(Issue No. 6 , August 1991)
Sales in progress 11 July Effective today, the US government will deny all new applications for munitions export licenses and suspend all previously-approved licenses to Yugoslavia. The action is taken pursuant to sections 38 and 42 of the AECA and the relevant ITAR provisions.
19 July The Pentagon notifies Congress of a proposed Letter of Offer and Acceptance by the US Air Force to Morocco for 20 F-16A/B fighter jets at a total cost of $250 million. The price includes spare engines. 19 July The DSAA notifies Congress of a proposed $150 million sale of 119 V-300 Commando armored, wheeled vehicles to Oman. 19 July Congress is notified of a proposed $146 million "Product Improvement Program" for 12 of Egypt's Hawk anti-aircraft missiles. 19 July A $34 million sale of 12 Amphibious Assault Vehicles is announced to Brazil. The price includes machine guns and "as- sociated equipment." 19 July The Pentagon notifies Congress that under a commercial license, it proposes to export "major defense equipment" to Mexico. 23 July The DSAA sends Congress notification of a proposed $2.8 billion sale of 80 F-16C/D fighter aircraft, along with 12 spare engines, and support equipment to be coproduced in Turkey by Turkish Aerospace Industries. The Turkish government wants to produce 160 new aircraft on top of the 160 licensed in 1984, but a lack of FMS financing limits this to 80 for now. Funding for the remaining 80 will be sought from allies in the Persian Gulf. 23 July Lt Gen Teddy Allen, the Director of the DSAA, transmits the price and availability report for the fiscal quarter ending 30 June 1991 to the Speaker of the House and the Chairman of the Senate Foreign Relations Committee. 25 July The DSAA notifies Congress of the administration's intention to export $365 million worth of cluster bombs, components for laser- guided bombs, and air-to-air missiles to Saudi Arabia. Specifically, the sale would include 2,000 MK-84 bombs, 2,100 CBU-87 cluster bomb munitions, 770 AIM-7M Sparrow air-to-air missiles. 25 July The DSAA notifies Congress that Taiwan is to receive from the US Navy--through its Coordination Council for North American Affairs--97 SM-1 Standard Missiles, training missiles and materials and logistics support to be used aboard Taiwanese ships. The contract value is $55 million. 30 July The Speaker of the House receives a letter from the DSAA transmitting notification of a proposed sale of defense articles and services to Greece by the Navy. 30 July The State Department certifies to Congress that the Peruvian government passes the human rights criteria of the International Narcotics Control Act of 1990, and therefore should be permitted to receive $35 million in US military aid. The State Department's annual report on human rights released last January found that Peruvian "security forces personnel were responsible for widespread and egregious human rights violations." Based on this, the Appropriations and Foreign Aid/Relations Committees have held the aid hostage to an improvement in the situation. The military aid to Peru is part of the Bush administration's war on coca production and includes military hardware and training by a "small number" of US military personnel. 1 August Sen. Robert Byrd, Chairman of the Senate Appropriations Committee, sends another letter to President Bush concerning arms sales to countries delinquent in paying their dues for the Gulf War. "Despite the prohibition of Section 109 [of the Desert Shield/Storm supplemental budget bill enacted into law in April 1991], the State Department has notified the Congress of three arms sales to Saudi Arabia, a country with an outstanding commitment of $4.11 billion, and a sale to Korea, which has paid only 62 percent of its pledge. Of course the thirty day notification period for these sales will expire while the Congress is out of session in August." Byrd quotes the State Department's legal advisor as follows from a letter to the GAO: "We do not interpret Section 109 as prohibiting Executive branch officials from taking steps that might be preliminary to the making of sales, so long as no agreements are actually concluded." Byrd asks Bush then to "refrain from finalizing the four pending sales and any future sales to Korea or Saudi Arabia until they have paid their entire pledges." 2 August Rep. Mel Levine organizes a letter to President Bush which 76 colleagues co-sign, expressing their intention to oppose any major weapons sale to Saudi Arabia. Such a sale has been anticipated in Congress for nearly a year. "We cannot support arms transfers to Saudi Arabia which contravene the need for arms control in the Gulf. ... If we have learned anything from the mistakes of the past, it is that friendship and stability cannot be bought with arms." The signatories also express dismay over reports that Saudi aid to Syria for its participation in the war is now being used to buy weapons from the Soviet Union, North Korea and Czechoslovakia. 8 August Rep. David Obey, Chairman of the Foreign Operations Subcommittee of the House Appropriations Committee, sends a letter to Secretary of State Baker, requesting a halt to the proposed coproduction/sale of 80 F-16s to Turkey. The 15 day congressional notification that NATO nations require passed on the 6th of August, but the LOA has not yet been signed. "I am informing you of my objection to proceeding with this sale at this time," Obey writes to Baker. Obey opposes the deal because it would require a commitment of some $500 million in FMS grant aid over the next five years on top of the annual $420 million Turkey already habitually receives in FMS through the foreign aid bill. He objects to such "cash flow" funding agreements, where the State Department enters into long-term commitments and expects Congress to approve the promised money at anticipated levels. 8 August The thirty day congressional notification for the sale, co- assembly and licensed co-production of 120 F-16 aircraft to South Korea expires, clearing the way for the agreement to be formalized. 29 August Maj Gen Dennis Malcor, the Pentagon official in charge of the Saudi security assistance survey, is reportedly briefing State and Defense department officials on his findings today. He is expected to brief members of Congress soon after the August recess. 30 August The South Korean Ministry of Defense announces today that it has signed a final MOU with the US government on the KFP, agreeing to pay more than $5 billion for the 120 F-16s. The delivery/ production schedule is: 12 off-the-shelf, 1994-5; 36 co-assembled, 1995-7; and 72 co-produced, 1997-9. Notes from some hearings 25 July Under Secretary of State Reginald Bartholomew appears before the HFAC Subcommittees on Arms Control and Europe/Middle East. He testifies on the meeting of the Permanent Five in Paris on 7-8 July to discuss Middle East arms control. Bartholomew on Paris Talks The US entered the talks, Bartholomew says, seeking development of guidelines on arms transfers and "a mechanism of consultation, notification, and information exchange to back it up." Noting the difficulty that lies ahead in achieving agreement--among both arms exporters and importers--he says: "We must coax certain suppliers that normally export arms in secrecy to open their process to the transparency of consultations, notifications and information exchange. ... We are asking nations in the region that normally underpin their security on secrecy and arms stockpiling to accept an approach that demands transparency and arms limitations. Saudi Arabia has demonstrated its leadership by boldly declaring a willingness to abide by any restrictions on weapons of mass destruction and to be among the first nations to dispose of weapons so restricted." [Does that mean Saudi Arabia has some mass-destruction weapons?!] Conspicu- ously absent is a statement about Saudi compliance with limitations on conventional arms. Rhetorical progress on controlling the spread of unconventional weapons was more apparent: "The Five," he says, "agreed to develop and maintain stringent national and, as far as possible, harmonized controls to restrict the transfer of weapons of mass destruction and related material." The group further endorsed a freeze on the testing and acquisition of ballistic missiles, with a view to their total elimination; encouraged all countries in the region to open all nuclear activities to IAEA inspection; supported a ban on importing "nuclear weapons-usable material"; and encouraged all states in the region "to become parties to the CW Convention as soon as it is concluded (in 1992)." A follow up meeting of experts will be held in September, with another plenary to take place in London on 17-18 October. ...On US Arms Sales Again expressing administration opposition to a halt in arms sales, Bartholomew says American sales are not the problem. "Let me assure you that the United States never had a `business as usual' attitude with regard to its security assistance programs. We only approve transfers that are consistent with our export licensing process, contribute to regional defensive capabilities, and thus strengthen stability, and enhance US military cooperation with the region. We will continue to follow a prudent security assistance policy that strengthens the defensive needs of responsible, friendly, and peace-seeking governments." He doesn't explain the criteria for identifying a "peace-seeking government"--perhaps it lies in the willingness of a country to take part in Secretary Baker's Middle East peace conference. "We are not the source of excessive stockpiles in the Middle East," he says. Specifically on the moratorium that the HFAC supports, he says: [A]ny unilateral action by the US in seeking a change in the global arms trade, such as implementing a moratorium, is a non-starter. Will halting unilaterally US arms transfers to the Middle East enhance our chances of getting other suppliers to follow our lead? In the administration's view, it would accomplish the exact opposite. More than likely, a moratorium would impede our efforts to construct an effective international supplier restraint system, deter the other major suppliers from working with us, and would allow `renegade' suppliers to simply step in and take our place. North Korean Scuds to Syria Confirmed In the Q&A many Representatives inquired about heretofore uncon- firmed allegations of North Korean Scuds going to Syria over the past several months. To Rep. Meyers' direct question as to whether North Korea is selling missiles to the Middle East, Bartholomew replied: "We have evidence that they have sold Scud missiles. There have been Scud missile deliveries to Syria this year. This is something that is of great concern to us. North Korea is emerging more and more as a major supplier of missiles of this type around the world. They are a major prospective merchant, almost acting as a renegade merchant in this business." Bartholomew will not answer questions on the quantity of missiles sold to Syria this year, nor whether any of the North Korean-supplied missiles are operational, saying that informa- tion is classified. Israel's Qualitative Edge Rep. Ackerman queries Bartholomew as to whether any of the proposed US arms sales to the Mideast would in any way reduce Israel's qualitative edge; the Undersecretary flatly says "no" they would not. "The administration," he continues, "is not in the business of supplying arms that would contradict its own policy of maintaining Israel's qualitative edge." Ackerman presses on further, noting the eight 36 (b) notifications for arms sales to Egypt, Saudi Arabia, the UAE, Kuwait and Morocco which the Congress received in June and July, totalling some $3.268 billion. "Would any of that reduce Israel's qualitative edge at all?" "Not in our judgment," responds Bartholomew. Can You Define "Destabilizing Sale"? Rep. Berman and others continue to seek clarification on this sticky definitional question. Bartholomew discloses that Iraq is a case-study in destabilizing arms transfers, mainly because of the "scale and rapidity of buildup of sales to Iraq" over the past ten years. "I'm not saying that everything sold to Iraq was illegitimate" and destabilizing, he hedges. He cites the Soviet sale of in-air refuelling capability to Libya as a specific example of a destabilizing sale. Berman then wonders "With air refuelling capability to countries in the Middle East, could we say here is a generic example of something that they do not need for their deterrent and defensive capabilities, and this is something that should not be supplied to countries...?" Bartholomew is "not ready to say that aerial refuelling equipment in all circumstances to all countries would be proscribed." He cites Saudi Arabia--because of its huge territory--as a legitimate recipient of such a capability. Berman then asks about offensive strike aircraft, to which the Undersecretary replies: "It depends on the state involved, circum- stances, numbers that are involved." Cutting off this line of question- ing, he says, "I think that we have to think very carefully about the direction that your questions are taking me, Congressman." [?] $15 Billion in US Arms Sales in Mideast Since Last August Subcommittee Chair Lee Hamilton notes that the US has contracted to sell over $15 billion in weapons and related services to the region since the Iraqi invasion of Kuwait last August. In 1989 the US sold $10.7 billion worth of arms world-wide and in 1990 $13.9 billion globally. Thus, he concludes, the administration is mouthing "very good rhetoric with respect to restraint" but not demonstrating it practically. Bartholomew says that these were all war related sales, "support, spares, ammunition, construction--all that went into supporting a 500,000 man effort." Hamilton corrects Bartholomew, saying: "Most of this equipment, Mr. Secretary, was not delivered during the war. It is in the process of being delivered over a period of years." He continues: "What this says to the world is that we are going to continue to put arms into that region in massive quantities and we are saying to France and to the Soviet Union and to Great Britain and to China `you folks stop.' I'm saying to you that we are not going to be credible on this arms restraint business until we are prepared by our own example to slow--not to eliminate--the flow of these arms." What's Wrong with the Moratorium Idea Again? Hamilton wonders: "How is it that a moratorium impedes our effort to construct a[n arms control] system. Does it not impede our effort to put into effect a supplier restraint system if we are selling $15 billion of arms there ourselves? Is that not an impediment to such a system? You say that a moratorium would deter the other major suppliers from working with us--that it only works if they are cooperating with us. You say that a moratorium would allow renegade suppliers to step in and take over. The problem has not been renegade suppliers. It has been the Permanent Five." Rep. Solarz continues that theme: "If we either by law or by adminis- tration policy announce to the world that we are not going to sell any major military equipment to countries in the Middle East unless and until another country sells major military equipment to a country to the Middle East, what do you think would happen?" Bartholomew responds, "I think that it would damage the effort that we have underway to get the support of the other four major suppliers. I think that it would damage our relationship with some of the major countries of the region, starting with Israel and Saudi Arabia." [The Israeli government is on record as supporting a multilateral moratori- um on weapons transfers to the region.] 31 July The House Ways and Means Committee holds a hearing on foreign contributions to the costs of the Persian Gulf War. Richard Darman, Director of the Office of Management and Budget, presents the fifth report mandated by PL 102-25 (the Desert Shield/Storm sup- plemental budget bill), which reports on foreign financial contributions to offset the costs of the war received through 29 July. (Updated reports will be provided on the 15th of each month.) According to his report, Saudi Arabia at this time, owes over $4 billion for pledges made in 1990-91; Kuwait owes about $3.5 billion; and South Korea owes $136 million. Section 109 of PL 102-25 mandates that any country in arrears on its pledged payments not be eligible to buy arms from the US. Nonetheless, arms sales to all three of these countries have been notified to Congress and have passed the congressional review. 1 August The Asian/Pacific Affairs and Arms Control Subcommittees of the HFAC hold a hearing, at the behest of Rep. Richard Gephardt, on the "Korean Fighter Program" (KFP)--the sale and licensed production of 120 F-16C/D to South Korea which Congress had been notified of on 8 July. Testifying, along with Gephardt, are Joseph Kelley of the GAO and Glenn Rudd, Deputy Director of the DSAA. Gephardt Concerned about Economic/Security Issues of KFP "This hearing will allow us to focus on what I and others view as the diminishing value and possible adverse effects of licensing and co- production aerospace agreements to the U.S. economy and our national security," Gephardt says in his opener. Further, he is not convinced that the deal is in the best interest of the country, the aerospace industry, or its workers. "In my view, we cannot continue to be party to agreements, which disproportionately benefit the workers of our allies the trading partners, cede market leadership to them, and gain very little in the American national interest." He continues: Though I realize that the KFP is not of the scope that we witnessed with the FSX with Japan, I am certain that we will see such a proposal for technology sharing and devel- opmental guidance for Korea and other countries in the future. In the long-term, all we are really doing is hastening the day when we will have to compete against Japan, Korea and other countries in the aerospace field--one of the few bright stars on our competitive horizon. History of KFP Deal The ROK government originally requested a commercially-licensed production program for the entire 120 fighter aircraft that it was seeking, Rudd says. After realizing that they were not going to agree to buy the planes off the shelf, the Pentagon insisted on a phased production plan. The compromise struck was 12 aircraft purchased off the shelf, 36 co-assembled, and 72 produced in South Korea under license. Additionally, Rudd reports, "the USG took the position that key components of the final 72 aircraft would have to be purchased through FMS channels." In order to protect sensitive information, Rudd says the Defense Department established the "FMS-must" list--those items which had to be brokered in a govern- ment-to-government deal rather than a commercial sale. Included on that list are "key soft-ware support, avionics sub-systems (the radar warning receiver, identification friend or foe system, electronic counter measure system, radar), explosives and weapons." As to the seemingly rushed timing of the sale's notification--three weeks before Congress' August recess--Rudd says that the Korean minister of Defense requested that the contracts be let by the end of this year. "We ... informed the [South Korean Ministry of Defense] that we could not guarantee that we could complete our analysis, negotiate a new MOU, complete the necessary USG notification requirements, and deliver a countersigned LOA [formal letter of offer and acceptance] in time to award contracts before the end of the year. However, we made the internal decision to try and, if possible, to notify the Congress before the August recess." Pentagon intervenes in offset negotiation He also discusses the Pentagon's involvement in limiting the offset component of the KFP deal. Korea entered the negotiations request- ing offsetting arrangements worth 60 percent of the value of the pro- gram. McDonnell Douglas (F/A-18) and General Dynamics (F-16) battled fiercely for the sale. "As the competition intensified, both contractors raised the ante and eventually pushed each other up past the 100 percent offset mark. ... Both Secretary Cheney and Secretary Mosbacher became personally involved in convincing the ROK [government] that the offset program must be capped at 30 percent of the contract value." Rudd stressed that under the agreement there will be no directed buy- backs of F-16 co-produced or licensed parts, which leaves the pos- sibility that South Korea will have no follow-on market after it completes its domestic procurement. A trainer codevelopment project called "KTX-2" and other aerospace industrial development projects are possible offsets for the engine competition, which is still being negotiated. GAO on KFP Joseph Kelley, who has by now authored several reports on the KFP for the GAO, was tasked by two separate requests from Congress "to examine (1) events and factors leading to the reevaluation of the F/A-18 decision and selection of the F-16, (2) the government-to-government and commercial agreement provision, (3) technology transfer decision and the basis for those decisions, (4) interagency meetings and review, (5) US government assessments of the program's impact on the US industrial base, (6) US, Korean and other countries' work shares, and (7) commercial offsets being proposed...." Left begging is the question of past South Korean violations of transfer restrictions on US-licensed war material. The report is in a preliminary state, he says. "We have been unable to fully evaluate the technology transfer decisions on this program in any detail." Kelley says that in the F-16 sale the Pentagon has negotiated an improved MOU over that of the F/A-18 deal, incorporating some of the GAO's previous recommendations for strengthening the third party transfer language--a time limit on how long the ROK had to respond to visit requests to ensure production does not exceed what it should, specification of the frequency with which the ROK was required to provide the US government with production reports of defense items produced under the MOU. He says "We are now evaluating an additional change made to the third-party transfer provision during the May 1991 negotiations [on the new MOU] to determine the extent to which the restrictions may have been technically weakened." 1 August In one of an ongoing series of hearings on the dealings of the Bank of Commerce and Credit International (BCCI) being held by the Senate Foreign Relations Subcommittee on Narcotics and Terrorism, Senate investigator Jack Blum says that BCCI helped finance and transport North Korean made Scud missiles to Syria, Chinese Silkworm missiles to the Middle East and handled payoffs and financing for other Chinese arms sales around the world. Blum also testifies that BCCI was allegedly involved in black market sales of US-supplied arms to the Afghan resistance, in arms to Guatemala from Jordan and in selling enriched uranium from South Africa to the Middle East. Legislation passed or pending ASM No. 4-5 reported on the House-passed foreign aid authorization and appropriation bills and on the SFRC action on the foreign aid and State Department authorization bills. This issue examines the Senate- passed versions of the latter two and the questions remaining for the Conference Committees. International Security and Economic Cooperation Act of 1991 S.1435 -->H.R.2508 [Amends the Foreign Assistance Act and the Arms Export Control Act and makes foreign assistance authorization for FY92 and 93.] This bill was discussed on the Senate floor during 23-26 July, passing by a 74-18 vote on the 26th. In FY92 it authorizes $12.8 billion in foreign assistance spending, with $4.5 billion of that total in grant weapons aid. This is the first time since 1985 that the Senate has passed a foreign aid authorization bill, its passage largely due to the delegation of the bill's management to subcommittee heads and to compromise on the floor; both Senators Biden and Helms withdrew controversial floor amendments, fearing that they would derail the entire bill. Arms and Democracy Sen. Biden's amendment, the "Middle East Security and Democracy Initiative Act of 1991," would have mandated that for any commer- cial or FMS sales notification to Congress, the administration would have to certify what steps the recipient country is taking toward democratization, and in the case of oil exporting countries, what steps are being taken "to invest and contribute, in a manner commen- surate with its wealth, to the economic development of the region." The amendment contained a presidential waiver, stating that if the required certification could not be made, the sale could go ahead with "a certification that the proposed transfer ... is of such compelling importance to the security interests of the United States as to warrant such transfer notwithstanding the President's inability to make the appropriate certifications required...." The wording of this waiver apparently aroused a great deal of opposition. In support of his initiative, Biden asserts that US policy should promote stability and security in the Mideast, best achieved through a policy of support for political pluralism and economic development. "Promoting democracy has never been an objective of US policy in the Middle East. Indeed, for years we sought precisely the opposite-- the maintenance of monarchies that extend privileges and basic rights to a select few. ... A key cause of the instability in the region is the jealousy felt by many Arabs toward the oil-rich states, whose contributions to Arab development they consider woefully inade- quate." "To those who say that this amendment might offend our allies in the Gulf, I say that promoting democracy should not be an offense to anyone, especially those whom American soldiers fought to defend. It seems like the least we can expect....I believe that our willingness to shed American blood in the Persian Gulf permits us to expect progress toward democracy and economic development." In opposition to the amendment, Sen. Mitch McConnell says, "the issue on the Biden amendment is not whether we are for or against democracy evolving in the Middle East. The issue [is] whether at this particular juncture having a public report card on our allies in the Middle East--in which they are stood up and given a grade, presum- ably none would get an A, maybe somebody would get a D, some probably would get an F--in what way, Mr. President, does that make any contribution whatsoever at this most delicate time in which there is quite possibly for the first time maybe ever a chance to solve once and for all the Arab-Israeli dispute?" Biden wonders how the administration's proposal for a massive new arms sales to Saudi Arabia positively impacts on the peace process. In a show of concern over post-war human rights violations and anti- democratic practices in Kuwait, a move to table the Biden amendment is defeated by a vote of 39 to 57. With a Republican filibuster looming on this issue, and another on an amendment by Jesse Helms opposing the linkage of aid to Israel to Israel's housing policies in the occupied territories, the two amendments are withdrawn. Arms Sales Moratorium Not Supported by Democratic Leadership Sen. Paul Wellstone introduced an amendment analogous to the arms sales moratorium provision in the House-passed foreign aid authoriza- tion bill. He was joined in sponsorship by Sens. Akaka, Cranston, Harkin and Daschle, but was not supported by the Democratic leadership, most critically not by Sens. Pell and Biden, and strongly dissented against by Republicans. Sen. Sarbanes, while almost saying he supports Wellstone's position, urges him to withdraw the amendment, saying it will be taken up in conference committee. Wellstone complies, saying before doing so: "a proposal to sell up to $14 billion in advanced conventional weapons to Saudi Arabia is expected to be sent to the Congress as early as September. ... [N]ow is the time to focus on weapons proliferation. Now is the time to learn the lessons that we need to learn...." In response to the tired old charges that the moratorium proposal is "unilateralism," he says: "The only unilateral action called for in this amendment is US leadership. The resulting moratorium is multilateral." The amend- ment was withdrawn. Arms for El Salvador Hotly Debated Military aid to El Salvador proved possibly the most contentious issue on the floor. A Dodd-Leahy amendment would have forced the administration to seek congressional approval before lifting a moratorium on aid to the Salvadoran government. The amendment also would have attached conditions on aid already in the pipeline but not yet delivered (about $150 million worth). A Republican filibuster led by Sen. McCain blocked the amendment, as the two-thirds vote for cloture was not mustered. The vote for cloture did, however, draw 52 votes, which demonstrates a high level of Senate support for further withholding weapons aid. Regional Nuclear Non-Proliferation Regimes Urged An amendment introduced and passed by Sen. Glenn encourages the development of regional nuclear non-proliferation regimes. It contains sense of Congress language in support of the important roles that the NPT and IAEA can play in establishing nuclear weapons free zones. "The president should pursue a regional negotiated solution to the issue of nuclear non-proliferation in the countries of South Asia, including at least the countries of the People's Republic of China, India, and Pakistan, and the President should seek an accord to be signed by all nuclear weapons states in the Asian region which would prohibit nuclear attacks or the threat to use nuclear weapons by nuclear weapons states on countries in South Asia." The amendment also calls for a report each January on progress made and obstacles toward achieving regional nuclear non-proliferation regimes. Senate Demands All Relevant Info on Coproduction Deals Sen. Alan Dixon introduced an amendment to this bill that would amend the AECA to delay the approval of arms sales licensing agree- ments and exports unless/and until the corresponding memoranda of understanding and any related documents for the coproduction or codevelopment of major defense equipment have been transmitted to Congress. Dixon says "We have unfortunately experienced all too many times a situation where Congress has practically had to threaten the administration before we received the critical cooperation we should have gotten from the outset. This is a grave problem--it shows a sloppy attitude on the part of the administration toward national security measures and it threatens the very integrity of our democratic governing process. ... Our amendment is designed to end once and for all the present charade in which we in Congress are continually asked to approve an agreement between the President and a foreign government, while nobody--nobody at all--in the Senate or the House is permitted to look at the document before we act." Conference The arms sales moratorium provision contained in the House-passed bill is the most controversial issue facing the Conference Committee, scheduled to begin on 16 September. Given the very strong adminis- tration opposition on this point, it is not likely to survive. Conferees for the Senate are Pell, Sarbanes, Biden, Cranston, Dodd, Wofford, Helms, Lugar, Kassebaum, Murkowski and McConnell. House appointees are: Fascell, Hamilton, Yatron, Solarz, Gejdenson, Donnelly, Torricelli, Broomfield, Gilman, Lagomarsino, and Leach. Foreign Relations Authorization Act S.1433-->H.R.1415 [Contains the State Department authorization for FY92 and 93.] On 29 July S.1433 as amended below passed the Senate by a vote of 86 to 11. This bill, which had been reported unanimously out of the SFRC on 12 June, authorizes appropriations of $6 billion for FY92 and $5.5 billion for FY93 for the State Department, US Information Agency and the Board for International Broadcasting. Title IV of the bill makes weapons obtained as the spoils of war subject to the existing US laws governing the transfer of military equipment. Title VIII lays out Sen. Biden's "Arms Suppliers Regime Act of 1991," which encourages and authorizes the administration to do what it has already done by convening the meeting in Paris of the Permanent Five countries on arms transfers. And Title IX ("Miscella- neous Foreign Affairs Provisions") contains both the Kerry-Brown criteria to be applied to any arms sales to the Middle East [see ASM No. 3 and No. 4-5] and the loan guarantee program to finance commercial arms sales to NATO member-countries, Japan, Australia, New Zealand and Israel. Chemical Weapons Sanctions Bill Attached Senators Pell and Helms offer as an amendment a new title, Title X, on chemical and biological weapons proliferation. The amendment is similar to the chemical weapons sanctions bill passed by both houses last fall and pocket vetoed by President Bush. The bill would establish sanctions against countries that use chemical or biological weapons and, in Sen. Pell's words, "against foreign companies that assist certain countries in acquiring a chemical or biological weapons capability." The bill requires that a presidential determination be made within 60 days after "information becomes available that a country may have used chemical or biological weapons." Upon a positive determination, ten sanctions would be levied for at least one year against that country. Similarly, a list of sanctions would be applied to a company that was found to be aiding in proliferation. The bill contains the allowance of a presidential waiver of the sanctions in one year's time and at any time "if the president determines and certifies to the Congress that there has been a fundamental change in leadership and policies of the government of that country." The amendment was agreed to. MTCR Clarifications As part of an en bloc amendment, Pell also introduced a measure which would clarify and strengthen MTCR provisions contained in the AECA, specifying that the US policy prohibits the acquisition of complete ballistic missile systems as well as component parts. It also contained a provision aimed at China, which would designate that in the case of non-market economy countries that sell missiles, components or expertise, wide-ranging sanctions will be taken against the government, and not just against the trading companies serving as fronts for what must be government-sanctioned activities. The bloc was agreed to. Arms and Democracy II Sen. Biden reintroduces as a floor amendment his "Middle East Security and Democracy Initiative of 1991," which he had withdrawn under heavy opposition from the foreign aid authorization bill [see description above]. Pell spoke on the amendment's behalf, saying that the administration does not object to the provision which would require that he President issue a report with every sale or transfer describing progress in that country toward building or maintaining democratic institutions. Thus, the Senate Republicans no longer object to the measure. As icing on the cake, Biden says that he has cleared the amendment with the Saudi government. ("I sat down with the Saudi Ambassador, and I went over it in detail with him. He did not see any problem with it.") Quite a change from the heavy opposition engendered three days previously. The difference in the two versions lies in the presidential waiver: the waiver in this version has been relaxed to such an extent as to make the legislation impotent. It now reads that a sale of armaments can be made to Mideast countries that do not embody democratic principles if the President certifies that the proposed transfer "would serve the national interests of the United States." Watered down from being "of such compelling importance" to serving "the national interest" renders it a meaningless pro forma statement, easily complied with. Re: China Another Biden amendment which was passed adds a new section at the end of the bill on "Chinese proliferation practices." It calls for a presidential report within 90 days of enactment on Chinese nuclear, chemical, biological and missile proliferation practices. An amendment passed by Sen. Hank Brown requires a detailed report be made available to Congress and the public 45 days before China's MFN status is up for renewal. Among other things, the report would examine China's weapons proliferation policy over the past year, detailing previous and possible future sales M-series ballistic missiles, technologies related to the production of nuclear-weapons-grade materials, and technologies for the production or use of chemical and/or biological arms. It would also report on Chinese willingness to adhere to the MTCR, Australia Group, and Nuclear Suppliers Group export control guidelines. Conference The Conference Committee is tentatively scheduled to begin on 17 September. Senate conferees are: Pell, Kerry, Simon, Moynihan, Biden, Sarbanes, Dodd, Helms, Lugar, Kassebaum, Pressler, Murkow- ski and Brown. House conferees are: Fascell, Berman, Weiss, Dymally, Faleomavaega, Lantos, Broomfield, Snowe, Gilman, Smith, Oakar, Neal (North Carolina), LaFalce, Leach and Bereuter. The most important issue for conference is the program for financing commer- cial arms sales through State Department loan guarantees. Other legislation of interest Nuclear Proliferation Prevention ActS.1601 Sponsor: Tim Wirth This bill amends the Atomic Energy Act of 1954 to restrict exports to states that do not permit full-scope IAEA safeguards or have a nuclear cooperation treaty with the United States of any items--in addition to nuclear facilities and nuclear fuel--that could contribute to nuclear weapons proliferation. Included would be such material as "high- speed computers, specialty metals and nuclear-related machines and components." The legislation would also phase out the export of highly enriched uranium for civilian nuclear uses. S.1601 requires the President to undertake negotiations with the Nuclear Suppliers Group countries to adopt similar export controls. Entered into the record by Sen. Wirth is an extensive discussion of S.1601, including a series of self-imposed questions and answers concerning the bill; a side-by-side comparison of S.1601 to Sen. Glenn's nuclear non-proliferation bill (S.1128), to the McCain-Gore bill (S.309) and the Rep. Stark's bill (H.R.830); an endorsement by several arms control lobbying groups; and an accounting by the CRS of "US exports that could have been affected by the provisions of the proposed Nuclear Proliferation Prevention Act, had it been in force at the time the exports occurred." Status: Introduced on 31 July and referred to the SFRC. House companion legislation (H.R.2755) was introduced last month by Reps. Markey, Wolpe, Solomon and Stark and referred to the HFAC. National Defense Authorization Act for FY92 and 93 S.1507 During the floor debate on the FY92 Defense Department authori- zation bill, Sen. Bob Graham brings up US arms sales to the Middle East. He had intended to introduce an amendment on the issue, but decided against--presumably because of time constraints. But he says "it will be my intention when we return to offer legislation which would amend the Arms Export Act to provide the Congress 60 days in which to review [proposed sales] so that we would not be caught in a circumstance such as we currently find ourselves" [with the notification of a $365 million sale to Saudi Arabia four days before congress adjourns for a month]. Other measures he intends to propose would require the President to analyze the military balance in the Persian Gulf region and define the threat facing countries in the area; and lay out the legitimate defensive requirements of each state in the region, taking into account the current inventories of counties on the Arabian peninsula. Recent congressional publications Arms Trafficking, Mercenaries and Drug Cartels (Hearings of the Permanent Investigations Subcommittee of the Senate Governmental Affairs Committee on 27 & 28 February 91) USGPO: 1991. "China's Arms Sales: Overview and Outlook for the 1990s," by Shirley Kan (CRS) in China's Economic Dilemmas in the 1990s: The Problems of Reforms, Modernization, and Interdependence, Volume 2 (Study Papers submitted to the Joint Economic Committee, April 1991) USGPO: 1991. "Conventional Arms Transfers to the Third World, 1983-1990," by Richard F. Grimmett, CRS Report for Congress (No. 91-578F), 2 August 1991, 82 pp. See review below. Department of Defense Report [to Congress] of the Defense Technol- ogy Security Administration, July 1991, 39 pp. The report is available by calling (703) 693-7110. Foreign Aid Funding and Chemical Weapons (Hearing of the House Budget Committee's Task Force on Defense, Foreign Policy and Space on 30 may 91) USGPO: 1991, 47 pp. Foreign Assistance Legislation for Fiscal Years 1992-93, Part 9 (Hearings of the House Foreign Affairs Committee on 7, 9, 14, & 21- 23 May 91) USGPO: 1991. Government Contracting: Reimbursement of Foreign Selling Costs [of Military Goods and Services], June 1991, GAO/NSIAD-91-01, 42 pp. Post War Policy Issues in the Persian Gulf (Hearings of the Arms Control and Europe and the Middle East Subcommittees of the House Foreign Affairs Committee on 31 January, 21 &28 February and 11 April 91) USGPO: 1991. Trade in Conventional Weapons: The International Arms Bazaar (Hearing before the Permanent Investigations Subcommittee of the Senate Governmental Affairs Committee on 12 June 91) USGPO: 1991. Literature Review: CRS' Conventional Arms Transfers to the Third World Conventional Arms Transfers to the Third World, 1983-1990, by Richard Grimmett of the CRS, was released in early August. This annually-updated report is an extremely useful indicator of trends in arms sales to developing countries: who's buying and who's selling; how much they're buying and selling; and what they're buying and selling. The report is divided up into two sets of statistical tables: one series on sales agreements made by year and the other on weapons deliveries made by year. The author is careful to provide both current year dollar figures and constant dollar figures, as well as to provide market share percentages over four year periods and changes in market share from four year period to four year period to correct distorting effects of inflation. The CRS data include the values of weapons, spare parts, military construction, services, and military assistance and training programs sold or given to developing countries each calendar year, including US Military Assistance Program and International Military Education and Training grants. US commercial sales, however, are excluded from this accounting, as no commercial sales agreement data are main- tained by the State Department. Data on commercially licensed arms deliveries are gathered only by completed export licenses and shipping documents which are returned to the State Department's Office of Defense Trade Controls. This omission results in a significant under- representation of US arms exports. By looking at the latest issue of the FMS Facts (see box for full citation), you find that from $2-4 billion dollars in weapons sales to developing countries have been made through commercial channels over each of the past few years. Cumulative for the period 1983-1990, the United States has transferred $15 billion more in weapons and related services than the CRS report shows. For the foreign-country data, Grimmett draws on classified US government figures, and the only information the reader gets on its source or methodology is contained in a footnote to the main statistical tables: "Statistics for foreign countries," it reads, "are based upon estimated selling prices." According to the CRS report, last year was the first year since 1987 that the value of arms transfer agreements rose over the previous year. New sales agreements in 1990 totalled $41.3 billion. Grimmett views this Gulf war surge as a blip in what otherwise would have been a continued downward trend in sales. He attributes the past decline in sales to the absorption of previously bought arms and the increasing proportion of spares, ammunition, and support services that developing countries are now buying. Arms deliveries in 1990--at $26.3 billion--were at the lowest value of any year in the period from 1983-1990, also the third consecutive year that the value of deliveries dropped significantly. Due to the above-mentioned decline in global sales, as well as to a professed policy of drastically reduced weapons sales and conversion of the arms industry, Czechoslovakia registered the greatest percent decline (82.1 percent) in arms deliveries from the four-year period 1983-86 to the four-year period 1987-90. Italy also registered a very signifi- cant decline of 78.5 percent in its deliveries from the first time period to the second. The most often-cited finding of the report is that in 1990- -for the first time since 1983--the United States overwhelmingly led in arms sales agreements made with third world countries, accounting for a full 45 percent of all such agreements. The value of American sales agreements jumped from $8 billion in 1989 to $18.5 billion in 1990, mostly attributable to Saudi purchase agreements. The Soviets were the second largest dollar-volume arms trader in 1990, making deals worth $12.1 billion, down from $13 billion the year before. This represented 29 percent of the third world market. The third largest seller in terms of deals made in 1990 was China, trailing far behind at $2.6 billion and accounting for 6 percent of the market. The major European sellers--France, United Kingdom, Germany and Italy-- combined accounted for only 10 percent of the market in 1990, valued at about $4.1 billion. All other arms suppliers accounted for the remaining 9 percent ($4 billion) of the arms sales agreements made last year. Countries in the Middle East continue to be on the receiving end of about 60 percent of all arms transfer agreements made with and weapons deliveries to the third world. Saudi Arabia was the largest recipient of arms in 1990, importing over $6.7 billion. Great Britain was its largest supplier. The Saudi kingdom was also overwhelmingly the biggest arms deal maker in 1990, signing $18.65 billion of new agreements. Of that, $14.5 billion was with the United States. (According to the report, US sales agreements with the Saudis are not all attributable to the Gulf war-- $6.1 billion worth of the sales were made before the Iraqi invasion.) For the entire period 1983-1990, Saudi Arabia was the overall leader in agreements and deliveries, signing sales agreements worth $57.3 billion and actually taking delivery of $48.1 billion worth of arms in that time. Iraq has been the second largest recipient in both agreements and deliveries of arms during 1983-1990, with its agreements totalling $30.4 billion, and deliveries totalling $39.6 billion. The accompanying two tables from the CRS report are interesting. Rather mysteriously, Israel is absent from the list of top ten third world arms importers. Since 1985, Israel receives from the United States every year $1.8 billion in FMS financing--grant aid to purchase US weapons. Over the past six years, that aid alone would equal $11 billion, and would place Israel as the ninth largest arms importer during that time period, not even counting imports in 1983 and 84. Under a special exemption granted by Congress, though, some portion of this aid may be spent on domestically-developed and manufactured weapons. Israel's absence from the tables might mean that Israel is not spending its military grant to import weapons or that at least $600 million of that aid per year is being spent domestically on Israeli made weapons. The report also gives quantities of different categories of weapons transferred by each of the major suppliers to the third world, and to specific regions, over four year time blocs. The following chart is based on those data: (for chart, please contact ASM directly) Free copies of this, or any other CRS report, can be obtained through your Congressperson's office. 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