� Eliminate the Defense Export Loan Guarantee Program. The Defense Export Loan Guarantee Program (DELG) was established in 1996 to provide $15 billion worth of guaranteed loans to qualifying countries for the purchase of U.S. military wares, theoretically at no net cost to the U.S. government. A December 1998 General Accounting Office (GAO) report outlined several problems with this little-used, money-losing program, but the Pentagon insists on keeping it functioning. High fees designed to cover administration costs and the risk of loan defaults have discouraged countries from signing up. With only one customer since its inception, the DELG has not received enough in fees to cover its costs. The defense industry’s solution to the financial problems is to lower the fees, passing the costs on to taxpayers. Yet with over $10 billion of foreign military debts forgiven since 1990 and $14 billion currently owed, the U.S. risks losing even more money through this approach. The best solution is to shut it down.

 ‚ Prohibit offsets on exports financed in whole or in part by U.S. military aid. American arms manufacturers use "offsets" to beat out foreign competitors for export sales. (Offsets are side deals in which U.S. companies agree to return economic benefits to the purchasing country, usually in the form of co-production or marketing assistance for the importing state’s goods.) Congress appropriates $3-4 billion in Foreign Military Financing (FMF) grants annually, nearly all of which must be used to purchase American-made arms, meaning there is no foreign competition to beat out. Yet recipients of this U.S. military aid still demand and receive offsets on these sales. Permitting offsets on sales financed with taxpayer funds is grossly unfair to the general public, which already pays for weapons development costs and the purchase of the weapons by foreign states. Furthermore, offset co-production agreements hurt American defense workers by sending all or part of the manufacturing work overseas.

 ƒ Repay taxpayers for public funds expended to research and develop weapons which are exported abroad and consolidate responsibility for collecting those funds. U.S. weapons makers benefit from federally funded research and development of their products for the Pentagon’s use. Congress should require fees on all export sales of major military equipment to recover some of these costs, which also subsidize the price of exported arms. Not doing so robs the Treasury of hundreds of millions of dollars per year and constitutes a major form of hidden aid to foreign militaries and U.S. defense contractors. Currently, such fees are required only on FMS sales and are often waived. Yet even this modest attempt at paying back taxpayers is failing. A 1998 GAO investigation found $183 million in outstanding FMS fees because the various military agencies failed to follow proper procedures. Those responsibilities should be transferred to a single agency to ensure that all fees are collected.

„ Amend Section 655 of the Foreign Assistance Act to include data on commercial sales deliveries and place the "655 Report" on-line. The "655" annual report on arms exports includes delivery data on government-to-government sales, but provides only export licensing information on direct commercial sales (DCS). Without information on which goods were actually shipped, Congress and the public have no reliable information on total U.S. arms exports. In addition, for complete transparency on U.S. arms transfers, the entire "655 Report" should be put on a government web site. An electronic version would cut down on the paper and time used to provide the report to the concerned public.

 … Amend Sections 36(a) and (b) of the Arms Export Control Act (AECA) and Section 655 of the Foreign Assistance Act to require notification and reporting on offsets. Little information is available about U.S. arms exporters’ offset agreements with foreign customers (see idea #2). Such deals reduce, directly or indirectly, the economic return of U.S. arms exports. Descriptions and values of offset deals should therefore be made public at the time Congress is notified of seemingly lucrative sales. They should also be published in the year-end "655 Report" which tallies U.S. arms exports. Greater transparency on offsets will help belie the myth that arms exports are always good for American workers.

† Hold hearings on arms export licensing, end-use monitoring programs, and conventional weapons proliferation. Congress regularly holds hearings on the threats posed by nuclear weapons and the export of information technology, but has not examined the threat of conventional weapons proliferation since 1994. Meanwhile, the U.S. has been exporting arms of ever-increasing lethality, many into regions of tension and conflict. Since 1994 the U.S. has agreed to export more than $36 billion worth of government-to-government arms sales and has issued an estimated $95 worth of export licenses for conventional weaponry. An increase in Congress’ oversight role could also contribute valuable information to current efforts to reform military sales programs and revamp the Export Administration Act. See related articles, pages 3-4.

 ‡ Amend Sections 36(b) and (c) of the AECA to require congressional notification of all small arms and light weapons exports. Under present law, Congress is notified of all arms exports worth over $14 million for "major defense equipment" and over $50 million for all other conventional weapons. Small arms and light weapons—the leading killers in today’s conflicts—usually fall under these thresholds, denying Members of Congress the opportunity to oversee this category of exports. Congress should therefore receive notification of all proposed small arms, light weapons, ammunition, and explosives transfers, regardless of value. While lowering the notification threshold for all arms might overwhelm Congress with large numbers of spare parts notifications, requiring notification of small arms and light weapons would place reasonable and much needed oversight on these transfers.

 ˆ Amend Sections 502(b) and 581 of the Foreign Assistance Act to include military training programs not primarily designed to train foreign soldiers. Military training programs for which the official primary purpose is not foreign training—such as the Joint Combined Exercises and Training (JCET) program—often escape the restrictions and oversight placed on traditional foreign military programs. But such programs usually include training for foreign soldiers in lethal combat skills, and some foreign soldiers trained in these programs have been implicated in serious human rights violations. Amending these sections of the FAA would subject such programs to the same human rights criteria and reporting requirements as other foreign military training programs.

 ‰ Standardize U.S. arms export systems. The United States is the only arms exporter with two separate channels for selling weapons abroad—the Pentagon’s Foreign Military Sales (FMS) or government-to-government program and the State Department’s Direct Commercial Sales (DCS) licensing system. Reconciling the DCS program with FMS reporting procedures, degree of oversight and attention, and funding mechanisms would create uniform arms export policies and stricter scrutiny of all U.S. arms exports. Reductions in bureaucracy and redundancy would save taxpayers’ money. See related articles, pages 3-4.

 Š Ratify the OAS Convention against Illicit Manufacturing and Trafficking of Small Arms. The OAS Convention, signed by the U.S. government in November 1997, is a crucial first step towards stemming the illicit trade in small arms and light weapons in the Americas. Hundreds of thousands of guns, rifles, and light artillery, most left over from the Central American wars of the 1980s, re-circulate through the hemisphere on the black market, fueling the drug trade and political and economic instability. The Convention will impose stringent, uniform standards on weapons marking (at manufacture, import, and export), export controls, and import and export licenses.

For more information on these ten initiatives, contact our office or see http://www.fas.org/asmp/topten106.html.

On May 11^th, the International Action Network on Small Arms (IANSA) was officially launched in The Hague. IANSA will facilitate the collaboration of activists and non-governmental organizations working against the proliferation and misuse of small arms and light weapons. For more information, see IANSA’s website: http://www.iansa.org.

The DSCA Strategic Plan is online at: http://www.dsca.osd.mil/StratPlan/stratmain.htm.

• Mandate regular end-use hearings to evaluate and monitor the effectiveness of all dual-use export controls (see #6 on the top ten list).
• Increase restrictions on and scrutiny of special equipment that is most likely to be used in lethal combat and lessen the focus on widely available equipment such as high performance computers.
• Avoid "foreign availability" provisions (which let U.S. exporters sell anything already available from other suppliers) in cases where exports might be put to direct lethal use.
• Ensure that all appropriate governmental bodies maintain a legal role in export control, including the DoD and the State Department’s human rights office. Decisions with implications for global security and human rights should not be left to the Commerce Department, which promotes the same items it regulates.
• Extend export license requirement for crime control instruments to NATO members that have been cited for human rights violations in the State Dept’s human rights report. Publish a list of all countries to which police items have been approved in Commerce’s annual report on foreign policy export controls.
• Raise the penalty for violations of dual-use export laws. The current penalty maximum of $10,000 is a mere slap on the wrist to large exporters.

 Other export control suggestions:

• Make U.S. arms export controls more effective and multilateral by associating with the EU Code of Conduct on arms transfers, with the stipulation that it be significantly strengthened.
• Prohibit use of Export-Import Bank funding for dual-use items.
• Place specific restrictions on highly sensitive or unique weapons-related technology. For instance, foreign weapons purchasers have been pressuring the U.S. to release classified computer "source codes" with weapons sales. These codes are a weapon’s "intelligence," enabling alteration of basic specifications such as "friend or foe" identification—the sort of high level technology that should not go to potentially unstable governments.

The Bureau of Export Administration has also revised the Commerce Control List to implement requirements of the Wassenaar Arrangement, the association of key arms exporters charged with cooperating to prevent conventional weapons proliferation. The new regulations, published January 15 and revised March 5 in the Federal Register, adopt the Wassenaar Arrangement’s list of "dual-use" items (exports with military and commercial uses) and requirement that participating states notify each other when licenses are denied or approved. –Anna Rich

 The United States sent or agreed to send arms to 154 countries during fiscal year 1998 (countries which received less than $1,000 worth of weapons in all categories were not included in the list below). For information about specific items sold, please see the ASMP website or contact our office.

 *All licenses for China indicate commercial satellite exports.

Centcom: Bahrain, Djibouti, Egypt, Eritrea, Jordan, Kenya, Oman, Pakistan, Qatar.

 Eucom: Austria, Botswana, Bulgaria, Cameroon, Cote D’Ivoire, Czech Republic, Denmark, Equatorial Guinea, Estonia, France, Germany, Greece, Guinea Bissau, Hungary, Italy, Latvia, Lithuania, Macedonia, Malawi, Mali, Mauritania, Morocco, Mozambique, Netherlands, Norway, Poland, Portugal, Romania, Rwanda, Spain, Swaziland, Switzerland, Tanzania, Tunisia, Turkey, Uganda, United Kingdom, Zambia, Zimbabwe.

Pacom: Australia, Bangladesh, Fiji, Indonesia, Korea, Republic, Malaysia, Maldives, Mauritius, Mongolia, Nepal, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand, Tonga, Vanuatu.

 Southcom: Argentina, Bahamas, Bolivia, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guyana, Honduras, Panama, Paraguay, Peru, Trinidad, Uruguay, Venezuela.

– Keith Tidball

In sharp contrast to this violent approach, the Zapatistas have chosen to build civil society support for their cause. In March 1999, 5,000 Zapatista delegates conducted a national survey on the peace process. Over one million Mexicans responded overwhelmingly in favor of the San AndrJ s accords. However, the results of this democratic process carry no weight with the Mexican government.

 Middle East Arms Proliferation

Secretary Cohen explained in a press briefing in Egypt that not only was the U.S. eager to sell arms in the region, he had to comply with the requests of friendly Middle Eastern governments because otherwise they "would take it as an insult" and seek another supplier. Meanwhile, some in the Arab media accused Cohen of "exploiting the issue of the so-called Iraq-Iran danger" in order to sell more arms in the Gulf. –Keith Tidball

• Reps. Chris Smith (R-NJ) and Lane Evans (D-IL) introduced H.R. 1063, the International Military Training Transparency and Accountability Act, which would prohibit all military aid and training to foreign countries that have already been banned from receiving international military education and training (IMET) or other military assistance. This initiative is a response to the administration’s circumvention of congressional intent in Indonesia; its military was banned from receiving IMET funds due to human rights abuses, but was secretively allowed to participate in "joint exercises" with the U.S. military.  
• Reps. Sam Gejdenson (D-CT) and Cynthia McKinney (D-GA) worked together on a compromise Code of Conduct bill that combines Gejdenson’s international code—which asks the President to "attempt to achieve" an international arms sales code of conduct with Wassenaar Arrangement countries—with important portions of McKinney’s U.S. Code of Conduct. This legislation would incorporate definitions for the original Code criteria (democracy, respect for human rights, non-aggression and transparency) and would require the State Department to include in its annual Human Rights report an assessment of states’ compliance with these criteria. This text has been passed by the House International Relations Committee as an amendment to the Security Assistance Act (H.R. 973) and the Foreign Relations Authorization Act (H.R. 1211). McKinney’s full U.S. Code of Conduct will soon be introduced in the House as a stand-alone bill.  
• The Security Assistance Act also contains a variety of minor provisions which would increase transparency and accountability in U.S. arms sales. These include requiring: delivery data on direct commercial sales (DCS); descriptions of offsets in Congressional notificaiton of proposed arms deals; an expanded prohibition on bribes in offsets; recoupment of administrative fees for leased defense items; expansion of the "655" Report on U.S. arms exports to include weaponry financed by U.S. loans or guarantees; and an increase in penalties for arms export violations. Not so good is an authorization of substantial surplus weapons giveaways to central European and former Soviet states, Greece, South Korea, and Thailand.  
• In the wake of the Littleton tragedy, President Clinton announced his sponsorship of a variety of gun control proposals, which would also help keep American small arms out of the global black market (see ASM 38 for background information). The Senate initially rejected a proposal to require background checks for firearm sales at gun shows, but the negative backlash forced another vote, which passed 51-50 (with Vice Pres. Gore’s tie-breaking vote). Other amendments to the Juvenile Justice bill, passed by the Senate 73-25, would ban the import of high-capacity ammunition clips, require safety locks to be sold with handguns, and require background checks on pawn shop sales.  
• Rep. Joe Moakley (D-MA) introduced this year’s bill to close the U.S. Army’s School of the Americas, a military training program for Latin American forces which has gained disrepute by the serious human rights abuses committed by many of its graduates (H.R. 732).

• The "Defense Jobs and Trade Promotion Act" (H.R. 796), sponsored by Rep. Sam Johnson (R-TX), would provide the same tax breaks on arms exporters’ profits that are given to other industries under U.S. tax code. In order to level the international playing field for American businesses, the 1976 tax law created a tax break on profits on most exported goods. The law excluded U.S. weapons producers because they were deemed sufficiently competitive. Johnson claims that defense companies deserve the same tax break to "improve international competitiveness"— despite the fact that U.S. defense firms claim over 50% of the global arms market today.

• Sens. Jesse Helms (R-SC) and Bob Torricelli (D-NJ) have introduced the Taiwan Security Enhancement Act (S. 693), which would increase U.S.-Taiwan military contacts, mandate increased arms sales to Taiwan—including certain high-tech weapons—and force the Clinton administration to justify any denial of arms to Taiwan. Their aim may be more to provoke China than defend Taiwan, since Taiwan is already a top U.S. customer. Whatever the prospects for the legislation, arms exports to Taiwan are likely to increase: recent news reports say the U.S. is ready to approve a $1.7 billion arms package for Taiwan, including a controversial missile defense deal.

• Turkish news media report that 37 Senators, again led by Sen. Helms, wrote a joint letter to Clinton urging him to ease restrictions on weapons sales to Turkey. Turkey has threatened to switch suppliers unless the U.S. complies with all requests for arms sales, forgives its Foreign Military Sales (FMS) debts—worth more than $6 billion—and lifts all restrictions on the use of weapons. These threats seem to be working: Congress has allowed a proposed sale of 50 Black Hawk helicopters to Turkey, a deal worth approximately $560 million. Concerns about Turkey’s human rights record have led the U.S. to deny or delay several arms deals in the past (See ASM 39). 
• Congressional proposals to arm the Kosovo Liberation Army have come from Sens. Mitch McConnell (R-KY) and Joseph Lieberman (D-CT) (S. 846) and Rep. Eliot Engel (D-NY) (H.R. 1408). So far the administration has not been receptive; White House Spokesman Joe Lockhart said such a proposal "runs counter to what we’re trying to do right now, which is actually demilitarize." –Anna Rich

100 Companies Receiving the Largest Dollar Volume of Prime Contract Awards "(Top 100)," Defense Department annual report, http://web1.whs.osd.mil/diorhome.htm.

 1999 Report on Foreign Policy Export Controls, U.S. Commerce Department, Bureau of Export Administration, March 30, 1999. http://www.bxa.doc.gov/PRESS/99/Repts/ForeignPolicyTOC.html.

 Annual Report on Military Expenditures, 1998, State Depart., Feb. 19, 1999. http://www.state.gov/www/global/arms/98_amiextoc.html.

 Country Reports on Human Rights Practices for 1998, State Department, February 26, 1999. http://www.state.gov/www/global/human_rights/1998_hrp_report/.

 Drug Control: Update on U.S.-Mexican Counternarcotics Activities, T-NSIAD-99-98. 13 pp. plus 1 appendices (3 pp.) March 4, 1999, http://www.gao.gov/monthly.list/mar99/mar9917.htm.

 Gun Shows: Brady Checks and Crime Gun Traces, Treasury, Justice, and ATF Departments, January 1999. http://www.ustreas.gov/press/releases/report.htm.

 International Narcotics Control Strategy Report, 1998, State Department Feb. 1999. http://www.state.gov/www/global/narcotics_law/1998_narc_report/index.html.

 Security Assistance Management Manual, Defense Institute of Security Assistance Management, December 30, 1998, http://web.deskbook.osd.mil/reflib/MDOD/004dm/001/004dm001doc.htm. Purchase: 937-255-2994.

 Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, CIA, Feb. 9, 1999. http://www.odci.gov/cia/publications/bian/bian.html.