trigger a nuclear explosion. And finally, Iran is building a 1,300 kilometer range missile called the Shahab-3, the most practical use for which is to carry a nuclear warhead. When one puts all of these activities together, they add up to a nuclear weapon effort.

Unfortunately, international inspections are not likely to prevent Iran from achieving this goal. Last November, my organization convened a roundtable discussion that included two senior veterans of the U.N. inspection effort in Iraq, during which this point was raised. The results can be found on www.IranWatch.org. The roundtable concluded that it would be difficult, if not impossible, to verify that Iran was not secretly making nuclear weapons under any deal that allowed Iran to enrich uranium. The inspection burden would either be unacceptable to Iran or provide inadequate assurance for the rest of the world. Only an intrusive, specialized inspection regime—perhaps modeled on the U.N. special inspections organized in Iraq—in which inspectors were allowed anyplace, anytime access would offer a robust guarantee against cheating. This would require access to sensitive military sites with no declared relation to Iran’s civilian nuclear infrastructure. Iran is unlikely to agree to such a regime, which it would see as a grave infringement on its national sovereignty.

The IAEA should not be asked to do more than it is capable of achieving. The agency can verify a suspension of activity at known facilities and it can track nuclear material at these facilities. But agency inspectors, under any inspection regime, are limited in their ability to detect secret nuclear processing at undeclared sites. Further, the IAEA is not equipped to detect any work that deals with the manufacture and testing of weapon components. Over nearly two decades, Iran has conducted secret nuclear processing at a number of sites. Some of these sites were known to the IAEA, others were never declared. Iran’s experience in duplicity will make it doubly difficult to catch any illicit nuclear work in the future.

If, therefore, inspections won’t stop Iran, and effective action is not likely to be endorsed by the Security Council, and we accept the statements by relevant governments that military strikes are not in the offing, it is logical to assume that Iran may actually succeed in getting nuclear weapons. That poses a question: how would we live with an Iranian bomb? What would be the main effect on the United States?

As in the Cold War, the United States would face an overtly hostile nuclear power. It would therefore be in America’s interest to weaken that power as much as possible without resorting to force. To do so, we would probably embark on a new policy of containment. America would use its resources and influence to undermine Iran on every front.

The United States would be forced to consider extending its nuclear or conventional umbrella to additional states, as a way of restricting Iran’s influence and persuading these states not to get nuclear weapons themselves. The most likely candidates would be Egypt and Saudi Arabia. It would also be natural to expect a period of “testing the waters,” in which Iran explores the boundaries of its new power. As in the Cold War, there would be a risk that someone could miscalculate. To reduce that risk, the United States would have to work out and then announce some clear “red lines” that Iran would be told not to cross.

The United States would also have to deal with Iran as a proliferation threat. After getting the bomb Iran could pass it to others. We have learned that Pakistan was a giant source of proliferation during the years when we were only worrying about Pakistan itself becoming a nuclear power. Iran might present the same problem. Its technology could spread through corruption, or its government could decide to spread the technology as a way of extending its influence. In addition, we would have to worry about Iran’s ties to terrorist groups, which take on an entirely new meaning in the context of nuclear weapons.

It would, of course, be better if the United States never had to face such issues. What is the best chance now for not having to do so?

Negotiations seem to offer the only realistic hope. The United States has little choice but to join the Europeans in their talks with Iran. A package of economic, political and security benefits could be offered for Iran’s cooperation, while at the same time punitive measures threatened in the event of non-cooperation. U.S. Secretary of State Condoleeza Rice’s endorsement of the talks on March 11 was a good first step. She also said that the United States would no longer block Iran’s application to be considered for the World Trade Organization or the purchase of spare parts for its ageing civilian aircraft. These two decisions were also positive. They helped convince the Europeans that the United States was behind a negotiated solution, if one could be reached. To have a chance of success, however, the process must have help from Russia, China and Iran’s neighbors. All parties would have to work together to induce Iran to roll back its nuclear effort. If that were to happen, Iran might eventually decide that nuclear weapons would have a negative impact on its security, its economy, and its standing in the world.

The Europeans have a great deal to offer Iran economically. Europe, unlike the United States, has active commercial ties to Iran and had been negotiating a trade agreement with Iran before the present nuclear crisis erupted in 2003. The promise of future benefits in exchange for cooperation is the main thing Europe has to offer; their denial is Europe’s primary threat.

While economics are important, Iran’s nuclear program remains motivated by security concerns—which Europe is less capable of addressing—and by Iran’s desire to increase its military and diplomatic power in the region. Only the United States is capable of providing Iran with adequate security assurances. It should start thinking about how to do so.

It would also be useful if Russia and China could approach Iran and underscore the importance of maintaining the current enrichment freeze. In particular, Russia and China could warn Iran that it should not try to back out of the freeze by accusing the Europeans of not delivering on their promises. Iran must understand that it currently lives under a suspended sentence, thanks to the deal it struck with the Europeans. If Iran decides to renege, then the sentence—notification to the U.N. Security Council of its previous inspections violations—would be applied.

Even with these steps, however, it is difficult to be optimistic. At the least, negotiations could increase awareness of the danger of a nuclear-armed Iran among key states in Europe, as well as in Russia and China, and therefore help to consolidate support for sanctions or the use of force should either be required. Before resorting to such measures, Europe and the United States would have to convince the rest of the world that all other options for preventing a nuclear-armed Iran had been exhausted.

Testimony: The Sanctions Charade

By Gary Milhollin

Testimony of Gary Milhollin

Director, Wisconsin Project on Nuclear Arms Control and
Professor Emeritus, University of Wisconsin Law School

Before the U.S.-China Economic and Security Review Commission

March 10, 2005

I am pleased to appear today before the U.S.-China Commission. The Commission has asked me to comment on U.S. policy towards China, especially concerning the proliferation of weapons of mass destruction. The Commission has asked me to discuss the effectiveness of U.S. sanctions against Chinese entities, and Beijing’s ability to police the exports of those entities.

As the Commission well knows, China’s exports continue to be a serious proliferation threat. Since 1980, China has supplied billions of dollars’ worth of nuclear weapon, chemical weapon, and missile technology to South Asia and the Middle East. It has done so in the face of U.S. protests, and despite repeated promises to stop. The exports are still going on, and while they do, they make it impossible for the United States and its allies to halt the spread of mass destruction weapons.

China’s official stance on proliferation has improved over the past few decades. China has ratified the Chemical Weapons Convention, the Biological and Toxin Weapons Convention, the Nuclear Nonproliferation Treaty, and is a member of the treaty’s Zangger Committee. Last year, China was accepted into the Nuclear Suppliers Group, and is moving toward joining the Missile Technology Control Regime.

Nevertheless, the U.S. State Department continues to announce sanctions against Chinese companies for their dangerous exports, usually because the exports are found to be contributing to the spread of mass destruction weapons. Over the past four years, the State Department has sanctioned more than twenty Chinese organizations, some of them more than once. Given the fact that these sales continue, and that some of these Chinese organizations are “serial proliferators,” it appears that our sanctions policy is not working very well. Or at least, it is not stopping these organizations from doing as they wish.

Today, I would like to discuss some of the reasons why I think that our sanctions policy must be improved. The reasons are, first, that parent companies are not punished for proliferating through their subsidiaries. This is a giant loophole, through which virtually any company can pass without touching the edges. The second reason is that the penalties imposed under U.S. sanctions laws are not strong enough to affect the profitability of the offending companies. Put simply, our sanctions do not have any real teeth.

To elaborate on the first reason, I’d like to draw the Commission’s attention to an article that my colleague Matthew Godsey and I wrote recently for the New York Times. Perhaps this article could be included in the record of this hearing. In the article, Mr. Godsey and I drew attention to the Sinopec Group, a large oil, gas, and chemical conglomerate owned by the Chinese government. The Commission has voiced its concern over this company in the past, both for its failure to disclose its operations in Sudan, and for its oil and natural gas projects in Iran.

Among Sinopec’s many subsidiaries are two that have been sanctioned a total of four times since 1997 for selling chemical weapons equipment and technology to Iran. These companies, Nanjing Chemical Industries Group and Jiangsu Yongli Chemical Engineering and Technology Import/Export Corporation, are fully-owned subsidiaries of the Sinopec Group, which holds decision-making authority over them. However, the Sinopec Group has never been sanctioned or even mentioned in sanctions announcements.

In fact, Sinopec has been doing quite well while its subsidiaries have been under sanctions. Many of its most dramatic successes have been in Iran. In 1997, the same year that Nanjing Chemical and Jiangsu Yongli were first sanctioned, China and Iran signed an agreement whereby Iran promised to increase its oil exports to China by 40% by the year 2000. In October 1998, Sinopec beat out competing bids from a host of European companies for the renovation of oil refineries in Tehran and Tabriz and the construction of an oil terminal port near Neka on the Caspian Sea. In 2001, Jiangsu Yongli was sanctioned again, while Sinopec won the right to explore Iran’s Zavareh-Kashan oilfield. And last year, Sinopec signed a $70 billion natural gas deal with Iran.

I am not aware of any direct evidence connecting Sinopec’s oil deals to the unsavory sales of its subsidiaries. However, it is not hard to imagine that Iran might be grateful for help with its chemical weapon effort-help it would have a hard time getting from Sinopec’s competitors-and that such help could result in a competitive advantage for Sinopec.

Sinopec has also benefited from joint ventures with American companies and access to the U.S. economy and capital markets. In 2000, 15 percent of the company was sold on the New York stock exchange, raising about $3.5 billion. Major U.S. companies such as Exxon Mobil, Dow Chemicals, Conoco-Phillips, Anderson Consulting, Halliburton and others have cooperated with Sinopec on a variety of projects.

Perhaps the most astonishing benefit conferred upon Sinopec has been by the United States government. In 2002, while its subsidiary Jiangsu Yongli was under its third set of sanctions, the U.S. Trade and Development Agency came up with a $429,000 grant to help another Sinopec subsidiary, Sinopec International Corp., establish an “e-procurement system.” This latter subsidiary, which did $10.8 billion in trade that year, is Sinopec’s import-export body. Sinopec itself has been listed as one of the world’s 100 richest companies by Fortune magazine. Even if its subsidiaries had not been involved in nefarious dealings, it is hard to explain why U.S. taxpayer dollars should be used to help this rich company get richer.

The root of this problem lies in the weakness of our sanctions laws. The few laws that include a provision for sanctioning parent companies, like the Arms Export Control Act, stipulate that the parent must have “knowingly assisted in the activities which were the basis” of the sanctions. That burden of proof is simply too high for our intelligence agencies to meet. Other laws, like the Iran Nonproliferation Act of 2000, make no mention of parent companies. And to make matters worse, insufficient information is given when sanctions notices are posted. The notice names the offending company, but does not name its subsidiaries, although the sanctions notice clearly says that the subsidiaries are sanctioned as well. Investors, exporters, and potential partners in joint ventures should be told whom they are dealing with.

Sanctioning parent companies in China is particularly important because of the structure of most large Chinese corporations. These companies are usually composed of an over-arching “group company” which oversees dozens of manufacturing, research, and import-export subsidiaries, one or more of which may be publicly listed on a Chinese or foreign stock exchange. When one of these subsidiaries is sanctioned (usually an import-export firm), the group company and the rest of its offshoots are untouched. Before the sanctions, the management of the group company may or may not have been involved in or aware of what its subsidiary was doing. It is possible, for example, that Sinopec was unaware in 1997 that its subsidiaries were building a factory in Iran for making glass-lined equipment. But after the sanctions were announced, and after Jiangsu Yongli and Nanjing Chemical wrote a letter angrily denying the charges, Sinopec must have known what was going on. Yet, it appears to have done nothing in response.

As subsequent events have shown, Sinopec was correct to conclude that it had no reason to be concerned. It could keep doing business with the United States through its other import/export branches, and keep proliferating through its subsidiaries, without suffering any harm itself. This is the pattern that we see today with many of China’s serial proliferators.

The most notorious of China’s serial proliferators is probably Norinco (China North Industries Corporation), a state-owned company that was sanctioned three times last year alone. Although Norinco may have actually lost some money due to sanctions, Norinco officials must have decided years ago that the profits they would receive from continuing to sell missile and other technology to Iran would more than compensate for any American business they lost due to sanctions. This decision seems to be paying off. In addition to weapons sales, Norinco has just won a recent $836 million deal to expand the Tehran subway.

While the United States has sanctioned Norinco repeatedly, its parent company, China North Industries Group Corporation (CNGC) has never been touched. CNGC owns eight other trading companies in addition to Norinco, some of which export to the United States. Sanctioning the parent would reach all of these firms, as well many other research and manufacturing subsidiaries (there are more than 120 of these, according to company literature). If we want to change Norinco’s behavior, we should try reaching its parent.

From what I have said here, it is fairly clear what the answer is to the Commission’s question about China’s ability to police its companies. Sinopec and Norinco are both owned by the Chinese government. The government could police them if it wanted to. The fact that these companies are still proliferating after numerous sanctions citations tells us that the government doesn’t want to.

A second reason why sanctions aren’t working is that the penalties are too weak. The punishment meted out to an offending company is usually limited to barring it from selling goods to the U.S. government, barring it from importing controlled American commodities (munitions and dual-use items), or receiving American foreign aid. This has virtually no effect, because sanctioned Chinese companies (which are always subsidiaries) do little or no business with the United States. Occasionally, the sanctions ban the importation into the United States of goods produced by the company, but this is more the exception than the rule.

We need to ask ourselves a simple question: what do we want sanctions to do? Do we want them to be anything more than symbolic? If so, we have to be prepared to restrict access to our economy in order to increase our security. China itself is good at this. It is deftly offering access to its civilian market as a lever to pry the Europeans loose from the present arms embargo. But we stubbornly refuse to use the American economy in this way, despite the fact that it is the most powerful tool we have to fight proliferation. Our sanctions laws have been written painstakingly to ensure that American companies never lose a dollar because of them. As a result, they are harmless to Chinese companies as well.

This is a great mistake, because the big Chinese conglomerates are rapidly becoming more vulnerable to economic pressure. Due to changes in the Chinese government and the Chinese economy, even state-owned firms in China are now motivated by profit. Like their peers elsewhere, companies that lose money face forcible re-structuring, or are assigned new management. Thus, one can get the attention of these firms by threatening their profitability. Unfortunately, our current sanctions system is incapable of doing that.

We need to amend our sanctions laws so they have some bite. The United States should sanction parent companies along with their subsidiaries, whether or not one can prove they “knowingly assisted” in the proliferation. The parent profits from the sale and is in a position to stop it. That is enough.

The penalties should also be severe. They should include a ban on imports to and exports from the United States, and should prohibit joint ventures or other forms of cooperation with American firms. They should also bar access to American capital markets. Such laws would provide a powerful financial incentive for companies like Sinopec to change their ways.

A Shell Game in the Arms Race

By Matthew Godsey and Gary Milhollin

The New York Times
February 25, 2005

Washington – President Bush has enjoyed a surprisingly jovial reception in Europe this week, but there has been a serious point of contention: the desire of European countries to lift the 15-year ban on arms sales to China. Given concerns that the Chinese are willing to sell military, and perhaps even nuclear, technology to the highest bidder, Mr. Bush’s stance seems admirable. Unfortunately, his reasonable skepticism about China’s intentions hasn’t translated into a solid commitment.

For example, earlier this month Under Secretary of State John Bolton scolded China for allowing its companies to spread weapons technology, saying the embargo was just as important “today as it was in 1989.” Yet such talk is undermined by the State Department’s own failure to check Chinese companies’ reckless sales, and by weaknesses in American trade laws. In the end, China knows it has little to fear from Washington.

Case in point: Sinopec, China’s state-owned oil and gas giant, has subsidiaries that the State Department has hit with sanctions four times since 1997 for selling to Iran materials that could be used to make chemical weapons. However, because these subsidiaries do little or no business with the United States, the punishments – curbs on trade with America – were purely symbolic.

Sinopec itself has extensive ties with American companies, dealings Washington could block. Yet we refuse to punish it for anything its offshoots do. The reason is simple: American sanctions laws were written so that the government can hold a parent company responsible only if it “knowingly” assists a sale by its subsidiary, a burden of proof our intelligence agencies can rarely meet. Why? Because our government is largely unwilling to hurt the financial interests of American firms that do business with companies like Sinopec.

This laxity on our part leaves Sinopec free to sell whatever it likes to Tehran. In 1997, the same year the State Department first cited subsidiaries of Sinopec for “knowingly and materially contributing to Iran’s chemical weapon program,” Iran promised to increase oil exports to China by 40 percent. The following year, Iran chose the Chinese company over a host of European rivals to renovate oil refineries in Tehran and Tabriz, and to construct an oil terminal on the Caspian Sea. In 2001, when the State Department again censured a subsidiary for continuing sales to Iran of products useful for poison gas production, Sinopec won the right to explore Iran’s Zavareh-Kashan oilfield.

Then, last October, Sinopec pulled off its biggest coup: a $70 billion deal in which the Chinese company will buy hundreds of millions of tons of liquefied natural gas and will help Iran develop its Yadavaran oil field.

The fact is, the United States could lower the boom on Sinopec by cutting its ties to the American economy. In 2000, Sinopec raised some $3.5 billion by selling shares on the New York Stock Exchange, with Exxon-Mobil buying a large stake. Halliburton has since provided Sinopec a design for a new chemical plant; Bechtel has helped it build a petrochemical complex in China; and ConocoPhillips has aided it in oil and gas exploration.

And, believe it or not, in 2002 Sinopec received a $429,000 grant from the United States Trade and Development Agency. The purpose was to help an import-export subsidiary to develop an electronic procurement system. No matter that another Sinopec subsidiary, the awkwardly named Jiangsu Yongli Chemical Engineering and Technology Import/Export Corporation, was under sanctions for sales to Iran, or that Sinopec ranked among the 100 richest firms in the world according to Fortune magazine. Uncle Sam still wanted to help it market its products.

Sinopec is hardly the only beneficiary of American kindliness. Our weak laws have spared Sinosteel, China Aviation Industry Corporation I and II, and China North Industries Group Corporation, even though subsidiaries of these state-owned conglomerates have been sanctioned for selling missile technology to Iran and Pakistan. In large part, we can lay the blame for this charade on a compliant government and on political pressure from American companies, whose lobbyists work to ensure that federal sanctions laws are written to protect their corporate interests. This is a travesty, because cutting off access to our economy is the most powerful leverage we have, and our failure to use it shows we aren’t serious about punishing rogue states and their corporations.

Our laws need to be rewritten so that Sinopec and other companies that abet the spread of weaponry through their subsidiaries are kicked out of American capital markets, forbidden to deal with our companies and denied access to American goods and technology. Only then will they have an incentive to change their ways, and only then can our government honestly claim that it is trying to shut down the global arms bazaar.

Matthew Godsey and Gary Milhollin are, respectively, a research associate and the director of the Wisconsin Project on Nuclear Arms Control, which produces iranwatch.org.

China’s Rockets and Missiles

Chinese Missiles

Dong Feng-3 or -3A (DF-3/3A) (US: CSS-2)

The CSS-2/DF-3 is a single-stage, liquid fueled missile fitted with a thermonuclear warhead. It has a range of 2,800 kilometers and was the first indigenously designed Chinese ballistic missile. Several CSS-2 missiles were exported to Saudi Arabia in 1988.

Technical Specifications

Range (km): 2800
Payload (kg): 2150
Diameter (m): 2.25
Weight (tons): 64
Length (m): 24
Stages: 1
Propellant: UDMH and nitrogen tetroxide
Mission: Nuclear-armed; mobile launcher
Status: First flight, December 1966; now deployed.

Dong Feng-4 (DF-4) (US: CSS-3)

The DF-4 is a two-stage, liquid fueled ballistic missile with a range of 4,750 kilometers. It can reach targets throughout European Russia, including Moscow.

Technical Specifications

Range (km): 4750
Payload (kg): 2200
Diameter (m): 2.25
Weight (tons): 80
Length (m): 28
Stages: 2
Propellant: UDMH
Mission: Nuclear-armed; ground-based
Status: First flight, September 1971; deployed.

Dong Feng-5 (DF-5, DF-5A) (US: CSS-4)

The DF-5 is China’s only true intercontinental ballistic missile, with a range of over 13,000 kilometers. It is a two-stage, liquid-fueled missile that is virtually identical to the Long March-2 rocket. According to a report by the U.S. Secretary of Defense, China is replacing its approximately twenty DF-5 missiles with the CSS-4 Mod 2, an upgraded version which has greater range.

Technical Specifications

Range (km): 13,000
Payload (kg): 3,200
Diameter (m): 3.35
Weight (tons): 183
Length (m): 32.6
Stages: 2
Propellant: UDMH and nitrogen tetroxide
Mission: Nuclear-armed; silo-based
Status: First flight September 1971; approximately 20 deployed.

Dong Feng-21 (DF-21) (US: CSS-5)

The DF-21 is the land-based version of the Julang-1 (JL-1) submarine launched missile (SLBM), with the same technical characteristics but deployed on a transporter-erector-launcher (TEL) vehicle. It can carry a 600 kilogram payload about 1800 kilometers.

Technical Specifications

Range (km): 1800 km
Payload (kg): 600 kg
Diameter (m): 1.4
Weight (tons): 14.7
Length (m): 10.7 m
Stages: 2
Propellant: Solid
Mission: Nuclear-capable; mobile launcher
Status: First flight, May 1985; deployed.

Dong Feng-15 (DF-15) (US: CSS-6 or M-9)

The DF-15 (M-9) is a short-range, mobile, solid-fueled missile, that can carry a 950 kilogram payload 600 kilometers. It is marketed abroad by the China Precision Machinery Import-Export Corporation (CPMIEC).

Technical Specifications

Range (km): 600
Payload (kg): 950
Diameter (m): 1
Weight (tons): 6.2
Length (m): 9.1
Stages: 1
Propellant: Solid
Mission: Short-range; mobile; nuclear-capable
Status: First flight, June 1989; widely deployed.

Dong Feng-11 (DF-11) (US: CSS-7 or M-11)

The DF-11 is a short-range ballistic missile that can carry a 800 kilogram payload 300 kilometers. The DF-11 is believed to be deployed largely in the Nanjing Military Region, opposite Taiwan. The M-11, an export version of the DF-11, has been exported to Pakistan. The DF-11A (DF-11 Mod 2), an improved version of the DF-11, reportedly was displayed at a military parade in 1999, and may now be in service.

Technical Specifications

Range (km): 300
Payload (kg): 800
Diameter (m):
Weight (tons):
Length (m):
Stages: 2
Propellant: Solid
Mission: Short-range; mobile; conventionally-armed; nuclear-capable
Status: First flight, mid-1990; widely deployed.

Dong Feng-31 (DF-31)

The DF-31 is a long-range, mobile, solid-fueled ballistic missile estimated to have a range of 8,000 kilometers. Deployment of the DF-31 is expected by the end of the decade. The DF-31A, a longer-range follow-on version of the DF-31, reportedly is also under development. The DF-31A is expected to have a range of approximately 12,000 kilometers.

Technical Specifications

Range (km): 8000
Payload (kg): 700
Diameter (m):
Weight (tons):
Length (m):
Stages: 3
Propellant: Solid
Mission: Nuclear-capable; mobile
Status: Under development

Submarine Launched Missiles (SLBMs)

Julang-1 (JL-1) (US: CSS-N-3)

The JL-1 is a single-warhead, two-stage submarine launched ballistic missile. It is the first Chinese missile to use only solid fuel and China’s only deployed SLBM.

Technical Specifications

Range (km): 1700
Payload (kg): 600
Diameter (m): 1.4
Weight (tons): 14.7
Length (m): 10.7
Stages: 2
Propellant: Solid
Mission: Submarine-launched; nuclear-capable
Status: First flight, October 1982; 12 deployed on Xia-class submarines.

Julang-2 (JL-2) (US: CSS-N-4)

The JL-2 is a three-stage, submarine-launched ballistic missile currently under development. It is based upon the DF-31, a land-based long-range ballistic missile also still being developed. The JL-2 is expected to have a range of approximately 8,000 kilometers, far greater than the 1,700 km range of the JL-1. The JL-2 would be deployed on the Project 094 SSBN, currently under construction.

Technical Specifications

Range (km): 8000
Payload (kg): 700
Diameter (m):
Weight (tons):
Length (m):
Stages: 3
Propellant: Solid
Mission: Submarine-launched; nuclear-capable
Status: Under development

Note: According to a report in July 2003 by the U.S. Secretary of Defense, China has approximately twenty ICBMs capable of targeting the United States. The report says that this number could increase to about 30 by 2005 and could reach 60 by 2010.

Chinese Launch Vehicles

Long March 2C/SD Launch Vehicle (LM-2C/SD or CZ-2C/SD)

The LM-2C/SD is a two-stage launch vehicle with a smart dispenser and a payload capacity of 2,500-2,800 kilograms. It is used to deploy recoverable satellites in low earth orbit (LEO). The original model, the LM-2, was renamed the LM-2C after a successful test flight in 1975. The LM-2C’s design was derived directly from China’s DF-5 (CSS-4) ballistic missile. It was renamed the LM-2C/SD in 1999, after being modified in preparation to launch Motorola’s Iridium communications satellites. The modifications included upgrades to the first two stages and the addition of a smart dispenser (SD) as a third stage. The LM-2C/SD is capable of placing multiple satellites into different Low Earth Orbits (LEO).

Technical Specifications
1st Stage 2nd Stage Smart Dispenser
Diameter (m): 3.35 3.35 2.7
Mass of Propellant (t): 162.7 54.7 12.5/50
Propellant: Nitrogen tetroxide/UDMH HTPB
Engine Type: DaYF6-2 DaYF20-1 (Main) Solid motor
YF21-1 (Vernier)
Engine Thrust (kN): 2962 742 (Main) 157
11.8×4 (Vernier)
Lift-off Mass (t): 213
Overall Length (m): 40.4
Fairing Diameter (m): 3.35

Long March 2D Launch Vehicle (LM-2D or CZ-2D)

The LM-2D is a two-stage launch vehicle adapted from the first and second stages of the Long March 4. The LM-2D can deploy a payload of 3700 kilograms into low earth orbit (LEO). The LM-2D is launched from the Jiuquan Satellite Launch Center.

Technical Specifications
1st Stage 2nd Stage
Diameter (m): 3.35 3.35
Mass of Propellant (t): 182.07 35.408
Propellant: Nitrogen tetroxide/UDMH
Engine Type: DaYF-21B YF-22B (Main)
Engine Thrust (kN): 2250 742 (Main) 46.1 (Vernier)
Lift-off Mass (t): 232.7
Overall Length (m): 37.73
Fairing Diameter (m): 2.90/3.35

Long March 2E Launch Vehicle (LM-2E or CZ-2E)

The LM-2E is a two-stage launch vehicle using stages similar to those of the LM-2C. The LM-2E has four 15 meter strap-on boosters. It is used to deploy payloads up to 9,500 kilograms in low earth orbit (LEO). When equipped with a perigee kick motor (EPKM) as a third stage, the LM-2E can deploy a payload of 3,500 kilograms in geostationary transfer orbit (GTO). Kick motors for the LM-2E were originally supplied by foreign companies; however, China now has the ability to produce its own kick motors.

Technical Specifications
Boosters 1st Stage 2nd Stage 3rd Stage
Diameter (m): 2.25 3.35 3.35
Mass of Propellant (t): 148 (4 x 37) 181 37
Propellant: Nitrogen tetroxide/UDMH
Engine Type: 4 x YF-20 YF-21 YF-22 (Main)
YF-23 (Vernier)
Engine Thrust (kN): 4 x 740 2961 742 (Main)
47 (Vernier)
Lift-off Mass (t): 460
Overall Length (m): 49.7
Fairing Diameter (m): 4.20

Long March 2F Launch Vehicle (LM-2F or CZ-2F)

The LM-2F, China’s largest launch vehicle, was developed on the basis of the LM-2E. The LM-2F has four boosters, two stages, and an escape tower. On October 15, 2003, an LM-2F launch vehicle carrying a Shenzhou V spacecraft launched China’s first astronaut into space.

Long March 3 Launch Vehicle (LM-3 or CZ-3)

The LM-3 is a three-stage launch vehicle with a cryogenic third stage. The liquid hydrogen and liquid oxygen third-stage engines were developed by the China Academy of Launch Vehicle Technology (CALT). The LM-3 can deploy satellites up to 1,500 kilograms into a geosynchronous transfer orbit (GTO). It was first launched in January 1984.

Technical Specifications
1st Stage 2nd Stage 3rd Stage
Diameter (m): 3.35 3.35 2.25
Mass of Propellant (t): 144 36 8.7
Propellant: Nitrogen tetroxide/UDMH LOX/LH
Engine Type: 4 x YF-20 YF-22 (Main) YF-73
(YF-21) YF-23 (Vernier)
Engine Thrust (kN): 2962 2911 (Main) 44.4
2834 (Vernier)
Lift-off Mass (t): 204
Overall Length (m): 44.56

Long March 3A Launch Vehicle (LM-3A CZ-3A)

Designed and developed using LM-3 technology, the LM-3A uses a more powerful cryogenic third stage engine, a more capable control system, and greater flexibility in the attitude control system. It can deploy a 2,600 kilogram payload into geosynchronous transfer orbit and can be used for low earth orbit and polar orbit missions as well. It was first launched in February 1994.

Technical Specifications
1st Stage 2nd Stage 3rd Stage
Diameter (m): 3.35 3.35 3.0
Mass of Propellant (t): 171.8 30.8 18.2
Propellant: Nitrogen tetroxide/UDMH LOX/LH2
Engine Type: DaYF6-2 DaYF20-1 (Main) YF-75
(4 x YF-20) DaYF21-1 (Vernier)
Engine Thrust (kN): 2962 742 (Main) 157
11.8×4 (Vernier)
Lift-off Mass (t): 241
Overall Length (m): 52.52
Fairing Diameter (m): 3.35

Long March 3B Launch Vehicle (LM-3B or CZ-3B)

The LM-3B launch vehicle was designed with a LM-3A vehicle as its core with four strap-on liquid propellent boosters. The core stage of the LM-3B is identical to the -3A except that the stage tanks have been extended and reinforced, the fairing has been enlarged, and the control and telemetry systems have been modified to accommodate the strap-on boosters. The LM-3B can deploy a payload of 5,200 kilograms into geosynchronous transfer orbit (GTO). The LM-3B can also perform payload attitude adjustments and dual or multiple launch requirements. The LM-3B is launched from Xichang Satellite Launch Center (XSLC) in Sichuan Province.

Technical Specifications

Boosters 1st Stage 2nd Stage 3rd Stage
Diameter (m): 2.25 3.35 3.35 3.00
Mass of Propellant (t): 171.8 49.6 18.2
Propellant: Nitrogen tetroxide/UDMH LOX/LH2
Engine Type: DaFY5-1 DaFY6-2 DaFY20-1 (Main) YF-75
DaFY21-1 (Vernier)
Engine Thrust (kN): 740.4×4 2961.6 742 (Main) 78.5×2
11.8×4 (Vernier)
Lift-off Mass (t): 426
Overall Length (m): 54.838
Fairing Diameter (m): 4.00

Long March 3C Launch Vehicle (LM-3C or CZ-3C)

The LM-3C is a three-stage launch vehicle. It differs from the LM-3B in its use of two strap-on boosters in its first stage rather than four. The LM-3C is launched from Xichang Satellite Launch Center (XSLC). The LM-3C can be used to deploy payloads into GTO.

Technical Specifications

Boosters 1st Stage 2st Stage 3rd Stage
Diameter (m): 2.25 3.35 3.35 3.00
Mass of Propellant (t):
Propellant: N2O4/UDMH N2O4/UDMH N2O4/UDMH LOX/LH2
Engine Type: DaFY5-1 DaFY6-2 DaFY20-1(main) YF-75
DaFY-21-1(Vernier)
Engine Thrust (kN): 740.4×2 2961.6 742 (Main) 78.5×2
11.8×4 (Vernier)
Lift-off Mass (t): 345
Overall Length (m): 54.838
Fairing Diameter (m) 4.00

Long March 4 Launch Vehicle (LM-4 or CZ-4)

The LM-4 is a three-stage launch vehicle. The first and second stages are adapted from the LM-3, with a liquid propellant third stage. The LM-4 can deploy a 2,790 kilogram payload into sun synchronous orbit (SSO), a 1,419 kilogram payload into geosynchronous transfer orbit (GTO), or a 4,595 kilogram payload into low earth orbit (LEO). The LM-4 is launched from Taiyuan Satellite Launch Center. It was first launched in September 1988.

Technical Specifications

1st Stage 2nd Stage 3rd Stage
Diameter (m): 3.35 3.35 2.90
Mass of Propellant (t): 182.07 35.408 14.3
Propellant: Nitrogen tetroxide/UDMH
Engine Type: DaYF-21B YF-22B (Main) YF-40A
YF-23 (Vermier)
Engine Thrust (kN): 2962 742 (Main) 100.8
46.1 (Vernier)
Lift-off Mass (t): 249.2
Overall Length (m): 45.8
Fairing Diameter (m): 2.90/3.35

Small Launch Vehicle J-1

Small Launch Vehicle J-1 is a small three-stage launch vehicle with an orbit-maneuver motor. It is used to launch small satellites into LEO or SSO. The Small Launch Vehicle conducted its first test flight in 1997.

Technical Specifications

1st Stage 2nd Stage 3rd Stage OM Motor
Diameter (m) 2.25 2.25 2.05
Mass of Propellant (t):
Propellant: N2O4/HNO3 N2O4/HNO3 HTPB HTPB
Engine Type: YF-2A YF-3 SPAB-14B OM-1
Engine Thrust (kN): 1101.29 320.19 161.5 7.93
Lift-off Mass (t): 85.42
Overall Length (m): 31.28

Brazil’s Nuclear Milestones – 1955-2004

1955: The U.S. and Brazil sign an Atoms for Peace agreement for nuclear cooperation.

1956: The National Atomic Energy Commission (CNEN) is created.

1957: Brazil’s first research reactor, the IEA-R1, a pool light water reactor, goes critical.

1960: A second research reactor, the IPR-RI, a Triga Mark I light water reactor, goes critical.

1965: A third research reactor, the Argonauta, an Argonaut light water reactor, goes critical.

1971: Brazil orders a light-water power reactor from Westinghouse.

1975: West Germany agrees to provide Brazil with 8 nuclear power plants and facilities for a complete nuclear fuel cycle. In fact, only one reactor is supplied under the agreement.

Late 1970s: A secret “parallel” program intended to develop an atomic bomb begins. The program seeks to develop a graphite reactor to produce plutonium, and both laser and gas centrifuge technology to enrich uranium.

1980: Brazil and Argentina agree to cooperate in developing the nuclear fuel cycle.

1984: Angra I, the Westinghouse reactor, begins commercial operations.

1985: Joint Declaration of Nuclear Policy with Argentina.

1987: Brazil announces that researchers have succeeded in enriching uranium.

1987: A West German intelligence report says equipment from Brazil’s safeguarded nuclear program is leaking into the secret parallel program.

1988: Brazil adopts a new constitution restricting nuclear activities to peaceful uses and giving congress authority over nuclear affairs.

1988: A fourth research reactor, the IPEN / MB-01, a light water critical assembly, goes critical.

1990: Secret parallel nuclear bomb program is formally exposed.

1990: Secret shaft apparently intended for testing nuclear weapons in the Cachimbo mountains is symbolically closed.

1990: Argentina and Brazil sign the Foz de Iguacu Declaration on Common Nuclear Policy renouncing nuclear weapons and pledging to develop a system of safeguards.

1991: Argentina and Brazil sign a bilateral agreement for the exclusively peaceful use of nuclear energy, creating the Argentine-Brazilian Accounting and Control Commission (ABACC) to verify implementation of the agreed-upon safeguards.

1994: A Quadrapartite Agreement for nuclear inspections enters into effect between Brazil, Argentina, the IAEA, and the ABACC.

1994: Brazil enters into the Treaty for the Prohibition of Nuclear Weapons on Latin America and the Caribbean (Treaty of Tlatelolco).

1996: Brazil joins the Nuclear Suppliers Group.

1996: The Brazilian Navy announces that it has suspended plans to build a nuclear-powered submarine due to a shortage of funds.

1997: An agreement with the United States for peaceful nuclear cooperation is submitted to the U.S. Congress.

1998: Brazil ratifies both the NPT and the CTBT.

2001: The Angra II light water power reactor begins commercial operation.

2003: Brazil announces it still plans to build a nuclear submarine.

2003: Brazil announces that it will enrich uranium at a commercial-scale facility in Resende.

2004: Brazil prevents IAEA inspection of equipment at the facility in Resende, claiming it needs to protect its superior technology.

China’s Ballistic Missile Update – 2004

Introduction

China continues to modernize its ballistic missile arsenal. Although limited in number and capability when compared to their American counterparts, China’s ballistic missiles are being improved in a number of key ways, making them a growing threat to the United States. The newly-developed DF-31 is capable of targeting the west coast of the United States, while its longer-range follow-on, the DF-31A, once deployed, may be able to reach much of the continental United States. These missiles will be mobile and require far less launch-preparation time than China’s older missiles, making these new weapons more likely to survive a preemptive strike. Furthermore, advances in warhead design and multiple independently-targeted reentry vehicle (MIRV) technology (including a successful test of a MIRVed DF-21) appear intended to enable China to overcome U.S. missile defenses, allowing it to maintain a credible deterrent. Information and technology purchased from foreign companies and stolen from U.S. weapons labs has contributed greatly to the success of China’s modernization program.

Modernization efforts

DF-21:

The DF-21 is a two-stage, solid-fuel, mobile intermediate-range ballistic missile carried in a canister on a transporter-erector-launcher (TEL). It can be armed with a single 200-300 kiloton-yield nuclear warhead, is reported to be 10.7m long and 1.4m in diameter, to weigh 14.7 tons, and to have a range of 1800 km with a payload of 600 kg. It is estimated that 48 DF-21s have been deployed. In 2002, according to a report in Japan’s Daily Yomiuri newspaper, a DF-21 equipped with several MIRV-ed warheads was successfully test-launched, making it the first Chinese missile to be successfully armed with multiple warheads. The DF-21 is capable of reaching U.S. military bases in Asia, as well as targets in Russia, India, Japan, Korea, and the Philippines.

DF-31:

The DF-31 is a three-stage, solid-fuel, mobile missile that forms an essential part of China’s modernization effort. It has an estimated range of 8,000 km with a 700 kg payload, and is designed to carry a single 200-300 Kt nuclear warhead. The DF-31 was successfully flight-tested in August 1999, reportedly using a dummy warhead and several decoys. China conducted two more successful flight tests of the DF-31 during 2000. According to a report in the Washington Times, a 2002 test of the DF-31 re-entry vehicle was unsuccessful, ending in a mid-flight explosion. The DF-31 offers a number of operational advantages over older Chinese missiles such as the DF-4. Instead of being launched from a single location, the DF-31 can be transported on its TEL to one of many predetermined launch sites, providing greater survivability in the event of a first strike. Furthermore, liquid-fueled missiles such as the DF-4 require greater launch preparation time. The DF-31 may also be the first Chinese missile to be armed with a warhead based on the W-88 or W-70, U.S. warheads the designs for which were stolen from American weapons labs. Despite a number of successful flight tests, deployment of the DF-31 has not come as quickly as previously predicted. Currently, the system is expected to be deployed before the end of the decade. The JL-2 is the submarine-launched version of the DF-31.

DF-31A:

The DF-31A is an extended-range version of the DF-31. It is estimated to have a range of around 12,000 kilometers; however, few details are known about the new system. It will likely replace the now-canceled DF-41 as the future mainstay of China’s intercontinental ballistic missile (ICBM) arsenal. The DF-31A is likely to supplement, rather than replace, the DF-5/DF-5A, China’s existing ICBM. Like the DF-31, the DF-31A would provide mobility and a shorter launch preparation time. The DF-5 is stored in silos and elevated prior to launch, making it vulnerable to a preemptive strike.

DF-5:

China currently has approximately 20 DF-5 (CSS-4 Mod 1) ICBMs in service, most of which are believed to be targeted at U.S. cities. This two-stage, liquid-fueled missile has a range of over 13,000 kilometers, highest among China’s missiles. The DF-5 Mod 1 will reportedly be replaced by a longer range version, the DF-5 Mod 2 (CSS-4 Mod 2), possibly by mid-decade.

Outside assistance

China’s ballistic missile program has received outside assistance from a variety of sources. A 1999 report by the United States House of Representatives Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China found that information supplied by several U.S. firms to China intended to improve the reliability of its space launch vehicles could also be used to improve China’s ballistic missiles. A number of well-known U.S. defense and aerospace firms were convicted of transferring data and technology to China in violation of U.S. export control laws. In 2003, Hughes Electronics Corporation and Boeing Satellite Systems, for example, were forced to pay $32 million in penalties for 123 such violations during the 1990s, while Loral Space and Communications Corporation and Lockheed Martin Corporation received fines of $20 million and $13 million, respectively. In June 2000, Lockheed Martin was also fined for supplying China kick motor technology in 1994 that could help position satellites in orbit.

China’s efforts to deploy MIRVed warheads on several of its missile systems may also have been assisted by information received from U.S. firms in the 1990s. Hughes, for example, helped China improve the fairing of its Long March 2E rocket. This technology could potentially be used with MIRVed warheads, as well as with submarine-launched ballistic missiles. Hughes also provided China with diagnostic and failure analysis techniques that could help it solve other problems in its missile programs. Such transfers have become all the more troubling since the revelation that China may have developed miniaturized warheads based on designs stolen from U.S. weapons labs, making the MIRV-ing of even mobile missiles– such as the DF-31– a distinct possibility.

The transfer of sensitive technology to China is also conducted by individuals– often Chinese nationals– living and working in the United States, as well as US-based companies with ties to the Chinese military. In 1998, Means Come Enterprises, a Florida company run by two Chinese nationals, was investigated for exporting to China several thousand radiation-protected computer chips, devices that can be used in ballistic missiles and other weapon systems. In 2004, three Chinese citizens– John Chu, Sunny Bai, and Zhu Zhaoxin– were indicted for attempting to export to China GyroChips (angular rate sensors) and military-grade power converters, both items with applications in missile systems. While it is difficult to gauge the impact that these comparatively minor transfers might have on China’s overall missile program, it is reasonable to assume that they, like the larger transfers, have the effect of reducing the amount of time and resources China is required to devote to research and development of its own.

Threat outlook

China’s ballistic missile arsenal presents a limited, but increasing, threat to the United States. China’s missiles can target both cities on the American mainland and U.S. military bases in Asia. China’s ICBM arsenal has always been small when compared to those of the United States and Russia, a reflection of China’s belief that a minimal nuclear deterrent is sufficient. China’s ongoing modernization of its missiles will result in both qualitative and quantitative improvements. The increased mobility and brief launch preparation times of the DF-31 and DF-31A will boost the PLA’s confidence in its ability to survive and respond to a first strike.

Whether China’s long-range missiles increase in number will depend on whether China chooses to continue to deploy its more outdated systems alongside its modern missiles. This decision will likely be influenced by the United States’ development and deployment of a national missile defense system, which, if effective, could put the credibility of China’s nuclear deterrent into question. Concerns over missile defenses were probably also a motivating factor behind China’s efforts to develop multiple warheads for some of its missiles and to test decoys and other penetration aids on other missile systems. These efforts have been spurred by China’s recent advances in nuclear warhead design, which may have benefitted greatly from leaked information on U.S. warheads. A series of nuclear tests conducted from 1992 to 1996 showed that China was capable of building small, light warheads that could be MIRVed or deployed on mobile missiles. As a result, the number of warheads capable of hitting the United States may be increasing more rapidly than the rate at which new missiles are being deployed.

China’s ballistic missile modernization must also be viewed within the context of Beijing’s long-term objective of taking possession of Taiwan, through force if necessary. While China’s nuclear force has historically been intended to deter an attack on or invasion of the mainland, recently deployed missile systems and others still under development appear designed to both intimidate Taiwan and deter the United States from taking military action if a conflict arises across the Strait. China has devoted extensive resources towards producing short-range ballistic missiles such as the DF-11 (M-11) and DF-15 (M-9). China currently has approximately 450 of these short-range missiles, most– if not all– of which are based in the Nanjing Military Region facing Taiwan. China has used test-firings of these missiles to try to intimidate Taiwan and influence the island’s politics, most notably during the run-up to Taiwan’s 1996 presidential election. China’s newer missiles are also intended to pose a threat to U.S. military forces stationed in the region, in order to convince Washington that any U.S. intervention over Taiwan would be costly.

Brazil’s Nuclear Sites

Uranium Reserves (world’s sixth largest)

Deposit Status Estimated Reserves (tons U3O8)

Pocos de Caldas Shutdown 4,500
Lago Real Operating 100,770
Itataia Deferred 142,500
Others 61,600

TOTAL 309,370

Uranium Enrichment

Facility Year Annual Capacity (SWU) Process

Resende 2004* 20,000 gas centrifuge
2010* 100,000
2014* 200,000
Aramar Current 9,000 gas centrifuge

* Estimated

Other Uranium Processing

Facility Status Scale Capacity

Conversion to UF6 Under Construction Pilot Plant 40 t HM/a
Conversion to UO2 Operating Commercial 120 t HM/a
Conversion to U metal Operating Pilot Plant 30 t HM/a
Fuel Fabrication (Pellets) Operating Laboratory 2,550 Kg/a
Fuel Fabrication (Pellets) Operating Laboratory 21 elements/a
Fuel Fabrication (LWR) Operating Commercial 240 t HM/a

Power Reactors

Facility Type Supplier Net Capacity Commercial Date

Angra 1 Light-water power Westinghouse 626 MW(e) Dec. 1, 1984
Angra 2 Light-water power Siemens/KWU 1270 MW(e) Feb. 1, 2001
Angra 3 Light-water power Siemens/KWU 1224 MW(e) Suspended

Other Reactors and Assemblies

Facility Type MW Days Thermal Power, Criticality Date per Year Steady (kw)

IEA – R1 Pool Research 250 5,000 Sept. 16, 1957
Argonauta Argonaut Research 1 0.2 Feb. 20, 1965
IPR – RI Triga Mark I Research 2 100 Nov. 6, 1960
IPEN / MB – 01 Crit Assembly Research 0 0.1 Nov. 9, 1988

Other Facilities

Facility Status Scale

Subcritical Graphite Reactor Completed Pilot Plant
Experimental Irradiation Reactor Deferred Large-Scale
Heavy Water Production Plant Reported Pilot Plant
Plutonium extraction plant Completed Laboratory
Plutonium extraction plant Deferred Large-Scale

Brazil’s Nuclear Puzzle

By Liz Palmer and Gary Milhollin

Science
October 22, 2004, p. 617

Brazil is planning to commission later this year a uranium enrichment plant that, if configured to do so, could fuel several nuclear weapons annually. As a member of the Nuclear Nonproliferation Treaty (NPT), Brazil has promised not to make such weapons and is obliged to allow the International Atomic Energy Agency (IAEA) to ensure this is the case. But this spring Brazil took the extraordinary step of barring the plant’s doors to the IAEA’s inspectors.

Brazil and the IAEA are now negotiating over how much access the IAEA will have. The outcome will set a precedent for Iran and for any other country that decides to build an enrichment plant while a member of the treaty.

At its announced capacity, Brazil’s new facility located at Resende will have the potential to produce enough U-235 to make five to six implosion-type warheads per year.[1][2] By 2010, as capacity rises, it could make enough every year for 26 to 31[3] and by 2014 enough for 53 to 63.[4]

Brazil has pledged to enrich uranium to only 3.5% U-235, the concentration required by its two power reactors. This would be too weak to fuel a bomb, which typically requires a concentration of 90% or above. If Brazil should change its mind, its stockpile of uranium already enriched to 3.5 or 5% will have received more than half the work needed to bring it to weapon grade.[5][6] This confers what is known as “breakout capability”—the power to make nuclear weapons before the world can react. Such a power is what the United States and some European countries fear Iran is aiming at.

Iran, too, plans to field thousands of centrifuges at a new enrichment facility at Natanz and claims that its sole purpose is to produce low-enriched reactor fuel. If Brazil succeeds in denying the IAEA access to its centrifuges, Iran can demand the same treatment. Under the NPT, there is no legal ground for treating the two countries differently.

There is little evidence that Brazil actually intends to become a nuclear weapon power. Brazil’s science and technology minister Eduardo Campos declared earlier this year that “the Brazilian nuclear project is intended exclusively for peaceful purposes.”[7] He pointed out that Brazil has joined the Treaty of Tlatelolco, as well as the NPT, both of which forbid Brazil to make nuclear weapons. Brazil has also adopted a new constitution that does the same.

These statements, however, must be seen in light of Brazil’s nuclear history. During the 1980s, Brazil ran a secret effort to build an atomic bomb that ran in parallel with the public program to make electricity. It was administered by the military, and hidden from the IAEA. In 1990, the program was openly repudiated by Brazil’s newly elected President, Fernando Collor de Mello.[8] Brazil then joined the NPT and accepted international inspection.

But now, Brazil has built a physical screen around its centrifuges at Resende for the express purpose of preventing inspectors from seeing them. Brazil says it has done this to protect its advanced technology from leaking out to competitors. The IAEA, however, has a long history of protecting commercial secrets. Brazil is thus a serious challenge to the IAEA’s authority.

The real effect of the screen will be to make it harder—if not impossible—for the IAEA to do its job. The IAEA must account for all the enriched uranium the plant makes and must ensure that it is used only to fuel peaceful power reactors. Brazil contends that the inspectors will be allowed to see everything going into Resende and everything coming out and that that should be sufficient. But with a screen in place, it will be difficult to be sure the centrifuges are not hooked up to a hidden supply of uranium. Such a hookup would allow Brazil to stockpile enriched material while inspectors believe that the facility is less efficient than it really is. And since there is no requirement that Brazil enrich a certain amount of uranium, no one would be the wiser. Unfortunately, the IAEA has already allowed the Brazilian Navy to shield a group of centrifuges for several years at a pilot plant, where uranium was enriched. Thus, Brazil can argue that if the IAEA could certify for years that the pilot-scale plant was not siphoning off any uranium, and could do so without seeing the centrifuges, the same should be possible at Resende.

One response to this argument is that the throughput of the plants is different. Resende will have the capacity to enrich enough uranium for dozens of bombs per year. If the machines are shielded, the inspectors can only measure input and output and then calculate the “material unaccounted for.” This is the amount of uranium assumed to be hung up somewhere in the system. Every plant has some. The question is whether the amount makes sense. At Resende, the amount could be considerable, whereas the amount at the pilot plant, given the limited number of centrifuges there, was fairly small.

It seems unlikely that Brazil is really concerned that the IAEA will illegally reveal industrial secrets. More likely, Brazil is trying to hide the origin of the centrifuges. In December 1996, Brazil arrested Karl-Heinz Schaab, a former employee of Germany’s MAN Technologie AG, a firm that developed centrifuges for the European enrichment consortium called Urenco.[9][10] German authorities wanted Schaab extradited to prosecute him for selling centrifuge blueprints to Iraq. There is evidence that Schaab and other experts were helping Brazil as well.[11] It follows that, if the IAEA inspectors were to see the Brazilian centrifuges, they might discover that Urenco’s design data had been transferred.

The United States has decided not to challenge Brazil’s new status and instead has tried to persuade Brazil to cooperate with the IAEA. Its inspectors were to arrive in Brazil 15 October to pursue a solution to the inspection dispute. The rest of the world should help the United States convince Brazil to put these concerns to rest and to be a good nuclear citizen.

Footnotes:

[1] If one assumes that the plant’s first cascade will produce 20,000 SWU/year and that 16 kg of uranium enriched to 93.5% U-235 are needed for an implosion device. For SWU capacity, see [2].

[2] M. Hibbs, Nuclear Fuel, 7 July 2000.

[3] If one assumes 100,000 SWU/year.

[4] If one assumes 200,000 SWU/year.

[5] About 3000 kg of uranium feed requires ~3500 SWU to make one implosion bomb. The same feed needs more than 2000 SWU to enrich to 3.5%. See (6).

[6] T. B. Cochran et al., Nuclear Weapons Databook, vol. 2, U.S. Nuclear Warhead Production, (National Resources Defense Council, Washington, DC, 1987), Table 5.1, p. 127.

[7] “Brazil refuses to let UN inspectors into nuclear facility,” AFX.com, 5 April 2004.

[8] J. Brooke, New York Times, 9 October 1990, p. A1.

[9] M. Hibbs, Nucleonics Week, 19 December 1996, p. 1.

[10] M. Hibbs, Nucleonics Week, 20 March 1997, p. 17.

[11] M. Hibbs, Nuclear Fuel, 23 March 1998, p. 5.

The International Atomic Energy Agency: The World’s Enforcer or Paper Tiger?

By Gary Milhollin

Panel Discussion with Gary Milhollin
American Enterprise Institute

September 28, 2004

Excerpts

. . .

MR. MILHOLLIN: Sure. Thank you. I’m very pleased to be able to talk about the IAEA. As those of you know who followed my, I guess I could call it a career–I’ve been at this for a long time–in this area, I’ve been quite critical of the Agency over the years.

I thought I’d talk a little bit about the history and then make some points and leave it at that. But since I’m here and since I’ve had my coffee, I would like to make a commercial announcement. Right here among us is Valerie Lincy, who’s sitting right over there. She is the editor of Iran Watch, our new Web site on Iran’s WMD program, which already has 8,000 pages and a beautiful home page. Which is in your folder. Valerie designed this, she conceived it and she’s populating it. I just happen to remember the Website, it’s called iranwatch.org. If you didn’t get that, I’ll repeat it–iranwatch.org. It’s a sequel to our iraqwatch.org, which was quite successful and, well, did not cause the war.

The history of the IAEA is an important and interesting subject which I worked very hard to lay out some years ago. So you now hear the second commercial announcement. I did so in the New Yorker magazine in February of 1993. And I’m going to repeat a few of the things I said then.

You can find it on our institutional Website, that is wisconsinproject.org. And you can find it if you look in February of 1993.

What did I say about the IAEA back in 1993? Well, I guess I pointed out something that Joe said and that is that the IAEA really is a historical relic in a sense. That is, it was invented under Atoms for Peace, at the same time as our old Atomic Energy Commission.

We divided up the old Atomic Energy Commission into the Nuclear Regulatory Commission and DOE because, we, the United States, perceived that the public wouldn’t accept the idea that the same entity was in charge of both promoting nuclear energy and regulating it.

That, unfortunately, however has not happened to the IAEA. And so the IAEA is still in charge of both promoting and regulating nuclear energy. In fact, it’s an international entity whose official mission is proliferation.

And so, that puts it in a strange position. If its inspectors find that nuclear equipment is leading to the bomb somewhere and was exported under the assumption that it would be peaceful, the conclusion would be that it might not be such a good idea to proliferate this stuff in the first place, and therefore that the Agency’s other function shouldn’t be carried out.

Thus inspectors really have an institutional incentive not to find things. That’s important. And I think that attitude was primary in the early days of the IAEA’s history. The inspectors didn’t want to find things. That is literally true. When David Kay and his band of inspectors in Iraq discovered the Iraqi nuclear weapon program, they had to do so by violating the IAEA’s rules of engagement.

The IAEA was giving the Iraqis 6 to 12 hours notice before they went to a site, during which time our satellites were watching the Iraqis clean things out.

So Kay took his guys in with no notice and they found the calutron program. The IAEA was unhappy about that. They told David that he was not going to be welcome on any more inspections in Iraq, as a result of his not following the rules. I’m not making this up, this is true.

The agency had a definite credibility problem before the first Gulf War. But, because its failure was so obvious-literally, it was inspecting parts of a site where bombwork was going on in other buildings- it had to change. It had to change its attitude. And I think it has. I think in Iran it’s doing a much better job.

It’s engaged in the same iterative process that the UNSCOM inspectors used successfully in Iraq. That is, the inspectee (the country being inspected) has an obligation to tell the truth and to present a coherent picture of what its nuclear program is.

The inspectors can poke at that picture and find holes in it and demand explanations and do just what the IAEA is doing now. One can get closer and closer through this process to a coherent statement you can believe. In Iraq, it was never possible to get to the end because the Iraqis had an official policy of lying, which revealed the basic problem or limitation with inspections.

Inspections are meant to verify things. They’re not meant to create agreements or to find things that have been hidden. They’re meant to verify statements. You cannot verify a lie. You can only verify the truth.

And so, if you’re inspecting a country that is lying, it’s not going to work. The only cases that I know of where you’ve had successful inspections have been cases where the country being inspected had an incentive to be truthful and to prove that.

When you get those conditions, inspections are going to work for you. But when you don’t have those conditions, you can inspect all you want, but you’ll wind up sooner or later with a conclusion that look, these guys are not telling the truth. In Iraq, we couldn’t find out whether Iraq actually had stuff or didn’t have stuff. All we could find out at the end was, whether they were presenting a coherent picture of what they claimed that they had.

And the answer was that they were not. It was clear that that was the answer.

In Iran, I think there are a lot of lessons to be learned from Iraq, because we seem to be going down the same road. The Iranians don’t seem to be telling the truth. And so, where are we going to come out with inspections in Iran? We’re going to come out sooner or later with the statement that what these guys are saying just doesn’t add up. These guys aren’t telling the truth.

A group of inspectors cannot guarantee that there is not something hidden in a cave or a building somewhere. But what they can tell you is that the reality that we’re seeing doesn’t square with the country’s declarations.

That’s where we are now. The Iranians have not told the truth up to now and so the IAEA’s job is to report that. They’ve done it, but they haven’t said the magic word that takes the case to the U.N. Security Council.

One of the big issues is whether they’re going to do that. Because once they say that word- and Blix was in this position in Iraq- once they say that word, it goes out of their hands into somebody else’s hands.

So if you’re an inspector, if you’re the IAEA, if you’re even the Director General, you’ve got a problem, because if you say, “look, I’m not being told the truth, I can’t get any further here,” then you’re going to lose the case to the U.N. Security Council and, in effect, you have dropped out. That was Blix’s problem.

A final note. It’s often said that the IAEA’s job is to verify the NPT. That is not true. The NPT is a treaty with no verification mechanism. There are many Articles, such as Article 1, which is not verified by anyone. All the IAEA does under the NPT is make safeguards agreements with countries. And then the IAEA determines whether those agreements have been fulfilled, and that’s it.

It’s a very narrow function. You can’t expect anything other than that. But you can expect that. When the IAEA runs up against that brick wall and can’t get any further and is not being told the truth, you have to expect the Agency to report that. Because that’s really the Agency’s job.

Thank you.

MR. MURAVCHIK: Gary, thank you very much. And now, I said I’m not introducing anyone, but I must say that Mark Groombridge has been a colleague here at AEI for a number of years and it’s really nice to welcome him back. Mark.

MR. GROOMBRIDGE: It’s good to be back. People ask me, you know, would I ever want to come back to AEI. And my standard response is, ask me in 2017 after the second Cheney Administration and then we can have that discussion. Although, as a U.S. government official now, I can’t be provocative, but if I were, Joe, I thought that was a rousing audition for the Kerry Administration you gave just moments ago. But I can’t say that. But, nevertheless.

No, thank you very much, Josh, and I’m going to agree with most of the comments that have been made here today.

Let me clear, though, about the lens through which I view this problem. I’m Mr. Bolton’s advisor on Asia. And so, I’m going to limit my problems primarily to the case study of North Korea. Although I’ll be happy to discuss some of the broader issues.

I think one area, though, where I would have to disagree with Joe is the idea that the Administration has done nothing or that we have sat idly by watching the problems of Iran and North Korea go. I think the best evidence I would have to support to the contrary to that is the fact that I received my United mileage-plus one K card just two weeks ago, basically, because I’ve been shuttling back and forth between Asia and the United States, engaging in very serious and rigorous diplomacy with North Korea’s surrounding neighbors about this very serious problem.

It’s not simple. It’s not easy. And I would say that, in this case, although I can’t really comment about it in contrast to Iran and, perhaps, to Iraq. The IAEA has actually played a very positive role in the case of North Korea.

Primarily in the sense that if I had to pinpoint what I thought was the most serious miscalculation North Korea probably made, it was in the last two years with the recent developments that we’ve had with the uranium enrichment program and the six-party talks.

It’s that North Korea has underestimated the degree to which the international community views this as a problem. I think that–I think Joe was correct to point out that, yes, there were some serious risks on the Iraq issue. I think North Korea might have looked at those risks and said that the international community would be equally divided on the North Korean situation.

In fact, that has not turned out to be the case. The IAEA has played, I think, an important or not just technical role in the past in North Korea, but I’m going to go further and say there have actually been some political benefits, as well. Even though I agree with the previous speakers that their primary role has been focused on technical issues only.

Let me just begin with a very brief history about the IAEA’s role in North Korea, which is to say that it’s had a very long and deep history. They have been interacting with North Korea now for close to 27 years. North Korea–the initial safeguards agreement, was signed in 1977. Then North Korea ceded to the NPT in 1985 and then the next safeguards agreement was concluded in 1992.

Unfortunately, at that point, discrepancies began to arise almost immediately. And it was actually Hans Blix who, at the time, who was Director General, who was in charge of inspecting the North Korean situation or handling the situation, who called for special inspections, which North Korea–which then led to the crisis in ’92/’93, subsequently to the agreed framework.

But it was sort of the rigor which the IAEA wanted to investigate and verify the completeness and correctness of the initial declaration that North Korea offered, which they presented to the IAEA. Which, initially helped expose the problem and began North Korea’s, I think, period of intense intransigence, beginning, initially, in ’93/’94 and then culminating after the failure of the agreed framework was made clear with the exposure of the uranium enrichment program by Mr. Kelly in October of 2002.

Ironically, it was the IAEA, itself, which criticized or was one of the sharpest critics of the agreed framework signed in 1994 by the Clinton Administration. The reason, and here, I’m quoting Mohammad El Baradei, himself in an April 27, 2003, interview with Walt Whitzer on CNN, was that the agreed framework was, quote, “not comprehensive enough in terms of verification and that any new agreement should give the agencies” the IAEA, included, of course, “as much authority to make sure that we will not be cheated once more in North Korea.”

Essentially, what the agreed framework did was it limited the IAEA’s role to only monitoring specific parts of Pyongyang and keeping certain facilities under seal.

The problem with the agreed framework, though was that it froze the problem or it postponed the problem. I often get upset when people say that the agreed framework solved the problem. And it was intransigent or I should say, blustering Bush Administration, which ignite the crisis in North Korea.

North Korea’s uranium enrichment program was going to be exposed at one point, if they didn’t declare it themselves. So the point being was that it was incumbent upon the Bush Administration to confront the North Koreans about this problem. And I would hasten to add that the uranium enrichment program began interest he Clinton Administration.

Now, I’m not faulting the Clinton Administration for ignoring this problem because the true intelligence or the intelligence that we got on this matter, didn’t really come to light until the summer of 2002, though it’s difficult to know exactly how a Gore Administration would have handled the problem.

We felt it important, though, to confront the North Koreans, declare that they were in material breach of the agreed framework.

Complementing that role, though was the IAEA, though. And I’d like to go back to some of the political benefits that the IAEA Board of Governors was able to provide in its various resolutions and in reporting this to the U.N. Security Council.

After North Korea kicked out inspectors on December 27, 2002, the IAEA Board of Governors took this issue up almost immediately. They issued an initial resolution in early–I think, January 6, 2003, calling upon North Korea to readmit inspectors and to come back into compliance. And then on February 13, they reported–they formally adopted a resolution of noncompliance of North Korea’s safeguards agreement with the IAEA, which reported it to the Security Council.

This, I think, helped bring the international community on-board to recognize that this is a serious problem; one which needs to be confronted by the entire international community.

So, I find it deeply ironic when people accuse the Bus Administration of sort of maverick cowboy unilaterlism when, in fact, we have been championing the efforts to adopt a multilateral or to bring a bunch of nations together in a coherent and cohesive way to address this problem.

The current way that it’s manifesting itself is in the six-party talks in Beijing, which, unfortunately, as Mr. Bolton indicated earlier is something that the North Koreans at least seem to be stalling a little bit on. Perhaps they’re waiting for the outcome of the U.S. elections. They’ve also cited the case of the South Korean example.

I think it’s impossible to know exactly what is going on in the North Koreans minds.

In terms of the future role for the IAEA, specifically, in the case of North Korea, I would say that the situation is unclear. It’s difficult to know, because North Koreans have specifically accused the IAEA of being, quote, “a shaggy dog,” of the United States or a “cat’s paw” of the United States and has specifically referred to El Baradei as a lacky of the United States.

I, certainly, would disagree with that characterization and assessment by the North Koreans. But the North Koreans have indicated that any future verification regime, they would want to exclude the IAEA from this.

I think that is a mistake on their part and it would be difficult to envision a verification regime outside of at least some role for the IAEA. The reason is, of course, that the IAEA brings some degree of international legitimacy to the issue. It enables us to say that we aren’t engaging in a double standard as North Korea suggests in the case of South Korea.

So, let me just wrap up by saying that I know I focused my remarks more on sort of the positive externalities, if you will, or some of the political side benefits of the IAEA, in terms of raising the consciousness in the international community of the North Korean issue.

It’s not to say that there aren’t some technical problems with the ways that the IAEA can be improved or strengthened, that’s not my area of expertise.

But one thing I can tell you having now, at least, racked up the miles to show that we aren’t completely ignoring the situation, Joe, is that when we can point to the IAEA Board of Governors resolution that helps with others to say this is a serious problem. It’s something we need to address. And it’s not just a U.S./North Korea problem. I’ll leave it at that.

MR. MURAVCHIK: Thank you, Mark. Before we turn to questions are any of the panelists that want very much to respond to something that one of the other panelist said? If not, the panelists were very self-disciplined about keeping within their time, so they have time for lots of questions.

Before I open the floor for questions. We are very fortunate to have Henry Sokolski here who’s the head of the Nonproliferation Education–what’s the C stand for, Council Center and they have a new report hot off the presses or maybe not even off the presses, maybe it’s a preview. And we put it in your packets and I asked Henry, if he would just take a minute or two and flag it for you. Henry?

MR. SOKOLSKI: I’ll try not to do that. It’s in the package. It’s a report entitled “A Fresh Examination of the Proliferation Dangers of Light Water Reactors.” It’s about a two-year investment of time by a number of engineers and weapons designers. I recommend it and it goes directly to one of the things that’s going to be a bit worrisome in the future, and more worrisome over time.

We got a peek at this with regards to Bushehr. And that is, one of the conflicts of interest which each one of the panelists raised is that the IAEA really is in the power promotion business, nuclear power promotion business. And their key lead candidate is something called the light water reactor.

Now, it turns out, everyone, including many U.S. officials over many administrations, both Democratic and Republican, have said that these machines are proliferation resistant.

And, indeed, compared to other machines, there are ways in which they are. But this study examines how, in fact, they’re not as proliferation resistant as they’ve been sold.

And, in particular, the machine, for example, in Iran will, as the footnote which you heard John Bolton explain about lightly enriched uranium being very close to highly enriched uranium, will, in fact, have many hundreds of tons of lightly enriched uranium sitting next to the machine, which can be diverted and very quickly turned into bombs.

And it will also generate material which is called spentfield, that will contain material that will be near weapons grade in the first 15 months.

The reason this is important, all of these examinations, and they go into greater depths–charts, even learn about weapons design, everything else is in the report–is that it turns out the one ace-in-the-hole that everyone here has indirectly applauded is the–they call it the additional protocol, in fact is going to reduce, in most instances the amount of attention paid to these diversion possibilities. And that, I think, at a minimum, needs correction and attention.

And, in addition, I think we’re going to have to deep inflict ourselves as members, politically, and start saying that machines that have no economic justification aren’t simply enough in the case of light water reactors. They ought to be resisted. And some neutral rules with regard to this kind of matter need to be established so these things don’t go just anywhere.

MR. MURAVCHIK: Thank you. That wasn’t a question, because it wasn’t intended to be. I wanted to get a chance there to alert you to the NPC’s new study. But any of our panelists want to comment on or you’re certainly free to, if you wish to before we open to other questions. Gary.

MR. MILHOLLIN: I’ll make a comment. Henry, I just got the document so I haven’t had a chance to read it yet. But, I, like you, have been concerned with the statement, particularly in connection with North Korea that light water reactors are proliferation resistant.

And, technically, that’s not true, every reactor makes plutonium and all plutonium can be used in bombs. And any reactor, any light water reactor, as you well know, can be operated in such a way that the plutonium it produces can be optimized for weapon use. And so, it’s just not true that light water reactors are inherently or necessarily less likely to be diverted to weapons purposes than, say, heavy water reactors or graphite reactors. It’s just–I’d just like to say that it’s a good thing that you did that study.

Ito debunk this idea that light water reactors are somehow more benign than others. I say that as a former administrative judge at NRC. I’ve spent a lot of time worrying about reactors.

MR. MURAVCHIK: We’ll put it out for questions. We even allow comments as long as they’re brief. And please remember to introduce yourself.

MR. HORNER: Dan Horner, from McGraw-Hill again. I wonder if I could raise a country that hasn’t been discussed much, which was Libya. And particularly in the context with the IAEA, because it seems–it just proves the hypothesis that IAEA seemed to be tougher in this case than the U.S. And I say that because in the last report, the Board of Governors, the IAEA Director General noted there are still questions about the weapons design information that Libya has and contamination on centrifuge components. But in spite of that the U.S. lifted sanctions on Libya or some sanctions on Libya citing the progress on weapons of mass destruction and it was justified in testimony on the Hill last week.

I was wondering, if maybe Mark could lead off and the others could comment on that.

MR. GROOMBRIDGE: Well, sure, I’m happy to. I don’t know that I would characterize it as the U.S. or the IAEA was tougher than the United States. We made a specific agreement with Libya with regard to WMD, various other aspects, particularly after the PANAM 103 and terrorist bombing of the airplane was solved, those difficult questions.

We have been very clear that we still have issues with Libya, particularly on the human rights front. We’re still investigating claims and press reports that, perhaps, Mr. Kadafi was interested in assassinating various Saudi leaders. So, but it’s more just–I think what I’m trying to say is that it’s not so much that I would say it’s tougher versus weaker. The United States had a specific agreement with Libya, in conjunction with the U.K. We’re biding by the terms of that agreement.

We see the IAEA’s role in Libya as important and more in terms of long-term verification.

MR. : There are other issues, other than weapons of mass destruction that are still not resolved and the new administration has been very clear about that. But it would seem that the way the lifting of the sanctions was framed was because of the progress of mass destructions.

MR. GROOMBRIDGE: Sure, there’s been tremendous progress.

MR. : There has been progress, but there still would appear to be some pretty major open questions, though, so I’m just–that’s what I’m trying–weapons of mass destruction–with terrorism and other issues.

MR. GROOMBRIDGE: There are still unanswered questions, we are still in conversations with the Libyans on this issue and until those questions are fully resolved, you will not see, at least from what I understand, a complete lifting of sanctions.

MR. CIRINCIONE [?]: Let me just comment very quickly. I think the Administration has done exactly the right thing hereon Libya and handling it the way they did, they really have laid out a model for how we expect other countries to behave.

The Libyan model is how disarmament should be done. And the U.S. has been very creative and flexible in combining both the international inspectors under the IAEA and U.S. officials and U.S. inspection personnel working side-by-side with them hand-in-hand. As you are probably aware, there are some issues there, the IAEA wants more authority. But it’s going more like–and the IAEA’s really proving its value here. It’s doing its work. It wants to dot the I’s and cross the That’s and these are important dots that they want to make here. There’s real questions about the contamination of the centrifuges that would be obtained from a, quote, “foreign supplier.” That is, Pakistan. And they want to do sampling in the Pakistan named here as a supplier state–not names in the report, but everybody knows who it is–they want to do sampling in Pakistan to verify that the contamination, that the isotope that they found on the Libyan centrifuges were, indeed–did indeed come from the Pakistan source.

And this is important because they want to match it up with–

[Technical interruption. Tape change.]

MR. CIRINCIONE [?]: –the United States could be working more closely together to get a major nonNATO ally Pakistan to cooperate with us in running down the truth behind the origins of these centrifuges and to get at a better understanding as to whether the Iranian, the contamination at the Iranian sites came from Iran producing it’s own highly enriched uranium or if it is, in fact, as the Iranians claim, the result of contamination of used centrifuges, basically, that they bought from the Pakistanis.

A key issue is–this is the key issue in Iran, it’s intimately linked to what’s going on in Libya, the IAEA and the Administration are doing a good job but they need to do a lot more to get that, as the report says, the cooperation of other member states, which remains essential to the successful completion of these inspections.

MR. MILHOLLIN: I have one comment. You know, when you look at the history of what Libya’s done, what strikes me is that for a number of years, Libya was a member of the NPT, supposed to be a nonweapons state, but had already imported things that it didn’t report; it was in clear violation of its obligations. And it was being inspected by the IAEA at all those times.

And the IAEA didn’t find any of that activity. It was only when the Libyans decided to come in from the cold that the information started coming out. And so, I think this proves a point I made earlier, which is that if the country you’re inspecting isn’t telling the truth, inspections aren’t going to work. When they really become useful, as Joe says is when the country starts telling the truth. And then you can kick in all of the scientific capabilities and forensic capabilities and you can begin to verify what you’re being told. And that’s happening in Libya.

MR. GROOMBRIDGE: Could I just–

MR. MILHOLLIN: But it didn’t happen previously. And so, we had a case where, like Iraq, Libya was in violation of its NPT allegations and wasn’t being discovered.

MR. GROOMBRIDGE: Could I just follow-up on that? Clearly, in the case of Iran, Iran has not been telling us the truth. Or let me put it another way. They’ve told us various versions of a story about their activities. And, yet, what we find in this 18-month process of inspections is that they’ve been–the inspectors have been getting–have been unpeeling this onion. And so, here we have a case where Iran appears to be lying to us and we are getting closer to the truth.

So, I’m not sure that it’s true that we can’t inspect a country that’s lying to us.

MR. MILHOLLIN: Well, I guess my point is that inspections only can work up to a point in that case. You can never reach the point where you are content–that you know enough to feel secure if the other country is not telling the truth. You can get from point A to point , which we did in Iraq. I mean, in Iraq, we discovered a tremendous amount of stuff. We destroyed tons of chemical weapons. We found out about their missile programs, destroyed missile engines.

We made a tremendous amount of progress in Iraq, but because Iraq’s policy was not to tell the truth, we could never get to the end where we said, okay, this problem has been solved. I think, unless Libya changes its attitude, we’ll get there in the case of Libya, but we’re not going to get there in the case of Iran unless Iran has a change of policy.

MR. GROOMBRIDGE: I mean, I would agree with that, but I think the point to bring home from this is that the IAEA can serve powerful and different roles and varying roles depending on the country, which is to say, I mean, look, you know, PSI is Bolton’s baby, you know, it was the instigator or I would say the impetus which caused Libya, I think, to help make their strategic decision to allow inspectors in.

But the IAEA can play a long-term and positive role in terms of increasing the international community’s confidence over the long-term that Libya has, in fact, come in from the cold.

In the case of North Korea, where they’re not allowed in, they can signal that the international community is deeply concerned about this problem and it’s not just a simple, you know, U.S./North Korea problem.

I think–but I would have to agree with Joe here that in the case of Iran that you might say that it is, you know, only peeling away some layers of the onion, but it is, in fact doing that. I think that’s helped us with the Europeans, in terms of convincing them that, in fact, they do have a weapons program and I am confident that in November, regardless of the outcome of the election this will be referred to the Security Council at that time.

MR. NELSON: Chris Nelson, Nelson Report, again. Can’t let Mark get away with all this. North Korea, in a strange way, seems to be telling the truth, right? They told Jim Kelly something about an HEU program, which somebody, sort of witnessed a couple years ago. And yesterday, at the U.N., they said something about they have not-they took the statement about having a right to have nuclear weapons another step, apparently, saying things that could be interpreted as we do have them.

I’ll confess, I’ve managed to be thoroughly confused for the last three years on this subject. You’ve tried to help me out to understand why we say we’re willing to talk, but when they say they’re willing to talk, we say we won’t talk because that’s paying blackmail and that sort of stuff.

You know, it seems that we deliberately chase our tail, let them chase their tail. They’ve done everything except fly over here and say, let’s make a deal. Help me out. What am I missing about truth telling and a desire to negotiate.

MR. GROOMBRIDGE: There’s a difference between a willingness–Chris, you have to choose your verbs carefully. We are willing to talk to the North Koreans. No preconditions whatsoever, okay? We will sit down with them. The mantra after the first six-months of the Bush Administration, when we had the Korea policy review was, anytime, anyplace, no preconditions.

But there’s a difference between sitting down with someone at the table and talking with them versus what you are saying, which is that where you bring in the blackmail part. What you say at the table also matters and what we have been very clear about and I think is absolutely the right policy is that we are not going to give North Korea incentives. We are not going to reward their bad behavior for coming back into compliance with obligations that they have violated.

I mean, they have violated pretty much every single international agreement they have ever signed. So, we will talk to the North Koreans about how they can come back into compliance, but the idea that we’re going to offer them carrots or give them rewards to do so, is an entirely different question.

[OFF MICROPHONE – UNINTELLIGIBLE]

MR. GROOMBRIDGE: Well, we tried rewards. Chris, we tried your route once, it was called the Agreed Framework of 1994. Where we did offer them rewards and carrots. They rewarded us, then, with not just a plutonium program, but a uranium enrichment program, as well.

MR. MURAVCHIK: I’m not going to let a colloquy go on endlessly.

[OFF MICROPHONE – UNINTELLIGIBLE]

MR. GROOMBRIDGE: Just very briefly, quick 10-second answer. That’s why we have adopted a truly multilateral form, the six-party talks, to address this situation, so that it brings all interested parties to bear because we are interested in a lasting solution, not a temporary freeze where North Korea can kick out inspectors again, we had to confront them on uranium enrichment, they were in material breach.

MR. DINMORE: Thank you, Guy Dinmore from The Financial Times. I’d like to ask the panel if they think the IAEA has the capacity or the ability to discover whether or not there’s a Brazilian onion that can be unpeeled and whether there is a link there with A.Q. Khan and his proliferation services.

MR. CIRINCIONE: That’s a very interesting point. Let me start with that so Mark can think how he’s going to answer this.

MR. GROOMBRIDGE: My answer is, no comment.

MR. CIRINCIONE: There’s been rumors about this, that Brazil is, in fact, one of the customers of the A.Q. Kahn network. We need Brazil to allow the IAEA inspectors full access to their uranium enrichment program so we can understand the origins of that equipment.

It also raised–Brazil is not cooperating sufficiently with the IAEA inspectors. This is a serious problem. It produces this problem of double standards, that the really bad guys use to deflect the international spotlight and inspections.

We see already, as the undersecretary pointed out, that North Korea is using the problems with South Korea as a diplomatic or propaganda excuse to justify it’s program. Iran is fully aware of the example that Brazil is setting and is already talking about double standards. And they have a point. And the undersecretary raised it. You cannot allow new nations to acquire the ability to enrich uranium that can be used to make fuel rods one month and nuclear bombs the next.

And if we can’t allow Iran to do it; we can’t allow Brazil to do it, either; we can’t allow South Korea to do it, either. The President of the United States has set the right standards in his February 11 speech. We have to put an end to these programs, no new nation should be allowed to acquire these capabilities. The problem we have is figuring out how to do that; how to get that agreement; what’s the path forward?

The President has proposed using the nuclear supplier group to do that. Simply stop exporting this material to these new nations. that hasn’t worked so far. No action on that front. Can’t get the supplier’s group to agree with that.

The Director of the IAEA, Mohammad El Baradei, has proposed internationalizing facilities, placing all uranium enrichment facilities and plutonium reprocessing facilities under international control. And idea, certainly worth pursuing, but it hasn’t advanced much since the director said it.

This is a serious problem, this is why we at Carnegie came up with this universal compliance report. We think if you’re going–and as Brent Scowcroff pointed out in a very useful op-ed several months ago, in order to solve the Iranian problem, you have to solve the Brazil problem at the same time.

And this drives the Brazilians nuts, by the way. They don’t like being put in the same sentence with Iran and I completely understand it. They’re not identical, it’s not the same case, but it’s the same problem. Reforming the fuel cycle. We have to get serious about this. It’s going to take a lot of heavy lifting to do this. There’s billions of dollars invested in the fuel cycle, we have to find a solution that is acceptable to all the parties in order to do this.

A good place to start with that is for Brazil to come clean on the origins of its uranium enrichment program and to be open to the idea of discussing not pursuing that program and seeking the fuel for its reactors through other means.

MR. MILHOLLIN: I have a comment on that. I think it’s fine to tinker with the international regimes, but they’re pretty much irrelevant in the case of Brazil and Iran, because Brazil and Iran have what they need.

The Brazilians have a large commercial-size enrichment plant. The problem is, that they’re not going to let the IAEA look at it to the extent the IAEA wants. And, as I understand it, it raises the possibility that there could be enrichment that would be undetected under the arrangement that the Brazilians are proposing.

So, what we have in Brazil is really a challenge to the inspection regime. And if Brazil succeeds then, obviously, the Iranians would demand equal treatment.

MR. CIRINCIONE: Right.

MR. MILHOLLIN: If for no other reason than simply because it would be too insulting not to. So, the Brazil issue is an issue of the integrity of safeguards. That’s the issue the IAEA is contending with. The larger issue in Brazil is whether Brazil should fall in the category of countries that don’t really need enrichment, such as Iran.

If you look at the economics of the Brazilian situation, it doesn’t make any sense for Brazil to enrich uranium. The uranium Brazil will enrich is going to cost a lot more than it would cost Brazil to buy it on the world market, which Brazil is doing now. So, why would you do that? Why would you waste money enriching uranium? There must be some other motive. The burden of opinion is that Brazil is not going for the bomb. Instead, Brazil wants to enrich uranium for national prestige.

If you take the position that Iran’s enrichment effort is illegitimate because it’s unnecessary, uneconomical, and doesn’t make sense, then you almost have to take that position with respect to Brazil, because Brazil’s excuses for enriching uranium are no better than Iran’s. In fact they’re basically the same and it’s diseconomic in both cases. But Brazil has an additional element, and that is the challenge to the inspection regime.

Thankfully, however, we have a tremendously able state department, and they’re going to work this out. And so that’s, that–now, I’m going to pass to my next panelist. And he’s going to tell you how the government to handle this.

MR. : No comment.

MR. MILHOLLIN: That was a joke.

MR. : Right. No. Right. No, I know. Well, but I think probably our colleague from Brazil is itching to respond to that. So I will–

MR. : If there’s a colleague from Brazil here, it would be great to have that comment. And by the way, I’m very interested in going down to Rio to investigate–

[Laughter.]

MR. : December, January–

MR. COSTA: I’m Bran Costa [ph.] from the Embassy of Brazil. I just want to make a comment on what Mr. Milhollin just said. I am afraid I don’t agree with him when he says that Brazil is a challenge of the inspection regime. I think this is not the real problem. This is not the question here.

The problem with the Rosan [ph.] Plant in Brazil, and everybody knows that, is not about if there will be safeguards, if or whether the IAEA is allowed to inspect that plant. The problem there is only a question of technology, new technology. What means the IAEA is allowed, inspectors are allowed to check what is coming in the reactor and what is the outcome. The only thing they are not allowed right now to see is the technology used to produce this outcome. That’s the difference. So with the sophisticated equipment of the IAEA, it’s very easy for them to check if Brazil is enriching uranium in a higher grade or not. It’s easy.

And I don’t think the reasons for Brazil wanting to produce uranium are the same of that of Iran. On the contrary, the reasons may see the same, but the credibility of each country is different. The credential of each country is different. So I think the international community can be assured of the allegations of the declarations of the Brazilian Government. I cannot tell the same thing about the Iranian Government. But it’s not for me to say anything about another government. So I just wanted to make it clear for everybody here that there is not a problem of inspection. We’re not preventing IAEA inspectors to see what is happening in the Rosan Plant. We’re just safeguarding our new technology. And that’s all.

MR. MURAVCHIK: Anybody want to comment on that? Okay.

MR. : The problem is not enriching above a certain concentration of U235. The problem is unmonitored enrichment at whatever level. And if, if this problem were so simple, as you suggest, then why hasn’t the IAEA agreed?

MR. COSTA: They just want to see everything, including the technology.

MR. MURAVCHIK: We’re short on time. I’ll try to squeeze in a couple more questions if they’re brief questions. And we’ll try to give brief answers. Mario, you haven’t had the floor?

MR. LOYOLA: I just–

MR. MURAVCHIK: Introduce yourself, please.

MR. LOYOLA: Mario Loyola. Our friend just said that it’s easy to monitor, for inspections to monitor what goes into a reactor and what comes out. That’s true and that’s the justification for the people that have proposed the light water reactor programs that Mr. Sokolski is worried about in his study. It is a lot more difficult to, if a country develops indigenous enrichment capabilities and indigenous reprocessing capabilities, it is much more difficult for the IAEA to exclude the possibility that those capabilities have been used for illegal purposes. And that’s why the establishment by non nuclear states of a complete nuclear fuel cycle is so worrisome. And since it’s technically legal under the NPT, we’re struggling with a way to solve that problem.

So we’re talking about sort of several degrees of, sort of several layers of problems. Because Mr. Sokolski points out a problem with the light water reactor programs. The NPT makes the nuclear fuel cycle essentially legal, which is 90 percent of the way to a bomb. But even what’s clearly illegal under the safeguard agreements, which is disclosure violations, we’ve established over the last year and-a-half that disclosure violations are not going to be subject to enforcement. So from a lawyer’s point of view, there’s a question whether even if the NPT makes certain things illegal, whether enforcement isn’t so weak that these treaties and safeguard agreements don’t really constitute international law at all and are just voluntary norms.

And I would suggest, one more comment, if the credibility problems of a single administration and a single member of the board of governors can lead to a collapse of enforcement at the IAEA, then the problem is probably more institutional than political.

MR. : Henry, but I appeal to each person for brevity, and we are out of time.

MR. : And you asked Henry?

[Laughter.]

MR. : The sum of all your fears.

This discussion highlights something that the state department, big important non profit groups that get lots of attention, and ones that have tremendous integrity should all be trying to answer. Why is it that the burden of proof for a violation is placed on the board of governors and they have to make the determination, rather than the inspected party? What is it that makes us not want to get behind even a French proposal that the burden of proof should be on the inspected party and when the board cannot clearly agree that someone is in full compliance or fully cooperating, some minimal, automatic action should be in play?

MR. MURAVCHIK: I’m going to take one more question and then you can all get a chance to answer one or the other. This gentleman is the last one. Briefly, please.

MR. MIASARA: Mr. Milhollin–

MR. MURAVCHIK: Say your name once again.

MR. MIASARA: I’m Mike Miasara [ph.].

You said you cannot verify a lie. You can only verify the truth. In retrospect Saddam Hussein told the truth. And Rivaldi [ph.] was very close to verifying the truth. And, yet, one country didn’t like it and therefore it invaded Iraq. If you were a leader of those inspected countries, what would you do? Tell the truth or tell a lie?

MR. MILHOLLIN: If I’m the leader of what?

MR. MIASARA: One of those inspected or suspected countries?

MR. MILHOLLIN: Do you want me to go first?

MR. : Go ahead.

MR. MILHOLLIN: I’m sorry. I just didn’t understand the word you said.

I think what you say depends on what your goal is. And if your goal is to prove that you’re innocent, you tell the truth if you are innocent. And if you’re not innocent, obviously you don’t tell the truth.

As far as Saddam Hussein goes, Saddam Hussein was in the curious position of telling lies to conceal the fact that he did not have the bomb. He was judged by all the inspectors in every branch, that is chemical, biological, missile, and nuclear, to have told lies. And I followed it closely and he did tell lies in every one of those disciplines, consistently told lies to the inspectors. He said that documents didn’t exist that they knew existed, that things had been destroyed that there was no evidence of having been destroyed. There were lots of reasons why the inspectors knew he was lying. That’s clear. That’s history.

MR. MURAVCHIK: Mark, John, do you want to respond to either of the last two questions?

MR. : I’ll just respond very to Henry. Henry, and I’ve given you this answer before. You know my training. I’m a political scientist. The reason why the burden of proof or that there’s not this universal objective rule, it varies by each case, and politics interferes in nasty complicated ways. In the case of North Korea, you know, China’s interest is also in stability. And so in the case of Iran you might have different levers because other countries have different economic interests. And so the reason why, I know you’ve been pushing this universal standard in a variety of institutions in terms of country neutral rules, it’s difficult because politics intervenes and that there are different levers and different interests that nations hold.

MR. SOKOLSKI: You realize that the only nations that violations have been found has been when there have been confessions. That’s quite a standard.

MR. MURAVCHIK: Joe, do you want the final answer or comment?

MR. CIRINCIONE: Yeah. I want to close by saying that there’s a lot of agreement among conservatives, liberals, neoconservatives, neoliberals, institutions on the need to do more on non proliferation policy. There’s already a lot of agreement on some of the tools. Mark, under Secretary Bolton, the American Enterprise Institute deserve a lot of credit, for example, for bringing the focus back to the enforcement of existing agreements.

You heard the under secretary talk about it. They’re absolutely right. We were paying more attention to the signature of treaties, rather than their enforcement. And this has been a needed corrective that this Administration has introduced. The PSI is a great idea. It was dreamed up by neocons in this Administration, you know, but liberals in the former Administration should certainly embrace it. It’s a good tool, necessary addition.

Everybody, after this election is over, everybody is–you are going to see a flurry of activity for a new non proliferation policy. You heard, you heard secretary–whoever is, whoever is the President. You heard Kerry talk about it on the stump, how he wants to do it. You heard President Bush talk about it February 11th. Everybody agrees what we’re doing isn’t working well enough. We have to do more. There’s going to be a lot of room for these kinds of discussions. I look forward to coming back to AEI, no matter who is President. Thank you, Josh.

MR. MURAVCHIK: I’d like to thank each of our three panelists for what I thought was a very enlightening and interesting discussion. And I want to thank warmly Karen Nicols-Barrett, who did most of the work putting this on, one of my two wonderful assistants, the one who was responsible for this event. And I want to thank you all for coming. These panels will continue. I expect we’ll have our next one in November after the election. And please check out the AEI website for the details. Thank you very much.

Remarks about the Importance of Export Controls

By Gary Milhollin

Remarks at the Southeast Europe Defense Ministerial Border Defense Conference

I am pleased to have this opportunity to discuss export controls before so many experts in the subject. I notice that there are a number of countries represented here that subscribe to our export control database, the Risk Report. I would like to thank both Mr. Harlan Strauss and Mr. Paul van Son for making it possible for my organization to provide this database to help countries with export control.

I would like to begin with a reminder of how essential export controls are to the security of the world. Every program to build weapons of mass destruction has depended on imports. In fact, imports have usually been the pacing item.

Let us consider the three countries that have not joined the Nuclear Nonproliferation Treaty – Israel, India and Pakistan. Each of these countries has depended on imports for virtually every program, every plant and every system that they have put together in the nuclear sphere. Exports have been the pacing item for all. That is true of all the reactors, of all the heavy water plants, and of Pakistan’s uranium enrichment effort. It was also true of all of the nuclear programs in Iraq. No counterproliferation effort can succeed without export control. This same is true of efforts to stop the spread of long-range missiles.

Successful export controls raise the price of all these programs. When Argentina and Brazil decided to put proliferation behind them, one of the main reasons was that it was costing them dearly in technology denial from America and other countries. Libya also made a similar decision recently – Libya decided that its nuclear bomb effort wasn’t worth the cost it was paying in international isolation.

Likewise, Iraq’s effort to make a solid-fuel nuclear missile was thwarted by the Missile Technology Control Regime, and although Iraq did manage to import a large quantity of equipment for its nuclear effort, the program went slowly enough so that it never succeeded in the time available. Iraq had to re-engineer many items that could not be obtained from abroad.

In the future, we must keep the pressure on. The future, however, will be different. We will need more cooperation than ever. Why? Because the threat is changing, and the response will have to change too.

The best example is the nuclear smuggling network set up by Pakistani scientist A.Q. Khan. What lessons does it have for us? The main one is that the management methods of globalization have spread to proliferation. We are familiar with the concepts of “out-sourcing” and “off-short production.” Well, these new methods are now being used by proliferators. A.Q. Khan’s customer in Libya placed an order; that order was filled by suppliers throughout the world. Machine tools from Europe were sent to Asia, and there they produced centrifuge parts for delivery to the Middle East, with the operation being managed by companies in the United Arab Emirates. The profits went to a Pakistani national who put them in off-shore banks.

In effect, one uses the same methods one might adopt to produce motorcycles, or vending machines, or television sets. One looks around the world for a market, and then one looks for the means to supply it.

To make matters worse, it is not clear that this activity was really against the law.
It is legal for one country that is a member of the nuclear non-proliferation treaty to export centrifuge parts to another, unless strong export controls regulate it. It is a sad fact that we don’t have such export controls in all countries of the world. In addition, it is probably not against the domestic law of a number of countries for a group of terrorists simply to move in, set up shop, and make mass destruction weapons. All countries need to look at their laws to ensure that this behavior is clearly made illegal.

Another lesson we can draw from this network is that it worked. The network managed to supply Iran, North Korea and Libya with the means to make nuclear weapons fuel, and Libya also got a tested nuclear bomb design. Iran began getting deliveries in the late 1980’s and early 1990’s; North Korea in the mid and late 1990’s; and Libya was still getting things last autumn. The United States was about a decade late in confronting the Pakistani government over Mr. Khan’s activities, more than a decade late in responding to Iran’s progress, and tardy by several years in the case of North Korea.

This was a failure in the gathering and use of intelligence information. The reaction did not come until after the harm was done. The lesson is that we must do much better, and we must acknowledge that we have to change to do that. Otherwise, we will continue to be too late. This kind of activity must be discovered and stopped before it succeeds.

To all these considerations we must now add another: terrorism. Did A.Q. Khan’s network sell only to countries, or were “sub-national groups” on his customer list as well? If orders from a country (such as Libya) can be filled by these global management methods, why not an order from a terrorist group? We cannot rule it out. The same methods could serve any customer.

The possibility that global supply networks could outfit terrorist groups is a new and frightening development. It should be seen as a direct security threat by all countries and their ministries of defense. How do we counter it? One way is to increase our cooperation.

The United States probably spends more money to gather intelligence than the rest of the world combined. Yet, we still fail to get what we need. It is becoming clear that everyone must help. Increased cooperation in gathering strategic intelligence must be a top priority for all countries concerned about terrorism.

We also need better laws and stronger enforcement. As many of you know, the United Nations Security Council has just passed U.N. Security Council Resolution 1540, calling on all countries to strengthen their anti-proliferation laws. I hope that all countries will see this as an opportunity for governments to act sooner rather than later to improve their export control performance.

Thank you for this opportunity to address this conference.