"In my home there are few publications that we actually get hard copies of, but [Arms Control Today] is one and it's the only one my husband and I fight over who gets to read it first."

– Suzanne DiMaggio
Senior Fellow, Carnegie Endowment for International Peace
April 15, 2019
Press Releases

CD Convenes Committee to Work on Fissile Cutoff

THE UN CONFERENCE on Disarmament (CD) agreed on August 11 to start talks on banning the production of fissile material for nuclear weapons purposes. Israel, the last holdout among the 61 member-states, made clear that although it did not object to beginning negotiations, it did have "fundamental problems" with a cutoff treaty. Other members, led by Pakistan and Egypt, called for inclusion of fissile stockpiles under the treaty, a view not shared by the five nuclear-weapon states, India and Israel.

Conference members agreed to base the talks on the March 1995 "Shannon" mandate and its accompanying report, which permitted states to raise the issue of past fissile material production. Despite reaching consensus on the Shannon mandate in 1995, the CD had proved unable to start cutoff talks because members of the non-aligned movement, led by India, linked work on a cutoff treaty to negotiations on a timebound framework for nuclear disarmament, a condition unacceptable to the nuclear-weapon states. India dropped the linkage in May following its nuclear tests and Pakistan, another principal obstacle, signed on to the talks in July. Israel was not a conference member in 1995 and thus had not consented to the Shannon mandate.

In remarks to the Israeli cabinet on August 11, Prime Minister Benjamin Netanyahu said President Clinton had asked Israel not to block establishment of the ad hoc committee. Netanyahu told the cabinet that convening the committee does not "indicate that we [Israel] are taking a position on the treaty and its contents" and that Jerusalem would voice its concerns to Washington. Israel is concerned that a cutoff treaty with an intrusive inspection regime of its Dimona reactor could remove the ambiguity surrounding the Israeli nuclear program.

India, voicing a view shared by the nuclear-weapon states, emphasized on August 11 that the purpose of the treaty is to ban future production. Washington, for its part, envisions a treaty limited to banning future production, verification measures focusing on newly produced fissile material and uranium enrichment and plutonium reprocessing facilities, routine inspections and some type of challenge or non-routine inspections.

However, Pakistani CD Ambassador Munir Akram, speaking on August 11, said a "vast majority" of conference members want a treaty that also addresses stockpiles. Akram said that Pakistan could not "agree to freeze inequality" vis-a-vis India by endorsing a treaty that only halted future production. New Delhi is estimated to possess enough fissile material to make two to three times as many nuclear weapons as Pakistan.

Syria claimed that a treaty not accounting for past production would be "discriminatory," while Iran expressed concern that leaving out stockpiles would legitimize their possession. In general, most non-aligned states agree with Egypt that a treaty would only be effective if it included stockpiles. Otherwise, they claim, the treaty would merely be another non-proliferation mechanism that has no "real disarmament value" since the five declared nuclear-weapon states have already reportedly stopped production of fissile material for weapons purposes.

Members could not agree on a chairman for the committee until August 20, thereby limiting the committee to two meetings before the negotiating mandate expired on September 9, the close of the 1998 negotiating session. In order to reopen negotiations next year, the conference will need to reach consensus again on forming the committee and appointing a chairman.


Other CD Business

Despite earlier promising signs, Australian Ambassador John Campbell, the special coordinator on anti-personnel landmines (APLs), reported to the CD on August 27 that the non-aligned states could not reach consensus to negotiate an APL transfer ban. He recommended a special rapporteur be appointed next year to win the necessary consensus to start talks.

Ambassador Li Changhe of China pressed the conference on August 13 to establish an ad hoc committee for the prevention of an arms race in outer space. Calling it an "urgent issue," he charged that the Anti-Ballistic Missile (ABM) Treaty has been "seriously weakened through…re-interpretation" and cited U.S. programs, including theater missile defense systems and the Mid-Infrared Advanced Chemical Laser (MIRACL), as evidence that weapon systems could appear in space in the near future. The United States does not support establishing an ad hoc committee, claiming that there is no arms race in outer space.

At the last plenary meeting of the 1998 session on September 8, the application of Ireland, Malaysia, Kazakhstan, Tunisia and Ecuador for CD membership was blocked. According to Rebecca Johnson of the Acronym Institute, Iran vetoed the admission of these states in order to punish Ireland for its criticisms of Iranian human rights policies. Members expect the conference to revisit the issue of new members at the start of next year's session, which will be divided into three parts: January 18–March 26; May 10–June 25 and July 26–September 8.

Moscow Summit Brings Two Minor Arms Control Agreements

IN A SUMMIT dominated by other issues, including the Russian financial crisis and regional security issues such as Kosovo and Iraq, Presidents Bill Clinton and Boris Yeltsin signed two minor arms control-related agreements during their September 1–2 meeting in Moscow. The agreements concerned the sharing of early-warning information and the disposition of plutonium no longer required for military purposes. Other arms control and non-proliferation issues, such as Russian ratification of START II, were discussed, but without major breakthroughs.

The "Joint Statement on the Exchange of Information on Missile Launches and Early Warning" has two main components. First, the United States and Russia will share, on a "continuous" basis, early-warning information on the launches of ballistic missiles and space-launch vehicles by any nation, a measure that goes beyond previous information-sharing agreements. (North Korea's August 31 test of the Taepo Dong-1 "is exactly the kind of information that we would have passed on to the Russians" had this agreement been in effect, explained Robert Bell, special assistant to the president for national security affairs, in a September 1 White House briefing.) Each side will be responsible for processing its own early-warning data, retrieved from launch-detection satellites and ground-based radars, at its national center before providing it to the other party. In addition, Yeltsin announced in his September 2 press conference with Clinton that a joint early-warning center, the first of its kind, will be established on Russian territory. Many details of the agreement must be worked out in the months ahead, however, especially with respect to the scope of the data to be shared.

Second, the United States and Russia agreed to establish a multilateral pre-launch notification regime for ballistic missiles and space-launch vehicles. In this way, any state that chooses to participate could provide advance notification of a missile launch.

The joint statement aims to bolster the reliability of Russia's early-warning system. In his September 1 briefing, Bell said the joint statement "is especially relevant at a time when Russia's early-warning system is under stress from budget difficulties, systems failures and the closure of early-warning radars on the soil of nations outside Russia." Despite these concerns, however, the U.S. government remains confident that there is little chance of an accidental Russian nuclear launch. Ted Warner, assistant secretary of defense for strategy and threat reduction, said at the September 1 briefing that there are not "significant dangers" of an accidental launch today and that the joint statement will reduce this small risk even further.

Washington and Moscow have been sharing information on missile launches and early warning for nearly three decades. Under the 1971 "Accidents Measures" agreement, the United States and Soviet Union agreed to provide each other with advance notification of any planned missile launches that "will extend beyond its national territory in the direction of the other Party." In addition, both sides were required to notify each other immediately if their early-warning systems detected "unidentified objects," though this provision was implemented only on a case-by-case basis. The 1971 agreement was expanded in 1988, when the United States and Soviet Union agreed to provide advance notification of any launch of an ICBM or submarine-launched ballistic missile (SLBM) by either side. At their 1995 and 1997 summit meetings, Clinton and Yeltsin also agreed to share early-warning information related to theater missile defense systems.

Under the "Joint Statement of Principles for Management and Disposition of Plutonium Designated as No Longer Required for Defense Purposes," the latest of several plutonium-management agreements between the two countries, the United States and Russia declared their intention to remove approximately 50 metric tons of plutonium each from their nuclear weapons programs so that the materials can never again be used to fabricate nuclear devices. According to Gary Samore, senior director for non-proliferation at the National Security Council, this amount represents approximately 25 percent of Russia's total plutonium stockpile and as much as 50 percent of the U.S. stockpile. The joint statement specifies that the plutonium must either be consumed as fuel in nuclear power reactors, or immobilized in glass or ceramic together with high-level radioactive waste.

Details of the plutonium agreement, such as transparency and verification measures, must be finalized. Also, the financial arrangements to implement the agreement remain to be made. In a September 1 White House briefing, Samore estimated that the agreement, which is expected to take at least five years to implement, is likely to cost hundreds of millions of dollars in the United States and Russia—a price tag that Moscow can ill afford at this time. (Financial issues have plagued a related agreement on the disposition of highly enriched uranium removed from dismantled Russian nuclear weapons. See story.) Nevertheless, the two governments hope to complete negotiations on the agreement by the end of the year.

Privatizing U.S. National Security: The U.S.-Russian HEU Deal At Risk

Just before their end of summit press conference on September 2, Russian President Boris Yeltsin informed President Bill Clinton that he was going to announce the end of the historic "HEU deal" signed by the two countries in 1993. Under this unprecedented government-to-government agreement, the United States agreed to purchase, over a 20 year period, 500 metric tons of highly enriched uranium (HEU) from dismantled Soviet weapons that Russia would "blend down" to low-enriched uranium (LEU) for sale to the United States as fuel for civilian nuclear reactors. The deal—worth an estimated $12 billion to Moscow—would guarantee that the Russian HEU, enough to build more than 20,000 nuclear weapons, would never again be used for weapons purposes.

The HEU deal, initiated by President George Bush and signed by President Clinton in February 1993, arose from a proposal to U.S. and Russian officials in October 1991 (only weeks before the dissolution of the Soviet Union)< 1 > and subsequently became the centerpiece of U.S. efforts to address what is arguably the most extreme proliferation threat since the beginning of the nuclear age: the possibility that nuclear weapons, the fissile material from them, or the technical skills necessary to make them would be diverted from the rapidly decaying Soviet military industrial complex to rogue states, terrorist groups or countries with nuclear ambitions. To date, Russia has shipped LEU made from about 50 tons of HEU (10 percent of the total)—the equivalent of about 2,000 nuclear weapons.

Because Russia's closed "nuclear cities" that are responsible for making nuclear weapons are unavoidably involved in the destruction of these weapons and the purification and blending down of HEU, the U.S.-Russian deal ensures that money flows to precisely those places and people that present the largest proliferation threat to the world. The need to verify that the LEU that Russia sells under the deal truly comes from HEU has given the United States the opportunity not just to monitor the destruction of Russian weapons-usable fissile material, the so called transparency process, but also to assist Moscow in improving fissile material protection, control and accounting systems that further protect inventories of these materials. In addition, U.S. national laboratories have developed active relationships with an increasing number of Russian "nuclear cities," an engagement that builds peaceful relationships with the most capable of Cold War adversaries and the most dangerous potential contributors to global nuclear weapons proliferation. These otherwise intrusive measures—and new initiatives on plutonium and closed cities—are possible largely because of the more than one half billion dollars per year Russia gains from the HEU deal.

In short, the HEU deal benefits Russia, the United States and international security. Why then did Yeltsin threaten to end the deal? The answer lies in recurrent failures on the part of both governments to implement the deal. While this failure is due in part to Russian bumbling and commercial incompetence, it is the United States that has created the real impediments to success. Despite warnings and opportunities to intervene, Washington has consistently put domestic commercial and financial interests, most notably those involved in the recent privatization of the U.S. Enrichment Corporation (USEC), ahead of U.S. national security interests. If the deal is to be repaired, the United States must reassume the responsibility it has abdicated. If decisive action is not taken, shipments will end, perhaps permanently.


An Unusual Deal

The basic terms of the HEU deal are outlined in an agreement signed by the United States and Russia on February 18, 1993. However, the HEU deal is unusual in that it calls for the parties to carry out their obligations through commercial mechanisms. Under the agreement, each government was to appoint an "executive agent" that would carry out commercial implementation of the deal through contracts for the purchase and sale of the Russian LEU.

Russia assigned implementation to its Ministry of Atomic Energy (MINATOM), which would utilize its experienced government trade organization AO Techsnabexport (TENEX). In a fateful move, the United States, which initially made the Department of Energy (DOE) its executive agent, committed to make USEC—a newly created, government-owned corporation—its ultimate executive agent. Created by the Energy Policy Act of 1992 and slated for eventual sale to private investors, USEC was the result of a 20 year effort to make the government's uranium enrichment operations more "business-like."

Unfortunately, actions taken by U.S. government officials—some of whom later joined USEC—to assure the corporation profitability and increase its value at privatization have systematically worked against the HEU deal. National security officials, skilled in negotiating agreements and wielding U.S. power in conventional ways, have either failed in their oversight of the commercial implementation at home, been misled, or simply been outvoted in the administration.

While some administration officials now take the position that the United States has no financial responsibility for the HEU deal, and that Russia must simply take what it can get, the 1993 agreement is quite clear that the ultimate responsibility belongs to the governments. The agreement specifies that the "[commercial] terms (including price), shall be subject to approval by the Parties." The United States committed to "use the LEU converted from HEU in such a manner as to minimize disruptions in the market and maximize the overall economic benefit for both Parties." Such provisions show the responsibility of both governments to manage carefully the commercial implementation of the HEU deal. From the Russian perspective, the United States has failed to do so.

The Uranium Problem

While the United States is committed under the government to government agreement to purchase LEU from Russian HEU and the initial contract was for the purchase of LEU, that is not how things have turned out. The Russian LEU contains two inputs of value: the natural uranium (as uranium hexafluoride, or UF6) and the "enrichment" services (measured in separative work units, or SWUs). (See sidebar.)

The current problem is that Russia is not being paid for the uranium component, which is a state asset of the Russian government, like gold. The enrichment component is being purchased by USEC, with that money going to MINATOM. Because it is not possible to ship a SWU (except as an input of enriched uranium) and because Russian law prohibits export of state assets without a contract for sale and payment within 180 days, LEU derived from HEU cannot be exported from Russia without a uranium sales agreement. Thus, the whole HEU deal rests on finding a workable solution to the uranium problem.

The uranium problem has been present from the beginning of the deal. Following the intergovernmental agreement, an implementing contract for the HEU deal was negotiated with MINATOM and TENEX by DOE Deputy Assistant Secretary Philip Sewell in May 1993. That contract called for DOE to purchase Russian LEU but to pay immediately only for the enrichment component. The uranium component (actually, an equivalent amount of feedstock material that USEC customers had previously delivered for enrichment) was to be paid for when USEC "used or sold" the uranium equivalent or at the conclusion of the deal, which might be as late as 2013. At the time the contract was negotiated, it was expected that USEC would be assigned the contract after the company came into existence in July 1993. Indeed, Sewell left government for USEC several months later and the final contract was signed by USEC and TENEX at the January 1994 Moscow summit.

This defective LEU purchase contract, which Russia contends did not carry out the intent of the 1993 agreement, was designed more to benefit the commercial interests of USEC than to implement the intergovernmental agreement. USEC would get control of the uranium component of Russia's LEU without having to pay for it until the company wanted to. Of course, USEC would not be able to resell the accumulating inventory of displaced feedstock for some years because of trade restrictions on the sale in the United States of Russian uranium. USEC could have used the uranium for a process called "overfeeding," that is, using more uranium in the enrichment process to reduce consumption of electricity. DOE had been overfeeding the two gaseous diffusion plants it owned for years, a practice that was assumed to continue when the HEU deal was proposed. However, subsidies provided to USEC (in particular, DOE's below-market-value electricity contracts) eliminated incentives to overfeed and it soon became apparent that Russia would not get paid for its uranium anytime soon.

Thus, even from the beginning, the United States did not act to ensure payment to Russia for the uranium component of the LEU, which was estimated to be worth up to $4 billion over the course of the agreement. But USEC supporters were too clever by half: the corporation would, two decades hence, have to pay for the Russian uranium it held title to under the contract, a major liability that would interfere with the ultimate privatization of the corporation.

The uranium problem was addressed, but not fully solved, by the USEC Privatization Act, which Congress passed and President Clinton signed into law on April 26, 1996.< 2 > The legislation called for the United States to purchase the uranium component of the Russian LEU delivered in 1995 and 1996 and, overriding the defective LEU purchase contract, returned title to the uranium content (rather, the displaced uranium set aside by USEC) to Russia for it to sell on its own beginning January 1, 1997. To facilitate Russian uranium sales, the legislation overrode trade restrictions imposed on Russia in 1992 (as a result of an anti dumping action against uranium exporters from the former Soviet Union) by creating a new and gradually expanding quota for Russian sales of uranium to the United States.

By returning title of the displaced uranium to Russia, USEC was relieved of a $4 billion liability on its books, but Russia was left with a substantial amount of uranium to sell. When annual Russian LEU shipments to the United States are scheduled to reach 30 metric tons HEU equivalent in 1999, the uranium component will reach 9,000 metric tons (23.4 million pounds U3O8) annually. By comparison, the United States consumes about 17,000 tons of uranium each year, while other Western nations together consume about 36,000 tons.

Moscow will face serious obstacles to selling such large amounts of uranium in the current market. Both the United States and the European Community impose restrictions on the amount of Russian uranium that can be sold, and Japan is reluctant to buy Russian uranium because of ongoing territorial disputes with Moscow. In addition, because most utilities purchase uranium under long term contracts that cover requirements for several years forward, there is little near term market for new sales of any kind of uranium. Thus, Russia will not be able to sell its uranium directly to utility end users, but only to companies that are willing to purchase the uranium and hold it for future sales when market demand and trade restrictions allow.

On June 2, 1998, Russia reached a preliminary agreement with a consortium of three Western uranium companies (CAMECO of Canada, COGEMA of France and NUKEM of Germany) to purchase its uranium at USEC for a 10 year period, including the 11,000 tons remaining from LEU deliveries to USEC in 1997 and 1998. Under the preliminary agreement, Russia would receive payment promptly when the uranium contained in the LEU delivered to the United States was returned to Russian control at USEC. The companies offered to pay the going market price, less a profit margin when prices rose above $29 per kilogram of uranium (as UF6).

For this deal to make commercial sense, the price of uranium would have to be expected to increase at a rate at least as great as the interest rate used to finance the purchase and holding of the uranium. Based on their own market analyses, the companies clearly believed that uranium prices would rise, particularly if the sale of the Russian uranium was handled responsibly, and that they would not have to hold the Russian uranium for more than a few years. After an extensive review, the Russian government approved the draft agreement by issuing a formal decree. In its own effort to be clever and put pressure on the companies to pay a minimum price in a final contract, MINATOM asked that the decree establish $29 per kilogram of uranium as the minimal acceptable price.


USEC Privatization

Unfortunately, just as Russia was approving its agreement with the uranium companies, the United States was completing its plans for USEC's privatization. Unbeknownst to all but those directly involved, USEC had convinced mid-level DOE and Office of Management and Budget (OMB) officials to transfer large amounts of DOE inventories of uranium to USEC to increase the company's value. The existence of this uranium was not generally known until May, when merger and acquisition bidders involved in USEC's privatization tried to find buyers for the uranium as part of their plans to finance the company's acquisition.

On May 20, the author alerted national security officials at the State Department and the National Security Council to the uranium transfers, and the potential negative implications for the HEU deal of USEC sales of uranium in competition with Russia. National security officials subsequently met with DOE and Treasury Department officials to discuss the implications of possible USEC uranium sales for the HEU deal. However, Treasury and White House officials pushing USEC privatization overruled any actions. The reasons given ranged from the parochial to the absurd: nothing could be done that might threaten the privatization, and government officials were forbidden to discuss any matters concerning USEC (even among themselves) during the "quiet period" mandated by the Securities and Exchange Commission (SEC). The latter turned out to be a fabrication—SEC rules apply only to company management's public disclosures and only after a securities offering is filed with the SEC. Neither was the case.

On June 26, Senator Pete Domenici (R-NM), who co authored the USEC Privatization Act, wrote to national security advisor Samuel Berger (with a copy to Secretary of the Treasury Robert Rubin) stating his concern that "sale of [the USEC uranium inventory] would negatively impact the sale of HEU Agreement derived natural uranium and could significantly reduce the Russian Federation's incentive to continue the [HEU] Agreement." Domenici concluded: "I have worked for over a decade to privatize the USEC. But if circumstances are different than what we have assumed, you need to take those new circumstances into account before a decision to privatize is made." Three days later, the Treasury Department proceeded to file the prospectus for the sale of USEC with the SEC, starting the countdown to the sale of USEC shares to private investors.< 3 > Domenici never received an answer to his letter.

If the president's highest national security advisor could, or would, do nothing, Secretary Rubin should have been in a position to weigh the foreign policy implications of USEC privatization against the domestic forces promoting privatization. But on June 24, Rubin delegated to the undersecretary for domestic finance the necessary authority for all matters relating to the privatization of USEC.< 4 > Whatever Rubin's reasons, he delegated the decision-making authority to the government's leading cheerleader for USEC privatization, a move that had the full support of more than 60 Wall Street investment firms set to profit from the sale of USEC.

The June 29 SEC filing confirmed not only the huge size of USEC's uranium stockpile, but also the fact that USEC was stockpiling additional uranium at one of the plants it was leasing from DOE by a process called "underfeeding."< 5 > To make matters worse, the SEC filing committed USEC to sell more than 60 million pounds of uranium on an accelerated schedule, before July 2005. A subsequent leak of an internal USEC planning document revealed plans to sell nearly 90 million pounds in this period, reaching a peak level of more than 22 million pounds in 2002.< 6 > If USEC and its administration supporters had intended to sabotage Russia's pending agreement with the three uranium companies, they could not have done more. USEC's planned sales totally changed the economics of any commercial deal to buy and hold Russian uranium. Not only would the holding time, and thus holding costs, increase, but the ultimate price received would be lower because of the additional supply to the market.

Perhaps coincidentally, DOE, under pressure from OMB (which strongly supported USEC privatization and DOE uranium transfers to the company), advanced a proposal in May to sell about 30 million pounds of its uranium inventories (in addition to that already transferred to USEC) between 1998 and 2003. New projections of uranium prices by industry analysts and the independent Energy Information Administration soon showed reductions of up to 40 percent in future uranium prices.< 7 > Not surprisingly, in the face of USEC plans and DOE uncertainties, the three Western companies re evaluated the draft agreement and informed Russian authorities it would have to be revised.

As USEC's privatization moved forward, Russia also made clear its serious reservations about the future of the HEU deal. On July 17, Russian Minister of Atomic Energy Yevgeniy Adamov wrote a letter to Domenici, who had visited Moscow in early July and discussed the deal with Russian officials. Adamov wrote:


We are not sure that after actual privatization USEC as a private company will be able to fulfill its commitments of the U.S. executive agent under this Agreement and ensure further acceptance and full payment for the low enriched uranium supplied…. We think that this constitutes deviation of the U.S. Party from the implementation of agreed provisions of the Agreement and affect its fulfillment. In such situation Russia will bear significant financial losses and this will result in strengthening the negative reaction of the Russian legislators both with respect to the implementation of this Agreement and other arrangements with the USA on the issues of nuclear arms control.

Adamov was undoubtedly referring to the opposition in the Russia Duma (the lower house of parliament) to the ratification of START II, to intrusive transparency and security measures, and pending legislation to end the HEU deal itself. Adamov's warning, which foreshadowed Yeltsin's threat to end the deal at the upcoming Moscow summit, should have made the dangers clear to the United States.

Additional interagency meetings on the HEU deal broke down because OMB officials insisted that President Clinton had approved a go ahead on privatization on July 25, 1997, and had not altered this order. In fact, Clinton reportedly had read a press article questioning privatization and forwarded it to his advisors, asking: "Are we sure we are doing the right thing?" Despite U.S. officials' prior knowledge of the impending problem and sober warnings from responsible Russian officials, the privatization juggernaut plowed on, raising questions about the source of the pressure to proceed at any cost, including U.S. national security interests. On July 28, USEC became a private company.


The Current Situation

At the Moscow summit, Clinton managed to dissuade Yeltsin from withdrawing from the HEU deal by assuring him that the United States would find a solution to the problems. Adamov and Energy Secretary Bill Richardson were appointed to coordinate the effort. However, Richardson was soon handicapped by differences within the administration about how to deal with the uranium feed issue. For a long time, White House officials steadfastly refused to consider a U.S. purchase of any part of the uranium feed component, arguing that Moscow must recognize that market circumstances had changed (even if the United States changed them) and therefore must settle for much less money from commercial buyers. In effect, these officials contended that the United States had no responsibility under the government-to-government agreement, and that Russia was on its own in the commercial implementation of the HEU deal.

This position arises from a fundamentally flawed assumption about the HEU deal. When it was first proposed, it was thought that the HEU deal would be "budget-neutral." At that time, it was the U.S. government, through DOE, that was to purchase the Russian LEU. DOE would then resell the LEU without requiring an appropriation by a Congress that was trying to balance the U.S. federal budget. It was thus politically and budgetarily necessary to assert that DOE would incur no costs when it entered into the contract. In fact, under government accounting rules for the enrichment enterprise, the HEU deal would not only be budget-neutral, but "profitable." The price the United States would pay for the uranium content of the Russian LEU would be recovered by reduced costs (according to government accounting rules at least) from overfeeding the enrichment plants, and the price paid for the SWUs would be far below the full-cost recovery values attributed to operation of the enrichment plants.

In privatizing the U.S. enrichment enterprise and transferring large amounts of uranium, administration officials themselves destroyed the budget neutrality of the HEU deal. The transfer of below-market-value electricity supplies to the new government corporation and the failure to charge a capital cost per SWU for use of the enrichment plants not only destroyed any incentive to overfeed and thus buy the uranium, but also subsidized USEC production costs for SWUs so that they were below what was promised Russia. The privatization of USEC compounded this problem, since the private corporation—unlike the government corporation—must make a profit in reselling the Russian SWUs. As discussed below, it is now impossible to pay Russia a fair market value for its enrichment services. Transfer of amounts of uranium greater than was statutorily authorized and aggressive USEC uranium sales plans made it impossible for Russia to sell the uranium from HEU at prices even close to those originally agreed.< 8

If U.S. actions taken in connection with USEC privatization have altered not just the economic factors, but also the fundamental assumptions of the deal, it is important to ask what responsibilities the United States retains under the original government-to-government agreement. In the world of commercial agreements, the answer would be clear: the United States would be obligated to compensate Russia for any lost income. Of course, Russia lost the Cold War and is desperate for money. Perhaps U.S. officials believe Russia will just have to accept the dictates of the victors.

For its part, Russia holds the United States responsible for purchasing the LEU and will not continue to ship without payment. Russia is undoubtedly counting on the importance of the HEU deal to the United States to force a resolution. However, this is a dangerous game of brinkmanship: Washington may push Moscow so far that it is impossible to revive the deal. The inability of policy makers to perceive the consequences of their actions, or inaction, or to act to fix things, does not give confidence. Nor is it easy to identify anyone in Russia who would champion a resumption of the deal once it ended.


Domenici's Proposal

In a September 8 letter to Clinton, Domenici wrestled with this dilemma and came down on the side of prudence. Commenting that he did not think Russia could bend further on terms and that changed political circumstances in Russia would make it difficult for ministries involved to accept much lower prices, Domenici suggested that the United States take partial responsibility for the situation and intervene in a limited way.

Under Domenici's proposal, the United States would, in effect, purchase about 28 million pounds of uranium from Russia's 1997 and 1998 LEU shipments—at a cost of about $300 million—conditional on Moscow reaching a long term commercial agreement for the uranium component of its future deliveries. The United States would hold the Russian uranium and remaining DOE stocks of uranium off the market for 10 years. The hope was that removing an estimated 58 million pounds of uranium from the market (28 million pounds of Russian uranium and 30 million pounds of DOE inventory) would partly reverse the negative market impact of uranium transfers to USEC. Domenici also called for the United States to define terms for returning the uranium component of the LEU to Russia for use in the blending down of HEU or as fuel in Soviet design reactors in Russia and elsewhere.

Essentially, Domenici invited Clinton to join in a bipartisan effort to strengthen the HEU deal and signaled congressional receptiveness to a budget request under the president's emergency appropriation powers. Such a presidential request would not be unusual; Congress finally settled on more than $20 billion of such emergency requests. On September 22, Richardson and Adamov, meeting in Vienna, issued a joint report on the status of implementation of the HEU deal.< 9 The framework proposed in the report was intended to facilitate a purchase agreement between Russia and the Western companies. The framework included most of the Domenici proposal, but no commitment to purchase the uranium from 1997 and 1998 deliveries. Subsequently, after a great debate at high levels, the administration agreed to accept a congressional appropriation of $325 million for the 1997 and 1998 deliveries, which was passed into law on October 21.

The resolution of the uranium problem is still uncertain. Russia continues to insist on prices for its uranium that are now significantly above market and refuses to recognize that commercial buyers will have to pay even lower amounts due to the high costs of holding the uranium until market and trade conditions allow it to be resold. Some in the administration still resist spending the funds authorized by Congress and seem unwilling to accept limits on DOE sales of uranium. Between Russian inflexibility, administration equivocation, and worsening uranium market conditions, it will be hard to reach a commercial deal that relieves the United States of all future responsibility for the HEU deal.


The Future of the Deal

If the uranium problem can be solved, the next challenge to the HEU deal will come from USEC's obligation to pay Russia for the enrichment component of its LEU deliveries. As a government owned corporation, USEC was—at least in principle—under the control of the U.S. government. The United States could ask USEC to pay for Russian enrichment services even if the cost was greater than the company's own cost of production and the corporation made no profit on the Russian SWUs. With privatization, USEC has no strong incentives to continue its role in the HEU deal. In fact, according to revelations in its SEC filing, USEC has a strong incentive to quit its role and even to seek to end the HEU deal.

Moreover, even when it was a government-owned corporation, USEC put its business interests ahead of the HEU deal. In 1996, Russia asked USEC to increase its 1997 purchases of LEU from 10 tons HEU equivalent to 18 tons. According to a protocol, or summary, of discussions in Moscow in July (in which no non-USEC U.S. government official participated), "USEC responded that because of power and labor commitments and level of demand for SWUs, this could not be done in 1997," offering instead to purchase the HEU equivalent of 12 tons.< 10 USEC officials asked U.S. government officials to approve the 12 ton level, but failed to inform them of the Russian offer to deliver more. Russian officials naturally assumed that USEC was speaking on behalf of the U.S. government. Without outside intervention, Washington might never have detected this subversion of the HEU deal.

The dominance of USEC's commercial interests has been amplified by privatization, enrichment market developments and continued ineffective oversight by government officials. According to the company's SEC filing: "Unit costs of SWU purchased under the Russian HEU Contract are substantially higher than the Company's marginal cost of production." Increasingly large volumes of Russian SWUs result in USEC having to operate its two enrichment plants at inefficient levels, raising unit costs on the SWUs that USEC does produce. The plants are most efficient at a production level of about 13 million SWUs per year. USEC sells 11 million to 13 million SWUs per year, but, by next year, Russian LEU deliveries will reach 5.5 million SWUs, meaning that USEC will have to operate its plants far below their optimum production levels.

Meanwhile, USEC's portfolio of old high priced SWU contracts, inherited from DOE, are ending and market prices for new contracts are declining. Under its present contract with Russia, USEC must, in 1999, pay about $88.90 per SWU (including transportation)—more than the current price for new SWU contracts, implying that USEC must market Russian SWUs on which it can make no profit. When USEC was owned by the U.S. government, the United States could simply tell USEC to buy and resell the SWUs even if it did not make a profit. Obviously, privatization has changed this; private shareholders demand a profit.

Thus, the best outcome, by far, for USEC is for the HEU deal to fail entirely; that is, for the Duma or the Russian government, in nationalistic frustration, to stop exporting its sensitive national treasure. Based on the above SWU-cost factors and the higher prices expected for uranium if Russian uranium were kept from the market, USEC's profits would be approximately three times as high as at present if the HEU deal ended completely.< 11 USEC's private investors and the Wall Street firms that still hold stock could see an increase in their return on investment from about 7 percent to 22 percent, or, equivalently, a trebling of share price.

The transfer of large amounts of uranium to USEC by its administration supporters, together with USEC leaks of aggressive sales plans, nearly caused an end to the HEU deal on September 2. Failure of the United States to ensure payment for Russia's uranium may yet guarantee that result. Given declining SWU prices and increased deliveries, it is inevitable that USEC will seek a deferral of Russian SWU purchases and a substantial reduction in the price paid to Russia to ensure the company's profitability. The U.S. government would either have to explain to Russia why it has to sell at a price well below the market price—so a private American company can make a profit—or subsidize that profit from taxpayer funds. Of course, it may not come to such a clear conclusion: there are many ways to frustrate performance of a contract to the point that Russia finds continuing the HEU deal unacceptable.



The United States must recognize that its own actions have severely undermined the HEU deal and that the assumption that the deal can be accomplished at no net cost to the United States is a serious mistake. In subsidizing and otherwise biasing USEC financial incentives against the SWU part of the deal and by transferring large amounts of uranium to the corporation without limits on sales, Washington may have increased the value received by the Treasury Department for USEC's sale but created a threat to national security that will most likely require continued expenditure of funds to alleviate. But even if the United States cannot shift the entire cost of the deal to the private sector, the HEU deal is a good buy, perhaps the most cost effective national security initiative in history. Trillions of dollars were spent in the Cold War to counter the threat of tens of thousands of Soviet nuclear weapons. If the United States can forever remove large numbers of such weapons from the world for less than the cost of one B-1 bomber, it will be money well spent.

There are several immediate tasks for the administration. The first is to use the uranium-funding "carrot" provided by Congress to secure the best possible long-term commercial agreement for the sale of Russian uranium beginning in 1999, and to formalize such an agreement in a way that ensures that it will continue in the future. To do so, the United States needs to convince Russian officials to be realistic about market conditions and the low salability of its large volumes of uranium, recognizing the Russian complaint that U.S. actions—from USEC transfers to trade restrictions—have significantly worsened the market situation for Moscow.

The second is to improve U.S. oversight over the HEU deal to a level commensurate with its national importance and U.S. commitments under the intergovernmental agreement. The president appointed an interagency oversight committee, but it has failed to recognize problems and take timely action. This failure is due partly to inadequate staffing and lack of information, partly to the inattention by national security officials preoccupied with other crises, and partly to the lack of influence of national security advisors in the White House policy process.

An immediate need is better information about what is happening in the HEU deal. The memorandum of agreement between the U.S. government and USEC defers excessively to USEC commercial interests.< 12 The United States should not depend on limited self reporting by the corporation about what is happening in the HEU deal. USEC's position, endorsed by the agreement, is that all information connected with the HEU deal is proprietary, preventing public as well as government scrutiny of developments—including those initiated by USEC—that involve profound public and national security interests. In short, privatizing USEC appears to have resulted in the privatization of an important aspect of U.S. national security. At the very least, a U.S. government observer should participate in all negotiations and meetings relating to the HEU deal and all documents should routinely be provided to a more knowledgeable and attentive oversight process.

With regard to the impending SWU problem, the United States could take several actions to alter USEC's economic incentives so that it was more willing to continue the HEU deal. After all, the United States owns the enrichment plants that USEC leases for only a few million dollars a year, and DOE holds the below market-value electricity contracts that benefit the company. One measure would be to increase power costs; another would be to impose an increasing fee per SWU for use of the enrichment plants above a certain level of production, so that USEC would have to pay more to produce SWUs that would otherwise replace Russian SWUs. Such a fee would also correct the artificial incentives that lead USEC to underfeed its enrichment plants and thus accumulate more uranium. If this cannot be done, the United States should itself (through DOE, for instance) replace USEC as executive agent for the HEU deal, taking over direct relations with Russia and reselling Russian SWUs to the highest bidders. If politically necessary, USEC might be given a right of first refusal to purchase the Russian SWUs.

Alternatively, while one must always be wary of institutional invention, creating a government owned corporation that could take on nuclear security tasks on a multi year basis, without the constraints of annual budget cycles and with a certain amount of commercial intelligence and flexibility, offers a number of advantages. Indeed, USEC was not a bad idea in principle; it was largely the pursuit of privatization and inadequate supervision that led to problems. The creation of a USEC II, for example, would provide the United States with a vehicle with which to bargain with both Russia and commercial parties to achieve the most efficient implementation of the HEU deal, including the ability to enter into long term commercial agreements that are impossible for government agencies. Such a government-owned corporation could also take on other post-Cold War tasks, including those relating to plutonium disposition, securing (including by direct purchase) smaller quantities of HEU and plutonium at diverse sites across the former Soviet Union, and other nuclear security matters that require sustained attention and funding.


1. Author's meeting with Soviet Minister of Atomic Energy Viktor Mikhailov, October 18, 1991; Thomas L. Neff, "A Grand Uranium Bargain," The New York Times, October 24, 1991, and author's subsequent meetings in Washington and Moscow in 1991 and 1992.

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2. The USEC Privatization Act (Public Law 104-134) treatment of uranium reflected a delicate compromise between the interests of USEC, the domestic uranium mining industry, and the HEU deal. The legislation imposes a 4-million-pound annual limit on the sale of uranium transferred under the act to USEC. However, Congress was not aware of other transfers made by DOE to USEC, sales of which USEC contends are not limited by the act. U.S. uranium producers have brought legal action against DOE, contending that the other transfers were illegal.

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3. The SEC "S-1" filing is available at http://www.sec.gov or from Morgan Stanley Dean Witter at (212)761-4000.

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4. Treasury Order Number 103-04, Federal Register, June 30, 1998, pp. 35644-35645.

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5. By using additional electric power, USEC can produce LEU using less uranium than its utility customers actually deliver, keeping the remainder. Underfeeding is commercially feasible for USEC because DOE resells its below-market-value electric power supplies to USEC at cost.

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6.Nuclear Fuel, Vol. 23, No. 14, July 13, 1998, p. 1.

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7. "The Uranium Market Outlook," Quarterly Market Report, Uranium Exchange Company, July 1998; and U.S. Energy Information Administration, unpublished analyses, July to September 1998.

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8. The original contract negotiated by DOE listed prices of $28.50 per kilogram of uranium and $82.10 per SWU, or $780 per kilogram LEU (enriched to 4.4 percent U-235). The current market price for uranium is about $25 per kilogram, while the value if purchased and held for later resale is about $15 per kilogram due to substantial holding costs.

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9. The text of the report was obtained unofficially and published in Nuclear Fuel, Vol. 23, No. 20, October 5, 1998, p. 6.

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10. "Protocol of Meetings Between MINATOM, Techsnabexport and USEC in Moscow," July 8-11, 1996.

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11. Thomas L. Neff, "The U.S.-Russia HEU Deal: Strategic Realities," presentation to the Nuclear Energy Institute Forum, July 29, 1998.

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12. Under the April 28, 1997 memorandum of agreement between the U.S. government and USEC, the United States would only be able to detect actions, like those taken in 1996 by USEC to limit purchases of HEU, if USEC chose to report them.

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Thomas L. Neff is a senior member of the Center for International Studies at the Massachusetts Institute of Technology in Cambridge.

Just before their end of summit press conference on September 2, Russian President Boris Yeltsin informed President Bill Clinton that he was going to announce the end of the historic "HEU deal" signed by the two countries in 1993.

Framework Funds Endangered by North Korean Missile Test, Digging

IN THE LATEST sign of trouble for the U.S.-North Korean Agreed Framework, congressional appropriators on September 2 adopted amendments to the fiscal year 1999 foreign aid bill that could undermine the 1994 agreement. The House of Representatives foreign operations bill includes none of the $35 million requested by the Clinton administration to support the nuclear deal. The Senate's version of the legislation makes funding contingent on the president certifying that North Korea is neither conducting any nuclear activities outside of the nuclear accord nor selling ballistic missiles to any state-sponsor of terrorism. Secretary of State Madeleine Albright has said she would advise a veto if a conference committee does not modify the bill to support the Agreed Framework.

Congress' actions reflect rising concern about the administration's North Korea policy, sparked most recently by Pyongyang's August 31 launch of a multi-stage rocket over Japan (see story) and by the North's continuing work on a massive underground construction project, potentially for use in developing nuclear weapons. According to The Washington Post on August 18, a small group of legislators had been kept apprised of the North Korean digging for several months, but most congressional leaders were not briefed until early August. A congressional staffer said that briefings by some of the president's most senior national security officials left members in both houses and both parties convinced that the administration was "in denial about a major national security problem." According to a minority staffer, the administration has lost credibility with Congress on the North Korea issue and "needs to make a stronger case for the Agreed Framework."

Even before these developments, the Agreed Framework was in jeopardy. Chronically underfinanced by its member-states, the Korean Peninsula Energy Development Organization (KEDO), the consortium that is implementing the U.S. and allied side of the deal, is likely to fail for the second consecutive year to supply North Korea with the mandated 500,000 tons of fuel oil by October 20, the end of its supply year. As of mid-September only about 43 percent of the total had been delivered, and money for the remainder had yet to be pledged by KEDO's member-states. Since late April, North Korea has been venting its frustration with U.S. performance under the agreement by halting the "canning" of spent fuel from its 5-megawatt gas-graphite reactor, conducting maintenance activities at its Yongbyon reprocessing facility, and regularly threatening to withdraw from the agreement. (See ACT, June/July 1998.)

Hoping to salvage its North Korea policy, the Clinton administration announced on September 10 that two weeks of negotiations with Pyongyang in late August and early September had produced an agreement to hold additional discussions on issues of mutual concern. In particular, North Korea accepted Washington's demand to negotiate terms for on-site inspection of the underground construction site, agreed to discuss steps it must take to be removed from the State Department's list of state-sponsors of terrorism, and will return for another round of four-party talks with the United States, China and South Korea aimed at ending the state of war on the Korean Peninsula.

North Korea will also allow the Department of Energy to complete the cleanup and storage of spent fuel in Yongbyon that was halted in late April, and appears to have accepted a U.S. commitment to complete the delivery of heavy fuel oil by the end of the calendar year rather than the scheduled October 20 date. Additionally, Pyongyang agreed to resume discussions about its development and proliferation of ballistic missiles and their technology. The missile talks, slated to begin October 1, will be the first such discussions since North Korea cancelled a scheduled round of missile talks in August 1997 following the defection of two diplomats.

N. Korea Launches Staged Rocket That Overflies Japanese Territory

ON AUGUST 31, North Korea launched its first multi-stage rocket in an unsuccessful attempt to place a satellite into orbit. Pyongyang's official Korean Central News Agency (KCNA) claimed on September 4 that the three-stage system lifted off from Musudan-ri and placed into orbit a satellite that was equipped with sounding instruments and was transmitting two nationalist hymns and a Morse code slogan. While U.S. intelligence later determined that the satellite failed to achieve orbit, the launch of the rocket—which passed over Japanese territory—may nevertheless provoke a crisis in the implementation of the 1994 U.S.-North Korean Agreed Framework, spur calls in the United States and Japan for the development of missile defenses, and lead to a new round of international missile proliferation.

U.S. officials, describing Pyongyang's launch as a test of its liquid-fueled, 1,500–2,000-kilometer-range Taepo Dong-1 ballistic missile, were initially unaware of the attempted satellite deployment. Speaking to reporters in Moscow on September 1, Gary Samore, senior director for non-proliferation on the National Security Council, said that "this is a serious development but certainly not one that has surprised us." Based on satellite imagery of the rocket's support scaffolding and activity at the site, Washington had reportedly anticipated the North Korean launch by as much as two weeks—enough time to position special ships and aircraft to observe the launch.

After Pyongyang announced the satellite launch, however, U.S. officials began to adjust their statements. By September 14 State Department spokesman James P. Rubin said, "We have concluded that North Korea did attempt to orbit a very small satellite. We also have concluded the satellite failed to achieve orbit."

The North Korean rocket was comprised of a No Dong first stage and a Scud second stage, with a solid rocket motor and a small satellite as the payload. A government official told The New York Times on September 15 that with a successful third stage (and an unspecified payload), the Taepo Dong-1 could travel 3,500 kilometers.

Various theories regarding the timing of the launch have been suggested, such as a ploy to extract concessions during the ongoing talks with Washington regarding the Agreed Framework and other issues, or as a salute by the North Korean military to leader Kim Jong Il, who on September 5 acceded to the highest post of the North Korean government. The launch may also have been staged as a reminder to Washington of North Korea's dissatisfaction with U.S. performance in implementing the 1994 nuclear agreement. (See ACT, June/July 1998.) Additionally, the launch may have been intended to demonstrate a new staging capability that North Korea could market to client-states like Pakistan and Iran, which are known to be interested in longer-range missiles. Staging is one of the key barriers preventing missile programs based on Scud technology from achieving greater ranges. Cited in CIA and Defense Department reports as a key proliferator of missile technology, North Korea has attended two rounds of bilateral missile talks with Washington aimed at ending Pyongyang's missile development and export programs.

Reminding Washington of the stakes involved in the missile issue could also have motivated the launch. On June 16 the KCNA announced Pyongyang's willingness to accept financial compensation for ending its missile exports. Two congressional staffers visiting North Korea at the end of August were reportedly told a figure of $500 million. The State Department announced on September 10 that a new round of bilateral missile talks will be held in New York on October 1.

The consequences for Asian security from the missile launch could be severe. On August 31, Japan announced that it was suspending its signature of the cost-sharing agreement reached July 28 for the light-water reactor project at the heart of the Agreed Framework. (See story.) Japan has committed itself to pay $1 billion of the $4.6 billion project. Under pressure from Washington and Seoul, Tokyo may relent on its suspension of cooperation in time for construction to begin in November, the Kyodo News Service reported on September 10.

South Korea and Japan may also use North Korea's action to justify new defense initiatives. The Mainichi Shimbun reported on September 7 that Japan's Defense Agency has begun looking into the development of information-collecting satellites for both civilian and military purposes. Tokyo has also expressed new interest in collaborating with the United States in studying the feasibility of developing ballistic missile defenses, a move sure to raise concern in China.

Within two weeks of the North Korean launch, on September 10, South Korean Minister of Foreign Affairs and Trade Hong Sun-yong said that he would call for revision of Seoul's 1979 agreement with the United States not to develop or deploy missiles with a range greater than 180 kilometers.

In the past, Seoul has argued that it should be allowed to join the Missile Technology Control Regime (MTCR) and build missiles capable of delivering a 500-kilogram payload to a range of 300 kilometers, the regime's threshold of control. A State Department official said on September 15 that Washington would like Seoul to join the MTCR but "under the right circumstances"—namely ending its longer-range missile ambitions.

Washington's missile defense debate could also be affected by the North Korean launch. Robert Bell, special assistant to the president for national security affairs, acknowledged to reporters on September 1, "There's no question that the test of the Taepo Dong-1 will factor into the congressional debate on national missile defense." Bell went on to point out that "the degree of technical challenge going from an intermediate-range missile like the Taepo Dong-1 to an intercontinental-range system like the Taepo Dong-2 is really quite profound." Even with the test, Bell said, the administration remains confident there will be "at least three years' warning of an ICBM threat."

UN Fixes Sanctions on Iraq, Seeks Renewed Cooperation

IN RESPONSE to Iraq's August 5 decision to cease cooperation with UN weapons inspections, the UN Security Council voted unanimously on September 9 to end its bimonthly reviews of international economic sanctions on Iraq until cooperation resumes. A review of sanctions is expected in mid-October following the biannual reports of the UN Special Commission (UNSCOM) on Iraq's proscribed chemical, biological and ballistic missile programs, and the International Atomic Energy Agency (IAEA) on nuclear weapons-related issues. The Security Council's resolution, number 1194, also provides for a "comprehensive review" of Iraq's compliance with its disarmament and other obligations once Baghdad resumes cooperation.

Unlike previous confrontations with Iraq, the Clinton administration—though claiming that force remains an option—has backed away from the threats to compel Iraq's compliance that had stood as U.S. policy since 1991. The United States is seeking to shift responsibility for dealing with Iraq's defiant behavior back to the Security Council, and onto those states—chiefly France, Russia and China—that have argued Iraq's case in the past. As deputy national security advisor James Steinberg said on September 4, Washington's goal is "to be in a posture where it is clear that what Saddam is doing is challenging not just the United States, but the entire international community."


Weapons Inspector Resigns

Drawing additional international attention to the situation in Iraq was the public resignation of William S. "Scott" Ritter, Jr., previously chief of UNSCOM's investigations into Iraq's proscribed weapons concealment activities, on August 26. In an angry letter to Richard Butler, executive chairman of UNSCOM, Ritter denounced the Security Council's refusal to enforce its resolutions against Iraq and condemned Secretary-General Kofi Annan for allowing his "grand office" to be used "as a sounding board for Iraqi grievances, real or imagined."

The day after Ritter's resignation, The Washington Post cited "American and diplomatic sources" who claimed that on at least six occasions beginning in November 1997, Secretary of State Madeleine Albright or other top U.S. officials contacted Butler to prevent scheduled inspections from going forward. The Washington Post also claimed that in March 1998, after Butler rejected Albright's suggestion to remove Ritter from upcoming inspections, Washington and London "withdrew crucial elements of the intelligence support that allowed the special commission to observe Iraqi concealment efforts as they happened during surprise inspections." According to Ritter, Albright called Butler twice to avert inspections Ritter was leading to uncover "illegally retained ballistic missiles" and "management of Iraq's concealment program by a member of Saddam Hussein's personal staff."

While acknowledging discussions on "timing and tactics," Albright and other U.S. officials have strongly rejected claims that they tried to tell Butler "how to do his job" and insist that Washington remains UNSCOM's strongest backer. Butler has also maintained that while he consults regularly with all members of the Security Council, none has "crossed the line" from making policy into running operations, which he claims is his exclusive domain. On September 9, Butler told The New York Times that "Scott Ritter's chronology of events is not accurate," but declined to give further details. (The FBI is reportedly investigating charges that Ritter improperly exchanged intelligence with other nations while at UNSCOM, a claim Ritter denies.)

Following his resignation, Ritter publicly warned that Iraq could reconstruct its chemical, biological and ballistic missile programs in six months or less and charged that Iraq already possesses three complete nuclear devices that lack only their fissile material cores. Ritter also claimed that Baghdad has used the UN-supervised oil-for-food program to smuggle proscribed and dual-use materials. In his last report to the Security Council on July 27, IAEA Director General Mohammed ElBaradei noted that, while the agency is confident Iraq had no "physical capability for the indigenous production" of fissile materials, "direct acquisition of weapon-usable nuclear material would present a severe technical challenge" to the IAEA's ongoing monitoring and verification efforts.

On September 3, Butler briefed the Security Council on Iraqi interference with UNSCOM's continuing monitoring activities, which are carried out at some 300 sites within Iraq. According to Butler, since August 5 Baghdad has refused to provide access to equipment and information related to its potentially illegal Al Samoud missile program and has blocked access to previously visited areas by claiming they are either "military sites" or not "declared sites" for monitoring.

In the face of Baghdad's continuing defiance, the Security Council's attention has turned to the issue of the comprehensive review allowed for in the September 9 resolution. Member-states are now waiting to hear Annan's views regarding the purpose and scope of the review, which is favored by Iraq's supporters as a means of drawing attention to the extent to which Iraq has already been disarmed.

Fortieth Ratification Sets Clock for Ottawa Treaty's Entry Into Force

Sidebar Accompanying the Print Publication: The Road to 40: Ottawa Convention Ratifiers

THE OTTAWA CONVENTION banning the use, stockpiling, production and transfer of anti-personnel landmines (APLs) will enter into force on March 1, 1999 after Burkina Faso, on September 16, became the 40th state to ratify the treaty. Entry into force is expected to take place without signature by China, Russia and the United States, all of which continue to use landmines. Washington has pledged to sign the treaty by 2006 if by that date it can identify and field "suitable alternatives" to its APLs and mixed anti-tank systems (combination of anti-vehicle and anti-personnel devices). For each state ratifying after Burkina Faso, five by the end of September, the treaty will enter into force six months after its date of ratification.

Canadian Foreign Affairs Minister Lloyd Axworthy hailed the 40th ratification triggering entry into force as a "significant step toward a world free of anti-personnel landmines." At the same time, however, widespread reports continued of landmines being planted in Kosovo, the embattled province of Yugoslavia (an Ottawa non-signatory).

In addition, Ken Rutherford, co-founder of the Landmine Survivors Network, expressed concern about reports of new landmines being laid in the treaty signatories of Angola, Cambodia, Senegal and Sudan. Once treaty provisions become legally binding, states-parties will be responsible for identifying and resolving compliance concerns as the treaty did not create any implementing or monitoring body.

Entry into force will require each state-party within six months, and annually thereafter, to report to the UN Secretary-General its total APL stockpiles (type and quantity), the location of all mined areas, the status of APL destruction programs and the technical characteristics of all APLs it produced. Countries must also include information on landmines retained for mine clearance training.

Stockpiled APLs are to be destroyed within four years of entry into force and all APLs, including those currently planted, are to be destroyed within ten years, although states-parties may request a renewable, ten-year extension. Whether heavily mined states can meet destruction deadlines will depend on operation of Article 6, which calls on states-parties that are "in a position to do so" to provide assistance to other states-parties in mine clearance and destruction.

Of the 12 states identified by the U.S. Department of State's 1998 report, Hidden Killers, as accounting for almost 50 percent of the landmines deployed in the world—Afghanistan, Angola, Bosnia and Herzegovina, Cambodia, Croatia, Eritrea, Iraq, Mozambique, Namibia, Nicaragua, Somalia and Sudan—only Bosnia and Herzegovina, Croatia, Mozambique and Namibia have signed and ratified the treaty. Afghanistan, Eritrea, Iraq and Somalia are not among the 132 signatories.

While the United States will likely remain outside the treaty until 2006, the U.S. Senate, led by Senator Patrick Leahy (D-VT), passed the 1999 Defense Appropriations Bill on September 29, providing $18.5 million to seek APL and mixed-system alternatives and more than $52 million for demining programs. (Since November 1994, the UN Voluntary Trust Fund for Assistance in Mine Clearance has received payment or pledges of $49.5 million from 37 governments, including Washington, and other sources.) The bill is expected to be signed by President Clinton.

In addition to funding demining activities, Washington will continue efforts in 1999 to negotiate an APL transfer ban at the UN Conference on Disarmament (CD), where Russia and China are among the 61 members. Because decisions are made by consensus within the conference, other Ottawa non-signatories that are CD members, including Egypt, India, Iran, Pakistan and Syria, must not object for the negotiations to get underway. Moreover, some Ottawa signatories at the CD have warned they will withdraw from any talks if it appears that more than a transfer ban is being negotiated or that the Ottawa Convention is being undermined.

The first annual meeting of Ottawa states-parties is scheduled for May 3–7, 1999 in Maputo, Mozambique. The first review conference will take place on the fifth anniversary of the treaty's entry into force.

NMD Bill Stalled in Senate; New Bill Introduced in House

FOR THE SECOND time this year, on September 9, Senate Republicans fell only one vote short of forcing a floor vote on the "American Missile Protection Act of 1998." The bill (S. 1873), introduced in March by Senator Thad Cochran (R-MS), states that it is U.S. policy "to deploy as soon as is technologically possible an effective National Missile Defense [NMD] system capable of defending the territory of the United States against limited ballistic missile attack (whether accidental, unauthorized, or deliberate)." Even though all 55 Senate Republicans and four Democrats—Daniel Akaka (HI), Ernest Hollings (SC), Daniel Inouye (HI) and Joseph Lieberman (CT)—voted to end debate on the Cochran bill and bring it up for a floor vote, the measure failed because 60 votes are required for a motion of cloture.

Earlier, on August 5, Representative Curt Weldon (R-PA) introduced a one-sentence bill stating "That it is the policy of the United States to deploy a national missile defense." Because the Weldon bill (H.R. 4402) does not contain the controversial language that created problems for earlier bills, such as a specific date for NMD deployment, it has already gained 63 co-sponsors, including 24 Democrats. The Clinton administration, which thus far has only committed the United States to the development of an NMD system, has not yet officially commented on the new bill, which may come up for a floor vote before the House adjourns in October.


The Cochran Bill

On May 13, the Senate defeated a motion of cloture on the Cochran bill by a vote of 59-41. (See ACT, May 1998.) Since then, a series of key domestic and international events inspired Senate Republicans to bring S. 1873 up again. On July 15, the Rumsfeld Commission concluded that the United States may have "little or no warning" before facing a long-range ballistic missile threat from so-called "rogue states," such as North Korea, Iran and Iraq. Just one week later, on July 22, Iran tested its 1,300-kilometer-range Shahab-3, which will be capable of reaching Israel, Turkey and Saudi Arabia. Then, on August 31, North Korea tested the Taepo Dong-1, which, with its range of 1,500 to 2,000 kilometers, could strike targets throughout Japan. In the September 9 floor debate on the Cochran bill, Senate Republicans pointed to these events as evidence that the ballistic missile threat is growing and that the United States must now deploy an NMD system.

The 41 Democrats who voted against cloture countered by citing an August 24 letter to Senator James Inhofe (R-OK) by General Henry Shelton, chairman of the Joint Chiefs of Staff, challenging the Rumsfeld Commission's assessment of the missile threat. Shelton wrote, "[The Chiefs and I] remain confident that the Intelligence Community can provide the necessary warning of the indigenous development and deployment by a rogue state of an ICBM threat to the United States." Furthermore, he stated that rogue states are "unlikely" to acquire an ICBM capability in a short period of time through foreign assistance and high-risk development programs while avoiding detection by the intelligence community. Shelton argued that rogue nations might also employ "unconventional, terrorist-style delivery means" in an attack against the United States and that the United States should address the full range of possible threats.

Accordingly, Shelton reiterated his support for the administration's "3+3" program, under which the United States is developing an NMD system by 2000 that could be deployed by 2003 if three criteria have been met: a specific missile threat has been identified, the technology has proven to be effective and the system is deemed affordable. If the United States decides not to deploy an NMD system in 2000, it will continue to refine the elements of its system, always remaining three years away from actual deployment.


The Weldon Bill

In an August 5 press conference, proponents of the Weldon bill charged that the administration is using the "3+3" program to conceal its opposition to NMD deployment. Calling instead for a commitment now to deploy an NMD system, they argued that this would send a clear signal to Russia that the United States is serious about missile defense and might also deter rogue states from expending the vast resources necessary to acquire ballistic missiles capable of reaching U.S. territory.

H.R. 4402 is likely to pass because it seeks to find a common ground between those who favor immediate NMD deployment and those who prefer a more cautious approach. Unlike Senate Majority Leader Trent Lott's "National Missile Defense Act of 1997," the Weldon bill does not mandate NMD deployment by a certain date. Weldon's bill also does not identify a specific NMD architecture, does not base a deployment decision solely on the technical feasibility of the system (as does the Cochran bill) and is silent on the issue of U.S. compliance with the ABM Treaty.

Small Arms and Light Weapons: Controlling the Real Instruments of War

One of the dominant features of the global community in the 1990s has been the violent breakdown of civil society in dozens of countries throughout the world. From the socialist states of the former Soviet bloc to Africa and Asia, we have witnessed the outbreak of ethnic, religious, racial, linguistic and other forms of communal strife and the melting away of social norms and government structures that would otherwise contain the violence. Adding to the disorder, in many instances, has been a significant upsurge in armed banditry and criminal violence.

The importance of this "failed state syndrome" during this decade can hardly be overstated. The very nature of conflict has been transformed—from traditional combat between nation-states to inter-communal conflict within states. Such strife typically involves a wide variety of actors, including governments, rebel movements, armed political militias, ethnic and religious groups, tribes and clans, expatriate and diaspora groups, criminal gangs and mercenaries. Common distinguishing characteristics of this type of intra-state conflict include multiple warring parties, blurred lines of conflict, greater involvement of civilians, and the fact that the conflict itself is not fought on traditional battlegrounds but in local communities; indeed, within society itself. Also characteristic of these conflicts is the presence among the warring parties of irregular and paramilitary forces with little or no formal military training and few compunctions about violating the rules of war. All too often, it is children and teenagers who are recruited or forced into these organizations and then made to kill, loot and rampage.

Another defining characteristic of such conflict is the fact that widespread death and suffering result not from the major conventional weapons traditionally associated with war—tanks, aircraft and warships, for example—but from small arms and light weapons. The global proliferation of assault rifles, machine guns, mortars, rocket-propelled grenades and other "man-portable" weapons has increased both the frequency and intensity of modern conflict and greatly complicated the task of restoring peace. Such weapons are readily obtainable on international markets, both legal and illicit, and are easily mastered by untrained and unprofessional soldiers, even children. Of the 49 major conflicts that have broken out since 1990, light weapons were the only arms used in 46; only one conflict (the 1991 Gulf War) was dominated by heavy weapons.< 1 >

Since 1990, these conflicts have resulted in the deaths of more than 4 million people and have produced 20 million refugees and 24 million displaced persons.< 2 > The resources of the international community are being overwhelmed by bitter conflicts, large-scale refugee movements and even genocide. In response to these disasters, the international community has spent tens of billions of dollars on emergency relief, refugee care and resettlement, peacekeeping, and direct military intervention. For the United Nations alone, the annual cost of humanitarian assistance and relief for war victims has increased ten-fold, from about $300 million a year in the 1980s to $3 billion a year in the mid-1990s.

In recent years, attention has come to focus on the ways in which the increased availability of low-cost small arms and light weapons contributes to the likelihood, intensity and duration of armed conflict. Although these conflicts often possess deep and complex roots, it is evident that the widespread availability of modern light weapons has emboldened belligerents to pursue their objectives on the battlefield, rather than at the bargaining table.

An analysis of contemporary warfare also reveals that such conflict overwhelmingly takes place in the world's poorest countries. In the 1990s, 30 of the 60 least-developed countries in the world have experienced conflict directly, while another 12 have had to support large refugee populations from neighboring countries in conflict.< 3 > This correlation between conflict and poverty helps explain why these conflicts are generally fought with relatively inexpensive small arms and light weapons. It also explains why the victims of these conflicts are so dependent on assistance from the international community.


Advantages of Light Weapons

In recent conflicts, more people have been killed by small arms and light weapons than by major weapons systems. The distinguishing features of these weapons that make them so suitable to contemporary intra-state conflicts include:

Low Cost and Wide Availability. Because the production of small arms and light weapons requires little in the way of sophisticated technology, and because these weapons are manufactured for military, police and civilian use, there are plentiful suppliers around the world. In addition, the existence of many tens of millions of such weapons—whether newly produced, given away by downsizing militaries or recycled from conflict to conflict—leads to bargain-basement prices in many areas around the world.

Lethality. The increasing sophistication and lethality of rapid-fire assault rifles, automatic pistols and submachine guns and their diffusion to non-state actors has given such groups a firepower that often matches or exceeds that of national police or constabulary forces. With such weapons capable of firing up to 300 rounds a minute, a single individual can pose a tremendous threat to society. The incorporation of new technology into shoulder-fired rockets, mortars and light anti-tank weapons has only increased the firepower that warring factions bring to bear in civil conflicts.

Simplicity and Durability. Small arms are easy to use and maintain, require little maintenance or logistical support and remain operational for many years. Such weapons require little training to use effectively, which greatly increases their use in conflicts involving untrained combatants and children.

Portability and Concealability. Small arms and light weapons can be carried by an individual soldier or light vehicle, are easily transported or smuggled to areas of conflict, and can be concealed in shipments of legitimate cargo.

Military, Police and Civilian Uses. Unlike major conventional weapons, which are most often procured solely by national military forces, small arms and light weapons cross the dividing line separating military and police forces from the civilian population. Depending on the gun control laws of a particular country, citizens are permitted to own anything from pistols and sporting guns to fully automatic rifles. In many countries, moreover, there has been a dramatic increase in the number and size of private militias and security firms which, in many cases, are equipped with military-type weapons.

All of these characteristics of light weapons have made them particularly attractive to the sort of paramilitary and irregular forces that have played such a prominent role in recent conflicts. These forces have limited financial and technical means, lack professional military training, and often must operate in remote and inaccessible areas—all conditions that favor the use of small arms and light weapons. At the same time, many states have increased their purchases of these weapons for use in counterinsurgency campaigns against ethnic and political groups and to suppress domestic opposition movements.


A Global Diffusion of Small Arms

For many years, the global trade in major conventional weapons has been well documented. By comparison, the global trade in small arms and light weapons has proved much more difficult to track. Few national governments publish statistics on the sale or transfer of light weapons or release information about the sales activities of private companies. Moreover, much of the trade—perhaps 25 percent—is carried on through illicit and black-market channels of one sort or another.< 4 >

In the absence of uniform statistics on the trade in light weapons, researchers must rely on anecdotal information and what little fragmentary data is available from government and trade sources. Fairly reliable estimates of the global trade in such weapons range from $5 billion to $7 billion a year, with some estimates running as high as $10 billion a year.< 5 > And while official statistics indicate that the trade in major weapons systems has fallen sharply with the end of the Cold War, many analysts believe that global transfers of light weapons have increased during this period.

The global spread of small arms and light weapons has been facilitated by the emergence in many states, including a dozen or more developing countries, of a domestic capacity for the manufacture of such weapons. Whereas the fabrication of major weapons systems is highly concentrated, with only a dozen or so states capable of producing modern tanks, planes and warships, some 50 nations now manufacture light weapons and/or ammunition of various types. The production of modern assault rifles, for example, occurs in many of the industrialized nations as well as in Argentina, Brazil, Chile, Egypt, India, Indonesia, Iran, Iraq, Israel, Mexico, North Korea, Pakistan, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan and Turkey. Many of these countries produce arms for export as well as domestic use, greatly adding to the number of sources from which a potential belligerent can obtain weapons of war.

The large number of production sites contributes not only to the expansion of national arsenals, but to the spread of arms within societies via theft, bribery and corruption. The multiplicity of trade channels leads to the diffusion of light weapons within societies—extending not only to governments and state-owned entities but also to private armies and militias, insurgent groups, criminal organizations and other non-state actors. Accordingly, any analysis of the trade in light weapons must take into account both the sharp increase in the number of producers and suppliers and how their weapons are being transferred to an ever-expanding array of states and non-state actors in every region of the world.

The following list of legal, illegal and covert methods by which small arms and light weapons are sold, transferred and exchanged underscores the complexity of the problem:

  • Grants or gifts by governments to allied governments abroad;
  • Sales by governments to client governments abroad;
  • Commercial sales by private firms to governments and private dealers in other countries;
  • Technology transfers associated with domestic arms production in the developing nations;
  • Covert transfers by governments to friendly insurgent and separatist groups in other countries;
  • Gifts by governments to armed militias and paramilitary organizations linked to the ruling party or the dominant ethnic group;
  • Black-market sales to the governments of "pariah" countries and to insurgent and separatist forces;
  • Theft of government and privately owned arms by insurgent, criminal and separatist forces; and
  • Exchanges between insurgent and criminal organizations, whether for profit or in pursuit of common political objectives.

Although it is impossible to discuss each of these methods in detail, it is useful to look briefly at the major channels.

Legal Channels. Currently, there are over 300 manufacturers of light weapons and related equipment in 50 countries around the world, a 25 percent increase in the last decade alone.< 6 > Until the end of World War II, the major producers of these weapons were the industrialized nations. In recent decades, however, these established producers have been joined by China, Israel, South Africa and many developing countries. Estimates of some common models produced by these countries in the past few decades show the enormity of the problem: 5 million to 7 million Belgian FAL assault rifles produced in 15 countries; 35 million to 50 million Soviet/Russian AK assault rifles manufactured by Soviet/Russian factories and licensees; 7 million German Heckler & Koch G3 assault rifles made in 18 countries; 8 million U.S. M-16 rifles produced in seven countries; and 6 million Chinese-made AK-type assault rifles.< 7 >

These numbers, as alarming as they are, do not include the millions of surplus arms that have been sold or given away as the world's major military powers have reduced their forces and/or found themselves with excess production capacity following the end of the Cold War. Because small arms and light weapons have few moving parts and are extremely durable, even weapons that are 10- to 20-years old are often fully operational and as effective as newly produced weapons. Accordingly, countries such as the United States, Russia and Germany (especially with the dismantling of the East German army) have been able to sell or transfer millions of light weapons to their allies and clients abroad.

Covert and 'Gray-Market' Channels. In addition to legal sales and military assistance programs, small arms and light weapons are disseminated through covert and "gray-market" channels (that is, channels that operate with government support even though in violation of official government policy), most often by government intelligence agencies or private companies linked to such agencies. During the Soviet occupation of Afghanistan, the CIA helped to supply some 3 million AK-47 assault rifles (mainly Chinese and Egyptian models) to rebel mujahideen; thousands of these weapons have since turned up in fighting in Kashmir and elsewhere in South Asia, and as far away as Southeast Asia and the Middle East. In addition, the United States and the Soviet Union supplied arms to rebel groups in Central America and sent massive amounts of weapons to various factions in Angola and Mozambique.

Since the end of the Cold War, Washington and Moscow have discontinued many of these activities. But it is widely believed that military commanders and managers of military factories in Russia and some of the other newly independent states of the former Soviet Union have engaged in large-scale covert sales of weapons to clients in neighboring states and beyond. Government officials in other states have also been accused of smuggling arms to allied groups in other countries, whether for profit or to advance particular political or religious objectives. Officials in Zaire, for instance, reportedly bought large quantities of weapons on the international market and sold them to UNITA forces in Angola for profits running into the hundreds of millions of dollars—most of which is believed to have wound up in the overseas bank accounts of former President Mobutu Seso Seko and his associates.

Another form of gray-market transfers entails the delivery of weapons from government stockpiles to political entities and ethnic militias associated with the ruling clan or party. Prior to the 1994 genocide in Rwanda, for example, the Hutu-dominated government distributed small arms and machetes to government-linked militias. Once the killing began, the Rwandan military sought to crush any organized Tutsi resistance while the militias slaughtered unarmed Tutsis and moderate Hutus. A similar pattern was evident in Haiti in the early 1990s, when the ruling military junta organized and armed the Front for the Advancement and Progress of Haiti (FRAPH) to suppress popular support for ousted President Jean-Bertrand Aristide.

Illicit and Black-Market Channels. The third major category of light weapons transfers includes illegal sales through black-market channels, the supply of arms in defiance of international embargoes and other legal sanctions, and the theft of arms from government stocks or private citizens. In recent years, there has been a striking growth in the operations of black-market dealers to satisfy the needs of non-state actors in ethnic and internal conflicts. Because such actors are normally barred from purchases on the legal munitions market, they must acquire their weaponry from illicit sources. The growing number of UN arms embargoes has also produced an increased demand for black-market arms. Although it is impossible to estimate the value or scale of all such transactions, some estimates place 1993 black market sales to the belligerents in Bosnia alone at $2 billion or more.< 8 >

The black-market trade has been facilitated by the existence of vast stockpiles of surplus arms in the states of the former Soviet bloc—arms which in many cases are guarded by near-destitute soldiers and officers who are all too eager to conspire in their theft by black-market dealers or to enter the illicit trade themselves. Moreover, there are strong linkages between the illegal narcotics trade and black-market arms trafficking. These underground networks have developed sophisticated methods for the procurement, transportation and sale of small arms and light weapons, at times with the connivance of governments or corrupt public officials.

Finally, theft of weapons from military and police warehouses is a major problem in countries afflicted by civil war or insurgent violence. As civil strife spread across Albania in the spring of 1997, thousands of weapons were looted from military depots by insurgents, criminals and civilians. These weapons not only increased the levels of armed violence in Albania, but reportedly were also being smuggled across the border into the Serbian province of Kosovo, where 2 million ethnic Albanians pose an irredentist challenge to Serbian authority. In South Africa and Colombia, stolen weapons contribute to a culture of violence and criminality that undermines the stability of the state and the cohesion of society.


The Need for Policy Initiatives

Clearly, the unchecked flow of small arms and light weapons to areas of conflict represents a significant threat to world peace and security. While it cannot be said that such weapons are a primary cause of conflict, their worldwide availability, low cost and ease of operation make it relatively easy for potential belligerents of all kinds to initiate and sustain deadly conflict. Accordingly, policy-makers have begun to highlight the need for new international controls in this area. In a January 1998 message to the UN Conference on Disarmament, Secretary-General Kofi Annan said, "With regard to conventional weapons, there is a growing awareness among member-states of the urgent need to adopt measures to reduce the transfer of small arms and light weapons. It is now incumbent on all of us to translate this shared awareness into decisive action."

Interest in the trade in light weapons has also been spurred by a growing number of national and international non-governmental organizations (NGOs), many of which played a key role in the international campaign to ban landmines. Along with UN officials and leaders of interested governments, these groups have led the search for new policy prescriptions.


International Efforts

In line with the increased attention being focused by the international community on the dangers posed by small arms and light weapons, the United Nations has been engaged in a wide variety of activities to both publicize the problem and initiate steps toward policy controls. The two major efforts undertaken so far by the United Nations are the study conducted by the Panel of Governmental Experts on Small Arms in 1996 and 1997, which analyzed the types of weapons used in contemporary conflicts and the nature and causes of their excessive accumulation,< 9 > and the parallel study of member-states' firearm regulations conducted by the UN Commission on Crime Prevention and Criminal Justice in the same two-year period.< 10 >

Operationally, the United Nations has sought to monitor the effectiveness of various international embargoes on the transfer of weaponry into areas of conflict. In 1996, a UN International Commission of Inquiry on Rwanda investigated the implementation of the UN arms embargo on Rwanda, paying particular attention to specific allegations of embargo violations. In their report, members of the commission noted that "[we] could not fail to note the absence of an effective, proactive mechanism to monitor or implement the arms embargo the Security Council had imposed on Rwanda."< 11 > Elsewhere in Africa, the United Nations has supported Mali's path-breaking efforts to collect and destroy firearms internally and to promote a regional moratorium on the trade in small arms and light weapons.

Other international organizations are also becoming involved in the light weapons issue, particularly as it relates to issues of economic and human development. The World Bank is devoting resources to issues of post-conflict reconstruction, particularly in regard to the demobilization of combatants and their reintegration into civil society. Also, the Organization for Economic Cooperation and Development (OECD), through its task force on Conflict, Peace and Development Cooperation, is putting greater emphasis on the need for "timely prevention measures" (such as limiting arms flows in areas of potential conflict) in order to forestall armed violence.


Regional Efforts

Particularly in Africa and the Americas, national governments and regional organizations are devising a variety of measures to better regulate the legal trade in light weapons and to combat illicit weapons trafficking. In November 1997, the Organization of American States (OAS) signed a convention on the illicit weapons trade that calls for standardization of national firearms regulations and increased law enforcement and customs cooperation to prevent illicit weapons flows within the Western Hemisphere. The OAS has also developed model regulations that focus on the linkages between the narcotics trade and weapons smuggling. Within the Caribbean sub-region, moreover, Jamaica has proposed that similar efforts be undertaken by the 14-member Caribbean Community.

Elsewhere, West African governments are working with the United Nations to assess the regional implications of light weapons diffusion and to craft a regional moratorium on the import, export and manufacture of such arms. In Central Africa, the United Nations has established a trust fund with which to remove small arms and light weapons from the region. Similarly, the Southern Africa Development Community has recommended the establishment of a regional database on stolen firearms and the implementation of multilateral police operations to recover such weapons.

Among European countries, there are increased pressures for controlling both legal and illegal shipments of weapons, particularly to countries experiencing civil strife and human rights abuses. In June 1997, the European Union (EU) agreed to a Programme for Preventing and Combating Illicit Trafficking in Conventional Arms. In June 1998, the EU formally adopted a "code of conduct" on arms transfers with the goal of preventing such transfers to areas of conflict and internal repression. While useful steps, both measures will require political will in constraining arms transfers and dedicated resources to help affected countries monitor arms shipments and remove excess weaponry.


National Efforts

Because so much of the light weapons trade takes place illegally, the role of national governments in tightening and enforcing export regulations will be very important. Under pressure from Mexico, the United States has cracked down on illicit gun trafficking on the U.S.-Mexican border and has agreed to stronger export controls in the context of the OAS convention signed last November. Similar efforts are underway in a number of other states, including Colombia, South Africa and EU states.

In many communities, municipal authorities and NGOs have begun grass roots campaigns to remove small arms from circulation at the local level, and to pressure their national governments to take the light weapons problem more seriously. In South Africa, such initiatives involve bringing various ethnic and tribal groups together to deal with the "culture of violence" plaguing that country. In countries like Britain and Australia that have experienced horrific massacres carried out by automatic weapons—notably the killings in Dunblane, Scotland, and Port Arthur, Tasmania, national groups have come together to lobby for more restrictive gun control laws. Elsewhere, NGOs and grass roots organizations have put the spotlight on their own governments' responsibility for supplying weapons to areas of conflict and persistent human rights abuse.


What Is to Be Done?

From all that has been learned about the international trade in small arms and light weapons, it is evident that no single set of policy initiatives will suffice to deal with this problem. Unlike the relative simplicity of the landmines issue—where the international community could focus on one particular weapon (anti-personnel landmines) and seek its elimination as a weapon of war—the effort to control the diffusion of light weapons will demand a host of initiatives, extending from the international arena to regional, national and local levels. National governments especially will have to go beyond their support for cracking down on the illegal trade in light weapons and examine their own role in the current legal weapons trade. The following initiatives represent a rough menu of the sort of steps that will be needed to subject light weapons transfers to greater international scrutiny and to reduce the flow of such munitions to areas of conflict.

Establish International Norms. The first, and perhaps most important, step is to adopt international norms against the uncontrolled and destabilizing transfer of small arms and light weapons to areas of tension and conflict. Although deference must be made to the traditional right of sovereign states to arm themselves, it must be made clear that this right has natural limits and does not extend to the acquisition of arms for the purpose of engaging in genocide or the suppression of opposition political or religious movements. It must become axiomatic, moreover, that the right to acquire arms for self-defense entails an obligation to maintain such weapons under effective government control at all times and to preclude their diversion to illicit purposes.

While it may take some time to clarify and win support for such norms, the basic groundwork has been provided by the UN Panel of Governmental Experts on Small Arms. In its 1997 report, the panel concludes: "The excessive and destabilizing accumulation and transfer of small arms and light weapons is closely related to the increased incidence of internal conflicts and high levels of crime and violence," and is, therefore, "an issue of legitimate concern for the international community."< 12 > With this in mind, the report calls on UN member-states to "exercise restraint" with respect to the transfer of such weapons and to take all necessary steps to prevent the diversion of government arms supplies into illegitimate hands.

Clearly, much work is needed to strengthen these norms and to promote their acceptance by governments. As in the worldwide campaign against landmines, the media can focus public attention on the dangers posed by such weapons, especially to civilians and children. The issue is admittedly complicated by the fact that, unlike anti-personnel landmines, national governments and military and police forces can demonstrate a far greater legitimate need for light weapons for purposes of self-defense and national security. Nonetheless, the frequency with which such weapons are used against civilians and children points to a humanitarian aspect of small arms that is quite similar to that of landmines.

International norms could also be developed along the lines of the Geneva Conventions, where states-parties would be prohibited from supplying light weapons to any government, group or entity that does not have the resources to treat its wounded or those of the enemy, or has not trained its own personnel in the laws of war. In addition, public sentiment could be mobilized to support constraints on the inhumane or indiscriminate effects of light weapons, in the same way that blinding laser weapons have been banned by the recently adopted protocol to the 1980 Convention on Conventional Weapons (CCW).

Increase International Transparency. At present, efforts to monitor and control the diffusion of small arms and light weapons are hampered by a lack of detailed information on the production, sale and transfer of such munitions. Few governments provide detailed data on imports and exports of light weapons, and the UN Conventional Arms Register covers major weapons only. To ensure effective international oversight of the legal trade in light weapons, efforts at increased transparency must be made at the national, regional and international level. National governments should be required to publish detailed annual tallies of weapons imports and exports, while regional arms registers covering light weapons should also be encouraged. Finally, at the international level, the UN arms register should be gradually extended to cover all types of munitions, including small arms and light weapons.

Enhanced international transparency is also necessary to curb the illicit trade in light weapons. In the absence of an effective transparency regime, it is relatively easy for illicit dealers to conceal their operations; as information on legal trade becomes more widely available, it will become more difficult to do this. Increased transparency will also facilitate joint efforts by law enforcement agencies to identify, track and apprehend black-market dealers.

Increase State Accountability. In the current international milieu, control over the import and export of small arms and light weapons rests with national governments; thus, efforts to better regulate the trade in such munitions will be most effective at the national level.

Increased governmental accountability is needed in two key areas: first, the establishment of effective oversight over all military-type firearms found within the national territory, so as to prevent their diversion to criminal elements and black-market dealers; and second, strict controls over the import and export of such weapons, so as to preclude their use for any purpose other than legitimate self-defense as sanctioned by the UN Charter.

Efforts to accomplish the first of these objectives should be guided by the draft proposals of the UN Commission on Crime Prevention and Criminal Justice. Particularly effective measures would include a licensing system for manufacturers and gun owners, more effective identification systems to track firearms, more effective record keeping of firearms, and safe-storage measures. An additional measure called for is the promotion of amnesty and weapons turn-in programs that encourage citizens to surrender illegal, unsafe, unwanted and excess weapons. (An Australian buy-back effort, for example, took in more than 600,000 firearms, Governments around the world should be encouraged to incorporate such measures into their national laws and regulations; those states that fail to do so should be barred from receiving arms from those states that do adopt such legislation.

Similarly, efforts to better control the import and export of small arms and light weapons should be guided by the recommendations found in the report of the UN Panel of Governmental Experts on Small Arms. These include the collection and destruction of weapons once conflict has ended; the destruction of surplus weapons no longer needed by a country's military or police forces (as opposed to selling or giving them away); and the exercise of restraint in exporting military and police weapons from one country to another.

States should also be encouraged to adopt a code of conduct for arms transfers such as those being considered at the regional (EU) and international levels. Such codes would bar the sale or transfer of small arms and light weapons to any state that is ruled by a military dictatorship, that fails to respect the human rights of its citizens, that violates UN arms embargoes, or that cannot ensure the security of the weapons already in its possession.

Regional and International Efforts. While priority should be given to the development of effective controls at the national level, efforts should also be made to establish systems of oversight and control at the regional and international levels. Action at the regional level is particularly important because light weapons are often circulated by regional networks of illicit dealers, insurgents and permissive government agencies. Moreover, experience suggests that it may be easier to mobilize political support for control systems at the regional level than at the international level.

At the regional level, policy initiatives could include agreements for the strengthening of import and export regulations, tougher enforcement of laws against illicit trafficking and joint operations against black-market dealers. The OAS effort is one means of fostering increased cooperation between national customs services and law enforcement agencies on a regional basis. Other such efforts could be greatly facilitated by countries like the United States and Japan, which could provide the requisite technologies for computer databases of suspected illicit weapons traffickers. In southern Africa, national governments and intelligence agencies are sharing information and mounting joint operations to uncover and destroy large caches of weapons left over from previous conflicts.

The Mali moratorium on the manufacture, sale and import of small arms and light weapons is another initiative that can begin to reduce the easy availability of such weapons. As one of the more successful multilateral attempts to control the flow of light weapons both prior to and following periods of civil tension, the Mali initiative might provide a model for other regions. In West Africa, for example, the experiences of Liberia and Sierra Leone demonstrated how even relatively modest numbers of light weapons inflicted horrific casualties on civilians caught in sectarian strife.

Other regional approaches include the establishment of regional codes of conduct on arms exports similar to that of the EU. Given the particularly troublesome black- market weapons activity in Eastern Europe and the former Soviet Union, the OECD or the Organization for Security and Cooperation in Europe (OSCE) should consider adopting codes of conduct. Additionally, economic incentive plans could be devised that would facilitate the closure of excess production capacity in Eastern Europe and the former Soviet Union. For example, Western countries could buy surplus small arms and light weapons from these states and destroy them, much as the United States is purchasing excess Russian nuclear weapons material.

At the international level, emphasis should be placed on the adoption of measures needed to strengthen the implementation of weapons embargoes agreed to by the United Nations and associated bodies. While such embargoes may never be entirely leakproof, evidence has shown that even a modest number of international observers at airfields, seaports and other points of entry for weapons to an area of conflict can make a difference. When supplemented by stricter national export controls, embargoes can make it far more difficult to deliver significant quantities of modern weapons to areas of conflict.

The major arms-supplying countries should also establish a mechanism (possibly as part of the Wassenaar Arrangement for conventional arms control) for consultation on arms flows to areas of current and potential conflict, along with provisions for the imposition of a moratorium on weapons transfers to any state or region deemed to be at risk of ethnic slaughter, state failure or genocide. International inspectors should be sent to the region to ensure compliance with these measures and to suggest any other actions that might be taken to reduce the flow of arms.

Reducing Surplus Weapons. Addressing the problem of surplus weaponry generated by decades of Cold War competition is especially important because many states—particularly former Eastern bloc countries—are eager to sell arms for hard currency with few or no questions asked. Because export controls on surplus arms are generally less strict than those for newly manufactured weapons, black-market dealers find it easier to obtain and sell surplus arms than newly made weapons. The problem of surplus arms is especially acute in areas just recovering from armed conflict, where impoverished ex-combatants may try to sell their weapons for cash rather than turn them over to UN peace-keepers or other designated authorities.

Measures to reduce global stockpiles of surplus munitions—a critical component of any international effort to constrain the flow of light weapons—can take several forms. States that can afford to do so should agree to destroy the surplus arms and ammunition in their possession and to take all the necessary steps to prevent the leakage of weaponry from government depots and warehouses. An early precedent was set by the Dutch Ministry of Defense, which announced in January 1998 that it would destroy most of its surplus small arms, including 115,000 Uzi submachine guns, FAL assault rifles, Garand rifles, Browning pistols and M-1 carbines.

For their parts, the United States and Russia should agree to cooperate in locating and reclaiming (or buying back) weapons given by them to insurgent groups during the Cold War. In many regions, these weapons are now being used to fuel internal power struggles and criminal violence. Taking these weapons out of circulation would close one of the most deadly chapters of the Cold War and help promote international peace and security in the current era.

Post-Conflict Measures. A high priority should be placed on efforts to remove the large quantities of small arms and light weapons that often remain in-country once a particular conflict has ended. Too often, the availability of such weapons facilitates either a renewal of the conflict (as in Angola) or a destabilization of efforts to build a peaceful civil society (as in South Africa). The limited success of disarmament programs in countries like El Salvador, where the country suffers from an appalling rate of criminal violence despite the collection of tens of thousands of weapons, points up the complexity and difficulty of such efforts. Above all, decisions to disarm warring factions and remove light weapons from areas of conflict must be implemented uniformly and comprehensively.

Moreover, in many countries around the world the possession of arms is deeply embedded in society, so that arms collection efforts may prove futile or not be politically feasible. In such cases, and more generally as well, the primary emphasis should be on economic development and social reconstruction so that ex-combatants and non-combatants have viable options in the civilian economy.

Recent initiatives on the part of the World Bank and a number of development and humanitarian NGOs to better integrate economic assistance programs with demobilization, destruction of weapons and conflict prevention strategies are a useful step in this direction.

International Capacity-Building. Ultimately, any regime to control global trafficking in small arms and light weapons will only be as effective as the weakest links in the system. As long as black-market dealers enjoy safe havens in which they can operate with impunity, it will be difficult or impossible to enforce tougher international standards on the light weapons trade. It is therefore essential that the stronger participants in the system assist the weaker elements to establish effective and reliable mechanisms for the oversight of the arms market.

As part of such efforts, technology should be developed and deployed internationally to help track the flow of small arms and light weapons, identify illicit sources of supply, and improve law enforcement and customs prosecution of illegal suppliers and traders. In addition to developing computer databases and communications systems that can facilitate international cooperation on the light weapons trade, several other technical initiatives have been proposed for helping to increase the transparency of light weapons flows. One such initiative being developed by OAS members is more effective marking and registration of weapons, both at the point of manufacture and when such weapons are legally exported. Such marking will make it easier for law enforcement and intelligence officials to trace the supply routes of weapons originally acquired legally which then entered the black market.

Other proposals exist for the tagging of ammunition and explosives, and studies on their feasibility are being carried out by the Canadian government and the United Nations. While some of these technical solutions may prove difficult and expensive to implement, the international community has at least begun the process of thoroughly evaluating them.


An Imperative to Act

By the middle of 1998, there was increased international momentum for taking more decisive action to prevent the continuing global diffusion of small arms and light weapons. In addition to ongoing efforts on the part of the United Nations and regional organizations like the OAS, national governments—including Norway, Canada, Belgium, Mexico, Colombia, South Africa and Japan—had signalled their interest in devoting substantial political and economic resources to deal with the problem. In July 1998, the Norwegian government hosted a meeting of 21 countries, including the United States, that issued a call for stronger measures to deal with both the illicit and legal trade in light weapons.

The Clinton administration has indicated its willingness to be fully involved in international efforts to dampen the light weapons trade. In August, the administration released a list of the comprehensive initiatives the U.S. government is pursuing—through the United Nations, the OAS and at the national level—to support global efforts for combatting the threat posed by unrestrained trade in light weapons.< 13 > Most of these efforts were aimed at the illicit trade in arms, though some focused on legal sales.

Clearly, the U.S. and other governments, especially those responsible for the majority of light weapons production and supply, need to do more. At the moment, most countries, including the United States, are putting greater emphasis on the illicit light weapons trade. Yet, it is the continued supply of large amounts of small arms and light weapons, through legal channels, to governments and non-state actors, that is most worrisome. All too often, supplier states continue to give away or sell at a discount hundreds of thousands of surplus light weapons that end up in the wrong hands.

In some cases, such as Somalia, these weapons are then used against U.S. peace-keeping forces that are sent to restore civil order. In other cases, such as Bosnia, Liberia and Sierra Leone, the United States and the international community will spend billions of dollars in peace-keeping and economic reconstruction when a more restrictive policy on light weapons transfers might have prevented or diminished the intensity of civil conflict in these countries.

As the international community is beginning to recognize, the humanitarian and development benefits of cutting the link between light weapons availability and civil conflict would be substantial. For the United States, the economic benefits of the light weapons trade are exceedingly minor compared to the ultimate costs of having to rescue "failed states," provide for millions of refugees, and reconstruct societies torn apart by genocide and ethnic strife. The savings inherent in preventing or greatly limiting conflict in even one Rwanda, Bosnia or Liberia would greatly outweigh the minimal political and economic benefits of being an indiscriminate light weapons supplier.

In sum, increased attention to the lethal effects of easily available small arms and light weapons on the part of humanitarian relief agencies, national governments, international organizations and the media is translating into a greater public appreciation of the need to better control the production, supply and diffusion of these weapons.

Admittedly, the problem is incredibly complex and policies to control and regulate these weapons will not come easily. Nonetheless, the scale of death and injury caused by light weapons is such that the international community must continue to search for effective means of controlling and reducing the lethal commerce of small arms and light weapons around the world.


1. Major wars are those with at least 1,000 deaths per year, though most of these conflicts have resulted in far more fatalities and wounded. See 1996 Yearbook of the Stockholm International Peace and Research Institute, Stockholm: SIPRI, 1996.

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2. See "Small Arms and Light Weapons: The Epidemic Spread of Conflicts," Conversion Survey 1997, Bonn: Bonn International Center for Conversion, 1997.

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3. Steven Holtzman, "Post-Conflict Reconstruction," Environmental Department, Work in Progress, The World Bank, Social Policy and Resettlement Division, 1996, p. 1.

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4. See The Economist, May 16, 1998, p. 47.

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5. Keith Krause, "Constraining Conventional Arms Proliferation: A Model for Canada," Multilateral Approaches to Non-Proliferation, Andrew Latham, ed., Toronto: York University, 1996, p. 57.

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6. Swadesh Rana, Small Arms and Intra-State Conflicts, New York: United Nations, 1995, p. 4.

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7. See Virginia Hart Ezell, "Small Arms Proliferation Remains Global Dilemma," National Defense, January 1995, pp. 26–27.

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8. See Lethal Commerce: The Global Trade in Small Arms and Light Weapons, Jeffrey Boutwell, Michael T. Klare and Laura W. Reed, eds., Cambridge, MA: American Academy of Arts and Sciences, 1995, p. 9.

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9. "Report of the Panel of Governmental Experts on Small Arms," Report #A/52/298, from the Secretary General to the UN General Assembly, August 27, 1997.

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10. "Measures to Regulate Firearms for the Purpose of Combatting Illicit Trafficking in Firearms," United Nations Economic and Social Council, Vienna, July 28, 1998.

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11. UN Report in response to Security Council Resolution 1013, September 7, 1995, pp. 18–19; see also the "Interim Report of the International Commission of Inquiry (Rwanda)," S/1998/777, August 19, 1998.

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12. "Report of the Panel of Governmental Experts on Small Arms," August 27, 1998.

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13. See "Factsheet: ACDA Outlines U.S. Policy on Small Arms Issues," August 11, 1998, Washington, DC.

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Jeffrey Boutwell is director of international security studies at the American Academy of Arts and Sciences in Cambridge, Massachusetts. Michael Klare, a member of the Arms Control Association Board of Directors, is director of the Five College Program in Peace and World Security Studies at Hamphire College in Amherst, Massachusetts. This article is adapted from the authors' chapter in Light Weapons and Civil Conflict: Controlling the Tools of Violence, Jeffrey Boutwell and Michael Klare, eds., forthcoming from Rowman & Littlefield, spring 1998.

One of the dominant features of the global community in the 1990s has been the violent breakdown of civil society in dozens of countries throughout the world.

Rumsfeld Panel Releases Report on Missile Threat to U.S.

Craig Cerniello

IN MID-JULY, the congressionally mandated "Commission to Assess the Ballistic Missile Threat to the United States," led by former Secretary of Defense Donald Rumsfeld, concluded that the United States may have "little or no warning" before so-called "rogue nations," such as North Korea, Iran and Iraq, are able to deploy long-range ballistic missiles capable of reaching U.S. territory. Although congressional Republicans claim the finding justifies the immediate deployment of a national missile defense (NMD) system, the report did not address this issue and the Clinton administration, which opposes NMD deployment at this time, has not backed away from the intelligence community's assessment that the United States is unlikely to face such a threat before 2010.

According to a November 1995 National Intelligence Estimate (NIE 95-19) on the emerging ballistic missile threat to North America, "No country, other than the major declared nuclear powers, will develop or otherwise acquire a ballistic missile in the next 15 years that could threaten the contiguous 48 states and Canada." Dissatisfied with the conclusion of that assessment, Congress, in the fiscal year (FY) 1997 defense authorization bill, ordered an independent review of the NIE.

The independent review, chaired by former CIA Director Robert Gates, criticized aspects of the NIE but rejected the charge that the estimate was "politicized" and reaffirmed the conclusion that rogue nations are unlikely to develop ICBMs capable of threatening the United States before 2010. (See ACT, January/February 1997.)

The authorization bill also established the so-called "Rumsfeld Commission," which was only responsible for analyzing the nature of the missile threat to the United States and not appropriate responses to that threat. In its unclassified executive summary released July 15, the nine-member Rumsfeld Commission reported that it had unanimously reached four key conclusions.

First, it noted that several hostile or potentially hostile nations are acquiring ballistic missiles armed with nuclear or biological weapons capable of threatening the United States and its allies. The commission concluded that once a decision had been made to acquire such a capability, it could only take North Korea and Iran five years and Iraq 10 years to acquire a ballistic missile capable of inflicting "major destruction" on the United States. Second, the commission said the emerging ballistic missile threat to the United States is "broader, more mature and evolving more rapidly" than the intelligence community had reported in the past. Third, the commission said, "The Intelligence Community's ability to provide timely and accurate estimates of ballistic missile threats to the U.S. is eroding." Finally, in a theme that runs throughout their analysis, the commissioners argued that the United States will have reduced warning of threatening ballistic missile deployments by rogue nations and that under some scenarios there may be "little or no warning."

Based on these conclusions, the commission recommended the revision of U.S. policies that assume extended warning time for ballistic missile threats. In its report, the commission noted that rogue nations are not following the lengthy development and deployment cycles for ballistic missiles that were utilized by the United States and Soviet Union during the Cold War, and that rogue states are now able to enhance their missile programs through foreign assistance.

In a July 15 letter to various members of Congress, CIA Director George Tenet defended his agency's recent assessment of the missile threat to the United States, which offered a longer timeline than does the Rumsfeld Commission for the emergence of an ICBM threat from a country other than Russia, China and North Korea. He said the conclusions of the CIA's March 1998 Annual Report to Congress on Foreign Missile Developments were supported by the available evidence, well tested in community debate and reviewed by outside experts. "But where evidence is limited and the stakes are high," Tenet said, "we need to keep challenging our assumptions."

In a July 15 statement, House National Security Committee Chairman Floyd Spence (R-SC) said, "The commission's work reinforces my views on the urgency of committing to the deployment of missile defenses to protect the American people as soon as possible...." That same day, Representative Curt Weldon (R-PA) said the findings of the commission "confirm the need to move forward with a commitment to deploy a national missile defense." Under the Clinton administration's so-called "3+3" program, the United States will decide in 2000 whether to deploy an NMD system by 2003 if merited by the existing threat and the available technology. If a deployment decision is not made in 2000, the United States will continue to refine the elements of its system, remaining three years away from actual deployment. However, critics of an early NMD deployment date remain skeptical. On July 7, Senators Carl Levin (D-MI) and Jeff Bingaman (D-NM) released a new report by the General Accounting Office (GAO) which concluded that even with increased funding there are "high" schedule and technical risks associated with deploying an NMD system by 2003.


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