Arms Sales Monitor #3, June 1991

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(Issue No. 3, June 1991)




Arms transfers in the pipeline                              
14 May  The Committee on Foreign Affairs receives a letter from the Assistant
Secretary of Defense for Legislative Affairs transmitting
notification of a proposed license for the export of major military
equipment to be sold commercially to Greece.    

It is previously reported that Greece intends to purchase, with
US FMS finance credits, 20 more F-16 multi-role combat aircraft. 


17 May  The Committee on Foreign Affairs receives a letter from
the Assistant Secretary of Defense for Legislative Affairs transmitting
notification of a proposed license for the export of major military
equipment to be sold commercially to South Korea.  

Late May  Raytheon Company confirms that it has received a
letter of intent by the Turkish government to buy up to 10 Patriot air
defense systems for $1 billion.  

31 May  Secretary of Defense Cheney says the US will give Israel 10
F-15 fighter aircraft worth $65 million. This transfer falls under a
provision of the FY 91 Foreign Operations appropriation bill, which
included $700 million-worth of "drawdown" credit in weapons for
Israel. 

In addition to the F-15s, Cheney announces that $216 million worth
of R&D funding for the second stage of the Arrow anti-tactical
ballistic missile system under development in Israel has been agreed
to.  

4 June  Secretary of Defense Cheney says that Congress will soon be
notified of a sale of 20 Apache attack helicopters to the UAE. This
sale is part of a larger package, including 337 M1A1 tanks, over 160
Bradley fighting vehicles, and 800-900 High Mobility Multipurpose
Wheeled Vehicles, which the Emirates are said to be "urgently
requesting." The New York Times cites administration officials as
saying the Apache sale is "a `test case' to sound the depths of
congressional opposition [to arms sales to the region] and determine
whether the sale of armored equipment to the United Arab Emirates
could proceed, perhaps later this summer."    The official Letter of Offer and Acceptance for the
whole package was reportedly prepared, but not presented, in April. 
  

Speeches, letters, etc.                                 

22 April  Rep. Steny Hoyer and Sen. Dennis DeConcini, co-chairs of
the Commission on Security & Cooperation in Europe, send a letter to
President Bush, reportedly urging him to suggest that the members of
the Conference on Security & Cooperation in Europe be required to
exchange arms sales information among themselves on an annual
basis.  

7 May  Senators Alan Dixon, Robert Byrd, Alfonse D'Amato, Wendell
Ford and David Boren request another GAO investigation into the
Korean Fighter Program sale. In late March the Korean government
announced that it was purchasing 120 F-16 instead of 120 F/A-18
Hornets, as had been negotiated and announced in December 1989.
Contract price increases were cited as the reason for the switch. 

The GAO investigation is to cover the provisions of the sale (believed
to be the same as the Hornet sale--12 bought off the shelf, 36 kits to
be assembled in Korea, and 72 of the aircraft to be produced under
license in Korea), technical data transfers, third country participation
in the program, and the sale's impact on the US industrial base. 


9 May  Senator Pressler makes a floor speech in defense of his 1985
amendment to the Foreign Assistance Act which bans foreign aid to
Pakistan unless the President can certify to Congress that Pakistan
does not possess a nuclear weapon. The administration is trying to
delete the Pressler amendment as part of its "International Coopera-
tion Act of 1991" foreign assistance and arms sales act re-write,
although it says it intends to "continue to insist on unambiguous
specific steps by Pakistan in meeting nonproliferation standards."

Pressler (a Republican) notes that the Administration supported his
legislation when it was enacted, viewing it as a compromise that
would allow aid to Pakistan to continue. He says, "My feeling is if we
are going to adhere to the same standard, we might as well leave the
amendment as it is. ...Frankly, I do not believe that the administration
has made a persuasive argument for eliminating this provision from
the law."  

14 May  Referring to a Bush administration policy shift concerning the
Chemical Weapons Convention negotiations, Rep. Dante Fascell says
in a press release, "Setting a deadline for a worldwide chemical
weapons ban, forswearing chemical weapons use and security stocks,
fixing a realistic challenge inspection regime and urging universal
adherence to the agreement by threatening sanctions are all positive
elements of a new policy which should be able to push these
negotiations to a successful conclusion."

"Action and leadership have been needed for some time to boost the
negotiations on chemical weapons in Geneva. ...Our President, joined
by the Congress, has provided the leadership. All other leaders and
governments should follow suit to rid the world community of the
scourge and threat of chemical weapons." 

14 May  Senator Joe Biden introducing Mideast arms control
legislation [S.1046, see p. 5] outlines the recent contradictory arms
sales policy statements of Secretary of State Baker, President Bush
and Secretary Cheney before the Congress: "Secretary of Defense
Cheney expressly downplays the possibility of Middle East arms
control, emphasizing instead the need for arms sales to strengthen the
Gulf States. ...I fully support the goal of enhancing security of friendly
nations in the Middle East, particularly Israel. But the administration
seems unable to grasp that an arms suppliers' cartel can do just that
and do it better. It would appear that administration policy has
become mired in a classic battle between the Defense Department
and the State Department. As s result, we have policy gridlock. In
this case, policy gridlock means more arms sales and business as
usual--and talk of a treaty regime based on a change in human nature
itself" [referring to possible administration arms control proposal
leaked in today's New York Times].  

14 May  Rep. Howard Berman introduces companion Mideast arms
control legislation to the Biden bill, saying "We must not put any issue
above that of trying to fundamentally change the system whereby the
countries of the world sell arms."

He continues

     Over the last 3 months, I have attended hearings with a
     handful of administration witnesses to whom I have put the
     same question: What is the United States doing to constrain
     the sales of weapons around the world?

     From these witnesses I have received answers ranging from
     indications that "it is a high priority," to "it is on the agen-
     da," to "it is not even a desirable outcome in and of itself."
     The lack of agreement has led me to conclude that it is
     necessary to employ some means to focus the administration
     on, at the very least, examining its options.  

14 May  On the floor of the Senate, Sen. Dale Bumpers says: "I have
never understood this nation's policy of arms transfers to just every
Tom, Dick, and Harry who happens to be willing to starve his people
to buy them. There are Third World nations that spend two-thirds of
their total income on weapons, nations where people are starving,
and in most instances those nations have virtually no ability to defend
themselves anyway." Bumpers says the Gulf states "do not have a
prayer" to defend against the much larger armies of their neighbors. 

Concerning the proposed "phase II" weapons sale to Saudi Arabia,
Bumpers says: "I am not going to be for any such sale as that [he
describes it as "$20 billion worth of new sophisticated American
technology"] right now. These arms sales oftentimes are nothing but
ego kicks for tinhorn dictators. Almost invariably--and particularly
considering the volatility of that region--we wind up just as we did in
this war, with our own weapons being used against us. Our weapons
always last longer than our friendships do."

He does not think the Biden-sponsored legislation goes far enough in
addressing the problem. "In my opinion, the times call for Draconian
action on arms sales. ...If this President wants to go down in history
I will give him a suggestion on how to do it. It is very simply to make
a very dramatic and bold move in recognition of the times which call
for boldness, and to convene all the arms manufacturing and
exporting nations in the world and say, `We have to stop this
madness.'"  

14 May  Senator Claiborne Pell commends the administration for its
renunciation of any use of chemical weapons and the pledge to
destroy all US stocks of those weapons. "These decisions," he says,
"put the United States in the forefront of nations seeking a multi-
lateral agreement to banish chemical weapons from the face of the
Earth."  

15 May  Rep. Tony Hall introduces a Joint Resolution to control
conventional arms transfers to Third World countries [see p. 6]. "My
goal in introducing this bill," he says, "is to stress that controlling
conventional arms transfers is essential to lasting peace in any region.
Further, in the poorest of the poor countries, controlling arms sales
can mean an immunization program over a stockpile of weapons.
Security needs must be met. However, human needs must also be
met. An international regime for controlling conventional arms would
allow a qualitative and quantitative review of which arms are needed
where and for what."  

22 May  While introducing legislation punishing those companies
which contribute to the nuclear weapons programs of developing
countries, Sen. John Glenn says: "Nuclear weapons pose a particular-
ly grave threat to the security of the United States and its allies--it
deserves a higher status on our list of priorities than it has achieved
in the past. The effects of nuclear weapons are quite unlike the
effects of mustard gas. The consequences of a nuclear war are quite
different from the consequences of a chemical war. ...We need to
protect the special place of nuclear nonproliferation on the public
agenda." He notes that some people criticize Congressionally-
mandated sanctions bills as "unilateralism," but takes issue with that,
calling it instead "leadership."

30 May  Seventeen Senators--organized by Jim Jeffords, Charles
Grassley, Brock Adams and Tom Daschle--send a letter to President
Bush urging him to "take the lead in negotiating a temporary,
multilateral moratorium on sales or transfers of conventional, chemical
and nuclear armaments and their related technologies to the Middle
East," during which time a longer-term solution can be sought. They
go on to say, "We understand the many complexities involved in
working to control the transfer of armaments in the Middle East.
However, we also appreciate the dangers of letting this opportunity
slip by as a new arms race begins." 

Notes from some relevant hearings                   

30 April  The Investigations Subcommittee of the House Armed
Services Committee holds its first hearing on the efforts of the
military in support of drug interdiction operations, focussing on
the administration's FY 92 budget request of $1.6 billion for those
operations. Stephen Duncan, the Department of Defense Coordinator
for Drug Enforcement Policy and Support testifies.

The President's National Drug Control Strategy was formulated, he
notes, to disrupt the supply of drugs at their source, chiefly Bolivia,
Colombia and Peru. In this vein, "Department of Defense personnel
have continued to provide training and operational support to host-
nation counternarcotics forces throughout the Andean region. Total
military aid has grown substantially in recent years. In 1988,
Colombia, Bolivia and Peru received approximately $3 million; in 1990
the total was $114.5 million."

In addition, he notes, President Bush invoked provisions of the FAA
which authorized the drawdown of up to $65 million of DoD stocks
for Colombia:  "The equipment which was provided at the end of FY
1989 and during FY 1990 included aircraft, boats, trucks, spare
parts, ammunition, medical supplies, communications gear and other
equipment and training."

1 May  The House Ways and Means, Oversight Subcommittee holds
its second hearing on the effectiveness of US export control
laws, with Charles Duelfer (Director, Center for Defense Trade, State
Department), Kenneth Cutshaw (Deputy Assistant Secretary of
Commerce), Richard Newcomb (Director, Office of foreign Assets
Control, Treasury Department), Carol Hallett (Commissioner of
Customs), Pete Stark (Member of Congress) and Jim Moody (Member
of Congress) testify.  

Rep. Stark testifies on export controls vis a vis nuclear proliferation,
which he says "is now the leading threat to US national security." He
notes that nine countries (US, USSR, UK, France, China, Israel, India,
Pakistan and South Africa) are now considered "to have the bomb."
"A host of others," he says, "including Iraq, Iran, Brazil, Argentina,
North Korea and Algeria have nuclear weapons programs at various
stages of development. If we don't take steps today to better control
the spread of nuclear equipment, material and technology, we could
wake up a decade from now and find ourselves in a world with every
terrorist nation brandishing the ultimate weapon."

As an addendum to his testimony, Stark includes case studies of
foreign firms which have reportedly assisted in nuclear weapons
programs in developing countries, particularly noting the role played
by German firms and multinationals in nuclear proliferation activities.
"The Germans certainly haven't been the only contributors to
proliferation, just one of the worst. One of the basic problems I see
is that many of our European allies rely far more on exports for
economic growth. Exports make up over a third of Germany's GNP,
more than half of Holland's, but less than a tenth of the United
States'. Europe has always fought us on export controls--they fought
us on COCOM and they will fight us here. In the aftermath of the war
in the Gulf, we may temporarily have their attention on this issue, but
I am not optimistic for the long run."

He details his proposed legislation, the Nuclear Non-Proliferation
Enforcement Act (H.R. 830), for dealing with companies that aid in
nuclear weapons proliferation projects. It would impose sanctions on
firms that sell unsafeguarded nuclear equipment, materials or
technology; these sanctions would include a prohibition on exporting
goods to the United States. 

2 May  The International Development, Finance, Trade and Monetary
Policy Subcommittee of the House Banking Committee holds a second
hearing on the use of ExIm Bank credits to guarantee commer-
cial sales of weapons to NATO-member countries, Australia, Israel,
Japan and any other country that the President determines would be
in "the national interest." Charles Duelfer (Director of the State
Department's Center for Defense Trade), Allan Mendelowitz (Director
of International Trade, Energy and Finance Issues, National Security
and International Affairs Division, GAO), Eugene Lawson (First Vice
President and Vice Chairman, Export-Import Bank) and David Obey
(Chairman, House Subcommittee on Foreign Operations, Appropria-
tions Committee) testify.

Obey states that if the ExIm becomes involved again in financing arms
sales, he (his subcommittee) will consider blocking all FY 92 funding
for it entirely, saying he would oppose giving "one dime" to it. Obey
says the "best way to kill off a bad idea is to kill it off before it gets
born." [In fact, his subcommittee reportedly did block ExIm funding
of arms sales in their report-out. See p. 5]

Lawson, in his prepared statement cites two mitigating reasons for
the proposed policy: "First, financial support is currently being
provided for defense exports from other countries by their export
credit agencies. As a result, US defense firms are being placed at a
competitive disadvantage. ...Second, the declining defense budget
could seriously erode our defense industrial base. ... A viable US
defense industry is critical to our ability to respond to the challenge
of future crises. At the present time, the survival of a number of
important programs, the M1A2 Abrams Main Battle Tank, UH-60
Blackhawk helicopters, and Hawk missiles, is already tied to foreign
sales."

As to why the ExIm Bank is the appropriate vehicle for further arms
financing, he says: "the program will be operated according to the
same criteria the Bank already uses under all of its current programs.
The Bank will be making the same kinds of commercial and financial
decisions, by mainly applying creditworthiness standards to determine
if reasonable assurance of repayment exists. Moreover, we expect to
operate the program through the same commercial lending institutions
which are already participating in our other programs.

Duelfer stresses that "this is a competitiveness program and not
another form of security assistance. ....[W]e do not intend to create
new markets or fuel regional arms races. This is a very limited
guarantee program. Its goal is not to make it easier for another
country to buy weapons, it is intended to make it easier for a US firm
to sell in a pre-existing market."

He notes that any ExIm financed sale would still have to go through
the State Department licensing approval process, based on whether
the sale is "consistent with legitimate commercial and defense needs
of the country concerned"; whether or not it undermines regional
stability; and whether there are adverse proliferation effects.  

"To preserve programmatic flexibility," he notes, "ExIm Bank would
also be able to support the commercial sale of defense exports to
other creditworthy countries if two requirements were met--(1) that
ExIm Bank certifies that there is a reasonable assurance of repayment
and (2) that the President finds that such support is in the national
interest and notifies Congress."

He explains the procedure that would be followed thusly: "Before a
company can begin an effort to compete for an overseas commercial
sale, it must receive US government approval through the State
Department. Once a company has a marketing license and is
competing for a sale, it may explore with ExIm Bank the prospects for
obtaining a preliminary commitment for credit guarantees for that
sale.. ...The policy considerations which would typically be evaluated
at the State Department would include regional stability, technology
transfer, proliferation, and human rights. Next, ExIm Bank will review
whether ExIm Bank support for the proposed transaction will
materially improve the applicant's prospects for winning the sale." 
"ExIm Bank will make the final judgment to approve a guarantee by
conducting its detailed financial and economic analysis to determine
if reasonable assurance of repayment exists to avoid undue losses on
the financing provided."

Mendelowitz notes that the US market share of defense exports
actually grew from 18% of the world total in 1980 to 29% in 1988.
The market overall is drying up, he points out, and therefore becom-
ing more competitive. He attributes this to decreased post- Cold War
defense budgets and the overcapacities of many defense industries.
Mendelowitz lays out the other factors which contribute to competi-
tiveness in the arms market, and notes that "In cases where financing
is a major factor, there already are financing resources available to US
military exporters, including government programs and commercial
financing. ...Two major DoD programs include (1) the Foreign Military
Sales Financing Program and (2) the Military Assistance Program.
...Besides DoD programs, commercial financing is also available for
and by the defense industry."

He further states that under the Administration's draft legislation pre-
sented to Congress on 7 March 91 (but still not yet introduced), in
addition to the national security waiver which would permit sales to
any developing country, "Israel, Greece, Turkey and Iceland would
become eligible for ExIm Bank-financed military exports without a
specific presidential determination. Under the current law, countries
that are not on a 1966 Internal Revenue Service list of developed
countries are not eligible for military export financing."  

He cites the likelihood of a "crowding out" of non-military exports by
weapons sales: The ExIm bank officials have said this would not be
a problem because the OMB has "included an additional $1 billion in
the ExIm Bank's requested fiscal year 1992 budget authority to be
used for military exports. However, there is no mention of an
`additional $1 billion in the President's budget or the proposed
legislation, only that there is a $1-billion limit on the amount that the
ExIm Bank can spend on financing military exports. In fact, the ExIm
Bank's requested budget authority is less in fiscal year 1992 than it
was in fiscal year 1991...."

He sums up by saying that the FMS Financing program is a more
appropriate and already existing vehicle for enhancing US competi-
tiveness in weapons sales. "Based on our review we do not believe
a case has been made to demonstrate the need for the proposed
legislation."

10 May  Near Eastern and South Asian affairs subcommittee of the
Senate Foreign Relations Committee holds a hearing on the role of
the UN in Mideast arms control. Eugene Rostow, Richard Murphy,
Max Kampelman, Edward Luck, and David Scheffer testify.

Because of its past equation of zionism with racism, Kampelman feels
the UN "has disqualified itself from playing a crucial role in the peace
process as regards Israel." But he adds, "where the UN can play a
constructive role is in halting the arms race." In the next 18 months
or two years, he says, the UN should organize to halt arms sales
while negotiations ensue to see if "something constructive" [long
term] can be achieved in that area. He also cites missile disarmament
as a confidence-inspiring measure that can be undertaken in the near
term.

Murphy, just back from Cairo, agrees with Kampelman that "restrain-
ing the arms race is an essential." It is, he says, "grotesquely out of
control." 

Luck, noting the difficulties in containing the Mideast arms race, says:
"in my view, the chances for success, as well as the risks of doing
nothing, have never been higher. To the legion of skeptics, we should
ask: if not now, then when? ...The experience of the Gulf War,
moreover, suggests that the revolution in `conventional' weapons
technology will insure that the next war in the Middle East will be
quick, costly, and terribly destructive, with major advantages accruing
to the side which strikes first. Besides, neither Israelis nor Arabs can
afford the enormous investment entailed in another cycle in their high-
tech arms race, given their staggering human, development, and
ecological needs. ...A large influx of armaments to any country in the
region could upset the current military balance and spark a wholesale
scramble for the latest in new technology and firepower."

"The UN Security Council now offers a promising mechanism for
opening discussions among the major suppliers, which happen to be
its five Permanent members. It is charged under the Charter with the
task of "regulating armaments," its decisions can be made binding on
all UN member states, and it is already imminently involved in
implementing arms limitations in the Persian Gulf. Whatever qualms
one might have about the UN's ability to act impartially on political
issues in the Middle East, it could play a useful role in helping to build
a consensus for arms restraint and then overseeing its implementa-
tion."

The panel agrees that confidence-building measures are prerequisite
to bilateral dialogue. Kampelman suggests water and other natural
resource issues and arms control issues, especially ballistic missile
disarmament, are areas where agreement could be reached. Rostow
brings up the nuclear-weapons free zone proposals put forward by
Egypt and Israel, saying "We [the US government] have supported
those as well as we could." Along these lines, Luck notes a recent UN
General Assembly report on the prospects for such a zone, saying it
was very well received by all nations of the UN.

Rostow notes the extraordinary nature of UN Resolution 687 (cease
fire) which says "certain countries are not fit to have certain weap-
ons." It should, he feels, be taken as far as it can be taken. Luck
calling 687 the "mother of all Resolutions," says that it is not yet
clear how well, or if, it can be implemented financially and technical-
ly: "I think it is a great experiment, but one that's not going to be
without some controversy." He does not think that this model is likely
to be easily repeated, and so it should not be relied upon as the sole
method of arms control in the region.

15 May  The Investigations Subcommittee of the House Armed
Services Committee holds a hearing on the implementation of the
Economic Adjustment Program. [The "Defense Economic Adjust-
ment Act" (H.R. 441) was passed last November and enacted into
public law. According to one of its authors, it "is aimed at crafting a
workable program to ease the transition of communities, businesses,
workers and professionals to civilian production as our base and force
structures gear down from the Cold War."]  

A Congressional panel testifies first, with Rep. Richard Gephardt, Rep.
Sam Gejdenson, Rep. Mary Rose Oakar, Rep. Ted Weiss and Rep.
Ronald Machtley. In the administration panel, Sean O'Keefe (Comp-
troller, DoD), Christopher Jehn (Assistant Secretary for Force
Management and Personnel, DoD) and Robert Rauner (Director, Office
of Economic Adjustment, DoD) testify.

The Congressional panel criticizes the DoD for not dispersing the
$200 million authorized and appropriated in the FY 91 DoD Authoriz-
ation legislation and more generally for not doing enough to ease the
effects of diminishing weapons procurement and base closures.  The
Pentagon panel criticizes Congress for authorizing conversion monies
out of the defense budget, feeling that their Office of Economic
Adjustment's efforts at "community-based economic adjustment" are
sufficient. 

17 May  The Subcommittee on Projection Forces and Regional
Defense, Senate Armed Services Committee holds a hearing on
current Marine Corps capabilities to respond to potential
conflicts in the Third World. Marine Corps Commandant Alfred
Gray provides testimony.

He lays out a rather euphemistic panoply of future Marine Corps
missions: "peacetime presence, disaster relief, humanitarian assis-
tance, crisis response, and conflict resolution."  "The emergence of
a multi-polar world, with its increasing potential for regional instability
and conflict, will have a significant impact on military planning and
force structure requirements. ...[R]ecent US military operations in
Panama, Liberia, Somalia, and the Persian Gulf have shown clearly
that the end of the Cold War has not resulted in a peaceful world. In
the emerging multi-polar world, economic and political competition
will foster conditions that can create regional instabilities and ignite
concurrent, but not necessarily related, crises."

"In this new international environment, we must continue to recognize
our responsibility to foster those conditions which promote world
stability and peace. Accordingly, we should replace our policy of
containment with one of global stability. This policy would provide the
foundation for us to maintain the favorable political, economic, and
security environment needed to achieve our worldwide objectives."

21 May  Secretary of Defense Dick Cheney appears before the
Defense Subcommittee of Senate Appropriations Committee.
He reiterates his view (expressed in testimony earlier this Spring) that
"It is not US arms sales that have fueled instability in the Middle East.
I think some kind of arms control policy, if we can develop it, would
probably be good thing. But it has to be evaluated." He reiterates that
the Administration is not considering an all out ban on arms sales.
Sen. Bumpers notes that the administration's arms sales policy seems
at odds with public opinion on the matter.  

22 May  The Senate Foreign Relations Committee hosts Ronald
Lehman (Director, ACDA), Stephen Ledogar (US Ambassador to the
Conference on Disarmament) and General Walter Busbee (Program
Manager for Chemical Demilitarization) to testify on the status of
various chemical arms control and disarmament negotiations.

Lehman's statement outlines the recent policy shift by the Bush
administration which should encourage progress at the multilateral
negotiations in Geneva in banning the possession of chemical
weapons through the completion of the Chemical Weapons Conven-
tion (CWC). The policy shift renounced any use of chemical weapons
after the treaty enters into force and, therefore, renounced the
previously-planned retention of a small stock of chemical agent until
all countries "chemical-weapons capable" joined the treaty. The policy
statement further called for completion of the CWC within one year,
with the recommendation that the negotiators work in continuous
session until that time and suggested a program of carrots and sticks
to encourage entry into the regime and to punish those who don't or
those who violate their obligations. According to Lehman, the US will
also make a new verification proposal for sites suspected of producing
or storing chemical weapons.

He also outlines the two US-Soviet bilateral agreements on chemical
arms control. The first, a Memorandum of Understanding signed in
September 1989 was "designed to promote greater openness about
the CW capabilities of the two sides and to provide practical experi-
ence that would facilitate implementation of a multilateral ban." He
notes that a series of 10 challenge inspections will be permitted by
the two countries during phase II of the MoU (phase II enters into
force when it looks as though the completion of the CWC is two or
three months away from completion). The second bilateral agreement
is the June 1990 bilateral agreement on the destruction of most of
the two countries' CW stocks before the CWC enters into force. The
verification and agent destruction arrangements of the agreement are
still being worked out.

Ledogar says, "1990 was a disappointing year in the multilateral CW
negotiations. ...[N]egotiators were looking over their shoulders to see
whether, indeed, chemical weapons would be used, and with what
effect, and with what response." He is optimistic now that the long-
running US internal CW policy review was completed in April,
resulting in the policy shift described above by Lehman. He presented
those policy changes to the opening plenary session in May, and they
were, he says, "very well received." He also notes the very good and
frank US-Soviet cooperation in working toward conclusion and
implementation of the CWC.

22 May  The Near Eastern and Southern Asia Subcommittee of
Senate Foreign Relations holds a second hearing on post War
Middle East policies, focussing on the Arab-Israeli conflict and
prospects for resolution. Lucius Battle (former Assistant Secretary
of State), Sam Lewis (United States Institute for Peace), George Ball
(former Secretary of State), Martin Indyk (Washington Institute for
Near East Peace), and Helena Cobban testify. 

22-23 May  Secretary Baker testifies before the House and
Senate Appropriations, Foreign Operations Subcommittees on
the foreign assistance request for FY 92. In his testimony he
plugs the administration's foreign aid overhaul provisions which would
end Congressional earmarking of monies. The FY 92 request for dis-
cretionary budget authority is $13.1 billion--a 6.5% increase over the
$12.3 billion Congress appropriated for FY 91. Of that total, $4.65
billion is in FMF credits; $3.24 billion in economic support fund; $1.3
billion in development assistance; $800 million for Development Fund
for Africa; $400 million for Central and Eastern Europe; and $160
million is for the Multilateral Assistance Initiative for the Philippines.
 
Responding to a complaint by House For Operations Subcommittee
Chairman David Obey of the lack of arms control initiative by the
administration, Baker announces the imminent presentation of a
Mideast arms control package. "I would be very surprised if you're
not reasonably pleased with the administration's initiative regarding
weapons of mass-destruction. ...You may not be as pleased with
respect to the administration's initiative regarding conventional
weapons," he candidly predicts.

23 May  The Near Eastern and Southern Asia Subcommittee of
Senate Foreign Relations holds a third hearing on post War Middle
East policies. Anthony Cordesman, Dov Zakheim (System Planning
Corporation), Geoffrey Kemp (Carnegie Endowment), Brad Gordon
(ACDA) and Barry Blechman (Defense Forecast Inc.) provide expert
testimony on regional security issues.

30 May  The Defense, Foreign Policy and Space Task Force of the
Budget Committee holds a hearing on the feasibility and desirabil-
ity of linking US foreign aid to an agreement to accede to the
Chemical Weapons Convention. Richard Durbin presides.

James Leonard, former US ambassador to the CWC negotiations, is
very supportive of the initiative. He notes that such linkage will not
impress all states. [It should, however, impress Egypt, Israel, Greece,
Jordan, Morocco and Turkey--all recipients of significant US foreign
aid.] He suggests going further, saying: "One inducement that you
might consider would have the US Government endeavor to build a
consensus among nations that export arms that they will not export
weapons of any sort to a country that does not join the Chemical
Weapons Convention. An embargo on arms exports to non-parties
would complement a cut-off in economic aid and might be even more
effective. It would affect wealthy developing countries such as oil
exporters that do not need or receive foreign aid [Iran, Iraq, Saudi
Arabia, UAE]. And its impact would be felt directly by military leaders
who may not be especially concerned about a loss of economic
assistance."

Legislation pending in the 102nd Congress               

State Department Authorization Act for FY 92        S.579

Summary: In the Senate Foreign Relations Subcommittee on Interna-
tional Operations Sen. John Kerry sponsored language that would
direct the administration to create a Mideast arms transfer policy.
During the writing of a report analyzing the impact of sales and the
feasibility of controlling sales multilaterally as mandated by the
legislation, and for at least 60 days after the submission of the report
to the Foreign Relations and Foreign Affairs Committees, no sales of
major military equipment (with the exception of surface to air
missiles) would be approved by Congress.

What US policy ought to do: The language reaffirms some aspects of
existing legislation: a provision that US only sell weapons to be used
for defensive purposes; that transfers be made only after an "arms
sales impact" assessment has been made; that sales only be made to
nations that have recognized the right of all countries in the region to
exist and that support and/or are engaged in the peace process
through direct negotiations (This would currently exclude arms sales
to all countries but Egypt and Israel.); and that the US not introduce
newly developed, advanced weapons into the region and seek an
agreement with other major suppliers to do the same.

Presidential report: Until at least 60 days after the president prepares
and submits a report which assesses the "current and projected
military threat to key allies and friendly states in the Middle East";
types and quantities of weapons most appropriate to maintaining the
deterrent capability of our allies and friends; a feasibility check of
"regional security arrangements that could control and reduce threats
to stability and security," such as missile-free, chemical weapons-free
and nuclear-free zones; and an assessment of the other major supplier
nations' actions to restrict arms transfers to the region.
Controlled equipment: Air-to-air, air-to-surface and surface-to-surface
missiles and rockets; turbine-powered military aircraft; attack
helicopters and main battle tanks.

This legislation contains straight-forward, useful and not overly
burdensome reporting requirements, which the administration should
be preparing already, indeed many of them are already required by the
AECA and FAA, or can be requested by Congress at the time of
notification of a sale, but are currently being prepared (see box).


Foreign Assistance Authorization Act for FY 92H.R.2508

At least three things of interest are contained in this bill. First, is
the policy-setting directives concerning the appropriation of foreign 
economic and military aid. Second, is the Foreign Affairs Committee 
language to induce an arms transfer control policy through the 
imposition of a moratorium, and third is the amending of the Foreign 
Assistance Act and the Arms Export Control Act to streamline and 
rationalize the arms transfer process. 

The latter is based in part at least on administration-supplied language
presented to Congress in the "International Cooperation Act of 1991"
(S.956/H.R.1792). As part of its overhaul of the AECA, the adminis-
tration proposes raising the threshold for Congressional notification
from $14 million worth of "major military equipment" to $25 million
or more; from $50 million worth of "other" equipment and services
to $75 million and from $200 million worth of construction and
design services to $300 million. In the full Committee mark-up, a
threshold of $18 million for major military equipment was reportedly
agreed upon.

The congressional notification period remains 30 days for all but
NATO member-countries (includes Greece and Turkey) and "major
non-NATO allies"--defined in the legislation currently as Australia,
Egypt, Israel, Japan and South Korea. For these countries, only a
fifteen-day notification period is required.

The administration-supplied language would also insert an "economic
impact statement," outlining "the economic benefits or disadvantages
to the United States of the proposed sale," to the list of reports that
the Foreign Affairs and Foreign Relations committees could request
with notification (see box above).  

The administration-proposed legislation also contains a "Special
Waiver Authority" which says that the President can ignore any
provisions of the relevant arms transfer legislation if doing so is
deemed to be "important to the national interests of the United
States." Reportedly this provision was not included in the Foreign
Affairs mark-up of the Foreign Assistance Authorization.

                  ***

On 23 May, the Committee agreed to language supplied by Chairman
Fascell which added a section on "Arms Transfers Restraint Policy for
The Middle East and Persian Gulf Region" to the bill. In part, the law
would allow only for the transfer of weapons to those nations of the
region that "have expressed willingness or are actively engaged in the
process of negotiating peace agreements of the Arab-Israeli dispute
through direct negotiations." It further directs the administration to
seek a meeting of the Permanent Five UN Security Council members
for the purpose of halting the proliferation of unconventional weapons
and missiles; slowing and limiting the proliferation of conventional
weapons; promoting regional arms control and maintaining the military
balance of the region through arms reductions. It also invokes, upon
passage, a moratorium on arms transfers until such time as the
administration presents to the foreign affairs and relations committees
"a report stating that the president has determined that there has
been agreement by another major arms supplier nation on or after
May 21, 1991, to transfer any major military equipment to any nation
in the Middle East and persian Gulf region" and a report on the
administration's plan "for leading the world community in establishing
a multilateral regime to restrict transfers of conventional and
unconventional arms to the middle East."

The law includes a waiver for the United States to break out of the
moratorium in times of emergency, but makes no similar provision for
other arms suppliers to the region. Similarly, it allows the US to make
one-for-one replacements of inoperable equipment, but doesn't seem
to permit other suppliers this right without causing grounds for the
cessation of the moratorium.

The legislation calls for many other reports, among them feasibility
studies on the utility of European and/or US-Soviet arms control
agreements for the Middle East and reports documenting "all transfers
of conventional and unconventional arms to the middle East over the
previous year and the previous 5 years, including sources, types and
acquirers of weapons."

Status: H.R.2508 was reported out of the Foreign Affairs Committee
on 5 June and goes to the House floor during the week of 10 June. 
At the time of this publication, the Committee print of the mark-up is
not yet available.

Foreign Assistance Appropriation Act for FY 92                                  
      no H.R. number yet

Reported out of subcommittee on 29 May, the money bill reportedly
adopted major elements the Foreign Affairs arms transfer moratorium
language in its mark-up of the $15.3 billion foreign assistance
appropriation. Also included in the bill, $4.1 billion in FMF grants plus
$404 million in FMF soft loans. Possibly in deference to administra-
tion desires, the subcommittee earmarked monies for only two of the
traditional big foreign aid recipients: Israel will receive its usual $1.8
billion in FMF grants and Egypt will receive its usual $1.3 billion. In
other cases, FMF funding ceilings were set, rather than monies
actually earmarked: a $350 million ceiling for Greece, $500 million for
Turkey (thus maintaining the 7:10 aid ratio), $100 million for Portugal
and $100 million for the Philippines. 

Language contained in the Foreign Aid bill would prohibit the use of
ExIm Bank funds to finance arms sales.  

Status: Full Appropriations Committee consideration and mark-up of
the Foreign Aid bill is scheduled to begin on Wednesday 12 June.

Arms Suppliers Regime Act of 1991                    S.1046/H.R.2315

Sponsors: Biden, Kassebaum, Mitchell/Berman

This bill directs the Secretary of State to make a "good faith effort"
to convene a conference of major arms selling states, specifically
naming the US, USSR, China, UK and France, the purpose of which
is to establish an arms suppliers' regime to halt flow of unconven-
tional arms (including ballistic missiles) and "limit and control the
proliferation of advanced conventional arms" to the Mideast (with the
Mideast broadly defined in the legislation). The regime would
comprise an information exchange and formal and informal arrange-
ments.

In order to halt the further flow of unconventional arms, the legisla-
tion directs the administration to seek agreement and adherence by
all cartel members to the supply restrictions embodied in the MTCR,
Enhanced Proliferation Control Initiative and the guidelines of the
Nuclear Suppliers Group.

To control proliferation of advanced conventional arms (defined as
"modern heavy tanks and artillery, cruise missiles, anti-satellite
weapons, high-performance jet aircraft, stealth technologies, naval
combatant vessels, and related military technologies"), the legislation
would have the regime develop information-sharing practices
regarding potential sales to the Mideast; examine the feasibility of
applying COCOM, MTCR and other types of restrictions to arms sales,
and conduct a feasibility study of "strict controls on the proliferation
of advanced conventional arms to the Middle East."

The bottom line of this bill is to require certification to the HFAC and
SFRC (by the administration) within 60 days of enactment of the
legislation that a "good faith effort" was made by the administration
to arrange a suppliers' control regime. If this is not done, no sales
licenses will be approved until such time as it is done. 

Status: The bill was introduced into the Senate and the House on 14
May and referred to the Foreign Relations and Foreign Affairs
Committees. In the Senate it is likely to be incorporated into the
Senate Foreign Assistance Authorization bill or perhaps into the full
committee mark-up of the State Department Authorization bill. The
House version of this was melded into the Foreign Affairs Commit-
tee's marked-up Foreign Assistance legislation (above).

Sponsor: Tony Hall            H.J. 256

This resolution calls on the US government to: confirm a commitment
to self-restraint of arms transfers to developing countries; develop
immediately with the other permanent members of the Security
Council qualitative and quantitative guidelines for controlling arms
transfers; seek to begin discussions among all major arms sellers and
arms buyers with a view to limiting transfers; establish a transparency
mechanism and some means of verifying transfers and enforcing
controls; encourage arms vendors to consider several factors before
making a sale; and promote both positive and negative trade,
economic and technical sanctions to encourage countries to abide by
controls on arms transfers. The resolution also would require the
President to report to Congress every six months on actions taken in
accordance with this resolution.

Status: Introduced on 15 May and referred to the Committee on
Foreign Affairs.

A bill to restrict the Export-Import Bank's role 
 in foreign military sales    H.R.2175

Sponsor: Gerald Kleczka

H.R.2175 prohibits ExIm involvement in military sales unless the
weapons are necessary to combat a direct threat to the US or for
anti-narcotics purposes when the state under discussion has faithfully
complied with end-use restrictions and does not engage in "a
consistent pattern of gross human rights violations."

The legislation also calls for a study by the GAO of the scope of ExIm
financing (which countries were granted financing and which were
turned down), compliance with the human rights and end use
restriction clauses above, and an assessment of the "theoretical and
practical, political and economic, pros and cons of such [ExIm Bank]
participation." 

Status: Introduced on 1 May and referred to the Committee on
Banking, Finance and Urban Affairs.

Omnibus Nuclear Proliferation Control Act of 1991S.1126

Sponsor: John Glenn

This bill would ban imports into the US and government procurement
from firms that the President determines are trafficking in goods or
technology that would assist in the acquisition of either nuclear
explosive devices or unsafeguarded special nuclear materials. The
sanction triggering process would involve: (1) presidential determina-
tion of complicity; (2) 180-day period for consultation with govern-
ment having jurisdiction over company found to be aiding nuclear 
proliferation; and (3) 90-day extension if corrective measures are 
being taken by foreign government. Exceptions for producers of "essential
defense-related commodities" and a waiver are included. 

The bill would amend the AECA to make sure that only nations that
"are in full compliance with their international treaty commitments
with respect to nuclear nonproliferation" would be eligible to receive
US arms. It would also amend the ACDA Act to designate nuclear
nonproliferation as a special area of emphasis. It would require an
annual report, modeled after the annual "Soviet non-compliance
report," assessing the level of compliance of other countries to their
non-proliferation commitments. It would require a second report
assessing the past effectiveness of US diplomatic overtures in
furthering nuclear non-proliferation objectives.

Status:  Introduced on 22 May and referred to the Foreign Relations
Committee.

Private Defense Export Financing Act of 1991                 S.1173

Sponsor: Joseph Lieberman

This bill, introduced to serve as an alternative to ExIm Bank involve-
ment in financing arms sales, would create a Defense Export
Financing Board, comprising the Chairman of the ExIm Bank, and the
Secretaries of State, Defense, Commerce and Treasury or their
designees. Two of the five members would represent a decision-
making quorum. The Board would determine whether a guarantee
should be granted, and the program will be administered by the
Center for Defense Trade (the State Department licensing office) Any
recipient would have to meet creditworthiness standards, be friendly
to US interests and not be in violation of human rights standards of
acceptability. The Defense Financing Board would be required to
provide notification of its financing, concurrently with the regular
congressional notification period. 

The bill calls for $65 million to be appropriated for guaranteeing
defense export loans.

Status: S.1173 was introduced and referred to the Foreign Relations
Committee on 23 May.

Recent Congressional publications                   

Arms Control in Asia and US Interests in the Region (hearings before
the Subcommittee on Asian and Pacific Affairs, House Foreign Affairs
Committee, 31 January and 13 March 1990) USGPO: 1991 

El Salvador: Flow of US Military Aid (GAO/NSIAD-91-151) 27 March
91, 15 pp

Export Controls: US Controls on Trade with Selected Middle Eastern
Countries (GAO/NSIAD-91-193FS) 12 April 91, 31 pp

Global Arms Trade (US Congress, Office of Technology Assessment)
USGPO: June 1991, 176 pp

Korea: North-South Nuclear Issues (hearing before the Subcommittee
on Asian and Pacific Affairs, House Foreign Affairs Committee, 25
July 1990) USGPO: 1991

Middle East Arms Control and Related Issues (Congressional Research
Service, US Library of Congress) CRS: 1 May 1991

Nuclear Nonproliferation Policy Issues in the 102d Congress (Warren
H. Donnelly and Zachary S. Davis, Congressional Research Service,
US Library of Congress) CRS: 2 April 1991

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