Where Industry and Security Intersect
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Controlling the proliferation of weapons of mass destruction is the foremost international security challenge of the next century. With the exponential global diffusion of information and technology, it has become increasingly easy for pariah states and terrorist groups to obtain whatever they need to develop weapons and delivery systems with awesome destructive capabilities. Further, consistent with the traditional principles of supply and demand, the cost of acquiring the needed technology, equipment and materials to build and deliver such weapons has declined substantially as the availability of the tools to make them has increased.
Throughout history, advances in technology have always been a two-edged sword, providing great good to society as well as having the potential to inflict monstrous evil when misapplied. As always, the challenge of civilization is to harness technological advances for the betterment of humankind while minimizing the potential that such advances will be deployed for malevolent purposes.
Export controls will continue to play a key role in any regime to control and manage the risk of proliferation of nuclear weapons. To understand that role in the future, we can look to the past and the present.
Ever since the end of the Second World War, export controls have provided a critical means to ensure that technologies, equipment and materials that can be used to develop nuclear weapons are carefully restricted. However, over time it has become clear that nuclear material, equipment, and technology could be misused and that existing controls required strengthening. Identifying critical items that had to be controlled because of their potential use in weapons applications became an ongoing activity of the United States and the major nuclear supplier nations, reflected in an evolving list of such items. The major supplier nations recognized the importance of consensus in creating and maintaining that list and its essential role in the development of the Nuclear Supplies Group in an effective control regime.
As a member of the Nuclear Supplies Group (and also the Zangger Committee), the United States has participated in the ongoing consensus building process to ensure that the list of controlled items remains updated and refined periodically to reflect changing global technical developments and the realities of international commerce. The NSG is one of several nonproliferation regimes in which members share a common understanding on how export controls should be interpreted and implemented. Today, all of the nonproliferation regimes meet regularly to ensure that members share a uniform interpretation of the technical parameters of the items that are subject to control as well as to seek common ground on guidelines under which items will be approved or denied for export.
Strengthening the nuclear nonproliferation control regime, while ensuring the free flow of commerce for peaceful purposes when the risk of diversion to nuclear weapons programs is acceptably low, remains an ongoing challenge. The challenge is especially high when, as in the United States, responsibility for nuclear export controls is shared among several agencies. In the U.S., the Departments of State, Defense, Energy and Commerce, and the Nuclear Regulatory Commission have significant roles in nuclear export control. Since I know the Department of Commerce's role best, I shall emphasize that role in explaining why I believe that export controls will continue to have a strong place in national and multinational nuclear control.
Such regimes have certain essential components which I will address in turn.
The international availability of the tools needed for nuclear weapons development is greater now than it has ever been before. For example, some of the same machine tools sought by developing nations to enhance their manufacturing capabilities and that are available worldwide, like those used in automobile production plants, can be adapted to produce components for nuclear weapons and their missile delivery systems. Since potential proliferators will continue to shop the global marketplace for the items they need, information sharing and licensing cooperation will remain cornerstones of the NSG and other multinational nonproliferation regimes.
From an operational perspective, license applications to the Department of Commerce, for example, for the export of nuclear controlled, dual-use items, are reviewed with a presumption of approval only when we are satisfied that the items intended for export won't be used directly in or diverted to nuclear weapons applications. So that no member of the NSG -- or other nonproliferation regimes -- may undercut a partner's denial by shipping the same or similar item to that same end user, NSG members have agreed to inform each other of denials and to consult with each other before making a contrary decision. The need to share information, especially about export denials, won't go away; the future effectiveness of the NSG will continue to depend on the willingness of NSG members to do so to consult with each other about their decisions.
"Catch all" controls will also continue to be an essential component of the NSG regime: it simply is not possible, neither is it desirable, to maintain an exhaustive list of controlled items. Thus, for example, the Department of Commerce has operated on the longstanding premise that the business community has an obligation to apply for a license when proposing to ship any items to a sensitive nuclear facility - regardless of the export's technical specifications or export control classification. This "catch all" control recognizes that it isn't practical or desirable to list and require licenses for the export of every item that can make a material contribution to a nuclear weapons program. However, when shipping to a facility that may be engaged in weapons development, we want to review all items that might be going there. At present, about one-third of the license applications we receive that are reviewed for nuclear nonproliferation reasons are for items that are not listed on our control list. Clearly the "catch-all" concept is here to stay and will be a critical element of our overall nonproliferation export control system for years to come. I'm pleased to note that most members of other nonproliferation regimes, including the Australia Group and the Missile Technology Control Regime, have also adopted the "catch all" concept, thereby attesting to its value in controlling weapons proliferation.
This "catch-all" control is well understood by the U.S. exporting community due to our extensive outreach efforts. And, of course, outreach is always critical to the success of any export control regime. The business community has to understand both its obligations and rights under the system and it is incumbent upon those who impose the regulations to ensure that they are easy to understand. In recognition of our obligation to ensure that our exporters are fully informed of their rights and responsibilities, I have recently announced a new U.S. domestic compliance program initiative known by the acronym LEAP -- License and Enforcement Action Program. U.S. business is now on notice that we are renewing our efforts to ensure program compliance. As a first step, we are standardizing the conditions we apply to licenses. Licensing conditions are sometimes necessary to make certain approved items are in the correct location and used as designated in the license application. And when a license carries conditions of approval, exporters are required to notify other parties to the transaction of those conditions and to obtain a written acknowledgment from the end user overseas that they have been informed of the conditions.
We are increasing the number of pre-license checks and post-shipment verifications we conduct, and we are auditing companies that operate under so-called Special Comprehensive Licenses -- a kind of bulk license available to companies with strong internal control systems. Audits of exports that do not require an individual license will also be initiated to make sure that the items exported are truly eligible for a license exception.
And our outreach efforts will expand through on-site company visits and multi-city seminar programs targeted to all the parties involved in an export transaction, from freight forwarders and distributors to trading companies, to ensure that our regulations are clearly understood by the business community. These efforts will include a number of Export Enforcement Conferences presented by "Business Executive Enforcement Teams," or BEETs. This program, begun in 1991, is part of our effort to prevent export violations by educating and expanding contacts with U.S. business. This program of half-day forums held throughout the United States educates corporate officials about their responsibilities under U.S. export control laws, and provides them with the opportunity to address questions to export enforcement officials from all U.S. agencies. BEET participants explore ways for U.S. business and enforcement personnel to work cooperatively to prevent violations and identify projects of proliferation concern.
There are some controls that the United States implements that are not widely accepted by other countries. One of the most notable is our broad- based program for licensing the export of intangible technology. We do so not only as part of our nuclear licensing regime but as a fundamental precept of our overall export administration system. The transfer of information via conversations, visual inspection or other intangible means may require an export license when such information can enable the recipient to develop controlled equipment, materials or technology. What makes our program comprehensive is that we often require licenses for such transfers even when they take place within the United States. Accordingly, many high technology firms are required to file an export application with us before they can release certain controlled technical data to foreign nationals. Many of our firms consider this program to be excessively intrusive. However, we live in the high tech information age where some of the most sensitive data can be transmitted without a written record. So if we control the export of technology to a foreign country, we also control the transfer of technology to nationals of that country in the same manner, on the grounds that they do not have permanent resident status in the United States and are expected to return home with the information they acquire here. We believe that this review of the bona fides of non-permanent foreign residents eliminates certain high risk persons who might seek to illegally divert technology critical to the development of weapons of mass destruction.
The United States also implements unilateral controls, even when these controls are not as effective as those that are multilaterally agreed upon and implemented. We have also been willing to impose unilateral sanctions on firms and, when necessary, nations who violate international norms of behavior, even if these sanctions place U.S. companies at a competitive disadvantage. As you might imagine, companies in our country who see their marketing opportunities limited by these unilateral actions view them as both unfair and ineffective. From the U.S. Government's perspective, we impose unilateral controls and sanctions only in limited circumstances, many of them required by law; we take the view that we will not contribute to nuclear proliferation even if other countries seek to undermine our efforts.
In the final analysis, we realize that even the most rigorous export control system can only be one element of an effective campaign to stem the proliferation of nuclear weapons. We have long recognized that an increasing number of countries have the indigenous capability to develop these weapons without outside assistance. Therefore, as part of any credible nuclear nonproliferation program, nations need to be open to international inspections that help promote transparency and compliance. In this regard, we consider the monitoring and accounting work done by the International Atomic Energy Agency (IAEA) to be a critical component of any nuclear nonproliferation effort. This model, established early on in the nuclear area, is now being copied in the chemical and biological arenas as well.
In all of our nonproliferation regimes, the intent is to ensure that dual use technology, equipment and materials are used for peaceful purposes. As this process unfolds, we want to ensure that our export control efforts do not undermine the competitiveness of our leading edge industries by putting company confidential information at risk during inspections, or by limiting an industry's ability to market products in the international arena for legitimate civil end uses. So we have a delicate balancing act to administer, because the United States -- like a number of our trading partners -- has huge commercial equities in the chemical, biotechnology, pharmaceutical and nuclear electric power industries. The economic health and overall technological progress of these industries depends on their ability to conduct business without undue government regulation.
I want to emphasize that the United States has been a vigorous proponent of the peaceful uses of nuclear energy since those earliest days of civilian use of nuclear energy -- since the Atoms for Peace days. The peaceful uses of nuclear energy have benefitted developed and developing nations alike. Worldwide, there are 442 nuclear power plants in 33 countries supplying 17% of the world's electric energy. For several nations, nuclear power represents the most viable option to secure adequate electricity to support and sustain people and industries in the near future. Further, the peaceful uses of nuclear energy are not limited to power production. Advances in nuclear technology have resulted in the successful treatment of disease and in the development of medical products that have eased the suffering of hundreds of thousands of people worldwide. Nuclear research has also contributed to our efforts to protect the environment. Nuclear isotopes and isotopic techniques help track pollution, monitor global warming, document climate change, and assist in the development and management of water resources. The U.S. nuclear industry is in the forefront of many of these efforts, and we support the export of nuclear tools and applications that can contribute to an improvement in the quality of human life. The export of nuclear related technology should not be controlled at the expense of sharing its many useful civil applications with other nations.
A generation from now the world will be a much smaller place as the electronic links forged through the use of communications technology via satellite, the Internet, and technologies as yet unheard of, will bring nations and their peoples closer. While the ease with which we will be able to communicate with each other may bring greater understanding and lessen global tensions on issues of common concern, it also affords the opportunity for proliferators to share information that could bring about the catastrophic destruction of nations. The day may come when this communications revolution will result in a world united in its efforts to secure a lasting peace, and nuclear energy will be known only for its contributions to our collective well-being. Until that day arrives, however, our responsibility is to ensure that sharing nuclear-related technology for the good of humanity does not lead to the destruction of the world we are trying to create. While it is difficult to predict the kinds of challenges we in the export control community will be facing in the future, our present export control regimes do provide a template on how to successfully approach the challenge of export controls in the years ahead.
I've already touched on two of the critical components of future control programs: outreach and compliance. Making the export control rules clear and accessible to those affected and ensuring that they comply with regulatory restrictions has been and will continue to be key to successfully combating nuclear proliferation. Last year, the Department of Commerce held 80 export seminars for over 6500 business representatives. And there were 115 international trade-related events that we participated in last year in both the public and private sectors that reached an additional 6100 participants. In 1999, we expect to increase our participation in domestic and international export control seminars to ensure that those most affected by our controls are also those that are the most knowledgeable about them.
I believe three more elements in our present export control program will become even more vital to our nonproliferation efforts of the future: program focus, adaptability, and multilateral cooperation.
Program focus will continue to be a challenge. Beyond the more obvious items, like nuclear fuels, assessing where to establish a control limit on technology with both civilian and military uses is a challenge now that will become even more difficult in the future. We believe an answer to this challenge is to sharpen the focus of our export controls. Narrowing the list of licensed items to technology with defined nuclear-related end uses, coupled with international "catch all" controls on all other items, ensures that any technology that could contribute to nuclear proliferation is subject to control, while legitimate trade is unaffected. We believe the burden that an export license requirement imposes should be limited to truly significant technology. But to ensure that any item that is used in support of prohibited nuclear activities -- no matter how technologically insignificant -- is subject to a validated export license, we must collectively agree to the imposition of an international "catch all" control standard that carries with it stringent penalties when a violation occurs.
Defining what items should be subject to a validated license requirement in the future will also call for program adaptability. Over time, as technology advances, the list of items useful to a proliferator may change in focus, and the list of so-called choke point technologies -- technologies necessary for the production of weapons of mass destruction -- may grow to include items that are not subject to nuclear controls at present. Control programs must be adaptable to changes in targeted proliferation activities to be a credible deterrent.
I am referring here to both lifting and imposing controls as new and important nonproliferation initiatives are put into effect. The lifting of controls on oscilloscopes to all but a few destinations is a recent example of how export controls can be reassessed in the light of broader nonproliferation context and technological innovation, coupled with new, wide-ranging consumer applications. With the advent of the Comprehensive Test Ban Treaty, it became desirable to review the advisability of controlling these items since almost all countries have pledged not to test nuclear explosives either through their NPT obligations and now through the CTBT and unilateral pledges.
And when action is required, we must have the collective political will to make the appropriate changes. In this regard, I would like to note that the issue of intangible technology has been a recent topic of discussion in both the Nuclear Suppliers Group and the Missile Technology Control Regime. We are encouraged by steps that our trading partners have taken to adopt controls over intangible technology transfers.
And finally, multilateral cooperation will continue to be the single most important aspect of any national export control program. Global treaty arrangements, like those behind the formation of the Chemical Weapons Convention (CWC) and the Biological Weapons Convention (BWC), will become the basis on which cooperation on nonproliferation will advance in the years to come. The CWC is founded on the premise that, given the domestic capability to manufacture chemical weapons held by many nations, an international agreement to use these capabilities only for legitimate civil applications is necessary to limit the spread of chemical weapons. Inspections of industrial facilities -- similar in many respects to those carried out by the IAEA -- are an integral part of the CWC compliance program. Likewise, the international community is in the process of developing a legally binding compliance protocol for the BWC that likely will include a regime of inspections for facilities that have the capability to produce biological weapons agents.
So we can see that the formula for nonproliferation lies in export controls plus global treaty arrangements whereby nations agree to allow the international community the right of on-site inspection of both military and commercial facilities. As nations come together in agreement on the need for nonproliferation measures to protect, support, and defend themselves against the threat of weapons of mass destruction, the global will to use these export control tools must evolve.
And we must encourage those countries who are not members of our nonproliferation regimes to adopt controls similar to ours. Our department has devoted considerable time and effort to assisting those nations that have asked for our help in developing credible export control regimes. And the international regimes themselves have joined in this effort by holding transparency seminars that describe how and why nonproliferation controls have developed, and provide guidance on how nonmember nations may join us in combating the threat of weapons of mass destruction. Some nations have opted to adopt effective export control regimes, and have petitioned and successfully joined us as regime members. Since its inception in 1974, twenty-nine nations have formally joined the six original members of the NSG -- twenty of those countries have joined since the NSG's formal establishment in 1992. Others are still developing the legal and regulatory basis necessary to establish nonproliferation controls. Whether multilateral membership is sought or not, there is a place for every nation in the world community of countries dedicated to nuclear nonproliferation, and we encourage our fellow regime members to assist nonmember nations in whatever way they can to develop the regulatory structure necessary to support our shared nonproliferation goals.
In conclusion, I would like to note that we have spent considerable time and resources in the last fifty years trying to perfect dual use controls, to ensure that they meet the challenges of changing technology and a changing world. While we have yet to achieve that perfect balance between the control and promotion of exports, we do know this: There are likely to be few new initiatives in the future that can be as successful in preventing the spread of nuclear weapons as our adherence in the present to the nonproliferation goals of the past. In the United States, we are taking steps to reaffirm that the nuclear nonproliferation obligations we undertook in the past are honored in the present to ensure peace and prosperity for future generations, and we challenge those nations that share our nuclear nonproliferation goals to do the same.
In April of 2002 the Bureau of Export Administration (BXA) changed its name to the Bureau of Industry and Security(BIS). For historical purposes we have not changed the references to BXA in the legacy documents found in the Archived Press and Public Information.