Arms Sales Monitor #15, May 1992

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(Issue No. 15, May 1992)



Editorial
Congress Should Enforce Existing Legislation

The US laws governing arms sales---the Arms Export Control Act (AECA)
and the Foreign Assistance Act (FAA)---are really very good. But
there's one problem: The administration routinely ignores provisions of
the laws, and for a variety of reasons Congress looks the other way. In
the past half year, several violations have come to light: 

In February, Sec. of State Baker acknowledged that the State Department
had licensed over $120 million in commercial arms sales to Pakistan
after the Pressler amendment to the FAA was invoked in October 1990.
(This law bans all US arms sales and military assistance to Pakistan if
the President cannot certify that Pakistan does not have a nuclear
weapon.) Incredibly, most of the weaponry licensed was for Pakistan's
F-16 aircraft, their most probable means of nuclear weapons delivery. 

In March, the State Department Inspector General reported that a "major
recipient of US weapons and technology" (Israel) had on several
occasions over the past decade violated re-transfer restrictions placed
on weapons of US-origin. Section 2753 of the AECA states that no
weapons can be sold or leased and no cooperative projects may be
entered into unless the recipient government agrees not to transfer
title or possession of any defense article without prior US government
approval. If a country violates this retransfer restriction, that
country is ineligible for further sales or credits. Despite the
Inspector General's findings, Israel continues to receive $1.8 billion
in military grants per year, plus several hundred million dollars of
funding for cooperative military R&D projects.  

South Korea has also violated this provision without suffering the
legislated consequences. In hearings last summer on the sale of an F-16
production capability to South Korea, the GAO noted past illegal sales
of weapons produced under US industry-licenses. Nonetheless, the F-16
sale was approved by Congress. And now it comes to light that
Turkey---another major recipient of US military aid and arms
sales---has transferred US-supplied military equipment to Pakistan
without US government consent.

The administration has delayed sending Congress a security assessment
of Saudi Arabia, conducted by the Pentagon after the war. Submission of
these reports upon the request of the Chairmen of the Committees on
Foreign Affairs/Relations is mandated by the AECA (section 2766).
Nevertheless, as of late May, Rep. Lee Hamilton (the future Chairman of
the HFAC) still had not been briefed on the Pentagon's findings, which
were completed last summer. This secret survey is used to justify
billions of dollars of arms the administration is selling to Saudi
Arabia. 

US arms sales and military aid are supposed to be contingent on human
rights practices of recipient countries. Section 502B of the FAA
explicitly states that "no security assistance may be provided to any
country, the government of which engages in a consistent pattern of
gross violations of internationally recognized human rights."
Nevertheless, the United States has continued to give and sell weapons
to many countries that fail to conform to internationally recognized
human rights standards---many fail even by the State Department's own
accounting.
 
During the 102nd Congress, dozens of bills have been introduced
concerning US arms sales policy. Congress' first order of business
should be to demand that the provisions of existing laws are complied
with, or else to revise them in some politically-enforceable way to
achieve the intended, very laudable goals. 

SALES IN PROGRESS                             

The AECA mandates that the executive branch notify Congress of any
military equipment valued at $14 million or more that it proposes to
sell. Congress then has 30 days to consider the sale before the formal
offer may be made. To block the sale, legislators must introduce and
pass a concurrent resolution (by a veto-proof two-thirds majority in
both houses) within the 30. Following are recently-proposed sales sent
to Congress for approval.

Naval equipment for Korea.  25-27 May---Over a three-day period, the
Pentagon and State Department notify Congress of their intention to
transfer various naval weapons to South Korea. The Navy proposes to
lease some unnamed "defense articles" to South Korea. The DSAA plans to
sell 3 naval vessels (under the FAA) and 28 Harpoon missiles, worth $58
million, for Korea's P-3C naval aircraft. In addition, the State
Department proposes to license for commercial export "major defense
equipment" to Korea.  

Turkey transfers US-supplied arms to Pakistan without US consent.  26
May---An entry in the Congressional Record says that the Assistant
Secretary of State for Legislative Affairs has notified Congress that
Turkey transferred US-origin spare parts for C-130 and T-37 miliary
aircraft to Pakistan without prior consent as required by law. The
notice, which apparently was supposed to have been classified, was
inadvertently printed in the Record. All that the State Department
would say about the transfer is that it occurred prior to October 1990,
when a law banning further US arms sales to Pakistan went into effect. 


Arms to Taiwan.  28 May---The Air Force proposes to sell $319 million
worth of weaponry and support to the Coordination Council for North
American Affairs (a front for the government of Taiwan). Specifically,
Taiwan would receive nearly 2,800 rounds of ammunition, 83,700 rounds
of 20 mm cartridges for the Close-In Weapons System, 48 ASROC rockets
and related items; and $107 million worth of spares and radars for F-5,
F-104, C-130 and C-119.   

$1.88 billion in weapons to Saudi Arabia proposed.  2 June--- Congress
is formally notified of the Pentagon's plan to sell nearly $2 billion
of weapons to Saudi Arabia, bringing the total amount of US arms sold
to that country since the Iraqi invasion of Kuwait to $16.7 billion.

Included in this package are: 8 UH-60 Blackhawk Medevac helicopters
($223 million); a $606 million package of weapons for the 12 Apache
attack helicopters that Saudi Arabia previously purchased from the US,
including 362 Hellfire missiles, 3,500 Hydra-70 rockets, 40 military
trucks and a combat mission simulator; a $495 million maintenance and
training contract for the Royal Saudi Air Force F-15 aircraft; a $400
million logistics systems; and a $157 million package of support for
the Saudi F-5 fighters.  


CHANGES IN THE RULES

Major revisions to ITAR proposed.  7 May---The State Department
proposes to "clarify" the existing regulations which implement the AECA
and "reduce the regulatory burden on exporters of defense articles." As
part of this clarifying effort, the currently-named "International
Traffic in Arms Regulations" would be changed to "Defense Trade
Regulations." This is in keeping with the name change of the State
Department's arms export licensing division in 1990 from the "Office of
Munitions Control" to the "Center for Defense Trade." Last year, the
Bush Administration sought to change the name of the main law governing
arms exports from the "Arms Export Control Act" to the "Defense Trade
and Control Act." All of these changes embody executive branch efforts
to commercialize and routinize weapons sales.

Included among the 30 pages of proposed rules, one would extend the
validity of export licenses from 3 years to 4 and another would revise
the definition of what constitutes a "defense article." Exempted from
the definition would be "exports approved under manufacturing or
technical assistance agreements; spare parts valued at $500 or less;
intra-company transfers of components being sent abroad for assembly
and return; temporary imports for repair and servicing; and items which
have previously been licensed for temporary import to trade shows." 


NOTES FROM SOME HEARINGS                   

Military Aid to Africa 
7 May---In a hearing before the Subcommittee on African Affairs of the
SFRC, the State Department and the Pentagon provide testimony on US
military assistance to Sub-Saharan Africa. 

Leonard Robinson, Jr., the Deputy Assistant Secretary of State,
testifies that US security assistance is being used to engage African
military forces in "the tide of modernization and democratization"
sweeping Africa. The administration's budget request for FY93 includes
$12.725 million in grant military assistance and $8.98 million in IMET
monies (down from about $180 million in the mid-80s). This military aid
program is almost entirely "non-lethal," Robinson asserts, supplying
"vehicles, communications equipment, uniforms, spare parts and the
like."  "We have been careful not to provide expensive equipment which
could drain scarce resources from African development efforts or which
might encourage adventurism or aggression," he continues.

James L. Woods, Deputy Assistant Secretary of Defense for African
Affairs, assures the Committee of America's limited military interests
in Africa. "We have no interest in establishing a major or permanent
military presence. We are satisfied with the arrangements for transit
and occasional facilities usage we do have. We station no troops, have
no bases and homeport no ships there. We do have formal access
arrangements with Kenya as well as with Somalia and Liberia." He says
there are fewer than 300 US military personnel presently assigned in
Sub-Saharan Africa. 

In FY91 the US created a regional military fund for Africa. Of the
$12.725 million requested for African military assistance, $11.225
million would be dedicated to that fund, "mainly for civic action,
health, protection of natural resources, and---if we can find suitable
approaches---for new agenda items such as support of peacekeeping and
downsizing of African militaries." Some funds from the regional account
will be used "to extend some minimal level of support for American
equipment provided earlier. We would not want Africa littered with the
rusting carcasses of American trucks, engineering equipment and boats
that we abruptly were incapable of supporting at all," he says. Woods
notes that the US no longer extends credits and financing assistance to
African countries for US weapons. "We concluded in the early 80s that
very few African states could afford to take on these debts, and we
reversed the decision made in the Carter administration to offer such
credits in lieu of grant aid."

"We continue to believe, that dollar for dollar, IMET is our most
productive program, giving African military officers and NCOs first
class military education while exposing them to American beliefs in the
primacy of civilian rule and the role of an apolitical military in a
democracy. ... We are also enthusiastic about the `expanded IMET'
program ... which allows us to provide training to military and civil
officials in managing and administering military establishments and
budgets, and in creating and maintaining effective judicial systems and
military codes of conduct, including observance of internationally
recognized human rights." He speaks of increased US military exercises
in Africa, involving National Guard and Reserve Units, which he says
"not only provide magnificent training for our forces but provide
important collateral training benefits to our African military
friends."

Pre-Invasion Policies toward Iraq 

8 May---House Banking Committee Chairman Henry Gonzalez continues his
inquiry into Bush administration policies toward Iraq, holding a
hearing on the bill he introduced in response to Iraq's use of a
foreign-owned bank to illegally obtain US government credits and loan
guarantees. The bill (H.R.4803) seeks to halt the proliferation of
technology necessary for the production of weapons of mass destruction
by denying US funding to the international financial institutions such
as the IMF, the World Bank, and the regional development banks, until
those institutions revoke the membership of all countries not adhering
to certain export control regimes (see ASM no. 13-14, p. 7).

Three panels testify: Robert Gates (Director of Central Intelligence)
and Gordon Oehler, (Director of the CIA's Nonproliferation Center);
Bush administration bureaucrats from the State Department, the
Pentagon, the Federal Reserve and Treasury; and a non-governmental
panel. 

Gates provides the same proliferation threat assessment he has given
several times this year already, with a section tacked on about the
CIA's nonproliferation center. The other administration witnesses
uniformly state that they share Mr. Gonzalez's concern about
proliferation of weapons technologies, but that they think his
legislation is "counterproductive" and "could have serious adverse
consequences." One of the reasons cited for this view is that the bill
calls for developing countries to join and abide by suppliers' regimes
such as the Australia Group and Missile Technology Control Regime
(MTCR), but the US does not want to extend membership to the MTCR to
all countries. As William Rope, testifying for the State Department,
says: "Even if desired by the US, such expansion could be vetoed by
other members, putting development aid for some countries at risk
because other countries did not want them as regime members. The
suppliers' regimes are successful in many cases because they are
limited to the industrialized countries, which share a strong
commitment to combatting proliferation and are the prime producers of
the relevant dual-use technology. Members compelled to join are
unlikely to have the same sense of commitment, and might actually
impede the work of the regimes."

US Arms Sales Policies

27 May---The HFAC subcommittees on Arms Control and Europe/Middle East
hold a hearing on US conventional arms transfer policy one year after
President Bush's Middle East arms control initiative which launched
talks among the Permanent Five UN Security Council members on limiting
destabilizing arms transfers. The five are to meet during the following
two days (see box). 

Specifically, the hearing is called to discuss recommendations on
multilateral arms transfer guidelines for the Middle East, put forth in
a report issued today by the Henry L. Stimson Center. The report,
authored by a bipartisan group of private experts, members of Congress,
arms industry representatives and retired diplomats and military
personnel, calls for greater specificity and urgency in actions taken
by the five to limit arms build-ups in the region. It also cites the
need for sustained, high-level US government focus and leadership.

Alan Platt, a consultant on international and security affairs and Paul
Freedenberg, former Assistant Secretary of Commerce for Export
Administration, present the Stimson report, which Platt says "does not
propose a cessation of arms transfers to the Middle East." Rather, the
group believes "that some arms must continue to be transferred into the
region for the foreseeable future consistent with regional security and
enhanced stability." The group further believes that "the current level
of armament in the region is relatively conducive to stability in the
Middle East." Other assumptions on which the group's recommendations
are based are: "no combination of Middle East nations hostile to Israel
should be allowed to gain military power such that they pose a direct
threat to Israel's survival", and Iraq, Iran and Syria should not be
allowed to obtain enough arms to gain hegemony over either the Persian
Gulf or Turkey. 

The immediate recommendations contained in the report largely mirror
the administration's current policy. The longer-term suggestions would:
limit transfers of "weapons or sub-systems incorporating advanced
technologies not already present in the region"; set ceilings on the
number of CFE-controlled types of weapons in the region; initiate
discussions on the global overcapacity in arms production and how to
achieve a "multilateral build-down" in defense industry; and
consolidate the various existing non-proliferation regimes and create
a single secretariat with enforcement and sales decision-making
authority over them. 
Joel Johnson of the Aerospace Industries Association says that claims
that the US is the world's leading arms seller---and therefore must
show greater self restraint if it is to convince others to do
likewise---are a "myth". Dismissing the need for US leadership to
encourage restraint, Johnson contends that "In most bargaining
situations, from intermediate range nuclear weapons to export finance,
a country has more leverage on other players if it gives up something
only in the context of other countries doing the same."

Johnson denies any role for supplier responsibility in regional arms
control, saying that "The most effective means is encouraging the
peaceful resolution of regional conflict and the agreement by countries
within a region to limit the type and quantity of weapons systems
produced or imported...." A CFE-type agreement imposed from outside the
region would only result in indigenous industry being developed, he
argues. [However, without licensed-production from the major arms
producing countries, very few---if any---developing countries would be
able to afford the R&D costs necessary to build indigenously any high
tech major military equipment.] 

Increases of $1-2 billion per year in foreign sales cannot make up for
$30-40 billion decreases from the peak Pentagon procurement in the
mid-1980s, he says. While acknowledging that major excess arms
productive capacity now exists, Johnson says that the AIA is skeptical
of arms industry conversion bills pending in Congress. Instead, he
recommends "using a small portion of any funds contemplated for
conversion programs for ... defense export support" programs. As
examples of this support, he suggests assisting industry to demonstrate
its products at arms bazaars and creating export financing programs
such as that proposed within the EXIM Bank last year. These programs,
he claims, involve "little or no budgetary outlays."

Lee Feinstein, of the non-governmental Arms Control Association, notes
that "The Big 5 talks would seem to provide a natural forum to test the
prospects for mutual restraint. But the administration has consistently
opposed suggestions to pursue limits on arms sales through these talks.
Before accepting the standard refrain of the Defense Department and
industry that `if we don't sell F-15s to Saudi Arabia, the British will
sell Tornados,' Congress might consider requiring the administration to
certify that it has made a good-faith effort to negotiate mutual
restraint in the sale of combat aircraft to Riyadh and other states in
the region."

Referring to the Stimson Center report, which cites the importance of
getting the Chinese and other second tier suppliers on board the P-5
program, Feinstein says: "the other four exporters should not use
Chinese recalcitrance as an excuse not to pursue arms sales restraint
to the Middle East. With the important exception of ballistic missiles,
Beijing is an increasingly minor supplier of arms to the region.
According to a recent report, China's share of the world arms market
shrunk from 11.5 percent in 1987 to just under 4 percent in 1989, for
a total of just $1.1 billion in that year. And although capable of
producing low-cost aircraft that might have some appeal to less
well-off buyers, China lacks the capability to produce planes to
substitute for anything near the capability of the F-15E, the Tornado
or the MiG-29. By any standards, Beiging is a bit player in the arms
trade, whose absence from the talks would be problematic but not fatal
to restraint efforts. The backward regime in Beijing should not be
setting the pace for progress in these arms control talks."

As to the report's medium-term recommendation of a one-for-one
replacement of CFE-limited weapons, Feinstein says this should be but
a first step. "There is no reason why exports could not be cut to half
their historic levels," given the gross over-abundance of such weapons
in the region.

Feinstein makes several recommendations beyond the Stimson report. He
suggests that Congress compile and publish the unclassified FMS and
direct commercial sales notifications it receives on a regular and
timely basis. Congress should "insist on serious analysis by the
government in the justifications that accompany the required arms sales
notifications", rather than the pro forma statements they currently
receive. He also recommends that the State Department's Center for
Defense Trade (formerly Office of Munitions Control) be divested of
either its arms promotion responsibilities, or its arms
control/licensing responsibilities to avoid a conflict of interests. 

Pre-Invasion Policies toward Iraq: II 

29 May---House Banking Chairman Gonzalez holds another hearing on the
Iraqi/BNL scandal, this one on the interagency group established by the
Bush White House to thwart Gonzalez's and other Congressional
investigations into US policy toward Iraq prior to August 1990. Two
panels testify: the first comprises Members of Congress involved in
investigating US policy and a Division Director from the General
Accounting Office. The Congressmen (Sam Gejendson, Doug Barnard and
John Dingell) release a sheath of memos and letters concerning their
various investigations into US government policies.

LEGISLATION PASSED AND PENDING            

Russian Aid Contingent on Rocket Sale

13 May---The SFRC approves the administration's aid bill for the former
Soviet Union by a 14-4 vote. By a unanimous vote, the Committee
approved an amendment sponsored by Joseph Biden that would make any of
the former republics ineligible for US aid if they transfer missile
technology, material or equipment. The measure is aimed at Russia,
which has announced it will sell a rocket engine to India for that
country's geosynchronous space launch vehicle. The bill permits a
Presidential waiver upon congressional notification that such
assistance would "serve the objectives" of the legislation. The bill is
expected to be voted on by the full Senate in late June.  

Conversion Bills

In late May, a Senate Democratic Task Force, chaired by David Pryor,
releases a $1.2 billion conversion plan for FY93. The plan calls for:
increasing funding and technical assistance for stimulation of
non-military exports; extending R&D tax credits for targeted
technologies; requiring the Pentagon to set aside funds for the
development of environmental clean-up technologies, energy efficiency
technologies, transportation technologies and computer technologies;
increasing the amount of funding that federal agencies must set aside
for small business R&D; reorienting the national laboratories away from
military endeavors toward civilian products. 

In a press release on the plan, Sen. Pryor criticizes President Bush
for pledging $85 million in technical aid for the conversion of the
Soviet arms industry, while seeking to close down the US government
agencies that oversee conversion efforts here (the  Economic
Development Administration at the Department of Commerce and the
Defense Department's Office of Economic Adjustment).  

The House version of the FY93 DOD authorization bill (H.R. 5006)
contains $1 billion for defense industry conversion programs. Among
other things, the measure would set aside $50 million for the promotion
of "critical" dual-use technologies, $200 million in job training for
former DOD/DOE civilian and military employees and $180 million to
assist former troops and DOD/ DOE employees in obtaining teaching
credentials and jobs. 

Berman Opposes Air-show Subsidies

11 May---Rep. Howard Berman introduces an amendment to the FY93 DOD
authorization bill (H.R.5006) that reads: "No funds made available to
the DOD may be used to provide support for expenses incurred by US arms
contractors in exhibiting or promoting their products at military trade
shows or conventions."  
The impetus for the amendment was a recent change in the Pentagon's
long-standing policy of leasing aircraft to US arms manufacturers for
air shows at full reimbursement. Beginning in March 1991, the DOD
initiated a "lease-free" policy, under which 69 planes and helicopters,
plus military personnel have been given to contractors for display and
demonstration at six air shows. The cost to US taxpayers for
participation at just two of the shows is estimated at $1.9 million. 


On 4 June Berman's amendment was passed by a voice vote, as part of the
HASC Chairman's en bloc amendment to the bill. On 5 June the House
passes the $270.5 billion authorization bill by a vote of 198-168.

In the Senate, Joseph Biden has requested a GAO investigation of DOD
subsidization of the US arms industry at air shows. The SASC is
scheduled to begin marking up its DOD authorization bill on 20 July. 

MILITARY AID RESCINDED FROM FY92 FUNDS

4 June---An omnibus bill rescinding $56.1 million from FY92 military
aid accounts is signed into law as PL 102-298. The bill cuts from
military programs in Kenya, Peru and Zaire.

RECENT CONGRESSIONAL PUBLICATIONS           

Agriculture's Export Credit Programs: Delays in Accessing Records
Relating to Iraq (GAO/NSIAD-92-47) 29 May 92 [GAO testimony on BNL and
Iraqi participation in Commodity Credit Corporation export credit
programs], 7 pp.

Arms Control: Improved Coordination of Arms Control Research Needed
(GAO/NSIAD-92-149) April 1992, 68 pp.

Fiscal Year 1993 Arms Control Impact Statements (Statements submitted
to Congress by the President Pursuant to Section 36 of the Arms Control
and Disarmament Act) USGPO: May 1992.

The Future of Arms Control: New Opportunities (report prepared by the
CRS for the Arms Control Subcommittee of the House Foreign Affairs
Committee) USGPO: April 1992, 172 pp.

Nuclear Nonproliferation (hearing of the Subcommittee on Oversight and
Investigations, Energy and Commerce Committee, 24 April 91) USGPO: 1992

Operation Desert Shield/Storm: Update on Costs and Funding Requirements
(GAO/NSIAD-92-194) 8 May 92

Operation Desert Shield/Storm: Foreign Government and Individual
Contributions to the Department of Defense (GAO/ NSIAD-92-144) 11 May
92

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