Arms Sales Monitor #16, July 1992

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



(Issue No. 16, July 1992)



Sales in progress                                  

Missile proliferation provisions tightened
16 June---The Commerce Department issues an interim rule in the
Federal Register listing destinations for which, beginning today,
a validated license is required "when an exporter knows that the
exported items will be used in the design, development, production
or use of missiles." Missile projects in Brazil, China, India,
Iran, North Korea, Pakistan, South Africa and the entire "Middle
East" are listed.  

 N. Korea sanctioned second time for missile exports
23 June---The State Department has determined that Lyongaksan
Machineries & Equipment Export Corporation, the Changgwang Credit
Corporation (both of North Korea), the Syrian Scientific Research
Center and the Syrian Ministry of Defense "have engaged in missile
technology proliferation activities" that require the imposition of
Missile Technology Control Regime sanctions contained in the Arms
Export Control Act. For a period of two years, beginning today, no
licenses for export to the above-named entities will be granted, no
US government contracts can be entered into with them, and no
products produced by them can be imported into the US. Because
North Korea is a non-market economy, the sanctions will apply to
all activities of the government related to missile development and
production, as well as development or production of electronics,
space systems or military aircraft. In March the same sanctions
were invoked against the same two North Korean entities for missile
dealings with Iran (see ASM no. 13-14 p. 1).

Navy still cool to sub sales
23 June---Congress receives a report from the Secretary of the Navy
(required by the FY92 DOD authorization bill) on criteria it
considers when determining whether to support or oppose export
licenses for US-produced submarines. The Navy's basic criterion is
that no advanced technology from the US nuclear-propulsion
submarines be incorporated into diesel submarines exported. Several
members of Congress---motivated by concern over constituent jobs in
their districts and US defense-industrial base considerations---
have been pressing the Navy to permit US shipyards to build or
assemble diesel-powered submarines for export. The Navy opposes
this on national security grounds.

Because there are currently no diesel submarine production yards in
the US, any new diesel sub export production would take place at
the nuclear sub yards. The Navy believes that the potential for
inadvertent incorporation of advanced silencing, propulsion or
sensor technology, etc. from the US nuclear-powered sub program is
high. In addition, the Navy worries that free-market competition in
submarine sales will pressure US  suppliers to actively seek to
incorporate advanced technology in their exports, in order to
become competitive in an already saturated market. (Twelve
countries currently build diesel subs.)   The Navy report
unequivocally states: "Construction of diesel submarines for export
in US shipyards would not support the US submarine shipbuilding
base and could en- courage future development and operation of
diesel submarines to the detriment of our own forces."

Several commercial sales proposed
21 July--- The Pentagon notifies Congress of its intention to lease
three naval vessels to Chile; the State Department proposes to
license major defense equipment to Israel, Hong Kong and Thailand. 


Notes from some hearings

         CIA/DIA on Former Soviet Arms Industry/Sales

8 June---The Subcommittee on Technology and National Security of
the Joint Economic Committee hears testimony from the CIA and DIA
on economic transitions in the FSU and East Europe. 

CIS arms industry  According to Kathleen Horste, Special Assistant
for Russia and Eurasia at the DIA, Russia inherited about
two-thirds of the defense-industrial infrastructure of the former
USSR, and it is the only republic that "retains a sufficiently
broad R&D and manufacturing base to produce a full range of
strategic and conventional weapons." The Ukraine assumed about 15
percent of the total Soviet infrastructure, including some major
factories for production of naval surface combatants, strategic
missiles, tanks, and transport aircraft, as well as several key R&D
and test facilities. The remainder of the industry (about 20
percent) is scattered among the other former republics, none of
which "possesses the industrial infrastructure or economic
resources to support major arms industries," she says.

The Russian arms industry is in a crisis state, and massive
lay-offs are imminent, Horste predicts. "Russian officials warn
that up to two million defense industry workers could lose their
jobs by the end of the year. ... Confronted with the prospect of
widespread unemployment and the daunting economic and social costs
involved in defense industry restructuring, the Russian government
is reevaluating its strategy. In a concession to defense
industrialists, who remain a potent political force, President
Yeltsin has named former defense managers to key posts in his
cabinet...."

Arms sales  "The Russian government is actively promoting foreign
arms sales, seeing in them a means of generating much-needed hard
currency and staving off unemployment in the defense sector," she
says. "In a 24 February interview, President Yeltsin termed arms
sales a `shock absorber' that will ease the impact of defense
procurement cuts." But, she adds, there are several countervail-
ing forces that make large-scale Russian weapons sales unlikely:
stiff competition in a shrinking world arms market; inability to
provide credit or financing for arms sales; perceived poor
performance of Soviet-made weapons in the Gulf War; and the
collapse of the former centralized arms sales bureaucra- cy. Due to
these factors, arms deliveries from the former Soviet Union in 1991
were down 65 percent from 1989 levels, she notes. [According to CRS
data, the FSU made $5 billion in arms sales in 1991.]

Export controls  Russia is still in the process of establishing a
system for managing its weapons sales, but she says that "President
Yeltsin and other CIS leaders recognize, however, that they must
balance their efforts to sell arms with assurances to the west that
they will control weapon exports and prevent proliferation.
Government approval will no doubt be required for all legal sales.
Nevertheless, the new states will have a more difficult time
controlling arms transfers than their Soviet predecessors because
many of the former controls over society have been removed, customs
services as yet are largely ineffective, and a growing number of
vendors are gaining direct access to the international market."

      Report Encourages Greater US-European                       
           Arms Production Integration 

10 June---In a hearing before the SASC on the role of the US in
Europe in the 1990s, former Army Chief of Staff Edward Meyer
presents a report prepared by the Johns Hopkins Foreign Policy
Institute, which notes the need for US leadership to ensure that a
trans-Atlantic competition in arms production and arms sales does
not increase with the end of the cold war. "As arms production
winds down, cooperative agreements among Western partners are
essential to avoid a dangerous competition in Third World markets
and duplication of efforts in the West. Western nations should
increase their efforts to promote specialization in defense
production and to link US and European defense production in a
coherent strategy that will promote, rather than undermine,
trans-Atlantic defense cooperation."

      Judiciary Hearing on US Policy Toward Iraq

23 June--Frank DeGeorge, Commerce Department Inspector General,
testifies before the House Judiciary Committee on his investigation
into the alteration by the Commerce Department of export records
for Iraq. Notation that $1 billion worth of trucks were designed
for military use, and that the end-user in Iraq was a military
facility, was deleted from Commerce Department licenses issued
between 1985-1990 before the records, which were subpoenaed in
December 1990 by a House Government Operations subcommittee, were
sent to Congress. DeGeorge's investigation found no evidence that
knowledge of the alterations went beyond Dennis Kloske, then-head
of the Bureau of Export Administration. Kloske, who was reportedly
forced out of the Commerce Department in 1991, after having
criticized the Administration's export policies toward Iraq, told
the Committee that higher-ups in the department, including the
general counsel, were aware of and approved of at least some of the
deletions.

The committee also hears testimony from Frank Lemay, a mid-level
State Department official in the office of the Undersecretary for
Economic Affairs, who warned in a 13 October 1989 memo that US
agricultural loan guarantees might have been misused by Iraq to
underwrite Iraqi purchases of military equipment. Lemay's memo
noted that the US Attorney for Atlanta---who had been investigating
the Banca Nazionale del Lavoro---said that "there was some
indication that diverted funds (and possibly direct bank-lent
funds) were used to procure nuclear-related equipment." In
addition, the memo stated that the director of the Agriculture
Department's Commodity Credit Corporation operations division had
expressed concern that commodities purchased with US loan
guarantees "were bartered in Jordan and Turkey for military
hardware." Lemay urged that the State Department be cautious in
authorizing further Iraqi loans. Distribution of the memo was
tightly restricted, Lemay testified, and his recommendations were
ignored. A few weeks after his memo was circulated in 1989, $500
million in new credits were extended to Iraq.

 Developments in the Middle East

24 June---Edward Djerejian, Assistant Secretary of State for Near
Eastern and South Asian Affairs testifies before the HFAC Europe/-
Middle East Subcommittee on recent developments in the Middle East.
(He reappears before the Subcommittee the following week (30 June)
to continue the Q&A.)

Djerejian says "Overall, our policy toward Iraq is on track, and
international support for and compliance with UN sanctions remains
strong, albeit not perfect." The administration, he says, has been
"working closely with the Government of Jordan to establish an
effective and credible sanctions enforcement regime there," but has
not succeeded yet. "We have informed the Jordanians that further
progress in our bilateral relationship and our ability to provide
assistance to Jordan depend not only on the peace process, but also
on effective Jordanian cooperation and measures to enforce UN
sanctions against Iraq."

Instability in the eye of the beholder  He also says that Iran's
"pursuit of a destabilizing arms build-up" remains a matter of
serious concern to the administration. [CRS data show that from
1984-1991 Saudi Arabia took delivery of $54.3 billion of weapons,
military construction and training, while during the same time Iran
took delivery of $16.1 billion. During much of this period Iran was
engaged in a war with Iraq, causing it to buy and expend much of
this weaponry. In 1991, according to the CRS data, Saudi Arabia
contracted to buy $7.8 billion, while Iran contracted to buy $1.9
billion of arms.]

After extensive questioning about Syria's sponsorship of terrorism,
and its lack of eligibility for US arms sales or military aid
because of this, Rep. Lantos asks Djerejian how US military
vehicles ended up in Syrian hands after the war. "Who gave US
military vehicles to Syria? Did we do that, or did the Saudis?"
Djerejian is "not sure anyone specifically gave [them away]. I
think they just happened to fall into the hands of the Syrians and
the Bangladeshis in the aftermath" of the war. Lantos finds it
difficult to visualize a large number of military vehicles "just
sort of passively" falling into Syrian hands. Djerejian states that
certainly the US didn't transfer them, from which Lantos infers
that the Saudis transferred them. Djerejian ducks into
classification at this point, saying he can't proceed further in
open session along this line of questioning....

      State Dept and Salvadorans Still Sticking to their Guns?

9 July---Assistant Secretary of State Bernard W. Aronson testifies
before the Subcommittee on Western Hemisphere Affairs of the House
Foreign Affairs Committee.

Aronson says the US is "seriously concerned" about FMLN compliance
with agreed procedures for demobilization of forces, and that the
weapons inventory they presented to the UN "seems to describe about
one third of the weapons the FMLN actually possesses."
Specifically, he claims that the FMLN drastically undercounts
surface-to-air missiles. He also asserts that the FMLN continues to
receive weapons from Nicaragua. Finally, he says that the State
Department has "numerous strong indications that the FMLN is
selling arms to the URNG guerrillas in Guatemala, and may be
preparing to sell or transfer arms to other revolutionaries in
Honduras and Peru."

For FY93 the administration is requesting $40 million in security
assistance for El Salvador: $13 million for the Demobilization and
Transition Fund, "to be used to reintegrate military and FMLN
ex-combatants into civilian pursuits"; and $27 million in
"non-lethal assistance." This aid is essential, he says. "We expect
to play a very active role in helping El Salvador's Armed Forces to
reduce and restructure. Continued U.S. support, especially our
emphasis on human rights and proper administration, is critical to
maintain our influence and ensure compliance with the peace
agreements. ... Moreover, sensitive border disagreements between El
Salvador and Honduras, stemming from the "Soccer war" of 1969, are
due to be decided soon at the International Court of Justice in The
Hague. To create an imbalance between these two countries' military
services would be dangerous and destabilizing at this time." 

 Israeli Foreign Military Aid: The `Dotan Affair' 

28 July---The Subcommittee on Oversight and Investigations of the
Committee on Energy and Commerce holds a public hearing on the role
of General Electric and the DOD in the illegal diversion of $40
million of Israeli military aid by an Israeli Air Force General,
Rami Dotan, and Herbert Steindler, a GE aircraft engines sales
manager. GE CEO John Welch and Senior Vice President Frank Doyle
testify, as does Lt.Gen. Teddy Allen, Director of the Defense
Security Assistance Agency (DSAA).

In opening the hearing, Chairman John Dingell notes that Congress
gives $5 billion of taxpayers' money away annually in foreign
military aid loans and grants. This money is to be spent on weapons
acquisitions authorized by the US government. In addition, he
notes, each recipient of military aid must sign a loan or grant
agreement stipulating "that if fraud is suspected in the use of
these funds, that nation must cooperate fully in any US
investigations, including making current and former government
officials available for interviews by US investigators." Both of
these stipulations appear to have been violated in this affair: the
Israeli government has denied requests by the Department of
Justice, DOD and the Subcommittee to interview General Dotan (now
Private Dotan, serving a 13 year jail term) and Harold Katz, a
former counsel to the Israeli Ministry of Defense who was
implicated in laundering the stolen money. In his testimony, Gen.
Allen says the Pentagon does "not accept Israel's position that the
text of the grant agreement excuses Israeli noncompliance for
reasons of `sovereignty, national security, and the public
interest.' ...[T]he administration still believes that the GOI
[government of Israel] is required to provide the DOJ [US Justice
Dept.] with direct access to all persons involved in the Dotan case
and is continuing discussions with the GOI in an effort to persuade
them to do so." Allen acknowledged the possibility of a cutoff of
Israeli foreign military aid this fall if Israel doesn't cooperate
with the investigation. 

The majority of the stolen funds were transferred to Israel,
according to Welch, where they were used for unauthorized projects
on Israeli military bases. While the Israeli government maintains
that Dotan was a "rogue operator", Dingell wonders how he could
have injected tens of millions of dollars into military bases
without the Israeli military leadership questioning where it came
from. 

Doyle, a member of GE's corporate level Compliance Review Board,
says that most of the GE engine division's operations are
scandal-free. It is only the foreign military financing program
---and specifically direct commercial sales to Israel funded by
FMF---that has been a problem. (Israel spends about 99 percent of
its annual $1.8 billion in FMF on direct commercial contracts.)
Dotan and Steindler were able to channel funds through front
companies that the two insisted GE use as subcontractors on
specific sales contracts. (Of GE's accommodation of some rather
unusual business requests by Dotan, Welch said there was "clearly
an over emphasis on customer-satisfaction"!) When asked if FMF was
"ripe for this kind of abuse," Doyle hedges, answering only that it
is a complex administrative system, and GE was "new to it,"
resulting in insufficient oversight of the program on GE's part. As
a result of the scandal, GE restructured its foreign military sales
operations to avoid the use of subcontractors. They now
systematically negotiate and document FMF-funded contracts and have
created special "Israel and Foreign Military Financing Program
screening boards" to monitor relevant activities. Now, Doyle
assures, GE is prepared to cope with the complexities of FMF sales!


Gen. Allen says the DSAA is "firmly convinced that the Dotan
scandal does not represent a failure of DSAA's procedures for
monitoring Israel's direct commercial procurement program. ...The
Dotan case is the first incident of fraud involving Israel's FMF
financed commercial contracts," of which he says, there have been
over $19 billion since 1971. The commercial purchasing program has
never been audited, he acknowledges.

       Pressler Amendment & Commercial Arms to Pakistan

30 July---The Senate Foreign Relations Committee holds a hearing on
the "Pressler amendment" to the Foreign Assistance Act, and the
Bush Administration's adherence to it. 

 In October 1990, President Bush was unable to make the
certification necessary to permit continued US military assistance
to Pakistan. Since that time, however, over $120 million in
commercial arms sales to Pakistan have been licensed by the State
Department. The Congressional sponsors of the measure and the State
Department have differing interpretations as to whether commercial
arms sales are prohibited.

Sen. John Glenn, long-time Senate activist on nuclear
non-proliferation and one of the principals behind the Pressler
amendment, testifies on the history and intention of the amendment:
The amendment "clarified---by its broad prohibition on all arms
transfers under any US law---that a failure to meet these standards
would lead to a cutoff of not only assistance but of military sales
as well. Let me just add at this point that neither the legislative
history nor the text of the amend- ment itself contains any written
or implied exclusion of commercial arms sales from the scope of
these sanctions. Indeed, it is useful to recall that in past
testimony at least one State Department witness has also dismissed
this peculiar argument for allowing commercial arms sales to
continue in the event of a nuclear violation. At a hearing of this
Committee on November 12, 1981, I asked Undersecretary of State
James Buckley to describe how a nuclear detonation by Pakistan
would affect our transfers of F-16 aircraft and he replied that
such an event would, in his words: `...dramatically affect the
relationship. The cash sales are part of that relationship. I
cannot see drawing lines between the impact in the case of a direct
cash sale versus a guaranteed or US-financed sale.'"

The other principals involved in crafting and passing the amendment
in 1985---Sen. Larry Pressler and Sen. Alan Cranston---also state
that it was their intention that all arms transfers to Pakistan be
barred if the President was unable to make the necessary
certification.

The State Department's Principal Deputy Legal Adviser, Michael
Matheson, testifies that in the State Department's "statutory
interpretation" of the Pressler Amendment, the operative language
does not deal with "licensing". He says that military "assistance"
is the subject of the prohibition, not commercial arms sales.
Congress can and has in the past explicitly banned direct
commercial sales, and it didn't do so here, he maintains.
"Statutory practice" dating back to the Carter Administration
demonstrates a consistent pattern of not applying the ban to direct
commercial sales, he says. He cites sections 3 and 36 of the AECA
and 502b of the FAA as other measures where the Administration
assumes that commercial sales may be li- censed when FMS are
banned.  

As to press and Congressional claims that the State Department had
tried to sneak the commercial licenses by Congress, Matheson says
the licenses were openly noted in the regular reports the State
Department is required to send to Congress, as well as in a
publication of the Center for Defense Trade.

Senator Richard Lugar argues that, while the Pressler amendment was
a good and neces- sary compromise at the time it was passed,
stopping commercial arms sales to one country "will not help"
redress the problem of nuclear proliferation in South Asia and
asserts that two years of Pressler sanctions have made no positive
impact on the situation. He makes a plug for the continued
provision of F- 16 spare parts, saying that this affords us the
ability to assure that the aircraft are not modified for nuclear
delivery, since General Dynamics contract personnel would be
present. 

Sen. Glenn outlines the failure of the government's decade-long
"constructive engagement" policy of providing advanced conventional
munitions to Pakistan in order to deter their nuclear ambitions.
"The `aid-and-trade' and `waivers-for-favors' policies for
restrain- ing bomb programs in both Iraq and Pakistan were complete
failures," he says. From 1982-1990, the US gave Pakistan $2 billion
of weapons and licensed almost $800 million in dual-use goods to
facilities in Pakistan, "including certain destinations widely know
to be associated with nuclear and missile pro- grams." During this
same time, Pakistan made steady progress toward its acquisition of
a nuclear weapon. Glenn provides for the record a list of 50
nuclear events clearly demonstrating this. Glenn recommends that
the US halt all commercial arms sales---especially of F-16 spare
parts, notify our friends and allies (especially France and Russia)
of our decision, and encourage them not to undercut our sanctions
policy by selling Pakistan nuclear delivery capable aircraft. 

Legislation passed and pending                                    

Iran-Iraq Arms Non-Proliferation Act of 1992 

18 June---Rep. Howard Berman introduces this bill, H.R.5434, as a
House companion to S.2543, introduced by Senators Mc Cain, Gore,
Thurmond and Helms in April (see ASM no. 13-14). The bill would
make it US policy "to oppose any transfer to Iran or Iraq of any
goods or technology, including dual-use goods or technology,
wherever there is reason to believe that such transfers could
contribute to that country's acquiring chemical, biological,
nuclear, or advanced conventional weapons." The measure differs
from the Senate version in that it expands the definition of
conventional arms to include "advanced military aircraft" and
submarines, as well as several other types of weaponry covered by
the Senate bill.

Countries identified as "knowingly" making sales that would
contribute to the acquisition of these types of weapons would
undergo suspension of US aid for one year. In addition, the US
would vote against the extension of loans or financial or technical
assistance to the sanctioned country for one year in international
financial institutions; codevelopment and coproduction of any items
on the US munition list would be suspended for one year; technical
exchange agreements would be suspended for one year; no items on
the US munitions list would be exported to the country for one
year.  

Russian Aid Bill Passes Senate

2 July---The Senate passes S.2532, the "Freedom for Russian and
Emerging Eurasian Democracies and Open Markets Support Act" by a
vote of 76-20. This bill authorizes $470 million in aid for Russia
and the other former Soviet republics and $450 million in new aid
to East European countries. The Russian and other republic aid is
contingent on several considerations: whether the former Soviet
republics "implement responsible security policies, including the
avoidance of excessive defense expenditures, full compliance with
international arms control agreements, and active participation in
international efforts to prevent the proliferation of destabilizing
weapons or the technology to develop such weapons." A republic
would be ineligible for the US assistance if after the date of
enactment it "knowingly" transfers  to another country missiles or
missile technology banned by the MTCR, any chemical or biological
weapons or technology that would contribute significantly to the
manufacture of such weapons.

While the President is expressly authorized in section 110 to
facilitate in the conversion of former Soviet military capabilities
into civilian activities, section 137 (sponsored by Sen.
Christopher Dodd) limits the amount of money the President may
authorize for Soviet conversion activities "unless the President
has previously obligated an amount equal to or greater than such
sums in the same fiscal year for defense conversion and defense
transition activities in the United States."

The House Foreign Affairs Committee reported favorably on a similar
bill (H.R.4547) in early June. It awaits a House vote. 

FY93 Foreign Operations Appropriation 

25 June---The FY93 foreign aid appropriations bill (H.R.5368) is
approved in the House by a 297-124 vote. The $13.8 billion bill is
nearly $1.3 billion below the Bush Administration request and
almost $600 million below last year's funding levels. Funding
levels contained in the bill are outlined in the box and some of
the specific policy contained in the bill follows.

An amendment sponsored by Reps. Machtley and Hall bans IMET funds
for Indonesia, due to that government's military crackdown in East
Timor last fall. The Administration had requested $2.3 million in
IMET money for Indonesia.

The bill bars the $27 million military aid to Jordan requested by
the Administration. To free it up, the President must certify that
Jordan is abiding by the UN trade embargo against Iraq and is
cooperating in the Middle East peace process.

It provides $11 million in non-lethal military aid to El Salvador,
and $29 million for El Salvador's war demobilization and transition
fund. The Administration sought $13 million for the demobilization
fund and $27 million in military aid.

It prohibits foreign military financing assistance to Guatemala,
Liberia, Malawi, Peru, Somalia, Sudan, and Zaire (and also cuts off
IMET for Zaire) on human rights grounds. No ESF or FMF funds can be
made available to Kenya until 30 days after the President certifies
to Congress that Kenya is taking steps to release political
detainees; ceasing abuse of prisoners; and restoring an independent
judiciary and freedoms of expression.

The bill directs the DSAA to submit a report by 1 December 1992
outlining ways that an increased human rights component could be
included in all IMET training. 

The bill eliminates military assistance grant aid to southern flank
NATO allies Greece, Turkey and Portugal, substituting market-rate
based loans and thereby shaving $823 million off of the
Administration's funding request. The bill places a $450 million
ceiling on loans for Turkey (rather than the $543 million in grants
the Administration had requested) and a $315 million ceiling on
loans for Greece (instead of the $30 million in grants the
Administration had requested), thereby maintaining the 7:10 ratio
in security assistance to Greece and Turkey that the Administration
tries every year to abolish.

Security assistance "earmarks" for Israel and Egypt remain in place
at $3 billion and $2.1 billion respectively. At the
Administration's request, Foreign Operations Chairman David Obey
dropped an amendment that would have enacted an across the board 1
percent reduction in all foreign aid accounts, which would have
reduced these levels. Of Israel's grant military aid, $475 million
can be used for procuring defense articles and services (including
research and development) in Israel.

Section 539 of the bill mandates that the President submit the
annual report of sales under consideration in the upcoming calendar
year (the "Javits Report") required by the Arms Export Control Act
to the Appropriations Committees, as well as the Foreign
Affairs/Relations Committees.


Section 541 of the bill states that "none of the funds appropriated
under this heading, and no employee of the Defense Security
Assistance Agency, may be used to facilitate the transport of
aircraft to commercial arms sales shows."

Section 565 reinstates a ban on the provision of Stinger
anti-aircraft missiles to "any country bordering the Persian Gulf"
which had been repealed in last year's foreign operations bill.

The Senate version of the FY93 foreign aid bill has not yet been
marked up and reported out by the Foreign Operations Subcommittee
of the Appropriations Committee. This is expected to happen in late
September.

United States-China Act of 1992

21 July---H.R.5318, the latest attempt to condition the renewal of
China's most-favored-nation (MFN) trade status on improvements in
its human rights, trade and weapons proliferation practices (see
ASM no. 11-12 p. 7 and no. 9-10 p. 5) is passed by a vote of
339-62. Unless the President certifies that the Chinese government
had made "overall significant progress" in the three abovenamed
areas, Chinese goods produced in state-owned factories would be
subject to high import tariffs. The Senate version of the bill was
introduced on 4 June and referred to the Finance Committee, where
it is scheduled to be marked up in early August.

      Landmine Ban

30 July---Citing their propensity for injuring civilian
non-combatants, and their ability to remain hidden and lethal for
long periods of time, Sen. Patrick Leahy introduces an amendment to
the Senate FY93 DOD authorization bill which would impose a
moratorium on the export of anti-personnel landmines for one year.
The bill would make it US policy "to seek verifiable international
agreements prohibiting the sale, transfer or export, further
limiting the use, and eventually, the termination of production,
possession or deployment of anti-personnel landmines." Over 35
countries around the world manufacture landmines, with many
exporting them. 

The amendment will be considered during floor debate on the defense
authorization bill in early August. 

Recent Congressional publications          

Assisting the Build-Down of the Former Soviet Military
Establishment (hearings before the Senate Armed Services Committee
5 & 6 February 92) USGPO: 1992, 85 pp.

Building Future Security: Strategies for Restructuring the Defense
Technology and Industrial Base, Office of Technology Assessment
(USGPO: June 1992) 160 pp.

Crisis in East Timor and U.S. Policy Toward Indonesia (hearings
before the Senate Foreign Relations Committee, 27 February & 6
March 92) USGPO: 1992, 112 pp.

Developments in the Middle East (hearing before the HFAC
Subcommittee on Europe and the Middle East, 17 March 92) USGPO:
1992.

Lessons in Restructuring Defense Industry: The French Experience,
Office of Technology Assessment (USGPO: June 1992) 

Need for an Independent Counsel to Investigate US Government
Assistance to Iraq (hearings of the House Judiciary Committee, June
1992) USGPO: 1992

Threat of North Korean Nuclear Proliferation (hearings of the SFRC
East Asian and Pacific Affairs Subcommittee, 25 November 91; 14
January & 6 February 92) USGPO: 1992, 118 pp.

US-Japan Codevelopment: Update of the FS-X Program, General
Accounting Office (GAO/NSIAD-92-165), 40 pp.                      

Summary: "Conventional Arms Transfers to the Third World, 1984-91"
CRS Report for Congress (92-577 F), by Richard F. Grimmett, 20 July
92, 86 pp. 

According to the report, the value of all arms sales made with the
Third World (which excludes some seemingly Third World countries,
such as Turkey, Greece and Yugoslavia) was $24.7 billion. The value
of all arms actually delivered was $18.4 billion. Both of these
figures represent the lowest levels in the 8- year period covered
by the report. The total value of arms sales to the Third World, as
defined, during 1984-1991 was $303.4 billion.

United States  According to the report, US foreign military sales
(FMS) agreements fell from a record $19.1 billion in 1990 to $14.2
billion in 1991, but still represented 57.4 percent of all sales
made. Foreign military sales to Turkey and Greece, excluded from
this figure, amounted to $3.6 billion in 1991. Direct commercial
sales are also excluded from this figure, but are listed separately
in the report. In FY91, commercial deliveries amounted to $1.346
billion. [According to the Congressional Record of 24 January 92,
a total of $12.6 billion in licenses for commercial arms exports to
the Third World were granted in FY91.]  

At $6.7 billion, the US surpassed the USSR in value of arms
deliveries last year (includes commercial sales). The USSR
transferred $6.4 billion. 

USSR  US sales agreements in 1991 were nearly three times the level
of Soviet arms sales agreements, which fell from $11.8 billion in
1990 to $5 billion last year. Soviet sales accounted for 20 percent
of all sales agreements made with the Third World, with Iran and
China being the largest recipients of Soviet sales last year.


Agreements for arms imports by eight of the former-Soviet Union's
largest arms clients declined significantly during 1988-1991 from
1984-1987 levels. Cuba made no new agreements during this time;
Iraq's imports declined by 88.5 percent; Syria's by 84.4 percent;
Angola's by 48.5 percent; India's by 45.5 percent and Vietnam's by
43.7 percent.

 China China, which had peak sales of almost $5.5 billion in 1987,
sold nearly $300 million worth of arms in 1991 (1 percent of the
arms market). Beijing fell from the third-ranked seller in 1990 to
the eighth place in 1991. China was also the 6th largest arms
importer in 1991, in agreements made, buying $1 billion of weapons.

West Europe  At $2.8 billion in sales, the four largest European
suppliers together (France, Britain, Germany and Italy) accounted
for just over 11 percent of all sales made to the Third World in
1991. French sales declined precipitously from $3.3 billion in 1990
to $400 million in 1991. Britain's sales increased slightly from
$1.8 to $2 billion, making the UK the third largest seller in 1991.
Germany went from $315 million to $400 million in sales last year;
and Italy fell from $200 million in 1990 to "virtually nil" in
1991. 

Recipients Saudi Arabia, contracted to buy the highest dollar
volume of weapons in 1991 at $7.8 billion, with $5.6 billion of
that total from the US. During 1984-1991, the Saudi kingdom was by
far the largest overall importer, making agreements worth $67.7
billion. In 1991, arms deliveries to Saudi Arabia totaled $7.1
billion. 

Iran was the fourth largest importer in 1991, buying $1.9 billion.
Iran purchased $19.8 billion of arms during 1984-1991 (including
$4.8 billion from the USSR, $1.9 billion from China and $1.2
billion from the major West European suppliers during 1988-1991).
In 1991, deliveries to Iran totaled $1.5 billion. 

Israel does not show up as a significant importer, which is odd
since it receives $1.8 billion in arms grants from the US per year.
Perhaps this is because Israel spends most of its FMF on commercial
purchases and also spends some of the aid on domestic, Israeli
projects. It does show up as a significant exporter: from
1984-1991, it ranked 10th, delivering $3.1 billion in arms to the
Third World. 

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