News

Hans the Irrelevant

By Gary Milhollin

The Wall Street Journal
January 28, 2003, p. A16.

Imagine this: Hans Blix, the 74-year-old Swedish lawyer who now serves as chief U.N. weapons inspector in Iraq, after drawing himself up to his full height, declares: “I’m not taking it anymore.”

After being fooled in the 1980s (when Saddam ran a secret A-bomb program under the noses of Mr. Blix’s inspectors at the International Atomic Energy Agency) and fooled again in the 1990s (when Saddam destroyed entire buildings to hide evidence of bomb making) and then brushed off last month when Saddam’s minions handed Mr. Blix a 12,000-page report in which none of his questions were answered – it would be normal to be upset and even, maybe, to reach for Saddam’s throat.

Yet, Mr. Blix, an infinitely patient international civil servant, could never bring himself to do so – at least consciously. But yesterday, in an extraordinary report to the United Nations, he did so unconsciously. In the most careful, lawyerly fashion, Mr. Blix unwittingly demonstrated that his efforts are leading nowhere, and that his mission is essentially over.

He did not, of course, say that in so many words. At first, he congratulated the Iraqis for their cooperation on “process”: “It would appear from our experience so far that Iraq has decided in principle to provide cooperation on process, notably access. A similar decision is indispensable to provide cooperation on substance in order to bring the disarmament task to completion, through the peaceful process of inspection, and to bring the monitoring task on a firm course.”

All lawyers (Mr. Blix is a lawyer) know the difference between process and substance. By “process” he meant letting U.N. inspectors tour some 230 suspected weapon sites, almost all of which had been visited already by previous groups of inspectors. By “substance” he meant real disarmament, toward which he had to admit that the Iraqis still have done virtually nothing.

“One might have expected,” Mr. Blix wrote, that Iraq would have explained the following:

– Evidence that it had tried to put VX, the deadliest form of nerve gas, into weapon-usable form.

– One thousand tons of poison gas contained in 6,500 missing chemical bombs.

– Several thousand missing rocket warheads for carrying poison gas.

– Some 8,500 missing liters of anthrax and enough growth media to produce 5,000 liters more.

– The illegal import of 300 rocket engines and other components for ballistic missiles.

– Illegal tests of long-range missiles that Iraq is not supposed to possess.

– Three-thousand pages of undeclared documents on the enrichment of uranium at the home of an Iraqi nuclear-weapon scientist.

This is a terrifying list of destructive potential to leave in the hands of someone like Saddam Hussein. Failing to account for it is a lack of cooperation on “substance,” and surely a material breach of Iraq’s obligations. But Mr. Blix is unable to say so. The report deliberately avoids taking any position on this point. The implication, however, is clear: With no progress on substance – that is, disarmament – the cooperation on process is irrelevant.

Mr. Blix’s only prescription for solving this problem is to give the inspections more time. But that makes no sense in light of what he has reported. It is, the U.N. chief inspector says, the lack of a decision by the Iraqi government to disarm that is the stumbling block. “Iraq appears not to have come to a genuine acceptance, not even today, of the disarmament which was demanded of it.”

Making a decision doesn’t take long, especially in a dictatorship. Giving the inspectors more time has nothing to do with complying with U.N. Resolution 1441. The truth is that Mr. Blix’s mission so far has not produced any progress toward disarmament, and is not likely to do so in the future.

What, then, can we expect to happen next? If the inspectors find more evidence that Saddam is lying – more evidence of hidden warheads or illegal imports, for example – it will only prove more clearly that disarmament isn’t taking place. Obviously, this has nothing to do with achieving the peaceful disarmament Mr. Blix hopes to achieve. On the other hand, if the inspectors fail to find more evidence, that will not prove that Iraq has no weapons of mass destruction as long as Saddam refused to account for the frightening list of missing items.

The only hope for inspections now is the last-minute conversion of Saddam Hussein. If troops begin massing on his border, there is a slim chance that Saddam will start answering Mr. Blix’s questions. There is even less of a chance that Saddam will then begin to transparently disarm. But if he does, the “process” will be unmistakable. The world would then see Iraq behaving like South Africa when it revealed its entire nuclear-weapons program after its government changed; and as Argentina and Brazil did when they decided to become part of the solution to the proliferation problem rather than part of the cause; and as Belarus, Ukraine and Kazakhstan did when they decided that nuclear weapons were not worth the cost of their keeping.

If that time should ever come, Mr. Blix may have a useful role to play. Then he could verify that disarmament was happening, as inspections are supposed to do, rather than trying to create disarmament, which inspections cannot do. In the meantime, however, he should admit what he has so ably proved in his report: His mission has been completed.

Mr. Milhollin directs the Wisconsin Project on Nuclear Arms Control in Washington.

Export Controls: Why We Need Them More Than Ever

By Gary Milhollin

Keynote Address

Before the Practicing Law Institute
Washington, D.C.

I. Introduction

I am pleased to be able to discuss with you today the important subject of export control. I would like to thank Cecil Hunt for inviting me. Cecil and I have known each other for almost a decade, during which Cecil had a distinguished career as a lawyer for the Department of Commerce. Now that he has left the government, I can reveal something: I used to give him legal advice. Of course, if you know Cecil, you also know that he did not solicit that advice, and if you know me, you also know that Cecil did not follow that advice.

Cecil has asked me to confine my remarks to 20 minutes or less to allow for questions, which I will try to do.

II. Export controls and ground zero

The first topic I would like to take up is the effect of the attacks that occurred on September 11. We did have terrorism before September 11. We also had the spread of mass destruction weapons before September 11. What we did not have was the realization that ground zero is now where we live. The battlefield has shifted. That is the big fact that causes us to conclude that we are at war. But what kind of war? What do the attacks tell us?

There are at least three lessons. First, we know that Al Qaeda is interested in getting weapons of mass destruction. We know this from evidence found in Afghanistan. With money, time, and a place to work, groups like Al Qaeda are going to try to build these weapons.

Second, we know that a terrorist organization could probably deliver any weapon it might produce. If Al Qaeda can organize a 19-person group to fly airliners into buildings, it can smuggle a nuclear weapon across a border. One can, in fact, import a bomb in parts and assemble it in a building; one can drive it across a border in van; one can sail it into a harbor in a ship. The nuclear weapon design that the inspectors found in Iraq was about the size of a beach ball and weighed under a ton. It would fit under your desk.

Third, we know that the attack may be anonymous. The United States was able to find out quickly who launched the attack on September 11, but the next attack might not be so easy. Rather than starting with a list of passengers on an airplane, we would probably be starting with a hole in the ground. And we could be starting without our best investigators.

Why? If someone brings a nuclear weapon into Washington, it would probably be set off at about 12th and Pennsylvania. That is what I concluded several years ago after looking into the question. The bomb would destroy the FBI, U.S. Customs headquarters, U.S. Secret Service headquarters, the Justice Department, and probably the U.S. Treasury building and the White House. It would certainly destroy this room. It is a literal fact that most of us in this room are probably spending our professional careers at what could be the next ground zero.

A biological attack might be even more difficult to figure out. We still have not discovered who mailed the anthrax letters, and may never find out.

It is absolutely necessary for us to keep the means to make these weapons away from terrorists and the nations that support them. And that, of course, is where export control comes in. In the new war against terrorism, export control is a front-line defense. And who are the front-line troops? They are customs officials, border guards, export licensing officers, and intelligence agents – around the world. They are the people who must get up every day and do their jobs in order to keep the rest of the world safe. They are also you – the people in this room. You are the experts in export control. Nothing is more important for the security of the world than what you do.

III. The front-line troops

During the past three years I have had the privilege of meeting a great number of these front-line troops. I have been to sixteen countries in the former East Bloc. They are Armenia, Azerbaijan, Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Moldova, Romania, Poland, the Slovak Republic, Slovenia, and Uzbekistan. My passport has so many stamps in it that I am beginning to get funny looks when I cross borders. These places are not high on anyone’s list of tourism hot spots. But they are hot spots for proliferation.

All of these countries have serious problems with goods crossing their borders. They must all contend with goods coming out of Russia. They also have problems controlling their own exports. But they want to do better. They want to come toward the West. Many of them want to join Europe, and all of them want to be seen as reliable recipients of Western technology. They know that to do that they need good export controls. And they want our help.

My organization has been trying to give it to them. We have been providing them with our database, the Risk Report, which describes more than 3,000 entities around the world that are linked to mass destruction weapon programs or to terrorism. The information has already been used to stop exports to places like Iran’s military production organizations. We are providing the Risk Report with the help of the State Department, the Defense Department, and the Customs Service.

But while our country is trying to rally the troops abroad, and trying to encourage them to protect our security – what are we doing at home? The answer is: our industry is trying to weaken our own export controls.

The recent bill to renew the Export Administration Act would have weakened U.S. controls dramatically. It was not enacted, I am please to say, although it came close.

We all need to understand that pushing this kind of legislation, or trying dilute our export controls administratively, is something we can no longer afford to do. These front-line troops I have been talking about may be poorer than we are, and they are certainly less organized than we are, but they are not stupid. If they see us weakening our controls, they are not going to enforce theirs. If we don’t keep the faith, neither will anyone else. It is simply not possible to expect that our security will be protected by dropping controls on dangerous technology. And we cannot live in a world where the means to make weapons of mass destruction is within reach of terrorist organizations.

IV. Iraq

This brings me to my last topic: Iraq. We are about to go to war there. Why? To get rid of Iraq’s mass destruction weapon programs. But where did those programs come from? The answer is: from us – from the West. From 1985 to 1990, Iraq received more than $1.5 billion worth of licensed dual-use commodities from the United States.

Virtually every nuclear and missile site in Iraq received licensed, high-speed American computers. America’s leading electronic companies sold sensitive equipment directly to the Iraqi Atomic Energy Commission, to various sites where atomic bomb fuel was made, and to a site where A-bomb detonators were made. American companies also shipped controlled items directly to Iraq’s main missile building site, and to the Iraqi Ministry of Defense.

It is highly likely that this equipment is still in Iraq and is still being used in Iraqi weapon programs. At the end of November, in the new round of inspections, the inspectors went to a place called the Nassr State Enterprise. Nassr helped extend the range of Iraq’s SCUD missiles so they could reach Saudi Arabia, where they killed our troops in their barracks, and so they could reach Tel Aviv, where they killed Israeli civilians. Nassr also helped Iraq’s secret effort to enrich uranium. Nassr was licensed to receive $1.8 million worth of American machine tools and high-speed computers. They may still be there, as far as we know. In addition to Nassr, the inspectors visited the Al-Qaqaa site. It developed explosive lenses for nuclear weapons before the Gulf War. It too, was licensed to receive U.S. exports, which the inspectors may still be looking for.

It is no exaggeration to say that our problem with Iraq is in large measure an export control failure, that we are still trying to rectify.

These exports no doubt made money for American companies, but they also cost the lives of American troops. During the Gulf War, we sent pilots to bomb plants filled with equipment that American and other Western companies had supplied. Some of those pilots did not come back. Now we are thinking of sending troops again. Some of these troops too will not come back, and they will still be trying to remove a problem that Western industry helped create. So, when we talk about export controls, we are not just talking about money. We are talking about the lives of our soldiers.

V. Conclusion

My point is that in light of September 11, we can no longer afford to put trade above national security. For our own safety, we have to convince the rest of the world to keep the means to make weapons of mass destruction away from terrorists and the countries that support them. But we can never do that if we allow our own companies to sell these same technologies. We can’t have it both ways. If we want to protect ourselves against terrorism, and against rogue regimes like Saddam Hussein’s, we must strengthen export controls, and we must provide the leadership that the rest of the world so desperately needs.

Hans the Timid

By Gary Milhollin

The Wall Street Journal
November 26, 2002, p. A24.

Hans Blix, by now a household name from New York to New Delhi, begins his fateful mission this week: rooting out Saddam Hussein’s hidden programs for making nuclear, chemical and biological weapons. Everyone should wish the chief U.N. weapons inspector and his colleagues success, but the odds are against it. Instead of disarmament, we are likely to get a prolonged process of paper pushing.

The main concern is Mr. Blix himself. The 74-year-old Swede was not the top choice for the job. The United States backed Rolf Ekeus, the highly effective leader of the U.N. Special Commission that inspected Iraq in the 1990s. But Iraq’s champions in the U.N. Security Council, Russia and France, vetoed Mr. Ekeus as too aggressive. They put up Mr. Blix instead. After ineffectual opposition from the Clinton administration, Mr. Blix took over the present U.N. inspection organization (called UNMOVIC) in January 2000.

Nuclear Negligence

There is a reason why Iraq’s friends preferred Mr. Blix. He already had an unsurpassed record of failure in dealing with Saddam Hussein. From 1981 to 1997, Mr. Blix headed the International Atomic Energy Agency, the U.N. body responsible for inspecting nuclear sites around the world – including Iraq’s – to make sure they are not cranking out atomic bombs. As late as 1990, the same year Iraq invaded Kuwait, Mr. Blix’s inspectors rated Iraq’s cooperation as “exemplary.” But all the while Saddam was running a vast A-bomb program under their very noses. Iraq produced both plutonium and enriched uranium for nuclear weapons in clear violation of the IAEA’s rules. Some of the work went on at the same places that were being inspected, and was hidden with the help of an Iraqi official who was himself a former IAEA inspector. (His knowledge of inspection techniques helped dupe his former colleagues). Had the Gulf War not intervened, Iraq might have made its first bomb without anyone being the wiser.

Mr. Blix’s spokesman at UNMOVIC has tried to explain this embarrassment by claiming that Mr. Blix had only limited powers under the IAEA’s rules. But the facts are otherwise. Mr. Blix had a lot of discretion, and he always used it to reduce the effectiveness of inspections.

For example, Iraq possessed more than 45 kilograms of highly enriched uranium before the Gulf War, far more than the 25 kilograms that the IAEA officially said was enough to make an atomic bomb. Iraq had imported the uranium from Russia and France as reactor fuel, but it would work in a bomb just as well. Now, when a country like Iraq has more than a bomb’s worth of weapon-usable uranium, the IAEA is supposed to inspect it every three weeks, because that is all the time it is supposed to take to fashion it into a warhead. Under Mr. Blix, however, the IAEA was inspecting it only every six months. Why? Because the uranium was stored in a number of separate “material balance areas” (where the inspectors went to measure it) and there was less than a bomb’s worth in each!

The areas were only a mile or so apart, so the whole thing was absurd. The stuff could be assembled in days, if not hours. But rather than annoy the Iraqis with frequent inspections, Mr. Blix chose the head-in-the-sand approach – which the Iraqis were quick to exploit. Immediately after the last six-month inspection before the Gulf War, they diverted the uranium to a crash nuclear weapon effort, which only the war prevented from succeeding.

Mr. Blix maintained this user-friendly stance even after the war. In May 1991, at the close of the first U.N. inspection, Iraq had accounted for the 45 kilograms of uranium it had imported, so Mr. Blix wanted to issue a report saying that everything was fine. But a minority of the inspection team wouldn’t go along. They just couldn’t understand why the Iraqis had torn out the foundations of bombed-out buildings as far as several meters down, while leaving other buildings untouched. They suspected that by removing the floors, Iraq had concealed evidence that the buildings had been used to process uranium domestically. Mr. Blix had no sympathy for such suspicions; he was determined to issue the report anyway. The minority (two American weapon experts) nevertheless held the report up until an Iraqi defector revealed a vast home-grown uranium processing program – saving Mr. Blix from humiliation.

Former leaders of the U.N. Special Commission say that Mr. Blix continued to accommodate the Iraqis during the 1990s. On repeated occasions, the commission had to use its power to designate sites for inspection in Iraq over Mr. Blix’s opposition. He objected on the ground that the sites were sensitive, and the inspections risked being too confrontational.

Nor does he seem to relish the new powers he received this month from the unanimous passage of U.N. Resolution 1441. U.N. inspectors can now demand that Iraqi scientists be made available for interviews outside the country, and that they be allowed to bring their families. There the scientists could tell the truth without retaliation. This technique could unmask Saddam’s weapons in a hurry. But Mr. Blix is not interested. He has dismissed this avenue as having “practical difficulties.”

Why such curious behavior? Because Mr. Blix faces a dilemma. The only way he can disarm Iraq is if Saddam Hussein decides to fess up and admit what he has. Saddam might do that if he decides that keeping his head is more important than keeping his weapons. Then inspections could work. They are, after all, designed to verify disarmament, not produce it.

If Saddam doesn’t fess up, Mr. Blix has a losing hand. If he is aggressive, and proves Saddam is lying, it will show noncooperation, just what the Pentagon is waiting for. Mr. Blix will then be the chump in the play – the first U.N. bureaucrat to hand the world a war.

Scurrying Sideways

To avoid that, Mr. Blix has an incentive to scurry sideways, like a crab, shunning confrontation. He has, in fact, already taken that direction. According to his press spokesman in Baghdad, the inspectors have no immediate plans to pressure Saddam Hussein. Instead, they plan to occupy themselves “for some time” at sites already visited by earlier groups of inspectors, where they will check on things expected to be there. With hundreds of sites and pieces of equipment already listed in their files, this process could keep the paper flowing for the better part of a year.

But there would be no disarmament. Inspections are not an end in themselves. They are supposed to implement the latest U.N. resolution which demands that Iraq disclose and surrender any chemical, biological or nuclear weapons or face “serious consequences.”

If the inspectors continue as they have begun, Saddam will never be forced to give up his mass destruction arsenal – which every Western intelligence service believes he has – because Mr. Blix will never uncover what is hidden. The world should demand that Mr. Blix confront Saddam now with the best evidence the West can muster, and insist on explanations. Unless he does so, Mr. Blix will have the distinction of missing the Iraqi bomb before the Gulf War, missing it afterward, and now missing it once again.

Mr. Milhollin directs the Wisconsin Project on Nuclear Arms Control in Washington, D.C.

Iraq: The Snare of Inspections

By Gary Milhollin and Kelly Motz

Commentary
October 2002

Every time war clouds gather over Baghdad, Saddam Hussein has a habit of hinting that he may allow UN arms inspectors to return. Similarly, every time war clouds gather over Baghdad, voices in the United States and elsewhere, including some in or near the Bush administration, can be heard urging a new and improved system of inspections. Today, some of those voices belong to critics of administration policy who are opposed to war with Iraq. Others favor war but think a provocation, or “triggering event,” is lacking, and they see inspections (which they fully expect to fail) as providing the necessary trigger.

The inspectors departed Iraq in 1998 after enduring more than seven years of tricks and obfuscations, all aimed at protecting the country’s programs for building weapons of mass destruction. Since then, Saddam’s interest in renewed inspections has been aroused in direct proportion to the perceived risk that his country will be invaded. When things are quiet, he has refused even to consider letting the United Nations back—in egregious violation of his pledges under UN resolutions and therefore of international law. But now that Washington is seriously contemplating “regime change,” he may well announce that inspectors are once again welcome.

If he does, he can count on Russia and France, Iraq’s allies on the Security Council, to rally the world in favor of giving peace a chance. Any delay on Saddam’s part in admitting or cooperating with inspectors will then still look better than war, and it will become that much harder to argue that Uncle Sam should use soldiers and bullets to do what international civil servants could do with blue helmets and notebooks. If inspectors go back in, said Jack Straw, Britain’s Foreign Secretary, only last month, “plainly the case for military action recedes.”

Whatever one’s stance on the question of how best to handle Saddam Hussein, it is vital to understand one thing. Unless the Iraqi dictator should suddenly and totally reverse course on arms inspection and everything that goes with it, or be forced into early retirement—in other words, unless Saddam Hussein’s Iraq ceases to be Saddam Hussein’s Iraq—inspections will never work.

To read the complete article, click here:  Iraq: The Snare of Inspections

Testimony: Iraq’s WMD Programs and Export Controls

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 Armed Services
United States House of Representatives

September 19, 2002

I am pleased to appear today to discuss the threat from Iraq’s mass destruction weapon programs, and the relation between that threat and the export of sensitive technology. Before getting into the substance of my testimony I would like to offer some items for inclusion in the hearing record. First, there are two recent articles written by my organization on inspections in Iraq, one from the New York Times and the other from Commentary magazine, together with a graphic prepared by my organization for the New York Times Week in Review that describes a series of dangerous nuclear imports and what one can learn from them. Second, there is a list of addresses in the United States where one can buy high-strength aluminum tubing similar to that recently intercepted on its way to Iraq.

I would like to begin by simply affirming that Iraq does have active programs for building weapons of mass destruction. We know that Iraq has a workable nuclear weapon design and lacks only the fissile material to fuel it. We also know that Iraq has recently tried to import high-strength aluminum tubing that our government says is suited to making centrifuge components which, in turn, are used to process uranium to nuclear weapon grade. Iraq also has an active program for making long-range missiles, and we know that Iraq has produced and weaponized nerve gas, mustard gas, and anthrax. In addition, we know that Iraq’s procurement activities have continued throughout the 1990’s despite the U.N. embargo.

The current status of these programs is summarized in my organization’s website: www.iraqwatch.org. I invite the Committee to consult this site to obtain a continuously updated report on what we know about Iraq’s mass destruction weapon efforts.

It is an unfortunate fact that Iraq has built these programs almost exclusively through imports. The great majority of these imports were from the West, and most of them were sent legally. Weak export controls were primarily to blame.

In February of this year, I had the privilege of testifying before this Committee on the new Export Administration Act, which is now under consideration by Congress. I made the point that this bill was conceived in a bygone period of history – the days before September 11, 2001. In reaction to the attacks on September 11, one would expect the United States to search for ways to strengthen controls on the sales of dual-use items. These sensitive products are the ones that terrorists and terrorist-supporting nations need to make weapons of mass destruction. Instead, we are going in the opposite direction. The bill now being considered would authorize the Commerce Department to drop export controls on the very items that our enemies would most like to use against us.

For example, I would like to draw the Committee’s attention to the shipment of high-strength aluminum tubes that was intercepted recently on its way to Iraq. According to administration sources that were quoted in the press, the tubes could have been used to make gas centrifuges, which can process uranium to nuclear weapon grade. President Bush cited the shipment as evidence that Saddam Hussein still has an active nuclear weapon program.

If the bill now being advocated by the administration passes, however, these very tubes would be removed from export control. They meet the bill’s proposed criteria for “mass market” items as well as for “foreign availability.” For this reason, they could be decontrolled by the Secretary of Commerce acting alone.

Such a decontrol would mean two things. First, the United States would no longer be able to interdict such shipments. We could never ask foreign countries to stop selling something that our exporters were entitled to sell without restriction. Thus, countries like Iraq would have a much easier time importing the means to make nuclear weapons.

Second, the Bush administration would be preparing to go to war to prevent Iraq from importing an item that the administration had decided was not important. This would damage our international credibility just when we need it most. We can’t cite Iraq’s appetite for aluminum tubes as justifying an attack or an ultimatum on inspections, and at the same time say that such tubes qualify for decontrol.

This week, the staff at my organization investigated the commercial availability of high-strength aluminum tubes. The staff identified numerous U.S. sellers of these tubes who were ready to take our order for as many tubes as we wanted to buy. It requires roughly a thousand of these tubes, made into centrifuge components, to produce enough weapon-grade uranium for one bomb per year. Our staff could have purchased several thousand of these tubes from a number of sellers here in the United States. I have attached a list of these outlets to my testimony.

It is clear that this wide availability within the United States would qualify the tubes for “mass market” status under the proposed bill. As a result, the Secretary of Commerce would be required to free them from export control. The criteria for mass market status are as follows:

  • The item must be “available for sale in a large volume to multiple purchasers;”
  • The item must be “widely distributed through normal commercial channels;”
  • The item must be “conducive to shipment and delivery by generally accepted commercial means of transport;”
  • The items “may be used for their normal intended purpose without substantial and specialized service provided by the manufacturer.”

High-strength aluminum tubes meet all of these criteria, which are listed in Section 211 of the bill. The bill says that the Secretary of Commerce shall determine that an item has mass market status if it meets them. The items would then be decontrolled automatically.

There is something wrong with this picture. What is wrong is that the world has changed, and this bill does not reflect that fact. How can we free for export something we are accusing the Iraqis of importing to make atomic bombs? It is manifestly absurd to decontrol the same technologies that we are worried about Saddam Hussein importing. With one hand, we would be helping Iraq make nuclear weapons, and with the other we would be smashing Iraq for doing so.

High-strength aluminum tubes are not the only items that are useful in making centrifuge parts. Maraging steel and carbon fibers are also employed for this purpose. Iraq experimented with both of these items when it tried to build centrifuges. As it turns out, both maraging steel and carbon fibers also meet the “mass market” criteria in Section 211.

In addition to centrifuge components, maraging steel is used to make solid rocket motor cases, propellant tanks, and interstages for missiles. In 1986, a Pakistani-born Canadian businessman tried to smuggle 25 tons of this steel out of the United States to Pakistan’s nuclear weapon program. He was sentenced to prison as a result. Maraging steel has been controlled for export since January 1981.

This steel is produced by companies in France, Japan, Russia, Sweden, the United Kingdom and the United States, and it meets all the criteria for “mass market status.” Several steel companies list maraging steel on the Internet and can produce it in multi-ton quantities. Over the telephone, two American companies and one British company explained to my staff how to order 25 ton quantities with delivery in less than a month. Maraging steel is bundled and shipped much like stainless steel, which it closely resembles.

In addition to maraging steel and high-strength aluminum, composites reinforced by carbon or glass fibers can be used to form the rotors of gas centrifuges. The fibers are also used in skis, tennis racquets, boats and golf clubs, and are produced in a number of countries. This availability would give the fibers “mass market status” under the bill, despite the fact that they too have been controlled for export since 1981.

In addition to the “mass market” criteria in the bill, these three sensitive items would also meet the “foreign availability” criteria. These are equally sweeping. The include any item that is:

  • “Available to controlled countries from sources outside the United States;”
  • “Can be acquired at a price that is not excessive;”
  • Is “available in sufficient quantity so that the requirement of a license or other authorization with respect to the export of such item is or would be ineffective.”

As I testified before this Committee in February, this language is so broad that it would appear to cover North Korean rocket motors. It would also cover the aluminum tubes we are worried about. We know that the tubes did not come from the United States; thus, they were obviously available abroad.

The only way to retain control over the sale of these items is for President Bush himself to make a special finding within 30 days, in which he would set aside the Commerce Department’s decision. This is an authority that he is not allowed to delegate. In effect, the bill sets up a powerful new machine at the Commerce Department for decontrolling exports. As I testified in February, once that machine gets moving, it is going to chop big holes in the existing control list unless the President can find some hours in his schedule in which to undo the Commerce Department’s work. Do we really want the President of the United States to put aside his concern about Osama bin Laden, or about the economy, and spend his time thinking about aluminum tubes, maraging steel and carbon fibers?

This is not an academic question. American lives are threatened by dangerous exports. We are now sending pilots, almost every day, to bomb Iraq’s air defenses. U.S. Defense Secretary Donald Rumsfeld, speaking to the press on Monday, reminded us that those defenses use fiber optic technology installed by Chinese companies, one of which, Huawei Technologies, was virtually built with American technology. China’s assistance to Iraq was not approved by the United Nations, and thus violated the international embargo.

The history of Huawei shows how sensitive American exports can wind up threatening our own armed forces. At about the time when this company’s help to Iraq was revealed last year, Motorola had an export license application pending for permission to teach Huawei how to build high-speed switching and routing equipment – ideal for an air defense network. The equipment allows communications to be shuttled quickly across multiple transmission lines, increasing efficiency and reducing the risk from air attack.

Motorola is only the most recent example of American assistance. During the Clinton Administration, the Commerce Department allowed Huawei to buy high-performance computers worth $685,700 from Digital Equipment Corporation, worth $300,000 from IBM, worth $71,000 from Hewlett Packard and worth $38,200 from Sun Microsystems. In addition, Huawei got $500,000 worth of telecommunication equipment from Qualcomm.

Still other American firms have transferred technology to Huawei through joint operations. These included Lucent Technologies, which agreed to set up a joint research laboratory with Huawei “as a window for technical exchange” in microelectronics; AT&T, which signed a series of contracts to “optimize” Huawei’s products so Huawei could “become a serious global player;” and IBM, which agreed to sell Huawei switches, chips and processing technology. According to a Huawei spokesman, “collaborating with IBM will enable Huawei to…quickly deliver high-end telecommunications to our customers across the world.” Did IBM know that one of these customers might be Saddam Hussein?

These exports no doubt make money for American companies, but they also threaten the lives of American pilots. Indeed, as we now contemplate military action against Iraq, we seem to see history repeating itself. During the Gulf War, the United States was forced to send pilots on missions to bomb plants filled with equipment that American and other Western companies had supplied. Some of those pilots did not come back alive. So, when we talk about export controls, we are not just talking about money. We are talking about body bags.

I would like to submit for the record some articles I wrote for the New York Times back in the early 1990’s, together with a report entitled “Licensing Mass Destruction.” These publications list the dangerous exports that American and Western companies sold to Saddam Hussein’s Iraq before the Gulf War. It is safe to assume that many of these products are still helping Iraq’s mass destruction weapon efforts and have never been found by the U.N. inspectors.

In the article in the New York Times from 1992, entitled “Iraq’s Bomb, Chip by Chip,” we see that America’s leading electronic companies sold sensitive equipment directly to the Iraqi Atomic Energy Commission, to sites where atomic bomb fuel was made, and to a site where A-bomb detonators were made. American companies also shipped directly to Saad 16, Iraq’s main missile building site, and to the Iraqi Ministry of Defense, which oversaw Iraq’s missile and A-bomb development. Virtually every nuclear and missile site in Iraq received high-speed American computers.

These exports are set out in greater detail in our 1991 report “Licensing Mass Destruction.” The report shows that all of these exports were licensed by the U.S. Commerce Department and, in many cases, the Commerce Department knew full well that the exports were going to nuclear, missile and military installations. Why did the Commerce Department approve such exports? Because the United States was following a policy of putting trade above national security. The bill now before Congress follows this same policy. That policy was wrong then, and it is just as wrong now.

The second article in the New York Times is from 1993. It shows that America was not alone in supplying Iraq’s mass destruction weapon effort. Its Western allies joined in. Germany (then West Germany) was far and away the leading culprit. German firms sold as much to Iraq’s mass destruction weapon programs as the rest of the world combined. Not only were German firms the main suppliers of Iraq’s chemical weapon plants, German firms also sold components that helped increase the range of Iraq’s Scud missiles. These longer-range Scuds were able to reach Tel Aviv, where they killed Israeli civilians, and Saudi Arabia, where they killed American troops. I must say that I find it shocking that Germany, whose companies have done more than any others to create the mass destruction weapon threat from Iraq, is apparently less willing than any other Western country to confront it.

My point in this testimony is that since September 11, we can no longer afford to put trade above security. We must convince the rest of the world to keep the means to make weapons of mass destruction away from terrorists and the countries that support them. Yet, we can never do that if we free our own companies to sell these same technologies. We can’t have it both ways. Either we protect ourselves from terrorism, or we make a few more bucks from trade.

 

AVAILABILITY OF HIGH-STRENGTH ALUMINUM TUBING

September 19, 2002

During the week of September 16, 2002, the Wisconsin Project on Nuclear Arms Control conducted a study of the availability of high-strength aluminum tubing in the United States. The Wisconsin Project identified numerous suppliers of 7000 series tubing, in particular series 7075, which is one of the kinds needed for centrifuges and meets the criteria for dual-use export controls administered by the U.S. Department of Commerce. An export license is needed if the tubes fit two criteria: an outside diameter of at least 75 mm (three inches) and a tensile strength capable of 460 Mpa or more at 293K (20 degrees C).

The Wisconsin Project identified the following suppliers, who offered to supply thousands of tubes meeting the control criteria within a period of roughly two months:

  1. Alcoa Aluminum Company (Lafayette, Indiana; 800-443-4912 ext. 3007)
  2. TW Metals (various locations throughout the United States; 800-545-5000)
  3. Metals Unlimited (Longwood, Florida; 800-782-7867)
  4. Metalsource (Chattanooga, Tennessee; 800-487-6382)
  5. Specialized Metals (Coral Springs, Florida; 954-340-9225)
  6. Kaiser Chandler (Richland, Washington; 866-249-3421)

In addition to the above firms, which the Wisconsin Project contacted individually, a number of others advertise high-strength aluminum alloys on the web. Some of these firms specifically offer alloys that meet the control criteria in their product descriptions. The Wisconsin Project will supply the names of these firms upon the Committee’s request.

 

Why Iraq Will Defeat Arms Inspectors

By Gary Milhollin and Kelly Motz

The New York Times
September 16, 2002, p. A21

Many voices are now calling for renewed United Nations inspections in Iraq. Some belong to critics of the Bush administration who are opposed to war. Others belong to those who favor war but see inspections – which they fully expect to fail – as the needed triggering event for war. Still other Iraq experts believe that Saddam Hussein himself will invite the inspectors back as a means of forestalling invasion if troops begin to move in his direction.

Whatever one’s stance on how best to handle Saddam Hussein, it is crucial to understand one thing: United Nations inspections, as they are currently constituted, will never work.

There are several reasons for this. Consider the record of the United Nations Special Commission, an agency that was charged with inspecting Iraq’s weapons programs from 1991 to 1998. While Unscom did manage to destroy tons of missiles and chemical and biological weapons, it could not complete the job. Iraqi obfuscations prevented it from ever getting a full picture of the entire weapons production effort. The commission’s replacement, the United Nations Monitoring, Verification and Inspection Commission, which has not yet been allowed to enter Iraq, will have even less success given its structure and policies.

Unscom was staffed mainly by officials on loan from national governments who did not owe their jobs to the United Nations; Unmovic personnel, on the other hand, are United Nations employees who are likely to be hobbled by the United Nations’ notoriously inefficient bureaucracy.

These inspectors are not set up to make effective use of intelligence information. In the 1990’s, American intelligence officials supplied secret information to selected Unscom inspectors, knowing that the information would be protected and be used to uncover hidden Iraqi weapons facilities. At Unmovic, however, no inspector will be allowed to receive intelligence information on a privileged basis, a policy that increases the risk of leaks to the Iraqis. Unmovic has also declared that it will not allow any information gathered from its inspections to flow back to national intelligence agencies. This eliminates the main incentive for intelligence sources to provide Unmovic with useful information in the first place.

Even if it is allowed into Iraq, Unmovic will run up against obstacles at least as formidable as those that stymied Unscom. After years of practice, Unscom became adept at launching surprise visits to weapons sites, yet Iraq’s intelligence operatives defeated it more often than not. It was a rare inspection when the Iraqis did not know what the inspectors were looking for before they arrived. Most Unmovic inspectors have little experience in Iraq and even less in handling intelligence information.

Compounding this handicap is the fact that Iraq has taken considerable pains to make its weapons programs mobile. Laboratories, components and materials are ready to hit the road at a moment’s notice. Once, as an experiment, Unscom had photos taken from a U2 spy plane of a site that it was about to inspect. First the photos showed no activity, then large numbers of Iraqi vehicles leaving the site, then no activity, then the inspectors’ vehicles arriving.

Unmovic is also stuck with a deal the United Nations made in 1998 on “presidential sites.” Iraq is allowed to designate vast swaths of land (big enough to contain entire factories) that the inspectors can visit only after announcing the visit in advance, disclosing the composition of the inspection team (nuclear or biological experts, for example) and taking along a special group of diplomats. This loophole creates refuges for mobile items and could defeat virtually any inspection effort.

New inspections will occur under the threat of imminent American military action. Any announcement that Iraq is not cooperating could be a casus belli. Such a risk might encourage Unmovic to monitor what is already known rather than aggressively try to find what is hidden. This could mean that the goal of inspections – the disarmament of Iraq – might never be achieved.   Which brings us to the heart of the matter. Inspections can only do one thing well: verify that a country’s declarations about a weapons program are honest and complete. It is feasible for inspectors to look at sites and equipment to see whether the official story about their use is accurate. Inspectors can rely on scientific principles, intelligence information and surprise visits to known weapons production sites to test what they are told. It is a different proposition altogether to wander about a country looking for what has been deliberately concealed. That is a task with no end.

For inspectors to do their job, they have to have the truth, which can only come from the Iraqis. As President Bush told the United Nations last week, the world needs an Iraqi government that will stop lying and surrender the weapons programs. That is not likely to happen as long as Saddam Hussein remains in power.

Gary Milhollin is director of the Wisconsin Project on Nuclear Arms Control. Kelly Motz is the editor of IraqWatch.org.

Psst … Can I Get A Bomb Trigger?

The New York Times
Week in Review
September 15, 2002

When it was revealed last week that Iraq had tried to purchase “aluminum tubes,” it seemed to many experts – and certainly to the Bush administration – that Saddam Hussein was continuing attempts to build a nuclear weapon. The inference was partly based on the shape and composition of the tubes, which were much like those used in equipment to enrich uranium

But keeping tack of all the equipment and know-how that go into making a nuclear bomb is rarely a simple task. Some items have benign uses. Others, like blueprints for making a bomb, have obvious implications. Following is a selection of technologies and services that are known to have been transformed to countries with nuclear ambitions – all of which raised suspicions regarding their ultimate use.

Case overviews compiled by Jordan Richie and Gary Milhollin of the Wisconsin Project on Nuclear Arms Control.

To view a larger version of the image, click here.

“Trading with the Enemy” – Letters from Readers in Commentary Magazine

By Gary Milhollin

Commentary Magazine
September 2002, pp. 3-4

Trade vs. Security

To THE EDITOR:

In his discussion of weapons proliferation and export controls, Gary Milhollin addresses issues of critical importance [“Trading with the Enemy,” May]. Unfortunately, he makes several incorrect factual and legal assertions, leaving readers misinformed and undercutting his thesis that “the White House is now pushing a bill in Congress that would make it easier for terrorists and the nations that support them to obtain … weapons of mass destruction. . . .”

KENNETH I. JUSTER
Under Secretary
Bureau of Industry and Security
U.S. Department of Commerce
Washington, D.C.

To read the complete letter and Gary Milhollin’s response, click here:  “Trading with the Enemy” – Letters from Readers in Commentary Magazine

Sabotaging Security for a Buck

By Gary Milhollin

Los Angeles Times
July 30, 2002

The scandals on Wall Street have taught us that industry tells lies, that our government does not protect us from those lies and that the result can be bad for our pocketbooks. The same process can also increase the nuclear threat to our nation.

In a report scheduled for release this week, the U.S. General Accounting Office concludes that the Bush administration made a dangerous mistake on nuclear arms proliferation.

According to the GAO, the administration improperly relied on false industry data to lower the barriers on the export of the United States’ most powerful computers–machines that could be used to build the most fearsome weapons that terrorists could get their hands on. The report shows how a computer industry lobbying group co-chaired by an official of Unisys Corp. duped the White House at the expense of the nation’s security.

In August 2001, the group wrote a letter asking the government to make it easier to export powerful computers to countries such as China, India, Russia and Pakistan.

The issue is important to national security. The GAO writes that the “availability of overall computing power to a nuclear weapon design program is critical” and that powerful computers “would be of significant use to China’s designers in examining likely gaps in their nuclear weapon science.”

The industry’s letter claimed that U.S. controls had to be weakened to keep American firms competitive. Why? Because a new generation of computer servers was about to hit the market. Each would contain 32 of the new Itanium chips, made by Intel Corp.

By early 2002, these servers would be marketed by companies all over the world. The new computers would do 190 billion operations per second, more than twice as many as computers formerly controlled for export from the United States.

Thus, according to the group, unless the government raised the control level for U.S.-origin computers to 190 billion, U.S. companies might lose business to foreign competitors.

The claim was bogus.

The GAO interviewed 10 companies that the industry cited as ready to sell these computers in 2002. It found that nine “would not introduce these servers in 2002 or had no plans to manufacture these servers due to the lack of software and a market for such powerful servers.”

Only one was ready: Unisys. No foreign company was, and no other American company was. Thus, no American firm ever risked losing business, and the whole case for weakening controls was a sham.

Why, then, did our government agree?

That’s what’s frightening. Our federal watchdogs, which are supposed to guard us against terrorists and the spread of the bomb, swallowed this industry fable whole, without so much as a cautionary sniff.

The decision “was based not on an independent analysis but rather on information provided by industry,” writes the GAO. Officials at the Commerce Department, which is in charge of finding out what is really available from foreign competitors, admitted they didn’t even try. “Industry,” they told the GAO, “made its case informally.”

The GAO found that the officials had relied on nothing more than the letter from the computer industry lobbying group.

Unfortunately, this is not the first time the U.S. has lowered computer controls. The Clinton administration did so a number of times without justification and got hammered by the GAO for decisions that “lacked empirical evidence or analysis.”

The reason this keeps happening is simple: campaign money.

The computer industry shells out millions of dollars annually to both political parties. It expects, and gets, something in return.

How does this sellout harm us?

First, it sabotages our fight against terrorism. We can’t ask our allies to keep dangerous equipment away from terrorists and the countries that support them if we don’t control our own sales. In fact, the GAO found that we unilaterally lowered our controls without the consent of our partners in the only international pact–the Wassenaar Arrangement–that tries to confine computer sales to responsible buyers. All the other countries in this pact still control computers at much lower operating levels, which makes the United States a rogue exporter, as well as a unilateralist.

Second, the new computers are highly potent. The GAO found that they were more powerful than the machines now performing 98% of the Pentagon’s military computing functions. And sending them off to places such as Pakistan, where they could boost the production of nuclear warheads, only increases the number of nukes that we have to worry about going astray.

As for Unisys, it can’t be expected to use restraint. Before the Gulf War, it sold Iraq’s interior ministry an $8-million computer system specifically capable of tracking the Iraqi population, which could still be helping Saddam Hussein stay in power.

The decision to change the rules came three months after Sept. 11, which means that, despite all the brave words, money was more important than security to the White House.

Gary Milhollin is director of the Wisconsin Project on Nuclear Arms Control in Washington.

Testimony: Export Control and Arms Proliferation: China and Russia

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 Governmental Affairs
Subcommittee on International Security, Proliferation, and Federal Services
United States Senate

June 6, 2002

I am pleased to appear before this distinguished Subcommittee to discuss the subject of export control and arms proliferation. The Subcommittee has asked specifically that I comment on China and Russia, and how these two countries’ exports have contributed to the spread of weapons of mass destruction.

First, I would like to present an overall view of what these countries have been exporting. Then, I would like to make some recommendations concerning the group of Chinese firms that were sanctioned last month by the State Department.

If we look around the world today, and ask ourselves what are the “pacing items” in the spread of mass destruction weapons, the answer is clear: they are Chinese and Russian exports. Sales by these two countries are now fueling the spread of chemical weapons, nuclear weapons and long-range missiles in a number of countries, some of which support international terrorism.

In his testimony this past March, CIA director George Tenet made it clear that this activity is still going on. He told the Senate Armed Services Committee that “Russia appears to be the first choice of proliferant states seeking the most advanced technology and training.” He said that “Russian entities continue to provide other countries with technology and expertise applicable to CW, BW, nuclear, and ballistic and cruise missile projects.” He further accused Russia of supplying “significant assistance on nearly all aspects of Tehran’s nuclear … [and] … long-range ballistic missile programs.”

He also testified that Chinese firms “remain key suppliers of missile-related technologies to Pakistan, Iran, and several other countries.” He said that these exports were continuing “in spite of Beijing’s November 2000 … pledge not to assist in any way countries seeking to develop nuclear-capable ballistic missiles.” In addition, he noted that China is selling CW-related production equipment and technology to Iran.

All this has been going on for a long time. If we just look back over the past several years, we see that Russia has done the following:

* Helped India develop a nuclear submarine and its missiles;

* Helped India develop a cruise missile and improve the accuracy of its surface-to-surface missiles;

* Shipped, in violation of Russia’s obligation to the Nuclear Suppliers Group, nuclear fuel for India’s reactors at Tarapur and begun work on two new Indian nuclear reactors;

* Supplied Iran a large nuclear reactor, which will give Iran its first access to fissile material, and sold Iran sensitive heavy water production technology, nuclear-grade graphite production technology, and research reactor design technology, all of which can be used to make nuclear weapons;

* Helped Iran develop long-range ballistic missiles by providing materials, components, designs, training, experts and testing equipment;

* Sold missile components and/or technology to Brazil, Iraq, Libya and Pakistan.

China’s conduct has been roughly the same. China has done the following:

* Essentially created Pakistan’s nuclear weapon program by supplying a nuclear weapon design, nuclear materials and nuclear technology, including the design of a clandestine reactor;

* Essentially created Pakistan’s ballistic missile program by providing entire missile systems, missile components and missile factories;

* Supplied Iran’s chemical weapon program with poison gas ingredients as well as poison gas production equipment;

* Sold Iran missile components and ingredients for missile fuel as well as complete anti-ship cruise missiles;

* Supplied, according to the CIA, dual-use missile-related items to Libya and North Korea.

The cumulative effect of these export transactions can work great changes in world security. Millions of people in South Asia now face the risk of sudden annihilation because India and Pakistan – presently on the brink of war – possess nuclear weapons. India’s nuclear reactors got a crucial component – heavy water – from both China and Russia at a critical point in India’s nuclear development. And if one subtracts China’s aid to Pakistan’s nuclear program, there probably wouldn’t be a program.

India and Pakistan also have missiles that can deliver nuclear weapons. The missiles too were built with help from China and Russia. It is simply a fact that Chinese and Russian exports have made the dispute over Kashmir far more dangerous.

Russia is a member of the Nuclear Suppliers Group, the Missile Technology Control Regime and has adhered to the Chemical Weapons Convention. Russia is also a member of the Wassenaar Arrangement. China is not a member of the Nuclear Suppliers Group, the MTCR, or Wassenaar, but it has adhered to the Nuclear Nonproliferation Treaty and the Chemical Weapons Convention. In 1996, China pledged not to assist unsafeguarded nuclear facilities. And according to the CIA, China has pledged not to transfer missile items covered by Category One of the Missile Technology Control Regime and not to help any country develop a ballistic missile that could deliver nuclear warheads.

Unfortunately, neither of these countries has a good record of keeping its word. The United States has applied sanctions to Chinese and Russian firms many times. The problem is that the bad behavior is still going on.

On May 16, the State Department announced – once again – that it had decided to punish a number of Chinese companies for fueling weapons proliferation. Seven companies and one Chinese individual were listed for selling Iran items useful for making weapons of mass destruction. According to the press, Iran got components for cruise missiles, as well as glass-lined equipment for making chemical agents. The most surprising thing about the list was that it contained a number of repeat offenders.

The State Department had already punished three of the companies and the individual for similar offenses before. And a fourth company on the list was indicted for export offenses in 1999. To anyone familiar with these companies, it is obvious that they have become scofflaws. They don’t care a straw about our policies on nonproliferation.

The question is: what are we going to do about it? Under the sanctions law that has just been applied, the companies are only barred from doing what they don’t normally do anyway. They are forbidden to sell goods to the federal government, or receive aid from it, or buy arms from the United States, or buy items that are controlled for export under the Export Administration Act. These restraints, however, are not much punishment. The companies don’t sell things to our government, or get aid from it, or buy American arms. The sanctions may deny them an occasional item controlled for export, but even that doesn’t mean much anymore. The companies are still free to buy as many high-performance American computers or machine tools as they want, so long as the computers and machine tools perform at a level just under the level controlled for export.

It is important to understand what this means. The control levels for most goods have been moved up to the point where they are quite high – so high that little is left under restraint. Today, the value of goods licensed for export is only one-tenth of what it was during the cold war. The reason is simple: Controls have been slashed by ninety percent. The control level for supercomputers, for example, has now been raised to the point (190 billion operations per second) where extremely powerful machines are available from the United States without a license. These machines can perform tasks that are highly useful for nuclear weapon and missile design. Even a Chinese company that has been sanctioned, or is under indictment, can buy high-performance American computers to boost its production, and then turn around and sell that same production to terrorist-supporting nations, despite the indictment and despite the sanctions.

Thus, the very Chinese companies that are now selling missile and chemical weapon technology to Iran are perfectly free to develop that technology with high-tech American imports.

Two of these companies are instructive examples. First, there is the China National Aero-Technology Import and Export Corporation, known as CATIC. In addition to being sanctioned last month for helping Iran, this state-owned Chinese company was indicted in 1999 and fined last year for diverting American machine tools to a Chinese cruise missile and military aircraft plant. The machines had produced parts for the B-1 strategic bomber and the MX nuclear missile. CATIC was charged with lying to get the machines out of the United States in 1995 by promising to restrict them to civilian use.

Yet, by January 2000, the Commerce Department was trying to get other federal agencies to agree to allow one of CATIC’s sister companies, the Xian Aero Engine Company, to buy the same kind of American machine tool that CATIC was indicted for diverting. The sister company makes engines for China’s military aircraft, including the nuclear-capable H-6 strategic bomber. Despite the fact that China refuses to allow the United States to verify where controlled American products actually wind up in China, the Commerce Department still lobbied for the export. The point here is that CATIC’s illegal acts did not really burden CATIC’s organization, which is known as Aviation Industries of China. The organization was still eligible to import sensitive American machine tools, simply by ordering through a different subsidiary.

A second example is the China Precision Machinery Import and Export Corporation. In addition to being sanctioned last month for helping Iran, this state-owned company was sanctioned in 1993 for supplying nuclear-capable missiles to Pakistan. It also sold Iran anti-ship cruise missiles in the mid-1990’s, and at least one press report has linked it to Libya’s missile efforts. It, too, is part of a large organization – known as the China Aerospace Corporation. If that corporation wants to buy sensitive American equipment, it can still place an order through another subsidiary, just as CATIC’s organization did.

Despite the notorious conduct of both of these companies, neither has been put on the Commerce Department’s watch list of dangerous companies in China. This “entity” list (Part 744, Supplement No. 4, of the Export Administration Regulations) requires that an exporter apply for a license before shipping to firms that might constitute a proliferation risk. In fact, not a single one of the repeat offenders that the State Department just sanctioned is on this list. It is logical to ask why not. The list contains only nineteen Chinese companies, which is a ridiculously low number in light of the scores of companies that deserve to be on it. Last November, in testimony before this Subcommittee, I submitted a list of fifty Chinese companies that are well-known to be dangerous, and that should be included on the list. By leaving the companies that were just sanctioned off the list, the Commerce Department is preserving their access to American exports, despite their bad behavior.

Congress could take some simple steps to remedy these shortcomings. First, instead of banning only licensed exports to these companies, Congress should ban all American trade with them. A company should not be able to buy high-performance American computers on Monday and send missile parts to Iran on Tuesday. The price of proliferation ought to be a denial of all U.S. trade, both to these companies and from them.

Second, their organizations should be affected. An organization should not be able to proliferate through one subsidiary and buy American goods through another. Our sanctions laws simply do not present a deterrent to China’s large, state-owned organizations. Through their recidivist subsidiaries, they are thumbing their noses at us.

The remedy is to bar American exports up the corporate chain as well as down. The corporate parent, as well as the corporate subsidiary, should be included in a total trade ban. By affecting a wider range of companies, we might cause China’s military-industrial organizations to take our views on arms proliferation more seriously.

Third, we could extend the duration of the sanctions. The sanctions just imposed will last but two years. Instead of simply ignoring these companies after that time, we should place them on the Commerce Department’s warning list. If the companies have done something bad enough to deserve sanctions, they are dangerous enough to be on the list. American exporters should be required to get government approval (an export license) before dealing with them. A minimum period of three years on the list would be reasonable.

Fourth, we could bar the employees of these companies from entering the United States. Before buying the American machine tools that it illegally diverted in the 1990’s, CATIC sent a team of specialists to inspect the machine tools at a factory in Columbus, Ohio. This visit was an integral part of CATIC’s deception campaign, which included fraud in obtaining the export license. It would have been much better for the United States if these officials had been stopped at the border.

Fifth, we could engage our allies and trading partners. When we cut off trade with a company because of an export violation, we should ask our allies to do the same. A request for assistance should go out immediately, so that our exporters are not undercut. Having our allies join us would increase the pressure on the offending exporter, and push it into the position of an international pariah – which it deserves to be.