Arms Sales Monitor #4-5, June-July 1991

FAS Homepage | Arms Sales | Arm Sales Monitor | Index | Search | Join FAS



(Issue No. 4-5 , June-July 1991)




Congressional notification 11 June  It is reported that along
with the formal notification of the UAE Apache sale (see side bar),
Congress is given "pre-notification" of the proposed sale of 8
Apache helicopters to Bahrain. 

17 June  The Speaker of the House receives a letter from the
Assistant Secretary of State for Legislative Affairs transmitting
notification of a proposed license for the export of major defense
equipment sold commercially under a contract in the amount of
$14,000,000 or more to Saudi Arabia. The notification is made
pursuant to section 2776(c) of the AECA.  

3 July  The Department of Defense notifies Congress of a proposed 
license to Hughes Aircraft Company's Ground Systems Group for 6 major 
command and control centers to be sold to Saudi Arabia at an estimated 
cost of $837 million. This contract is for the completion of the 
"Peace Shield" project, which was originally awarded to Boeing in 
1985 and cancelled last January because of failures to meet scheduled 
deadlines.   

10 July  The Speaker of the House receives a letter from the
DSAA on a proposed Letter of Offer and Acceptance to Greece
for defense articles and services estimated to cost $176 million. 


10 July  The DSAA notifies Congress of the Army's proposed
lease of defense articles to Bolivia under section 2796(a) of the
AECA.  

10 July  A letter on the proposed enhancement and/or upgrade of
sensitive technology to Kuwait is transmitted to the House Foreign
Affairs Committee.  

11 July  The Pentagon notifies Congress of a pending Letter of
Offer to Saudi Arabia for $350 million worth of contractor support 
services from Boeing for its AWACS and KE-F3 refueling tankers. The 
contract reportedly involves maintenance, personnel training and 
staffing.  

11 July  Notification is sent to Congress of a proposed sale to
Saudi Arabia of 2,300 High Mobility Multi-Purpose Wheeled Vehicles
produced by LTV and worth approximately $123 million.  
 

Speeches, letters, etc.      

3 June  Rep. Lee Hamilton et al. receive a response to their letter
of 4 April to President Bush requesting that he declare a unilateral 
pause in arms sales in order to encourage multilateral restraint. 
The response, by National Security Advisor Brent Scowcroft, says that 
the president's recent initiative demonstrates his commitment to supplier
guidelines on arms transfers to the Middle East. However, Scowcroft goes 
on to say the United States will not halt all weapons transfers. "If 
any lesson can be drawn from the success of Operations Desert Shield 
and Desert Storm, it is that multilateral cooperation is essential to 
success in this arena. To depart from our collaborative approach and 
announce a unilateral pause could be seen as turning our backs on our
allies for the sake of a political gesture."  

19 June  In a speech at the National Defense University, Sam
Nunn, Chairman of the Senate Armed Services Committee, proposes that the 
United States help the Soviet Union convert its military industry to the
production of civilian goods.  

20 June  Sen. Byrd sends a letter to President Bush regarding the
content of PL 102-28 (Desert Storm Supplemental budget bill)
Section 109, which he says clearly states a prohibition on "the use
of any funds for arms sales `to any country that has made a
commitment to contribute resources to defray any of the costs of
Operation Desert Storm and that has not fulfilled its commitment.'"
He continues, "It has been brought to my attention that, despite the 
clarity of Section 109, arms sales to countries such as
Saudi Arabia, with an outstanding balance of $5.246 billion, and
Korea, which has paid only 42 percent of its pledge, continue to
be processed by the Departments of Defense and State." He writes
that these countries are more than two months past due in paying.
"It is my sincere hope that we will collect all of the outstanding 
pledges," Byrd says, "but, until that happens, I will continue to 
oppose any sale to a delinquent country." 

21 June  The second annual report on offsets in military exports 
is submitted by the Office of Management and Budget to the Speaker 
of the House and to the President of the Senate. The report was 
mandated by the FY89 defense authorization act.

25 June  Sen. William Roth sends a letter to President Bush saying 
that he has found the new Czech government receptive to the idea
of limiting arms sales to the Mideast, even though they are honoring 
commitments made previously by the Communist government. 


27 June  Speaking on the floor of the Senate of the sale of Apache
helicopters to the UAE, Sen. Alan Cranston says: "The issue, the
larger issue, is the very credibility of the administrations's call 
for arms control in the Middle East. ...Obviously the $682 million 
sale to the UAE will not help set a forbearing precedent as we sit 
at the table to urge our fellow arms suppliers to forbear. It will 
not help restrain the arms race. It will not help solidify a well-
articulated US policy in the region...."  

27 June  Sen. William Roth makes a floor speech, supporting the
need for greater transparency in arms sales. He calls on the US
government to use its unprecedented influence in "halting the
unmonitored and unrestrained trading in conventional weaponry
that has been a part of the old world order for the past several
decades ... before another Iraq is allowed to develop."

"Institution of an arms registry and introduction of increased
transparency have several other advantages recommending them,"
he says, continuing: "The cooperative and consultative spirit 
engendered by multilateral collaboration to develop a registry 
would carry over into other efforts in controlling the arms market. 
The international pressures fostered by participation in such a 
registry would exert positive regulatory influence on traders in 
the international market. And, the increased attention brought to 
arms transactions would assist efforts to muster increased political 
will to bring the arms trade under control."   

Notes from some hearings                                   
6 June  Under Secretary of State for International Security Affairs
Reginald Bartholomew and Assistant Secretary of Defense for
International Security Affairs Henry Rowen testify before the Senate
Foreign Relations Committee on President Bush's recently-proposed
(13 and 29 May) Mideast arms control proposals.

In his opening comments, Chairman Pell notes that while substantial
progress has truly been made in the area of chemical arms control,
the record on conventional arms control is less promising. The
President's 29 May initiative in this regard represents "more loopholes
than guidelines," he says.

"We will not seek a regime that halts arms transfer, but we have
proposed one that will seek to ensure that sales that do take place are
responsible," Bartholomew says. "That is why, Mr. Chairman, it is in
no way a contradiction for the United States to be simultaneously
seeking an arms transfer regime with the other major suppliers and
continuing to supply arms needed by peaceful states to defend
themselves against aggressors." He outlines the President's plan,
which he says is both comprehensive and realistic, in that it "sets out
goals that nations in the region could now achieve":

*  Concerning conventional weapons, the administration wants to
prevent arming beyond legitimate self-defense needs and prevent
destabilizing arms build-ups. "To implement this regime," he says,
"the suppliers would commit to observe a general code of responsible 
arms transfers; to avoid destabilizing transfers; and to establish 
effective domestic export controls on arms or dual-use technology to be
transferred." The president's guidelines would include a mechanism 
for consultations among the major suppliers. They also call for an 
annual report on arms transfers by those suppliers.

*  On ballistic missiles, the plan calls for a halt to further 
acquisition, production and testing, with the eventual destruction of 
all missiles in the region. 

*  On nuclear weapons, the proposal calls for a halt in the production of
nuclear-weapon grade material and for all states of the region to sign 
onto the Nuclear Non-Proliferation Treaty and to permit full-scope IAEA
safeguards.

*  On chemical weapons, it calls for all states in the Mideast to
commit to becoming an original party to the Chemical Weapons
Convention and to institute confidence-building measures now.

*  On biological weapons, it calls for all states to accede to the 
Biological Weapons Convention and to adopt its confidence-building
measures.

Rowen reiterates the administration's contention that American
arms transfers did not contribute to the Iraqi aggression; 
indeed, he says the very military weakness of the Gulf states 
encouraged Iraq to attack. He also says that arms control is 
not an end unto itself, but is only sought if it leads to
enhanced stability and security. He then asserts that a strategic
imbalance between Iraq, Iran and the Gulf Cooperation Council
states remains, implying that only further arms transfers can 
rectify the situation. 

During the Q&A Pell asks what a "general code of responsible arms
transfers" might mean. Bartholomew responds that the introduction
of new types of equipment, which increase power projection
capabilities, burden economies or political systems, escalate the arms
race or create a major imbalance of armaments are all examples of
irresponsible arms transfers. The "legitimate national defense needs"
of a country are the touchstone in making this determination, he says.
The point of the Paris meeting of the Permanent Five is to come to a
common definition of a "responsible arms transfer policy," Bartholo-
mew says. Such a policy is determined not simply by the hardware
transferred, but the quantity of weapons, the circumstances surround-
ing the transfer, and whether the arms are required for legitimate
defense needs. Biden asks if there are any weapons that are intrinsi-
cally destabilizing and irresponsible, to which Bartholomew answers
yes--ballistic missiles and unconventional weapons. 

On alleged Chinese missile sales to Syria, Bartholomew says that
China pledged in 1989 that--apart from the CSS-2 missiles it had
transferred to Saudi Arabia in 1988--it had no plans to sell "medium
range missiles to the Middle East." "We're hoping that will continue
to be the case." He notes that a sale of the M-9 missile to Syria
would invoke the Congressionally-mandated sanctions contained in
the FY91 DoD Authorization bill.

Pell asks about arms sales planned by the administration in the near
future. Bartholomew says the Javits list is still a fair representation of
what's possible. Pell: Arms sales in the tens of billions of dollars are
planned while we discourage others from selling!? Isn't that hypocriti-
cal? How will the other four [of the Permanent Five at the July 8 Paris
meeting] react to that sort of proposal? Bartholomew says he thinks
they "will understand that what we are talking about is not a total
cessation of weapons sales." Pell wonders what the US would say if
one of the other four wants to sell lots of weapons? Bartholomew
says that if they are transparent like us, and responsible like us, it
would not be up to the US to approve or disapprove. [He earlier said
that the administration is still working out notification requirements
for their responsible arms transfer proposal, but veto rights are not
part of the proposal as currently envisioned.]

Bartholomew doesn't see any tension between arms control and arms
sales: "We have always viewed arms control as fully integrated" into
our arms sales policy. 

11 June  Under Secretary of State for International Security Affairs
Reginald Bartholomew and Lt-Gen Teddy Allen, Director of the
Defense Security Assistance Administration, testify before the Foreign
Operations Subcommittee of the Senate Appropriations Committee. 

In his opening statement, chairman Leahy expresses disappointment
with the administration's FY92 foreign aid request for security
assistance, saying that it does not reflect the numerous and profound
changes that have occurred in the past year. He says:

   The President speaks of controlling the proliferation of
   weapons, but you propose to give away or sell even more
   weapons than last year. We barely finished withdrawing
   American troops from the Gulf and the Secretary of
   Defense is out there promising more and better weapons to
   everyone. ... Military assistance is supposed to serve our
   national security interests. The challenge of the coming
   decades is the creation of new export markets for our
   goods and strengthening our economic competitiveness in
   a fiercely competitive world. Why should we not shift
   foreign aid resources towards programs aimed at stimula-
   ting economic growth in the developing countries and
   [promoting] US exports? Would that not be more respon-
   sive to the real security threat to the United States?

Bartholomew's prepared testimony discusses at some length the
continuing importance of the NATO alliance to US security interests,
saying that the alliance's infrastructure played a critical role in the war
against Iraq. He also notes the recently-agreed formation of a
multinational rapid reaction force by NATO members. Vis  vis NATO
Bartholomew says: "the role of security assistance is clear. In order
for several of our allies to have the confidence and capability to make
a full contribution to the alliance, they need our help."

Concerning the administration's regional arms control and anti-
proliferation proposals, Bartholomew says: "Security assistance will
play a key role here as well, in assuring that friends are confident
enough in their own ability to defend themselves that they will accept
the kinds of limits we are exploring. ... Security assistance--in
conjunction with non-proliferation and arms control measures--allows
us to assure stable balances that reduce tensions and the threat of
war." 

He lists several types of threats that our allies might need to be armed
to deal with: "purely internal threats, brought on by political and
economic inequalities"; transnational threats such as drug trafficking
and environmental degradation [water wars? weapons to reduce C02
emissions?]; and "anachronistic Marxist revolutions, led by those who
have not yet recognized the ideological bankruptcy of communism."

Allen explains that the Iraqi war has prevented the previously planned
reduction in security assistance. "What the shape of the post-war
world will be is as yet unclear. But we know that we will continue to
need these kinds of politico-military relationships with our friends and
allies, relationships that cannot be fostered without military assis-
tance. ...At this time it is clearly too soon to be able comfortably to
substantially restructure the FMF [grant aid] program."

Contained in the administration's funding request is $275 million in
FY92 obligation authority for the special defense acquisition fund. The
SDAF allow the pentagon to purchase excess defense articles before
actual sales commitments have been made by foreign purchasers.
Allen says: "SDAF proved its value during Operations Desert Storm
and Shield, enabling DOD to provide articles such as AIM-9M missiles,
TOW anti-armor systems, night vision goggles, and tactical radios to
our coalition partners without detriment to DOD's ability to build up
its own forces. The SDAF is also supporting counter-narcotics
efforts."

[For specific funding levels contained in the administration request,
see Bartholomew testimony reported in ASM "March 1991" entry at
14 March.]

12 June  Secretary of State Baker testifies before the Senate
Appropriations Subcommittee on Commerce, Justice and State on the
administration's FY92 State Department funding request. During the
hearing he testifies that the government has no proof that China has
delivered M-9 "or any other surface-to-surface missiles" to Syria.


12 June  The Permanent Subcommittee on Investigations of the
Senate Governmental Affairs Committee holds a hearing on "Trade in
Conventional Weapons: The International Arms Bazaar." The minority
staff, at the behest of Sen. William Roth, prepared with the help of
the CRS and the GAO an on-going data base on the defense indus-
tries and the national laws and policies regarding arms sales of 32
countries. A printout entitled "Arms Among Nations" is provided at
the hearing. 

The main themes of the hearing are the dangers posed by excess
armaments freed up by the end of the cold war; the need to convert
and assist defense conversion projects around the world; the need for
multilateral efforts to gain control on the arms trade; and an endorse-
ment of transparency in the arms trade.

Sen. Sam Nunn in his opening commentary says: "Just as the threat
of narco-terrorism has been increased by easy access to assault
weapons, ammunition, and explosives, so too, the threat of regional
conflicts has been increased by easy access to tanks, missiles, and
artillery. One need only look to the recent conflict in the Persian Gulf
for proof of this latter point. ...If we have learned any lesson from the
Gulf conflict, it should be that the community of nations must begin
acting in a multilateral fashion to stem the flow of conventional arms
before the next Saddam Hussein can become a threat to regional
peace and stability. In this regard, the epochal changes currently
taking place in Eastern Europe present both a tremendous opportunity
and a tremendous challenge. As democratization proceeds throughout
the nations of the former Soviet bloc, one hopes these countries will
follow the example of Czechoslovakia, which, despite its announced
sale of tanks to Syria, has declared its intention to phase itself out of
the arms trade."

Four panels provide testimony: one on the findings of the subcom-
mittee's research contained in the data base (basically that there are
a growing number of defense industries world-wide and a resultant
over capacity in production); two panels focus on the arms industry
and conversion efforts underway in Czechoslovakia; and one on the
views of a former high-ranking government arms control official (Paul
Warnke) and a spokesman for the arms industry (Joel Johnson) on US
arms transfer control policy.
Throughout his testimony Warnke makes several policy recommen-
dations. He:

*  urges the administration to seek--in collaboration with other major
arms exporters--a moratorium on arms sales to regions of tension. (He
advocates a short term unilateral pause in sales while multilateral
negotiations are conducted and security needs of the regions are
assessed.);
*  proposes a 50 percent reduction in the value of arms sales to the
Middle East in the next few years;

*  suggests that an agreement to restrict the sale of those types of
weapons covered by the Conventional Forces in Europe (CFE) treaty
would be useful and timely;

*  suggests forbidding the transfer and sale of those weapons which
must be removed from Europe as a result of the CFE treaty;

*  supports the idea of a UN registry of arms transfers over $14
million in value. He further suggests that UN Peacekeeping Forces
could facilitate this process and make it more reliable by monitoring
arms shipments;

*  recommends extending unemployment compensation for laid-off
defense workers in the United States;

*  urges provision of additional money to the Small Business Adminis-
tration to help some laid-off defense workers create new businesses;

*  urges the government to offer some tax or other incentives to
defense contractors and other "training bodies" (e.g. universities,
technical schools) to offer worker retraining courses, and to defense
industry workers to take such courses; 

*  would increase the money allocated for Congressionally-mandated
economic adjustment programs from $200 million in FY91 to $300
million in FY92; and

*  urges the Government Affairs Committee to conduct separate
hearings on economic adjustment/conversion issues.

Warnke opposes the proposed EXIM Bank financing of arms sales,
saying: "If the way chosen to help the American defense industry in
a period of declining military spending is to underwrite the purchase
of American weapons sales abroad, then the United States is destined
to undermine the New World Order it is trying to create."

Concerning declining business for the defense industry, he advocates
more money and creative thinking in working toward a conversion of
defense industry to civilian production. "We must find ways to assist
those who are economically distressed during the transition, without
adding to global instability."

In his testimony, Joel Johnson notes that defense budgets in the
Pacific Rim countries are increasing and predicts that "over the
remainder of the decade we may well see [American] exports of
defense equipment climb as a percentage of production to over 20 or
even 25% of output of conventional weapons. This is both because
domestic purchases will drop to somewhere around $60-70 billion,
and because international purchases will hold constant or rise slightly
to the $12-13 billion level."

Concerning controls on arms sales, he says: "The defense industry's
basic plea is that our political system at least ask the right questions
with respect to potential arms sales. When a possible sale involves a
cash paying customer and a defense product which is available from
sources other than the US, then the right question is not `do we want
that country to have the system?' Rather the right question is `are
there foreign policy reasons that dictate we would rather have the
country source its system from Europe or the USSR or country X than
from the United States?'"

12 June  Gen. Norman Schwarzkopf testifies before both the Senate
and House Armed Services Committees on the war and the Mideast
in general. On arms sales to the region he says: "Right now arms are
being sold all over the place and they're going to continue to be sold
over there. Every one of those nations has the ability to purchase
what they need, and they are going to purchase what they need. It's
going to be available to them on the open market. ...If we don't
participate someone else is going to do it anyhow," which he says
only leads to a loss of influence over the use of those weapons. 

On Mideast peace, Schwarzkopf says, "I think that the single biggest
thing that's going to contribute to peace and stability in the Middle
East...[is] the solution of the Palestinian problem. ...Once that
problem is in some way effectively solved to the satisfaction of the
parties involved, then I think you will very quickly see many, many
more accommodations."

According to Schwarzkopf, Iran is the all around winner from the last
Gulf war. He says that "the Iranians and the Iraqis have hated each
other for 1,000 years--they're going to keep right on hating each
other--and it was only a matter of time before the Iran-Iraq war were
to re-erupt. The Iraqis held the upper hand beforehand, and now the
Iraqis no longer do. So the Iranians have gained tremendously from
the fact that the Iraqi military machine has been crushed." Iran has
also "gained in having a better relationship with the Western world as
a result of the position they took [in the war]."  However, he says, "I
think Iran is a threat that everyone, us and the Arab world, are going
to have to keep a careful eye on, as they rearm, as their economy
recovers, and that sort of thing." 

13 June  The Strategic Forces and Nuclear Deterrence Subcommittee
of the SASC holds a hearing on US chemical arms control policies and
the status of the multilateral negotiation aimed at banning chemical
weapons world-wide. William Inglee, Deputy Assistant Secretary of
Defense for Conventional Forces and Arms Control Policy, and Susan
Livingstone, Assistant Secretary of the Army (Installations, Logistics
and Environment) testify.  

27 June  The Arms Control and Europe/Middle East Subcommittees
of the House Foreign Affairs Committee convene a hearing on the
administration's arms transfer policies in general and specifically on
the Apache helicopter sale to the UAE. Richard Clarke, Assistant
Secretary of State for Politico-Military Affairs and Frederick Smith,
Director of the Office of Near Eastern and South Asian Affairs of the
Office of the Secretary of Defense testify.

On the purpose of the President's Mideast arms control plan, Clarke
says: "We must prevent another Iraq. The Iraqi regime had procured
6000 main battle tanks. That force was clearly in excess of Iraq's
legitimate self-defense requirements and constituted an offensive
threat in being. No international regime existed to note this build-up
and address its threatening implications. [The IISS Military Balance
noted this build up annually.]

Arms transfers "are not inherently good or evil," Clarke says, nor
should they be an end unto themselves. In this vein he cites the role
the Patriot transfer to Israel played in keeping that country out of the
recent war and the role of arms transfers in the Camp David process.
According to Clarke, other goals of arms transfers are: deterring
aggression, aiding the integration of small militaries in a region (e.g.,
Gulf Cooperation Council forces), reducing the likelihood of the United
States having to intervene again, aiding interoperability of forces if
the US does intervene, enhancing US influence, and enhancing the
confidence of our friends in their defense capabilities so that they
might engage in arms control.

Clarke says that the United States wears "the white hat" in the
Mideast: "It is not US arms transfers that have been the problem in
the Middle East's becoming over-armed and falling into wars. Patriots
to Israel, AWACS to Saudi Arabia, M-60s to Egypt, F-16s to Bahrain,
I-Hawks to the UAE. They have not been the problem. No Middle East
state with which the United States had an on-going military relation-
ship at the time has been an aggressor. It was not Kuwait that
invaded Iraq. It was not Tunisia that attacked Libya. We have such
relations with Morocco, Tunisia, Egypt, Israel, Jordan, Kuwait,
Bahrain, Saudi Arabia, and Oman. They are not the problem. I believe
the problems of aggression have come from the governments of
Libya, Syria, Iraq, Iran. Thus, US arms transfers are not the problem."

He says that "halting arms transfers to the region while we seek an
international system to regulate them is a self-defeating meat cleaver
approach." The US "would diminish its ability to influence the
outcome we seek. ...We do not, never have, stopped our behavior
while we negotiate."

Fascell starts the Q&A off by saying that the hearing is not so much
about the 20 helicopters as it is about arms sales generally to the
Middle East. He reiterates that the committee is not suggesting
American "unilateralism," but rather thinks that if the challenge to
restrain arms sales is thrown out by the US it will be taken up by the
other major suppliers.

Clarke says that the Committee's arms sales moratorium legislation
(see box p.5) is meaningless, as each of the other members of the
Permanent Five has already concluded a major arms deal since the
war. Thus, the legislation's conditions for lifting the moratorium have
already been met, and so he doesn't see much point in pursing it. 

When pressed for information on specific countries' sales, he demurs,
saying that on classification grounds and in order not to prejudice the
upcoming discussions among the Permanent Five he can't talk openly
about it. "In a closed session, or if you'd like to talk after the hearing,
I'll be glad to detail for you arms transfers that have occurred since
the end of the war," he says. Several members of the Committee are
interested and so they agree to meet after the hearing. Clarke does
say that the other major suppliers are "tripping over themselves" to
sell weapons in the Mideast/Persian Gulf. Rep. Berman asks whether
they are tripping over themselves or "tripping over us?" To which
Clarke again notes, "we're supplying the good guys. ...The US does
not transfer arms willy-nilly to any regime that seeks them. It provides
them to responsible, friendly, and peace-seeking governments. ...We
say `no' alot." Clarke continues, "I said `no' in the Persian Gulf just
last week" to a request for a weapons purchase. He says that these
rejections remain quiet though, so as not to strain bilateral relations.
Of proposed or requested US sales, Clarke says, "This committee
sees the tip of the iceberg."

Rep. Mel Levine requests a classified report on efforts by other major
suppliers to sell weapons to the region after the war and on examples
of US restraint--times when the US has said no. 

Levine also notes that the administration always claims there is
another supplier on the horizon. He asks about efforts by the
government to use its influence to get US allies and the other major
suppliers to not make certain sales. "What have we said recently to
our allies and others about where we think they should be" in regard
to arms sales policies to the region? Levine cites a recent Washington
Post article in which a spokesman for the Chinese government
justifies Chinese missile sales as being "little different from US
weapons sales to the Middle East." They seem to "turning the
argument around on us, while you blame others, and the argument
becomes somewhat circular."

To claims that today's friend may be tomorrow's adversary, Clarke
says "The United States learned something from arms transfers to
Iran"--namely to ask how stable is the recipient. Iran "shows what
happens when US pulls the plug," including contract support, spares,
maintenance. "The Iranian air force was virtually grounded within a
year," he asserts. As far as claims that Jordan trained Iraq in the use
of American-supplied Kuwaiti weapons, he says that US intelligence
has "thoroughly investigated those claims and found no proof of
Jordanian involvement with Iraq."

Asked about the status of the Saudi joint security review, he says
that the Pentagon team has just completed its threat and force
structure assessments, but hasn't yet looked at procurement issues.
He and Smith say that the procurement section won't be done until
the end of the summer at the earliest, and so the absolute soonest
Congress could expect pre-notification of a "major Saudi arms sale"
is September.

12 July  A House Armed Services Committee panel on the structure
of the US industrial base holds a hearing in Los Angeles to examine
the effects of the declining defense budget on communities with large
armament manufacturing concerns.  

Legislation pending in the 102nd Congress         

The many bills which have been introduced into this Congress
concerning Middle East arms control and arms transfer controls have
been considered and/or melded into the foreign aid bills in both
chambers of Congress. Each chamber has to draft and pass an
authorizing bill and an appropriating bill for foreign assitance pro-
grams. Once this is done, a conference committee of members from
both the House and the Senate must work out any differences in their
bills, then each chamber must vote on and pass the identical bill. If
this happens, they will go to the President for his signature, which
will render them into law. In the past several years no foreign aid
authorization bill has passed out of the Congress, but an appropria-
tions bill always does--otherwise no money would be available for
foreign programs. Thus, policy guidance provisions contained in the
foreign aid appropriations bill are the most noteworthy, as they are
the most likely to be enacted into law.

Below, the House of Representatives' foreign aid authorization and
appropriations bills are discussed, as well as the Senate's foreign aid
authorizing legislation. In the Senate, the State Department authoriza-
tion bill also contains some relevant language and is also discussed. 
International Cooperation Act of 1991H.R.2508

[Amends the Foreign Assistance Act and the Arms Export Control
Act, renaming the latter as the Defense Trade and Export Control Act,
and authorizes appropriations for foreign assistance for FY92 and 93.]

Summary and status: This bill was passed in the House on 20 June
by a vote of 274-138. It authorizes $25.4 billion for foreign assis-
tance programs for two-years: $12.4 billion for FY92 and $13 billion
for FY93. As the Washington Post summarily noted, the bill includes
"a total of $10.7 billion in [military and economic] aid to Israel and
Egypt and $860 million for child survival and basic education in third
world countries." 

Highlights of the bill:

* Military grant assistance to Israel remains the same as usual ($1.8
billion) in FY92, but is raised to $2 billion in FY93. In addition, $700
million in special draw-down authority from DoD stocks is reiterated.
Military grant assistance to Egypt remains at $1.3 billion for each
FY92 and 93.

* Mandates regular Congressional notification before military
equipment captured from Iraq in the war may be transferred to other
countries in the Middle East.

* Mandates that not later than 31 January each year, the President
submit a report analyzing among other things the Mideast arms
balance, taking account of cumulative arms transfers made by all
suppliers to the region during the previous calendar year; how US
goals were furthered by US arms sales to the region; an assessment
of the threats which US arms transfers were intended to offset; and
the ability of the recipient country to operate, maintain, secure and
bear the cost of the weapons and services transferred.

* Calls for a Presidential report not more than 60 days after this
legislation is enacted that determines whether the Kuwaiti govern-
ment has stopped its seemingly arbitrary arrests, imprisonment,
torture and other human rights and democratic abuses. The findings
of the required report will be used to determine US arms sales and
defense policies vis  vis Kuwait.

* Cuts off all military aid to Jordan for FY92 unless the President
certifies that such aid is in the United States' national security inter-
ests and certifies that Jordan is in compliance with the embargo of
Iraq, has acknowledged Israel's right to exist and has agreed to direct
bilateral negotiations with Israel.
* Preserves the Pressler Amendment, suspending aid to Pakistan
unless the President can certify that Pakistan is not working toward
or in possession of a nuclear weapon. 

* Prohibits US aid and military sales to India unless the President
certifies that India has not developed any more nuclear explosive
devices after 30 September 91. The President must also certify that
the proposed assistance program "will reduce significantly the risk
that India will develop additional nuclear explosive devices."

* Bans military assistance to Guatemala for FY92 and 93, except for
monies provided to a fund for ceasefire monitoring and demobilization.
Similarly, FMS and commercial sales of any weapons or ammunition
or any armed aircraft to Guatemala are prohibited.

* Increases dollar reporting thresholds in the AECA to $18 million for
major military equipment, to $75 million for other equipment and
services, and to $300 million for construction and design.

*  Calls for enhanced quarterly reports by the administration on
coproduction and licensed US arms production in foreign countries,
including: all Memoranda of Understanding; descriptions of restric-
tions on third party transfers of foreign-manufactured articles; and
sanctions for violations of third party export restrictions.

Foreign Operations, Export Financing and Related Program
Appropriation Act for FY92                    H.R.2621

[This is the FY92 foreign assistance appropriation bill.]

Summary and status: This bill passed easily (301 to 102) and with
very little debate on 19 June, with the contentious substantive issues
being debated on the floor in the authorization bill. H.R.2621 provides
$4.1 billion in FMF grants--down $500 million from the administration
request. That $500 million is being programmed to development and
population aid. The bill also provides for $404 million in FMF
concessional (soft) loans. 

The bill would delete $27 million in military aid to Jordan unless the
President certifies that aid to that country is in the US national
interest, that Jordan is facilitating peace with Israel, and that Jordan
is in compliance with UN sanctions against Iraq.
H.R.2621 also makes the appropriation for the EXIM Bank conditional
that "none of the funds made available, and none of the credits and
grants limited, under this paragraph may be made available to support
in any manner whatsoever the financing of the sale of any item
included in or covered by any category of the United States Munitions
List."
International Security and Economic 
  Cooperation Act of 1991       S.1435

[Amends the Foreign Assistance Act and the Arms Export Control Act
and makes foreign assistance authorization for FY92 and 93.]

Summary and status: S.1435 was reported favorably out of the
Senate Foreign Relations Committee by a 17-2 vote (Helms and Hatch
voting against) on 11 June. It is scheduled to go to the floor on 24
July, where an amendment to strengthen the arms moratorium
provision is likely to be offered.

Parts of S.1046, "The Arms Suppliers Regime Act of 1991," were
adopted into this authorization act (contained in sections 641 through
650). However, the original language of S.1046 was diluted to non-
binding language encouraging the President to negotiate and commit
the United States to participate in a multilateral moratorium. Accord-
ing to the report accompanying the committee approved legislation,
"The committee does not regard this language as binding the United
States unilaterally, but views it as the strongest possible legislative
endorsement of a multilateral moratorium on advanced conventional
arms sales to the Middle East."

The bill would also mandate several reports to Congress: assessing
current and future threats to US allies in the Mideast; laying out the
US plan for "leading the world community in establishing a multi-
lateral arms supplier regime"; analyzing the military balance; and
listing arms transfers to the region during the preceding five years.
The committee report goes on to say, "In order to prevent the cutoff
of all arms sales to the region through fulfilling the reporting require-
ment of this section, the committee expects the administration to
submit a report to Congress which should contain the elements
outlined in President Bush's May 30 speech and Under Secretary
Bartholomew's June 5 [sic] testimony before this committee." So
apparently all that this bill legislates is that the administration send a
copy of President Bush's May speech to the appropriate committees!

Section 647 of the legislation "prohibits the sale or export of any
defense article or service to the Middle East 60 days after the
enactment of this act, unless the President has certified in writing
that the Secretary of State has made good-faith efforts to convene
the conference described" and has submitted the report on the plan
of action mandated. The next paragraph reads that "The committee
believes that good-faith efforts have already been made to convene
the conference." (!)

The bill also recommends that the United States "expand the
geographical scope of the arms suppliers regime to other regions." 

Language also concerning a cessation of arms sales to the Mideast
which had previously been introduced into the State Department
Authorization bill by Senators Brown and Kerry is also apparent in this
bill, but also in watered down form. The language remains as criteria
to be applied to any arms sale to the region. These standards are: 1)
reliable assurances must exist that proposed transfers meet existing
US law; 2) the transfer must not contribute to an arms race, increase
the possibility of outbreak of conflict, or prejudice arms control
arrangements; 3) the President must take steps to ensure that any
recipient "affirm the right of all regional nations to exist" and support
or be engaged in direct peace negotiations; and 4) no new and
destabilizing technologies should be transferred into the region.

Foreign Relations Authorization ActS.1433

[Contains the State Department authorizations for FY92 and 93.]

Status and summary: S.1433 was reported favorably out of the
Senate Foreign Relations Committee on 12 June. It, too, is scheduled
to go to the floor for a vote on 24 July. 

During full SFRC mark-up, Sen. Dodd proposed an amendment which
would authorize the Secretary of State to provide up to $1 billion per
year in loan guarantees for commercial military sales to NATO,
Australia, New Zealand, Japan, Israel. The Committee adopted the amendment with an 11-5 vote, with Biden, Dodd, (John)
Kerry, Robb, Helms, Lugar, Pressler, Murkowski, McConnell, Hatch
and Pell voting for and Sarbanes, Simon, Sanford, Moynihan and
Brown voting against. 

The legislation amends the AECA to add a subsection authorizing the
President to extend loan guarantees in support of commercial military
sales to NATO member countries, Japan, Australia, New Zealand and
Israel. The SFRC bill also authorizes $63.5 million in each FY92 and
93 to provide for up to $1 billion in guarantees a year. According to
the legislation, US companies will apply for financing guarantees to
the Secretary of State. The Secretary is authorized to make arrange-
ments with the EXIM Bank and other government agencies to process
these applications.   

The bill also contains the watered-down Kerry language on standards
which should be applied to arms sales (same as above).
Recent congressional publications                          
Arms Among Nations (prepared by Minority Staff of Permanent Sub-
committee on Investigations, Senate Governmental Affairs Commit-
tee) June 1991, 91 pp.

Fiscal Year 1992 Arms Control Impact Statements (prepared by the
US Arms Control and Disarmament Agency for the Committees on
Foreign Affairs and Foreign Relations) USGPO: 1991.  

El Salvador: Military Assistance has Helped Counter But Not Over-
come the Insurgency (GAO/NSIAD-91-166) 23 April 91, 34 pp.

Export Controls: US Controls on Trade with Selected Middle Eastern
Countries (GAO/NSIAD-91-193FS) 12 April 91, 37 pp.

Foreign Operations, Export Financing, and Related Programs Appropri-
ations for 1992, Part 3 (Middle East Panel; Egyptian Military Debt
Forgiveness; Secretary of the Treasury; AID Administrator; Central
and Latin America; Pakistan and Asia) and Part 5 (Testimony of
Members of Congress and Other Interested Individuals and Organiza-
tions) USGPO: 1991.

Israel: US Military Aid Spent In-Country (GAO/NSIAD-91-169) 23
May 91, 13 pp.

Proposed Sales to Saudi Arabia in Association with the Conduct of
Operation Desert Storm (hearings of the Arms Control and Europe and
the Middle East Subcommittees of the House Foreign Affairs
Committee on 31 October 90) USGPO: 1991.

Strengthening the Export Licensing System (First Report by the House
Committee on Government Operations, July 2, 1991) USGPO: 1991,
56 pp.

Arms Sales Monitor
Federation of American Scientists
307 Massachusetts Avenue, NE
Washington DC  20002
(202) 546-3300

FAS Homepage | Arms Sales | Arm Sales Monitor | Index | Search | Join FAS