U.S. Missile Sanctions

March 2002
Press Contact: Daryl Kimball, Executive Director, (202) 463-8270 x107 Paul Kerr, Research Analyst, (202) 463-8270 x102

U.S. Missile Sanction Law

As of March 2002, there are 10 entities operating in Iran, North Korea, Pakistan, and China that are currently under U.S. sanctions for missile proliferation activities. Many of these entities have been sanctioned more than once since 1990 for their continued sale and transfer of missiles and related technologies.

In 1990, Congress adopted for the first time specific guidelines for imposing sanctions against firms or persons engaged in missile proliferation. Previously, U.S. law stipulated that foreign aid would be withheld from any country engaged in the proliferation of weapons of mass destruction (WMD) but did not require sanctioning specific entities. This, however, did not prevent Congress from imposing sanctions if it so chose.

Current U.S. law requires the government to impose sanctions against "foreign persons"¹ that engage in missile technology proliferation. The 1976 Arms Export Control Act as amended, the Export Administration Act of 1979 (EAA) as amended, the fiscal year 1991 National Defense Authorization Act, and the Iran Nonproliferation Act of 2000 are the four key pieces of legislation that deal with missile proliferation.

These laws provide the United States with the means to enforce the guidelines and parameters established by the Missile Technology Control Regime (MTCR), a voluntary, multilateral export control regime that seeks to prevent the transfer of missiles and related technology capable of carrying a 500-kilogram payload a distance of 300 kilometers or more. This 33-member regime does not require its members to impose sanctions on offending countries or firms.

Missiles and technology covered by the MTCR are divided into two categories. Category I² items include whole missile systems; unmanned aerial vehicle systems, such as cruise missiles; or the production facilities for these systems. Category II³ items pertain to technologies, materials, and components that could aid in the development of missile systems that exceed the MTCR limitations stated above.

The 1976 Arms Export Control Act: Section 72 of this act, as amended, states that if the president determines a foreign entity is "conspir[ing] to or attempt[ing] to engage in" the transfer of MTCR-controlled equipment or technology to countries that are not party to the MTCR, U.S. sanctions must be placed on the offending party.

For the transfer of Category I items, the Arms Export Control Act:

• bars the foreign entity in question from all contacts with the U.S. government for at least two years; and
• denies the sale of any items currently on the U.S. Munitions List (a list of controlled military items whose export must be approved by the government) for at least two years.

For the transfer of Category II items, the Arms Export Control Act:

• forbids the foreign entity in question from all contacts with the U.S. government relating to missile equipment and technology for at least two years; and
• forbids the transfer of missile equipment and technology to the offending foreign entity for at least two years.

The Export Administration Act of 1979: The EAA regulates U.S. export of "dual-use items," civilian technology and goods that have the potential for military application, requiring the government to deny these exports to foreign entities involved in missile proliferation.

If an entity is charged with proliferating Category I items, exports of all dual-use items controlled by the EAA to the sanctioned entity are banned. If sanctions are imposed for the transfer of Category II items, only dual-use items controlled by the MTCR are banned. Although both sets of sanctions are for a period of at least two years, the former is farther reaching because the EAA controls more dual-use items than the MTCR.

The Fiscal Year 1991 National Defense Authorization Act: This act defines many key words found in U.S. missile sanctions law, such as what is included in the term "foreign person." It also serves as a reference guide, detailing which laws are applicable to certain aspects of the sanctions process and under what circumstances a presidential waiver of sanctions is justified.

The act also contains language dictated by the "Helms Amendment,"⁴ which strengthens U.S. missile sanctions when dealing with countries that have "non-market economies" and are not former members of the Warsaw Pact,⁵ namely China and North Korea. This amendment states that if a country meets the above two requirements and has entities engaged in missile proliferation, then the term "foreign person" is expanded to include all activities of the government in question "relating to the development or production of any technology affected by the MTCR and…aircraft, electronics, and space systems or equipment." This prohibits U.S. government contacts with and U.S. exports to those government agencies and bans imports produced by those agencies for at least two years.

Iran Nonproliferation Act of 2000: This act specifically states that sanctions will be "imposed on countries whose companies provide assistance to Iran in its efforts to acquire weapons of mass destruction and missile delivery systems." These sanctions:

• ban the U.S. government from providing assistance to the entity in question for at least two years;
• prohibit the U.S. government from acquiring any goods or services from the offending entity for at least two years;
• forbid the sale of any items on the U.S. Munitions List or of other controlled dual-use items to the entity in question;
• terminate any pre-existing sales of military items between either U.S. entities or the U.S. government and the offending party; and
• block the procurement of new export licenses for the sanctioned entity.

Presidential Waiver: The president has the authority to waive missile sanctions if he feels that the waiver is "essential to the national security of the United States," except those imposed under the Iran Nonproliferation Act, which have different criteria.⁶ The Clinton administration used waivers several times to try to encourage states to adhere to multilateral nonproliferation agreements, such as the MTCR.⁷

Imposition of U.S. Missile Sanctions on Foreign Entities

Since 1991, the United States has publicly imposed missile sanctions on foreign entities conducting business in eight countries: China, India, Iran, North Korea, Pakistan, Russia, South Africa, and Syria. Many of these entities have been sanctioned more than once for their alleged involvement in missile proliferation. For example, the United States has sanctioned North Korea's Changgwang Sinyong Corporation (Korea Mining Development Trading Bureau) at least six times, while sanctions have been imposed at least four times on the Iranian Ministry of Defense and Armed Forces Logistics.

While the efficacy of unilaterally imposed missile sanctions is debatable, there is some evidence suggesting that sanctions may have led some countries to alter their proliferant behavior. For example, in exchange for the 1993 waiver of missile sanctions against Russian entities, which had precluded U.S.-Russian space cooperation, Moscow agreed to significantly limit its transfers of engine technology to India and also to join the MTCR, which it did in 1995. However, recent CIA estimates challenge Russia's overall adherence to and enforcement of the guidelines, noting continued missile cooperation with Iranian entities up through July 2001.

Foreign Entities Currently Under U.S. Missile Sanctions

Notes

1. "…Definitions…

(7) the term "foreign person" means any person other than a United States person;
(8) (A) the term "person" means a natural person as well as a corporation, business association, partnership, society, trust, any other nongovernmental entity, organization, or group, and any governmental entity operating as a business enterprise, and any successor of any such entity…"
Arms Export Control Act, Chapter 39, Subchapter VII-Control of Missiles and Missile Equipment or Technology, section 2797c., 7 & 8(a).

2. Specifically, Category I items include complete rocket systems (including ballistic missiles, space-launch vehicles, sounding rockets); unmanned air vehicles, such as cruise missiles and target and reconnaissance drones; specially designed production facilities for these systems as well as complete missile subsystems, such as individual rocket engines or stages, re-entry vehicles, rocket engines, guidance sets, thrust vectoring controls, and warhead safing, arming, fusing, and firing mechanisms. (See MTCR Fact Sheet.)

3. Category II items include parts, materials, components, and machinery and technologies that could aid in the design, testing, and production of nuclear, chemical, and biological weapon-capable delivery systems such as special materials and machinery used in missile construction; propellant and propellant precursors and related materials for rocket engines; electronic components with applications for guidance systems, warhead design and fusing, and launch-control equipment; avionics and flight-control systems; stealth technology; and specialized software. (See MTCR Fact Sheet.)

.4. "…Defintions…

(8) (B) in the case of countries with non-market economies (excluding former members of the Warsaw Pact), the term "person" means-

(i) all activities of that government relating to the development or production of any missile equipment or technology; and
(ii) all activities of that government affecting the development or productionof electronics, space systems or equipment, and military aircraft…"

Arms Export Control Act, Chapter 39, Subchapter VII-Control of Missiles and MissileEquipment or Technology, Section 2792c. 8 (b), i & ii.

5. The Warsaw Pact was a Cold War alliance of Communist countries led by the Soviet Union formed to counter-balance the establishment of the North Atlantic Treaty Organization.

6. Examples of this criteria are a presidential determination that the entity in question did not "knowingly" transfer the technology, a determination that the goods and services transferred did not "materially" contribute to Iran's weapons of mass destruction programs, or a determination that the jurisdictional government has already imposed sufficient penalties on the entity in question. For a detailed description of the waiver criteria for the Iran Nonproliferation Act of 2000, see Dianne Rennack, "Nuclear, Biological, Chemical, and Missile Proliferation Sanctions: Selected Current Law," CRS Report for Congress, January 17, 2001, p. 26.

7. In November 1992, President Bill Clinton authorized the lifting of sanctions against Chinese entities in exchange for Beijing's assurance that it would abide by MTCR guidelines. After sanctions were again imposed on Chinese entities in 1993 for their transfer of M-11 missile technology to Pakistan, China agreed to reaffirm its commitment to the MTCR and promised to stop all transfers of surface-to-surface missiles.

More recently, on November 21, 2000, Beijing agreed not to export any missiles capable of delivering nuclear weapons and promised to establish a comprehensive export control system. In exchange, the United States waived sanctions against Chinese entities for their involvement in Iranian and Pakistani missile development.

Additionally, in the aftermath of the terrorist attacks of September 11, the Bush administration, in an effort to solidify Islamabad's support for the U.S.-led war on terrorism, agreed to partially waive existing missile sanctions against Pakistani entities, most notably the Ministry of Defense, for their receipt of Chinese missile technology.

8. Pakistan's Ministry of Defense was also sanctioned on August 24, 1993. These sanctions expired in 1995.

9. The Pakistani Space and Upper Atmosphere Research Commission was previously sanctioned on June 25, 1991. These sanctions have since expired.

10. The North Korean entity Changgwang Sinyong Corporation (Korea Mining Development Trading Bureau) has been previously sanctioned two times, on May 24, 1996, and on April 17, 1998. These sanctions have since expired.

11. The Iranian Ministry of Defense and Armed Forces Logistics was also sanctioned on March 6, 1992, and on May 24, 1996. These sanctions have since expired.

Research assisted by Andy Diamond