H.R. 2709, The Iran Missile Proliferation Sanctions Act of 1997

50–149 CC
1998
H.R. 2709, THE IRAN MISSILE PROLIFERATION SANCTIONS ACT OF 1997

MARKUP

BEFORE THE

COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

OCTOBER 24, 1997

Printed for the use of the Committee on International Relations

COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM GOODLING, Pennsylvania
JAMES A. LEACH, Iowa
HENRY J. HYDE, Illinois

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DOUG BEREUTER, Nebraska
CHRISTOPHER SMITH, New Jersey
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
PETER T. KING, New York
JAY KIM, California
STEVEN J. CHABOT, Ohio
MARSHALL ''MARK'' SANFORD, South Carolina
MATT SALMON, Arizona
AMO HOUGHTON, New York
TOM CAMPBELL, California
JON FOX, Pennsylvania
JOHN McHUGH, New York
LINDSEY GRAHAM, South Carolina
ROY BLUNT, Missouri
KEVIN BRADY, Texas
LEE HAMILTON, Indiana
SAM GEJDENSON, Connecticut
TOM LANTOS, California
HOWARD BERMAN, California

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GARY ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
MATTHEW G. MARTINEZ, California
DONALD M. PAYNE, New Jersey
ROBERT ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
PAT DANNER, Missouri
EARL HILLIARD, Alabama
WALTER CAPPS, California
BRAD SHERMAN, California
ROBERT WEXLER, Florida
STEVE ROTHMAN, New Jersey
BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
JIM DAVIS, Florida
RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff
WALKER ROBERTS, Senior Professional Staff Member
FRANK RECORD, Senior Professional Staff Member
HILLEL WEINBERG, Senior Professional Staff Member and Counsel
PARKER H. BRENT, Staff Associate
C O N T E N T S

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    Markup of H.R. 2709, The Iran Missile Proliferation Sanctions Act of 1997
APPENDIX
    H.R. 2709, reprint of
    Amendment to H.R. 2709 offered by Mr. Ackerman
    Amendment to H.R. 2709 offered by Mr. Berman
    Revised amendment to H.R. 2709 offered by Mr. Berman
    Amendment to H.R. 2709 offered by Mr. Menendez
    Letter to Mr. Hamilton from Hon. Madeleine Albright, Secretary of State
MARKUP OF H.R. 2709, THE IRAN MISSILE PROLIFERATION SANCTIONS ACT OF 1997

FRIDAY, OCTOBER 24, 1997
House of Representatives,
Committee on International Relations,
Washington, DC.

    The Committee met, pursuant to notice, at 10:08 a.m. in room 2172, Rayburn House Office Building, Hon. Benjamin A. Gilman (chairman of the Committee) presiding.
    Chairman GILMAN. The Committee will come to order.
    The Committee on International Relations meets today in open session, pursuant to notice, to consider H.R. 2709 to impose certain sanctions on those contributing to Iran's effort to acquire missiles. I hope we will be able to order these bills reported today.
    I would like to have very few introductory remarks, after which we will recognize the distinguished Ranking Democrat, Mr. Hamilton. We will then proceed to the bill. The Members will be recognized under the 5-minute rule.

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    Mr. Hamilton.
    Mr. HAMILTON. Mr. Chairman, thank you very much. I know we are taking up a very important bill this morning. I wanted to raise with you the question of implementation legislation for the Chemical Weapons Convention. You and I have had several conversations about this. I have written to you about it. I am deeply concerned about the delay, and I think the delay poses several risks for the United States.
    I am not going into a lot of detail on it because I know you are familiar with it. But I do believe the overall impact of not acting in the House is to undercut American leadership pretty badly. So I wonder if the Chairman could indicate to us what his intentions are with regard to the bill. It is S. 610.
    Chairman GILMAN. That is correct. If the gentleman will yield——
    Mr. HAMILTON. Yes.
    Chairman GILMAN. Mr. Hamilton, I acknowledge that you have expressed on several occasions your strong interest in moving forward on the implementing legislation for the Chemical Weapons Convention. And I want to assure the gentleman that I support consideration of the Senate-passed bill, S. 610, on the Chemical Weapons Convention; and in that regard, you have my commitment that I will seek to have the House consider S. 610 prior to the end of this session.
    Mr. HAMILTON. Well, I thank you, Mr. Chairman. I appreciate that. I hope we can consider it as a freestanding bill and not hook it to something else, but we will see how things develop.
    Chairman GILMAN. Thank you, Mr. Hamilton.
    Mr. HAMILTON. Yes.
    Chairman GILMAN. One of our most important national security objectives in the area of nonproliferation is to prevent Iran from obtaining and, in some instances, from improving their weapons of mass destruction capabilities.

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    Most critical in the short term is the prospect of Iran enhancing its ballistic missile capability. Iranian acquisition of ballistic missiles with a range of 1,300 kilometers or more poses an unacceptable threat to American forces in the Middle East, as well as to our allies throughout the Persian Gulf region.
    It is clear that Russia has already provided Iran with critical know-how and technological support. An important question facing us right now is whether we can halt any further assistance. And time is short; we have but a few months to try to prevent Iran from achieving a significant advance in its missile program.
    An incremental approach to this issue or reliance on friendly persuasion does not appear to be achieving any demonstrable results. Dialog cannot substitute for more forceful and immediate action, including the imposition of sanctions on those entities engaging in missile cooperation with Iran.
    As I have noted, it is hard to believe that Russia's assistance to Iran does not violate Russia's international obligations as an adherent to the Missile Technology Control Regime, the MTCR. It is almost inconceivable to me that such transfers would not trigger U.S. missile sanction laws. I don't believe that I stand alone in that position.
    It is clear that the Congress has a fundamental disagreement with the Administration over the utility of sanctions legislation. Permit me to make two points in that regard.
    First, with respect to those who express concern about the Congress imposing unilateral sanctions, I share the view of Senator Lott and those expressed yesterday by our colleague, Congressman Lantos. The Congress will not be shy about taking such action when the Administration's bilateral or multilateral action is demonstrably ineffective in protecting Americans' vital interests.
    My second point is that the Administration will continue to seek legislation of this type. Until it can make a credible case to the Congress, the current sanctions law is being implemented.

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    In short, there is absolutely no confidence in the Congress that the Administration is making it clear to the Russians that halting missile cooperation with Iran is vital to our interest; and the U.S. assistance, particularly in the area of space cooperation, may be jeopardized if such activities are not going to be altered.
    With that said, I would like to outline the legislation that we have before us today. The bill requires the President to submit a report to Congress 30 days after the date of enactment, identifying those business entities with respect to whether or not there is credible information if they transferred missile goods or technology to Iran after August 8th, 1995, the date of Russia's accession to the MTCR.
    Thirty days after this report is required to be submitted, three sanctions would be imposed for a period of at least 2 years on the entities identified in the report. These sanctions are as follows: One, no license may be issued. First, no licenses may be issued under the Arms Export Control Act for munitions exports to the entity. Second, no licenses may be issued under the Export Administration Act for dual-use exports to that entity. And third, no United States assistance may be provided to that entity.
    Additional reports require the same information, and potentially triggering the same sanctions would be required 180 days after the date of enactment, 360 days after the date of enactment, and annually thereafter.
    In addition, each report under this law would have to identify those entities that have attempted to transfer missile goods or technology to Iran; and the entity identified in these reports as having made attempts on more than one occasion would be subjected to the same three sanctions as those entities that have actually transferred missile goods or technology to Iran.
    We also made provision, the President could waive the imposition of sanctions on any entity by reporting to Congress when, on the basis of information provided by that entity or otherwise obtained, the President is persuaded that that entity did not transfer missile goods or technology to Iran after August 8th, 1995.

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    In the case of entities that attempted to transfer missile goods or technology to Iran, the President could waive the imposition of sanctions by reporting to Congress that he is persuaded on the basis of additional evidence that they did not attempt on more than one occasion after August 8th, 1995.
    The President may also waive the imposition of sanctions 15 days after he determines and reports to Congress that it is essential to the national security of our Nation. That is the essence of the legislation now before us.
    Mr. Hamilton.
    Mr. HAMILTON. Thank you very much, Mr. Chairman. My comments will be very brief. I agree with you that the issue of Iran's ballistic missile program is an exceedingly serious issue, as serious, I think, as any that this Committee deals with.
    I want to thank you for arranging the briefing yesterday with Ambassador Wisner. I thought it was very helpful to have that briefing; and I understand that you and the Vice President now are either negotiating, or perhaps you have agreed upon a time, for a meeting next week when we will hear from the Vice President.
    Chairman GILMAN. If the gentleman will yield.
    Mr. HAMILTON. Yes.
    Chairman GILMAN. We do have a meeting set with the Vice President for next Thursday.
    Mr. HAMILTON. I think that is very helpful, and I commend you for it.
    At some point—I am not sure of the right point—I do have a number of questions I want to ask about the bill to Administration witnesses. I will just let the Chairman indicate when he wants me to do that, and we will proceed.
    Chairman GILMAN. Thank you, Mr. Hamilton.

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    Are any other Members seeking recognition?
    Mr. Gejdenson.
    Mr. GEJDENSON. Mr. Chairman, I have only one concern, and that is that, in line 6 on page 2, the transfer of goods and technologies may simply be too broad, and I think maybe one of my colleagues may have an amendment later. But it seems to me we want to focus on missile technology, Mr. Chairman, that if somebody were to sell a stainless steel bolt that ended up in one of these projects, it is really not a critical technology.
    I think what you want to do is focus in on the choke-point technologies. So maybe the staff, or I think Mr. Berman may have some wording that will help identify the items that actually lead to the proliferation. And that is what we would want to focus on.
    Chairman GILMAN. I would be pleased to take that up as we get into the debate on the bill.
    Does any other Member wish to be heard at this point?
    If not—Mr. Fox.
    Mr. FOX. Just briefly. I am proud to cosponsor your bill. I believe it is a correctly measured step to stem the tide of Iran's efforts to acquire, develop, and produce ballistic missiles; and I hope we will get Full Committee support and, thereafter, House support on the floor.
    Chairman GILMAN. Thank you, Mr. Fox.
    Do any other Members seek recognition? If not, the Chair lays the bill before the Committee. The clerk will report the title of the bill.
    The CLERK. H.R. 2709, a bill to impose certain sanctions on foreign persons who transfer items contributing to Iran's efforts to acquire, develop, or produce ballistic missiles.
    [The bill appears in the appendix.]

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    Chairman GILMAN. The clerk will read the bill for amendment.
    The CLERK. Be it enacted by the Senate and House of Representatives that the United States of America in Congress assembled——
    Chairman GILMAN. The bill is considered as having been read and open for an amendment at any point. Is there anyone seeking recognition at this——
    Mr. HAMILTON. Mr. Chairman.
    Chairman GILMAN. Mr. Hamilton.
    Mr. HAMILTON. I wonder if I might ask the Administration a few questions.
    Chairman GILMAN. Is there an Administration person here? Would you please identify yourself.
STATEMENT OF MICHAEL KLOSSON, DEPUTY ASSISTANT SECRETARY OF LEGISLATIVE AFFAIRS, ACCOMPANIED BY BOB EINHORN, DEPUTY ASSISTANT SECRETARY OF POLITICAL-MILITARY AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. KLOSSON. My name is Michael Klosson. I am a Deputy Assistant Secretary for Legislative Affairs at the State Department.
    Chairman GILMAN. Mr. Hamilton.
    Mr. KLOSSON. And I have with me Bob Einhorn who is our senior-most nonproliferation expert. And he is a Deputy Assistant Secretary of State for Political and Military Affairs.
    Chairman GILMAN. Thank you, gentlemen.
    Mr. Hamilton.
    Mr. HAMILTON. All of us, of course, are in accord, I think, on the objective. We want to stop the transfer of any missile technology to Iran. So the real question becomes, how best do we do it? Do we do it through the ongoing discussions, through current law, or do we need additional legislative authority? So I would like to get your reaction to this bill.

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    Is this bill the best way to accomplish our purpose of trying to stop the transfer of missile technology?
    Mr. EINHORN. Thank you, Mr. Hamilton.
    No, we don't think this is the best way. And you are absolutely right. I think there is no issue in this room about what our objective is. Our objective is to prevent Iran from acquiring destabilizing missile capabilities. The issue is, the most effective way to do that.
    We believe we have a combination of tools already at our disposal that can achieve this objective. One is persistent diplomacy. And Ambassador Wisner had an opportunity to speak with Members yesterday about progress being made in that area. But another also is the existing body of sanctions laws that would impose penalties in the event that any supplier country continued to act in violation of international norms in this regard.
    We believe the existing body of sanctions laws serves as an effective deterrent. And, remember, sanctions are most effective when they are a threat, when they are implicit. When they are already triggered, then there may be little additional incentive for the violator to correct its behavior.
    So we already have a comprehensive set of sanctions laws in place. We believe they are operating today to induce the Russians to get on top of this problem and to remedy what is obviously going on. And we think it is important just to give diplomacy a chance to correct the problem.
    Mr. HAMILTON. OK. This point you make about progress is an important one. Is it your impression as you look back over the course of the negotiations here and the engagement with the Russians, your dialog with the Russians on this question, that you are making progress in deterring the transfer of missile technology from Russia to Iran?
    Mr. EINHORN. I believe we are, Mr. Hamilton. The returns are not in. Ambassador Wisner and his team will be going to Moscow again November 3rd and 4th for an additional round. But it is clear that the Administration's efforts, as well as the interest on the part of the Congress and some activity on the part of the Congress, have both very much gotten the——

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    Chairman GILMAN. Would the gentleman hold for a moment? Let's have some order, and please acknowledge that we have some experts testifying before us. Please continue.
    Mr. EINHORN. Thank you, Mr. Chairman.
    There is no question that the Russian Government has been focused on this problem as a result of attention by the Administration and of the Congress as well. We hope that these efforts will yield to real progress in putting an early halt on these activities.
    Mr. HAMILTON. Is there, in your judgment, a reasonable prospect for success in obtaining the cooperation of the Russians under the efforts that are now under way?
    Mr. EINHORN. It is hard to judge what the prospects are because the margin for error is rather small. It is very important that we stop all assistance by Russian entities. There is good basis to believe that the Russians are taking this seriously and at the highest levels, and we hope that more determined efforts will be put in place in the immediate future to stop these efforts at making assistance.
    Mr. HAMILTON. Now, I heard yesterday you are just back from China, so I am not sure how much time you have had to look at the particular language of the bill before us. But what would be the impact if this bill were enacted into law?
    Mr. EINHORN. Mr. Hamilton, frankly, I think it could undercut our efforts to deal with this issue effectively through diplomacy. If the Russians were able to stop this assistance today, absolutely stop the assistance today, sanctions would still be imposed under this legislation, because this legislation is retroactive. So what incentive would the Russians have to put a stop to this assistance if they would be sanctioned even if they stopped today? So we see a serious problem with this legislation.
    Mr. HAMILTON. All right. The bill sanctions persons, entities; it doesn't sanction governments. Do you know what entities would be sanctioned by this bill, what persons would be sanctioned by it? Whether Russian or, conceivably even American or European? Have you analyzed the bill in those terms?

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    Mr. EINHORN. Well, we haven't, to my knowledge—as you mentioned, I have been away—done a comprehensive analysis of all entities that might be sanctionable under this legislation. But as you know, there have been a number of reports of Russian entities providing assistance of various sorts to Iran's ballistic missile program.
    One of the problems with this legislation is that the standard of evidence required is too low, that virtually any intelligence report could trigger sanctions almost automatically.
    Mr. HAMILTON. Let me emphasize that. The bill speaks about ''any credible information.'' So any credible information would trigger the sanctions, as you indicated here. That means, for example, one bit of information that has credibility to it.
    Mr. EINHORN. That is correct, any credible information indicating that these transfers have taken place. But in the past, we have found that information deemed to be credible, upon further analysis, wasn't accurate. And the problem with this law, this draft legislation, is that you may trigger sanctions on the basis of credible information. This could cause far-reaching consequences for our foreign policy and our national security, and you may later determine that that credible information wasn't accurate.
    Mr. HAMILTON. And then the standard is not tied to any definition of ''knowing'' here, as I read the statute; that is, a totally unintentional transfer could bring sanctions forward.
    Mr. EINHORN. Absolutely. And I believe on every piece of sanctions legislation that exists there is a ''knowing'' standard; that is, the entity must genuinely believe that the transfer is going to—I say in this case, Iran—to a missile end use. But the problem is that the way the proliferation world operates is that it is very, very difficult often for an entity to determine the real destination, the real end use. There are so many front companies, cutouts, or false end-user documentation produced that it may be very difficult for an entity to know the true end use.

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    This legislation would impose sanctions even if the entity genuinely did not know that the assistance was contributing to proliferation.
    Mr. HAMILTON. And the transfer is not tied in any way to the MTCR or any other export control item, as I understand it. To take a kind of extreme example, you could have someone who would sell plastic glasses, for example, to Iran that would somehow get into their missile program, and that would create a transfer that would be sanctionable as this bill is now drafted; is that correct?
    Mr. EINHORN. That is correct, Mr. Hamilton. The National Defense Authorization Act of fiscal 1991 indicates that sanctions are triggered only when items, equipment, or technology on the MTCR annex are transferred, and transferred for an MTCR-controlled missile end use.
    Now, why does it do that? Because the MTCR, this missile control regime, has worked very hard to try to find equipment and technology useful in missiles. And this is a way that exporters can know that they should be controlling potentially troublesome trade. This legislation departs from that and would make virtually any kind of transfer, however unrelated, to missile end uses sanctionable. So this is a very tough standard to work with.
    Mr. HAMILTON. And could you comment on the difficulties of implementation of the bill, just carrying it out? I gather from what you have said thus far that the task of implementing this bill, because the standard is low, because it covers a lot of products not tied to the technology of building missiles, that the implementation of it would be extremely difficult.
    Mr. EINHORN. For the reasons you have cited, Mr. Hamilton, it would be very difficult to implement.
    Mr. HAMILTON. OK. Let me emphasize here—what you are trying to achieve with respect to Russia here is to change their behavior. That is really what we are after, isn't it? And my impression is—in talking to some of the policy people in our government, is that the top levels of the Russian Government today, including the President of Russia, are in agreement that it is not in Russia's interest to transfer missile technology from Russia to Iran. They are firm in that. They say that over and over again. But it may very well be, nonetheless, that lesser officials, lesser entities, make the transfers anyway which the top levels don't know about. The transfers haven't stopped for whatever reason.

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    Am I correct in saying that our impression is that at the top levels of the Russian Government, there is a very firm view that it is not in the Russian interest to transfer missile technology to Iran, and that they want to stop it?
    Mr. EINHORN. Yes, sir. We have been informed at the highest levels, and over and over again both privately and publicly, that it is not Russia's policy to support ballistic missile developments, ballistic missile capabilities in Iran. This is the standard against which their behavior should be measured.
    Chairman GILMAN. The gentleman's time has expired.
    Mr. HAMILTON. Yes. Thank you very much, Mr. Chairman.
    Chairman GILMAN. I am going to ask the two expert witnesses to please stand by a moment.
    Mr. Secretary Einhorn, do you believe—and I would like a yes or no answer to this—as of today there have been actual transfers to Iran from Russia of goods and technology that has been useful in Iran's ballistic missile program. And the answer to that—yes or no—have there been actual transfers that have been helpful to Iran's missile program?
    Mr. EINHORN. By acknowledgment of the Russian Government publicly, there have been some transfers of goods in technology.
    Chairman GILMAN. Since there are such transfers, have you imposed sanctions on any responsible entities under our existing sanctions law?
    Mr. EINHORN. Well, we did impose sanctions back a number of years ago on Russian entities for transfers of missile technology.
    Chairman GILMAN. If you would withhold a moment, please let's have order in the Committee; and if there are any conversations, please take them out to the anteroom.

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    Would you respond again, if there have been such transfers, as you acknowledged there have been, have any sanctions been applied?
    Mr. EINHORN. I was about to mention that sanctions had been applied against a Russian entity a number of years ago for transfers of missile technology to India.
    Chairman GILMAN. I am talking about to Iran.
    Mr. EINHORN. In this particular case, we have not yet made a determination on sanctionability.
    Chairman GILMAN. And yet there have been transfers that have been made over the last year; is that correct?
    Mr. EINHORN. As I said, by admission of the Russian Government, there has been some assistance, some transfers had been made. The question is whether those transfers meet the requirements of U.S. law.
    Chairman GILMAN. Mr. Manzullo.
    Mr. MANZULLO. Well, I am here scratching my head, and I realize why most people hate the whole concept of foreign aid. Let me see if I get this straight.
    The United States sends foreign aid to Russia. Russia has openly acknowledged they violated the MTCR. The Administration has failed to come up with any sanctions against those entities. And now the U.S. Congress wants to come back and lower the threshold to get the Administration to do something about these missiles or whatever parts are going to Iran. And you are telling the Congress today that you need more time for diplomacy.
    Well, the American people have had it with those types of answers. And I think the American people are fed up with foreign aid going to Russia and the Administration sitting there and defending Russia and saying, well, we are considering what sanctions we are going to make, when there has already been an admission of violation of the MTCR.

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    So I think this body is acting responsibly. I think the Administration is acting irresponsibly. And, Mr. Chairman, I commend you for this bill. It is a good, strong bill.
    In any case, at the end of the day, the President still has the option for national security waiver. So why is the Administration opposing this? Could somebody answer that?
    Mr. EINHORN. I would like to answer and go to your basic premise. The key question here is, what will be effective at inducing the Russian Government to take effective steps to stop the transfer of goods and technology?
    Mr. MANZULLO. No. The issue is, why aren't you enforcing the present law?
    Mr. EINHORN. And it is our belief that what will be effective is very strong, persistent diplomacy. Will the imposition——
    Mr. MANZULLO. Will the——
    Mr. EINHORN. Excuse me, Congressman. Will the premature imposition of sanctions do anything to stop these transfers?
    Mr. MANZULLO. Would you tell me what—the diplomatic tools you are talking about, is it the exchange of letters?
    Mr. EINHORN. I don't know if you attended Ambassador Wisner's briefing yesterday. I was in China myself, so I didn't attend. But if you did attend, you would have gotten a good briefing, I believe, on the——
    Mr. MANZULLO. I didn't have the opportunity. But you are the one answering the questions before this Committee today. What tools are you talking about?
    Mr. EINHORN. I am talking a combination of tools. One is very high-level diplomatic efforts, not just by Ambassador Wisner and his team, but by the President and virtually every senior official of this Administration. This has been a persistent effort for the last 6 months to a year.

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    But beyond that, another important tool is the implicit threat of sanctions under existing legislation.
    Mr. MANZULLO. You can have all the threat you want.
    Mr. EINHORN. That is right, and I believe that those——
    Mr. MANZULLO. So you are telling us—you are telling us——
    Mr. EINHORN. Excuse me, Congressman, because my view is that those threats do have an important effect at inducing Russian behavior, changing Russian behavior.
    Mr. MANZULLO. So you think that——
    Mr. EINHORN. And we see that taking place.
    Mr. MANZULLO. So you just sit there and say, will you guys please mend your ways?
    Mr. EINHORN. No, we don't just sit there. We have been very active. This has been one of the highest priorities of this Administration.
    Mr. ACKERMAN. Will the gentleman yield?
    Mr. MANZULLO. Of course.
    Mr. ACKERMAN. Thank you very much. I am very concerned with the gentleman's premise that the Russians have admitted to violating the MTRA.
    Mr. MANZULLO. He said himself——
    Mr. ACKERMAN. The MTCR, excuse me, and that the Administration has not responded to that at all.
    Mr. MANZULLO. Reclaiming my time——
    Mr. ACKERMAN. Have they, indeed, violated—have they admitted violating the treaty?

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    Mr. EINHORN. Congressman Ackerman, you are correct. The Russians have not admitted to violating the MTCR. There has been admission that certain goods and technologies have found their way to Iran, and they are investigating that. But there has been no admission that there have been violations of the MTCR. Indeed, they have claimed publicly that they have not acted inconsistently with——
    Mr. MANZULLO. Reclaiming my time, has the Administration made a determination that there has been a violation of the MTCR?
    Mr. EINHORN. As I mentioned a moment ago, we are examining that——
    Mr. MANZULLO. How long has that been——
    Mr. EINHORN [continuing]. Consistent with law, and so we have not made that determination.
    Mr. MANZULLO. How long has that been under examination?
    Mr. EINHORN. Well, we have been pursuing this diplomatically for several months. And within that time, we have been trying to evaluate our intelligence against the requirements of our law.
    Chairman GILMAN. The gentleman's time has expired.
    Mr. Berman. Mr. Berman has made a request. Now we are under the 5-minute rule here, Mr. Berman.
    If you would like to be recognized next, Mr. Lantos, we will be pleased to do it.
    Mr. Berman.
    Mr. BERMAN. Thank you, Mr. Chairman. In a little while, I am going to propose an amendment to this bill. But I just want to make a few points. First, I want to congratulate the Chairman on trying to deal with what I think is a serious problem. And if I could say, I have tremendous respect for Mr. Einhorn and for what the Administration has been doing recently and for what you have been doing throughout the time I have known you, to try and deal with the problem of missile proliferation.

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    But the Administration does have to understand that a lot of people in the Congress and in the world who are watching these issues feel like there is a reluctance to impose sanctions, perhaps for very good reasons. Perhaps our notions about the consequences of impositions of sanctions in terms of achieving the goal, which is to stop the proliferation of missile technology and, in this particular case, to stop Iran from developing the missiles, which we all share—and the Administration is obviously and clearly leading the way in its efforts to do something about that, but—maybe you think the goal is self-defeating. But the sanctions are self-defeating in terms of achieving the goal.
    From the time of the Administration's reluctance to impose sanctions for the transfer of technology by China to Pakistan a number of years ago, there is a growing feeling that the Administration uses the standard of evidence in the law as a basis for delaying the imposition of sanctions; and the reason is really based on its reluctance to deal with the consequences of that imposition of sanctions. I think it is out of that concern that the Administration—that the Committee is trying to find a way to force the issue.
    Now, a number of times, I asked Secretary Lynn Davis, when she was in her position, if there is something wrong with our law, if our law is too inflexible, if—tell us what. Let's talk about changes. Let's talk about how we can have a partnership to try and do something about missile proliferation. It is more effective than the way it seems to be working. And the response from the Administration during those times was, the law is just fine.
    But when we look at the lapse of time between the reports and pretty much the incontroverted reports of transfers of missile systems, missile technology guidance systems, items that are clearly MTCR-related, one thing the law is either—well, for what I said earlier, the Administration doesn't want to impose the sanctions, or the law is too restrictive and makes it too difficult to impose sanctions, and so this bill comes up.
    Now, this bill causes me some real problems. I would like to ask, is the Committee counsel—this issue of the credible information gives me great concern, because what if there is a credible report that entity X transferred an item that, hopefully, after my amendment, it will be an MTCR item, but an item to Iran, and then there is other credible evidence that—or greater credible evidence that, no, entity Y made that transfer.

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    This threshold of credible evidence as the basis for something of consequence flowing is a difficult standard. And while I don't have an alternative, you know—well, yes, my question was, if you have credible information that entity X made the transfer and you have other credible information that entity Y made the transfer, under this bill, what is the Administration to do? Sanction—sanction both on the ground, that there is a good chance that one of the sanctions will be on the right party?
    How do you deal with this issue of credible information in terms of making decisions from mysterious consequences, as sanctions go?
    Chairman GILMAN. If the gentleman will yield to counsel, if the counsel will identify himself, I think we can fully answer that.
    Mr. RADEMAKER. I am Steve Rademaker, counsel to the Committee. I wanted to make sure I understand your question, Mr. Berman.
    You are asking what is to happen in the situation where there is some credible evidence that points in one direction and additional credible information that points in another direction?
    Mr. BERMAN. Right.
    Mr. RADEMAKER. The structure of the bill is such that, in a situation like that, the credible information standard would be triggered because there is some credible information indicating that a transfer took place.
    The waiver provision——
    Chairman GILMAN. Mr. Rademaker, if you will pause for a moment, we intend to continue right through. I sent some of our Members over to vote early and come back. So we will continue. And I am going to urge my colleagues to please return as quickly as possible.
    Mr. Rademaker.
    Mr. RADEMAKER. The waiver provision of section 4 would also be implicated under your hypothetical, and in that situation, the President would have the flexibility to evaluate all of the available evidence and reach the conclusion under section 4 that, on the basis of the evidence taken as a whole, there had been no transfer whatsoever. And he could exercise the section 4 waiver. Section 4 permits that to be done in classified form.

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    And, moreover, there is a provision that ensures that if that happens, there is no need ever to publicly identify the entity in the report to be provided under section 2.
    Mr. BERMAN. Let me just follow up on this. As I understand it, credible information comes in, the report must be made, the sanctions must be imposed. And then, you are saying, they could waive those sanctions?
    Mr. RADEMAKER. That is essentially correct, though I think I made the additional point that if the information is evaluated in a timely manner by the President, it would be possible for him to exercise the waiver under section 4 prior to identifying the entity in any report under section 2. So there would never be a public listing of or public identification of the entity.
    Mr. BERMAN. I understand, but there is something wrong in the structure of a bill that says a party that we think probably didn't make this transfer, because while there is some credible report that they did, there is a great deal of other credible information that it was another party that made it, that that party is going to be sanctioned even if there is a waiver.
    I am not trying to deal with it now, but at some point, before this kind of a bill would come law, I think we have to work on that structure because there is something wrong with it.
    Mr. EINHORN. Thank you, Mr. Berman. Let me raise the same point.
    As I read the bill, it suggests that the initial report would be unclassified, and so the name of the entity would be published if there is credible information that that entity had made this transfer.
    Mr. BERMAN. Mr. Rademaker says that could be classified.

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    Mr. EINHORN. No. But the waiver report could be classified. There is no indication that the initial report can, but then there is what may be called the ''oops'' provision later on. So you are entitled to waive if you find out that the credible information turned out to be inaccurate.
    Now, that waiver report can be classified. But what you would have done in the interim is publish the name of an entity. You would discredit that entity; you might make it difficult diplomatically to engage with the government concerned because one of its entities had been, in its view, wrongly accused of having undertaken this action. So you will have done some damage and undercut your diplomatic efforts on the basis of information you thought to be credible.
    Chairman GILMAN. If the gentleman will yield.
    Mr. Rademaker, would you respond to that?
    Mr. RADEMAKER. Yes, Mr. Chairman.
    I would simply call everyone's attention to section 2(c), which lists exceptions to the requirement that entities be identified on the President's report. And in particular, paragraph 2(c)(3), which states that it is not necessary to identify an entity in an instance in which that entity essentially has benefited from a waiver under section 4.
    So, in other words, the list need not contain the names of entities with respect to whom the section 4 waiver was exercised.
    Mr. EINHORN. But what happens before the waiver 4—the section 4 waiver was exercised, but after the initial identification of the entity?
    Mr. RADEMAKER. Again, perhaps there is some misunderstanding. There is no need to wait until after the public identification of the entity in order to exercise the section 4 waiver. That waiver could be exercised at any point after the initial credible evidence or credible information comes to the Administration's attention, and well in advance of the issuance of the next report under section 2.

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    Mr. EINHORN. No, I understand that. But what happens if your credible information comes in, you make your report, and then a week later you have information that raises questions about that information; and you want to reconsider, re-evaluate. You know, then you can—by that time, the information is already public.
    I understand that you can simultaneously provide the notification and waive if, before that time, you have gotten information that throws doubt upon the initial information. But what if the sequencing is such that the information that throws doubt upon the credible earlier information doesn't come in in time? What do you do then?
    Mr. RADEMAKER. Well, Mr. Berman's hypothetical was a situation where you have evidence pointing in both directions. It sounds like you are asking, what if initially you only have information pointing in one direction?
    Mr. EINHORN. That is usually what happens. You get an initial intelligence report. It looks plausible, but you want to carry out more investigation, ask some questions, do more intelligence gathering, to try to substantiate it.
    What happens if the time elapses when you need to make that report? Do you go forward with it, and only later on, if information comes in that refutes the initial report—I mean, what do you do then?
    Mr. RADEMAKER. Well, the legislation tries to speak to that situation by delaying the imposition of sanctions for 30 days after the issuance of the report, so that there is an additional window after the report is issued to conduct the sort of investigation that you are talking about prior to the actual imposition of sanctions. And during that 30-day period, there would remain the possibility of a section 4——
    Mr. EINHORN. I suggest you have some intelligence officers come and speak to you in closed session about this, because this is not how it happens in the real world. In the real world, you will get an intelligence report, and 30 days is a very short period of time for you to get enough additional information to corroborate, substantiate, refute, and so forth. It is very rare that an issue like this would be resolved after 30 days.

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    And don't take my word for it. I would encourage you to have some intelligence officers speak to you in closed session about how intelligence information of this sort comes in.
    Chairman GILMAN. That is precisely what we did yesterday, Mr. Einhorn, and that is why we have some of these provisions in the bill responding to that. While we are waiting—I will recognize you in just a moment, Mr. Faleomavaega.
    We were informed that we have less than a year to prevent Iran from developing its short-range missiles and getting to the long-range missiles. How long have the negotiations been going on now with Russia, how long a period of time on the Iranian missile program?
    Mr. EINHORN. Well, we have raised some reports with the Russian Government last year, last calendar year. But the President has taken this up at the Helsinki meeting.
    Chairman GILMAN. How many months have we been engaged now in these negotiations all together?
    Mr. EINHORN. Well——
    Chairman GILMAN. Including Wisner, including the President?
    Mr. EINHORN. Well, the Wisner group has been meeting for a couple of months. It has only had one encounter. It has its second main encounter coming up at the beginning of November.
    Chairman GILMAN. When did the President first take this up?
    Mr. EINHORN. I believe it was at the Helsinki meeting.
    Chairman GILMAN. And what was the date of that?
    Mr. EINHORN. In March of this year.
    Chairman GILMAN. And was there any prior discussion between our Administration and with the Russians on the Iranian missile program?

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    Mr. EINHORN. Yes, Mr. Chairman. At the expert level, there were discussions earlier than that.
    Chairman GILMAN. How much earlier?
    Mr. EINHORN. Well, we had given some information to the Russian Government as early as September 1996, but the information was quite fragmentary at that time. And the information that we have received subsequently was much more full.
    Chairman GILMAN. So we are talking essentially about a 13-month period, aren't we——
    Mr. EINHORN. Well——
    Chairman GILMAN [continuing]. From discussing this with Iran, with Russia rather, and without any real substantive decisions being made by the Russian Government or by our government.
    Mr. EINHORN. You are correct, Mr. Chairman, that a number of the reports were in about a year ago, and we raised them. But the body of evidence that has been most troublesome for us only came in within recent months, I would say the last 6 months.
    Chairman GILMAN. So that is our concern, that here we have been fussing around with this for 13 months. We have continual evidence of the Russians continuing to supply Iran with technology and equipment, and yet we are not doing anything about it except to talk further.
    Mr. EINHORN. No. Excuse me, Mr. Chairman, your premise is that we have been doing little and the Russians have not responded at all. But I am sure Ambassador Wisner mentioned to you yesterday the steps that the Russians took——
    Chairman GILMAN. He said there were 10 specific cases that we had raised with them, and yet there was a minimal response on the 10 cases. That, to my mind, doesn't sound like any actionable success.

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    Mr. EINHORN. Well, in open session, it is very difficult to comment on all the cases, but I believe Ambassador Wisner demonstrated to you that on a number of these cases, and a substantial number, the Russians have taken serious steps to try to put a halt to it. We have to wait and see, to figure out how effective those steps will be.
    Chairman GILMAN. I am going to have to recess just briefly. Some of our Members will be returning.
    Mr. Faleomavaega, if you stand by, we will call on you as soon as we get back. I anticipate it will only be a few minutes. The Committee stands in recess because of a vote on the floor.
    [Recess.]
    Mr. MANZULLO. [Presiding.] The Committee will be in order.
    Mr. Faleomavaega, I think it is your turn.
    Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I would like to ask the Secretary for his assistance, if you could help me with some questions.
    I am right over here. Thank you. I would appreciate your edification.
    I realize when we talk about sanctions we talk about all kinds of things. The current law provides we have sanctions against nuclear transfers of whatever, the sanctions on missile transfer which is the case at hand. And there are also sanctions on trade.
    I wanted to ask, Mr. Secretary, are there any less standards provided for these three different categories that we have, given laws to impose sanctions on countries that violate our sense of fairness in the situation? Among these three areas that you cited, do you consider missile transfer as the highest priority as far as the current law is written? Are they all at the same level of standard?
    Mr. EINHORN. Thank you, Congressman.
    One of the problems with the nonproliferation sanctions laws, as we see them, is that they adopt different standards. There are different waiver standards. There are different standards in terms of evidence, the level of evidence you need to trigger sanctions. There are different standards in terms of the extent to which they conform to existing international agreements. They are inconsistent. And Congressman Berman isn't here now, but he raised this question of whether we should try to review all of our nonproliferation sanctions laws to try to make them more consistent.

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    Personally, I think it would be good for us to sit down and take another look, to see whether they can be more consistent, more effective.
    Now, consistency in the laws doesn't mean that all of the problems are equally serious.
    Mr. FALEOMAVAEGA. True.
    Mr. EINHORN. The question of Iran's acquisition of ballistic missile capabilities is especially serious and urgent at this time, and the Administration has reacted to that threat with, I think, a great sense of urgency. But we are also terribly concerned about Iran's efforts to acquire nuclear weapons, and we are working on that problem intensively as well. But right now, there are few national security problems to which we give higher attention than Iran's acquisition of missile capabilities.
    Mr. FALEOMAVAEGA. The question about missile capability isn't on whether or not the missile; it is the—not only the fact that the missile can go from one point to another, the fact is that these missiles can carry weapons of mass destruction, specifically nuclear weapons.
    Mr. EINHORN. Absolutely. One of the reasons we are giving such a high priority to this is because we know of Iran's efforts to seek these capabilities.
    Mr. FALEOMAVAEGA. Not only that, Mr. Secretary, but I think it is also known in the media, and the concerns that Israel has expressed in the fact that if Iran has the capability of providing for these kinds of nuclear missiles that carry nuclear weapons, that Israel's security is very much in danger, in jeopardy.
    Mr. EINHORN. That is correct. We are concerned about Israel's security. We are concerned about the security of other U.S. friends and allies in the region. We are concerned about the security of U.S. forces in the region as well.
    Mr. FALEOMAVAEGA. My time, I realize, is about up. But are we applying the same standard and the same pressures in China and its relations with missile transfer with Pakistan as we are doing between Russia and Iran?

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    Mr. EINHORN. We have been engaged for a year or two and a very active dialog with the Chinese about their missile technology exports with respect both to Pakistan and Iran as well.
    Mr. FALEOMAVAEGA. But it is a given fact that we have found that the Chinese, in fact, are transferring missile technology to Pakistan; is that true?
    Mr. EINHORN. We have sanctioned the Chinese twice for the transfer of missile-related technology to Pakistan; that is correct.
    Mr. FALEOMAVAEGA. And they're still doing it?
    Mr. EINHORN. They are still cooperating with Pakistan's ballistic missile program.
    Mr. FALEOMAVAEGA. And I am afraid this takes me right to the concerns that my good friend from California has expressed earlier—whether or not we have any teeth in the current law for providing for the sanctions. Otherwise, it is almost like riding around with a toothless tiger.
    In your opinion—at least the opinion of the Administration—you believe that the current law is OK, that you do have sufficient authority to put pressure on Russia, as well as China; that we are going to enforce these sanctions if they don't comply?
    Chairman GILMAN. If the gentleman will yield I am going to urge our Members to go vote and come right back. We will continue with the hearing right on through.
    Sorry for the interruption.
    Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. OK.
    Chairman GILMAN. The gentleman is—Mr. Campbell——
    Mr. FALEOMAVAEGA. This is a democracy.
    Chairman GILMAN. Have you——
    Mr. CAMPBELL. Your time was not up?

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    Mr. FALEOMAVAEGA. I was still raising a question to the Secretary, and he didn't respond to my question.
    Chairman GILMAN. Please respond.
    Mr. EINHORN. We do believe we have sufficient tools. We have. We have the sanctions laws that exist that must be triggered if the conditions for triggering them are present.
    But in addition to that and what is not often recognized here, we have various discretionary policies—authorities to use to penalize violators even if the rigorous standards of law are not met. And we reserve the right to impose such discretionary penalties if it becomes warranted.
    And in this case—I understand Ambassador Wisner made very clear to the Committee that if the requirements of law are triggered, we won't hesitate to implement our law. But even if those aren't met, and if diplomacy doesn't work, we have other policy tools available to us to deal with entities that are acting inconsistently with our missile nonproliferation policies.
    Mr. FALEOMAVAEGA. My problem, Mr. Secretary, I have always remembered this African proverb, that when two elephants fight, the grass still gets trodden. We have another way of saying, when two elephants make love, the grass still gets trodden.
    My problem here is, sometimes they are going to be doing some power plays and say, well, we will sacrifice this for giving Russia something else they might want. And I am very concerned that this is the way we are going to be doing these tradeoffs.
    Mr. EINHORN. Congressman, we haven't sacrificed our nonproliferation objectives despite our desire to have a good, strong relationship with Russia. We pursued our nonproliferation, our missile nonproliferation objectives very vigorously and at the highest levels. This is one of our top priorities today with Russia.

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    Mr. FALEOMAVAEGA. Thank you. Thank you, Mr. Chairman.
    Chairman GILMAN. Is any other Member seeking recognition at this time?
    If not, we will stand in a short recess while the vote is on. We will continue in a few moments. Thank you.
    [Recess.]
    Mr. MANZULLO. [Presiding.] The Committee will be in order.
    Mr. Lantos.
    Mr. LANTOS. Thank you, Mr. Chairman. I want to try to rephrase and recast the discussion we have had thus far, because I very much hope that we will not degenerate into wrangling and disarray.
    There is no doubt in my mind that the intention and the sincerity on the part of Republicans and Democrats on this Committee and the intention and sincerity on the part of this Administration are equally strong to prevent Iran from getting the technology for weapons of mass destruction.
    So let me stipulate that, because I think there is absolutely no room for parties in criticism here. We had enormous leverage in the early 1990's when the Republican Administration was in control, and that leverage was not used.
    Moreover, the issue is not a new issue. Last week, George Soros proposed $500 million in aid to Russia in the health and education field. Six years ago, he gave $100 million to prevent Soviet scientists from going to work for Iran, Iraq, and Libya. So the issue is old. The support for the goals of the legislation is bipartisan. And I think it is important we work this out in an amicable fashion.
    I would like to place in the record a letter to Mr. Hamilton from Secretary Albright which deals with this issue.

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    Mr. MANZULLO. Without objection.
    [The letter appears in the appendix.]
    Mr. LANTOS. This letter of our distinguished Secretary of State raises four or five issues that I would like to propose our Chairman or Ranking Member work out in conjunction with the Administration.
    Issue No. 1 relates to the meaningful waiver. I think it is absolutely critical that a national security waiver which is substantive and meaningful be present in legislation of such importance.
    The second issue relates to standards of evidence. I have an amendment which I may or may not offer. I would prefer that the question of standards of evidence be worked out by Mr. Hamilton and Mr. Gilman and the Administration.
    I think the standards here may be insufficiently strong. Presidential determination, which is what the Administration prefers, I think is too strong. I think some compromise can be found.
    The Secretary of State raises some questions with respect to reporting requirements. I think that with a modicum of good will and oversight, this can be accommodated and worked out in a harmonious fashion.
    I also believe that there is a question Secretary Albright raises concerning sanctions when individuals may not have been aware that actions taken by them might contribute to Iran's capability to develop weapons of mass destruction.
    My feeling is, Mr. Chairman, that, in view of the fact that the President raised this issue with Mr. Yeltsin, the Vice President raised this issue with Chairman Midan, Secretary Albright raised it with Foreign Minister Primakov, Ambassador Wisner is now having a series of meetings with his counterparts, it is useful for the Congress to make its voice heard on this issue.

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    Our voice is not in opposition to the Administration. It is designed and should be so crafted that it supports the actions of the Administration. No one in Congress and no one in the Administration has offered more to building U.S.-Russian relations than the Vice President through the Gore-Chernomyrdin Commission.
    It seems to me that our Chairman will be, as I understand it, having a dialog with the Vice President in which I hope other Members of the Committee will be asked to participate, and the matter can be worked out amicably.
    I think the Administration is correct in saying that it is on the right path. I believe the Congress is correct in saying that we are impatient. This is not a new issue. I disagree with the distinguished Secretary at the table that we should give diplomacy a chance. Diplomacy has been working on this for years. This issue was first raised 6 years ago. So it is not a new issue.
    And I simply cannot accept the notion that the Russian Government cannot control its entities that engage in such abominable practices. If, in fact, they cannot control their entities, there is nothing to worry about. Then we should proceed with the strongest sanction bill conceivable.
    I believe they have control over the various entities which are involved here, and it is a question of what priority they place on the issue. Clearly, the President, the Vice President, the Secretary of State have made it clear to the Russians this is a matter of utmost importance to us. Clearly they have not responded with a similar degree of urgency. They haven't placed the priority on this matter anywhere near commensurate with the importance of the issue. Congressional action, which I support, will encourage them to do so.
    I also think it is important to realize, Mr. Chairman, that at the collapse of the Soviet empire, our prestige and our leverage with Russia was enormous. When the Russians discovered that we expected this gigantic metamorphosis from a Soviet system to a democracy in the market system to take place without adequate lubrication, our leverage dramatically diminished.

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    That is why we are having so much trouble getting their attention. I think congressional action will serve to intensify their attention. And I respectfully urge the Chairman to seek an amicable resolution of the remaining differences between the Democratic and Republican sides and the Administration before the bill comes to the floor.
    Mr. GEJDENSON. Mr. Chairman.
    Chairman GILMAN. I would like to respond a moment to Mr. Lantos. And I thank the gentleman for his recommendations; he has certainly been a staunch supporter about doing something about the exchange between Russia and Iran. Since we have limited time before the end of this session, I would urge that we move ahead with the measure. We will be pleased to work with the Administration once the measure has been put out of Committee to see if there are any appropriate amendments that would be in order.
    Mr. Gejdenson.
    Mr. GEJDENSON. Mr. Chairman, might I recommend following Mr. Lantos' suggestion and Mr. Berman's language, he has proposed that the Committee recess for lunch and come back at, say, 1 o'clock, because I think we are going to be later than 2 now, but 1 o'clock should do it. And if your staff, Mr. Hamilton, Mr. Berman, and Mr. Lantos could have some quick conversations, we could actually have a document that could have very broad and deep support.
    I think we all want to achieve this, and I think you could work it out. I don't think the Chairman wants to move forward, particularly in the area of Mr. Berman's amendment—I think you could just do one en bloc amendment, would be my hope, at 1 o'clock and vote it out. That would, I think, achieve all our goals.
    Chairman GILMAN. I appreciate the suggestion by Mr. Gejdenson, but I am going to ask our staffs now if they will start meeting together and see if there are any agreeable amendments that can be defined before we have a vote. But since our time is limited, and since the floor may wind up at an early hour, I am going to urge us to continue.

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    Mr. Berman.
    Mr. BERMAN. I have an amendment at the desk.
    Chairman GILMAN. Mr. Berman has an amendment. Well, did Mr. Campbell have any opening remarks?
    Mr. CAMPBELL. I did. I was on the list to be recognized.
    Chairman GILMAN. I will allow Mr. Campbell to have an opening remark, please.
    Mr. CAMPBELL. I appreciate that, Mr. Chairman. These are really directed to my good friend, the Ranking Member from Indiana. I just want to say on the record that I have benefited from my conversations with Tom Lantos. I note there is not a man I have higher regard for. And, Tom, you have helped me understand these issues.
    The Chairman was very kind in granting an amendment to the bill yesterday. And it was after our meeting with Ambassador Wisner. And it may be that State didn't know about it, at least from the comment that was made about retroactivity, I think they may not have. So I am going to offer my thoughts on it, and hopefully it might have some value.
    First, the sanctions are only to the agency. That wasn't the subject of my amendment, but I do think it bears emphasis. We are not talking about Nunn-Lugar money. We are not talking about economic support money. We are only talking about help to the very agency that is transferring the weaponry or the technology.
    The amendment that I offered, which was accepted, is now section 5. And section 5 is a national security waiver. And here is how it would prevent the retroactivity, I believe. The retroactivity was alleged to be a problem in that, if an agency had been transferring technology, no longer was, they would nevertheless end up on this list, and sanctions would have to follow.
    If that were the case, obviously, it would be of no value for that agency to have abided by the rules. They would then be given no reward at all. They would be punished. For having changed their way, they would receive no reward. And that, to me, is an obvious instance that would be contrary to the U.S. national security interest.

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    If we are not rewarding agencies which have changed their ways, it is contrary to our national interest. The section that was added since Ambassador Wisner met with us yesterday, and I was there for the entirety of the meeting, I am confident changes the bill sufficiently that there is no retroactivity problem. And with that, I yield back with my credit due to the Chairman.
    Mr. BERMAN. Could you——
    Mr. CAMPBELL. I yield to my good friend from California.
    Mr. BERMAN. I would like to ask Mr. Einhorn to respond to what appears to be a flawless argument that this waiver should eliminate essentially our concern about the retroactive application of the sanctions imposed on people who made transfers, hopefully after my amendment is adopted, of MTCR items after the Russians committed to adhere to the MTCR, so that it was a bilateral understanding of what was supposed to be withheld from proliferation. Just waiver—Mr. Campbell—so if you don't mind——
    Mr. CAMPBELL. I would be happy to yield to the Secretary of State's representative. And also in an introduction saying I also understand you have got a difficult job. You also just got off a plane from China. You may not have known that the waiver was there, so I don't mean to hold you to an unfair standard yourself.
    Mr. EINHORN. Thank you, Congressman. As I read the law, it still has the retroactivity problem in it, because the report must be made with respect to any transfer taking place after August 1995. So a number of reports would be made regarding transfers since then. These would be sanctionable activities.
    And let's say it took the Russian Government 60 days to redress the problem and to give you a basis to invoke the national security waiver that you mentioned. You would have a situation where the Russian Government was working in good faith to put an end to the assistance; but because of the retroactivity problem, the fact that the entity had committed a transfer, you know, since 1995, would mean that it would be sanctioned even if it was not engaged in sanctionable activity after the date of enactment of the law.

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    Mr. CAMPBELL. I would like to reclaim my time just to say, I don't think so, because the final judgment is the President's. I agree with you, you go on the list. But it is really just illogical to think that the President could not waive in the circumstance you described where, using your exact words, he believes there is good faith on the Russian side. It would be absolutely contrary to our national security interest to sanction on those circumstances.
    Mr. LANTOS. Would the gentleman yield?
    Mr. CAMPBELL. I yield to my good friend.
    Mr. LANTOS. I strongly agree with my distinguished colleague from California, Congressman Campbell, and I think the Administration must not be overly solicitous of stepping on some toes here. We are dealing here with matters of utmost importance. And a little bad publicity is not going to hurt the Russian entity which engaged in an illegal transfer of materials relevant to developing weapons of mass destruction. I mean, we are not dealing with little flowers here. We are dealing with former entities of the Soviet empire now feeding stuff to Iran. And a bit of embarrassment is very minor punishment for past transgressions. I think Congressman Campbell is absolutely correct. We now have a provision which is reasonable. It is in the national security interest, and we should proceed with it.
    Mr. EINHORN. Congressman, can I just respond that I agree with you that our job is not to protect the sensibilities of entities that may be contributing to proliferation. Our job is to put an end to any assistance to such proliferation programs. The question is what provides incentives to stop these activities. And what I would say is that if you have a retroactive provision——
    Mr. LANTOS. But if we have legislation that will have sanctions in the future, that is sufficient incentive for them to terminate their preposterous behavior. That is plenty of incentive.

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    Mr. EINHORN. But if they are sanctioned whether or not the process is——
    Mr. LANTOS. No, they are sanctioned for past behavior which the President can waive. And they will be sanctioned for future behavior if they insist on transferring products and technologies to Iran.
    Mr. EINHORN. But the President can only waive if effective steps are being taken to terminate. And what happens if those effective steps take longer than the 30 days?
    Mr. CAMPBELL. No. He waives when it is the national security. It doesn't say anything like you just said. It is national security.
    Chairman GILMAN. The gentleman's time is expired. Mr. Berman.
    Mr. ACKERMAN. Mr. Chairman——
    Chairman GILMAN. Mr. Ackerman.
    Mr. ACKERMAN. In the absence of Mr. Berman——
    Chairman GILMAN. Mr. Ackerman.
    Mr. ACKERMAN.—I have an amendment at the desk.
    Chairman GILMAN. The gentleman has an amendment at the desk. The clerk will report the amendment.
    The CLERK. Amendment offered by Mr. Ackerman. After section 6 of the bill, insert the following new section and redesignate the subsequent section accordingly. Section 7, purchase of weapons, technology——
    Chairman GILMAN. I ask unanimous consent that further reading of the amendment be dispensed with. And the gentleman is now recognized for 5 minutes on his amendment.
    [The amendment referred to appears in the appendix.]

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    Mr. ACKERMAN. Thank you, Mr. Chairman. I offer this amendment after consultation and discussions and concurrence with Mr. Rohrabacher and others. This amendment expresses the sense of Congress that the President should exercise the authority he already has under current law to promote bilateral and multilateral nonproliferation and disarmament activities.
    Specifically, the Freedom Support Act authorizes the President to purchase, barter, or otherwise acquire weapons of mass destruction or weapons-related materials. In addition, that act authorizes the President to establish programs for preventing diversion of weapons-related scientific and technical expertise of the New Independent States to terrorist groups or to Third World countries.
    I believe that as long as we intend to give the President an additional stick to hit potential proliferators with, that we also ought to remind the President that he has carrots available as well, and that we should encourage him to use those carrots.
    The amendment also authorizes the President to use money already available for assistance to the New Independent States for the purpose of buying the material or technology that we would prefer Iran not acquire.
    Mr. Chairman, people do things for love or money. Unless I miss my guess, the Russians don't love the Iranians, so they must be in it for the money. I believe that we should give the Russians the money and let them sell missile systems to us and close down the systems that they have. I suggest to my colleagues and to the Administration that we catch more flies with honey than with vinegar, and I urge support for the amendment.
    Chairman GILMAN. Thank you, Mr. Ackerman. The Majority accepts the amendment. Anyone? Mr. Hamilton.
    Mr. HAMILTON. I think it is an excellent amendment. I commend the gentleman from New York. I support it.

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    Mr. CAMPBELL. Mr. Chairman.
    Chairman GILMAN. Mr. Campbell.
    Mr. CAMPBELL. The staff just pointed out to me a question, so if I might, if the gentleman would be kind enough on my reservation to explain the line 11 and 12, I am sure you mean scientific and technical expertise in regard to the weapons-related material and delivery systems.
    Mr. ACKERMAN. Yes.
    Mr. CAMPBELL. Would it be possible to ask unanimous consent to say so in connection with such?
    Mr. ACKERMAN. I have no objection.
    Mr. CAMPBELL. So my unanimous consent request would be that line 12 be amended to say: And technical expertise, with respect to such weapons-related material and delivery systems.
    Mr. ACKERMAN. Accepted. Done.
    Chairman GILMAN. Without objection, the language is revised. All in favor of the amendment, signify in the usual manner.
    Those opposed.
    The amendment is agreed to.
    Any additional amendments? Mr. Berman.
    Mr. BERMAN. I have an amendment at the desk, Mr. Chairman.
    Chairman GILMAN. The clerk will report the amendment.
    The CLERK. Amendment offered by Mr. Berman. In each section of 2(A)(1), 2(A)(2), 4(A)(1), and 4(A)(2), strike ''goods'' and all that follows through ''missiles'', and in each case insert in lieu thereof ''items on the MTCR annex or transferred items that the United States——''

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    Chairman GILMAN. I ask unanimous consent that the reading be dispensed with. I recognize Mr. Berman for 5 minutes.
    [The amendment referred to appears in the appendix.]
    Mr. BERMAN. Yes, Mr. Chairman. The missile technology control regime was a regime originally negotiated with our major allies during the time of the cold war to stop the proliferation of missile technology. Subsequently, other countries, including Russia, and China committed to adhere to that regime.
    What I consider to be a defect in this proposal to strengthen our sanctions legislation is that we really have no clear definition of what goods and technology are the cause of the sanctions. And I believe my amendment deals with that problem by tying it to the annex of the missile technology control regime, which contains a variety of specific goods and technologies which would contribute to the production and development and deployment of missiles within the range of the missile technology control regime, which are certainly the most serious developments in Iran that we are focused on.
    And in addition, since these are unilateral sanctions, we are seeking to include the items the President has sought to have added to the annex, or the Secretary of State has sought to have added to the annex, which have not yet been accepted by the other parties to the regime on the basis that these are U.S. sanctions, and stonewalling by some other countries should not stop us by imposing sanctions when very serious flows of goods or technology that would contribute to a missile system of the requisite range and throw weight are transferred.
    And so my amendment attaches to the regime and other items specifically proposed or deemed by the Administration so that you have a specificity, we want a statute—a law here that will hold up to both the test of fairness and to any kind of a judicial review.
    You have to have some level of specificity in knowing what items we are telling persons and entities not to transfer. I think my amendment deals with that problem. And I would urge its adoption. What is the Administration's view on——

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    Chairman GILMAN. Mr. Einhorn.
    Mr. EINHORN. I think moving in the direction of greater specificity is a good idea. Certainly identifying sanctionable assistance as the provision of MTCR annex items moves in the right direction, including items that the United States proposes to be placed on the annex is a good idea. I am not sure if that is the scope of Congressman Berman's intended addition or whether he also intends to broaden it beyond that.
    Mr. BERMAN. Well, we do have language here which provides technical assistance or facilities that the President deems to be of concern to the United States. So it requires a specific executive branch trigger.
    But the question of training or allowing facilities to be used to test items which contribute to the development of a missile capability, I think, are important items and we wanted to give the Administration the ability to include those kinds of activities within the list of sanctioning conduct.
    Mr. EINHORN. We agree that those are important items whether or not they are specifically listed on the MTCR annex, if they made a major contribution, a direct contribution to missile proliferation.
    Mr. BERMAN. Your last sentence.
    Mr. EINHORN. If those items, whether or not on the annex, make a direct contribution to missile proliferation, then those would be legitimately included in the scope of sanctionable activity.
    Mr. BERMAN. Well, that is the purpose of this amendment is essentially to give you the flexibility. This is one aspect of the bill that will give you some flexibility.
    Mr. EINHORN. Yes.
    Mr. BERMAN. Give you the flexibility to include items not on the annex that you are seeking to get on the annex or that are clearly contributory to Iran's missile program. Remember, this is only dealing with proliferation to Iran. It is not worldwide. So I think, in that context, the amendment makes sense.

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    Mr. EINHORN. That is a constructive addition.
    Mr. BERMAN. Thank you. I yield back what time I have remaining. All right I mean, oh, on the chance that we could get a bipartisan consensus in favor of this amendment, I would be happy to——
    Chairman GILMAN. Withhold the amendment.
    Mr. BERMAN [continuing]. Withhold or——
    Chairman GILMAN. They are working—I understand counsel is working on a better definition in the bill and we will come back to that after we view some of the other amendments. The amendment is withdrawn.
    Mr. BERMAN. Sure. But I will have a chance to vote before we leave?
    Chairman GILMAN. Yes. Are there further amendments to be considered?
    Mr. HAMILTON. Mr. Chairman.
    Chairman GILMAN. Mr. Hamilton.
    Mr. HAMILTON. I don't have an amendment to offer at this point, but I am not comfortable with the language we have in the bill with regard to credible information and the standard of evidence, nor am I comfortable with the proposal from the Administration which, as I understand it, puts all of the discretion with the President.
    I think it is possible here for us to come up with some language, although I don't have language to suggest at this moment. I just ask the Chair's indulgence so we can work on that at some point before we conclude consideration of the bill and see if the staff can help us out here with some language.
    Chairman GILMAN. And if the gentleman will yield, we will be pleased to try to come up with a better definition on the evidentiary.

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    Are there further amendments? Any further amendments to be considered at this time?
    Anyone seeking recognition? If not, we will declare a half-hour recess to give staff an opportunity to clarify some of the language in the Berman bill and any other areas. The Committee stands in recess until 12:30.
    [Whereupon, at 11:55 a.m., the Committee was recessed, to reconvene at 12:30, this same day.]

    [AFTERNOON SESSION]
    Chairman GILMAN. The Committee will come to order.
    Mr. Berman.
    Mr. BERMAN. Mr. Chairman.
    Chairman GILMAN. Mr. Berman is recognized.
    Mr. BERMAN. Yes. Earlier I offered an amendment which is before us, I guess, at this time. I would like to ask unanimous consent to withdraw that amendment and offer a somewhat revised amendment.
    Chairman GILMAN. The pending amendment is withdrawn. The clerk will report the revised Berman amendment. The clerk will distribute the amendment. The clerk will read the amendment.
    The CLERK. Amendment offered by Mr. Berman. In section 2(A) amend paragraphs 1 and 2 to read as follows. 1(A), transferred items on the MTCR annex——
    Chairman GILMAN. I ask unanimous consent that the further reading be dispensed with. Mr. Berman is recognized for 5 minutes on his amendment.
    [The amendment referred to appears in the appendix.]
    Mr. BERMAN. Yes, Mr. Chairman. I earlier explained the amendment. This is a slightly different manifestation of essentially the same principle, that the existing language in the bill is too broad; that the actionable conduct, transferred goods or technology, or provided technical assistance or facilities that contribute to Iran's efforts to acquire, develop, or produce ballistic missiles. I could argue almost anything that was sent to Iran could be viewed in that fashion.

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    This tends to tie it down to MTCR annex items, items that the United States is proposing for addition to the annex for the missile technology control regime, technical assistance or facilities which the President deems to be of concern, and attempts to do both the MTCR annex transfers or attempts to provide that technical assistance or facilities.
    And it has been cleaned up by counsel. And that is the amendment before us. I think I want to hear from the Administration on the issue of this amendment if they are willing to comment on it. Mr. Einhorn.
    Chairman GILMAN. Mr. Einhorn.
    Mr. BERMAN. Have you had a chance to look at this amendment, Mr. Einhorn.
    Mr. EINHORN. We have. And it is clearly an improvement over the original in addressing this particular problem in the legislation; that is, the scope of sanctionable activity. It narrows it to a manageable and reasonable extent.
    Chairman GILMAN. Thank you. Mr. Berman, I want to thank you and your staff for working together during the recess period to arrive at this amendment, which is now agreed to by the Majority. Mr. Hamilton.
    Mr. HAMILTON. Mr. Chairman, I think Mr. Berman and staff and others deserve credit. I urge the adoption of the amendment.
    Chairman GILMAN. Mr. Hamilton urges the adoption of the amendment. Are there any additional Members seeking recognition? If not, the Chair will put the question on the amendment by Mr. Berman. As many as in favor signify in the usual manner.
    Opposed.
    The amendment is carried.
    Is Mr. Menendez—Mr. Menendez, on your amendment.
    Mr. MENENDEZ. Thank you, Mr. Chair. I have an amendment at the desk.

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    Chairman GILMAN. Mr. Menendez has an amendment at the desk. The clerk will distribute the amendment. Would you identify which amendment, Mr. Menendez? There are two amendments apparently.
    Mr. MENENDEZ. It is an amendment—it is entitled section 6, programs or projects of the IAEA for the nuclear power plant in Iraq.
    Chairman GILMAN. The clerk will distribute the amendment.
    Mr. CAMPBELL. Mr. Chairman, I reserve a point of order.
    Chairman GILMAN. The gentleman reserves a point of order. If you withhold that a moment, the clerk will read the amendment.
    The CLERK. Amendment offered by Mr. Menendez, insert the following after section 5 and redesignate——
    Mr. MENENDEZ. Mr. Chairman, I ask unanimous consent that the amendment be considered as read and that I would be allowed to address myself to the amendment.
    Chairman GILMAN. Without objection.
    [The amendment referred to appears in the appendix.]
    Mr. CAMPBELL. Reserving a point of order.
    Chairman GILMAN. I recognize Mr. Menendez.
    Mr. MENENDEZ. Thank you, Mr. Chairman. I thank you for your courtesy. Mr. Chair, my amendment addresses an issue that is in the jurisdiction of this Committee and which I believe is relevant to this bill. And while the bill deals specifically with Iran's efforts to acquire, develop, or produce ballistic missiles, my amendment addresses an equally critical issue: Iran's efforts to develop a nuclear power plant, a power plant which we recognize to be of concern to the United States because of the transfer of civilian nuclear technology and training which could help Iran advance its nuclear weapons program.
    Deputy Assistant Secretary Bob Einhorn, who is here today, has publicly stated that the United States is concerned about the plant and the possibility that it could be used as a cover for an Iranian nuclear weapons program, and the fact that U.S. taxpayer dollars through the IAEA are being used to develop the Bushehr plant is absurd.

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    This Committee needs to take a serious look at activities that the IAEA is supporting which clearly contrast with the U.S. national security interest, particularly when they are funded in large part by U.S. voluntary contributions to the IAEA. That is the case with the Bushehr plant. And the United States is voluntary contributing one-third of the program costs to develop the Bushehr plant.
    So, Mr. Chairman, if you do rule my amendment to be nongermane, I hope that, at a minimum, considering the gravity of the concern, that you would work with me, and I would have a commitment from you to address this troubling issue in future legislation. And I would yield to the Chairman.
    Chairman GILMAN. I thank the gentleman for yielding. With respect to the Menendez amendment, let me say I do not oppose the amendment on its merits, but I do not want to expand the scope of our bill. We have learned the hard way, as you know, the implications of expanding that kind of a proposal. I would be pleased to work with you, Mr. Menendez, to draft freestanding legislation to address the issue with the next session.
    Mr. MENENDEZ. Well, I appreciate the Chairman's commitment and response. And in view of that, I would ask unanimous consent to withdraw my amendment.
    Chairman GILMAN. Without objection. And no need to rule on the point of order. Thank you, Mr. Menendez.
    Are there additional Members seeking any recognition? If not, do you have a second amendment, Mr. Menendez?
    Mr. MENENDEZ. No.
    Chairman GILMAN. No further amendment. We are preparing to go to a final vote, probably do not need a vote. But during the recess, we want you to know that our staffs are working together on several more difficult concerns that have been expressed by the Administration. We were able to reach agreement on the amendment by Mr. Berman relating to the MTCR as you just heard.

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    We were not able to reach agreement on a credible information definition issue that was issued by Mr. Hamilton. I think everyone would agree that we are trying, in good faith, to reach an agreement on that issue, and I have assured Mr. Hamilton that for the Majority, we are prepared to keep working on that issue throughout the legislative process. I think we all share the same basic objectives. And I am hopeful that with further work, we are going to be able to reach a satisfactory resolution.
    Mr. Hamilton.
    Mr. HAMILTON. I just want to express appreciation to the Chairman for his willingness to continue to work on it. I think we have made a few modest improvements in the bill today. I think there are still some problem areas. None of us want to see the legislation defeated. We recognize the importance of it. We will keep working with you on it. And thank you for your willingness to do so.
    Chairman GILMAN. Thank you, Mr. Hamilton. And we are just waiting a quorum so that we can report the bill. If Members just stand by a few moments, we have got some calls in the making and we hope we can arrive at a quorum very quickly.
    We are waiting for three more Members and we will have a quorum.
    If Members would now take their seats so we can have an accurate count. We are about ready to proceed.
    Will our Members please take their seats?
    Mr. SHERMAN. Mr. Chairman.
    Chairman GILMAN. Who is seeking recognition?
    Mr. SHERMAN. As I told you, I would like to——
    Chairman GILMAN. Yes. Mr. Sherman is recognized for a few minutes.
    Mr. SHERMAN. I just want to point out that back in early July, I began trying to ask the Administration and the State Department whether the countries of Poland, the Czech Republic, and Hungary have regular trade relationships or any trade relationships with Iran. Now, I realize the focus of this hearing is ballistic missiles that Iran is trying to acquire, but obviously their trade relationships help them generate the money that they can use to buy ballistic technology from Russia or other sources.

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    We have submitted these questions as formal questions, as part of the July 15th hearing. We sent them to the State Department. The Secretary of State has personally, face-to-face, promised me answers to these questions, first in September and again this week, and again, and again, and again, we are told we are going to get answers. We don't get answers. It is apparent that we are not going to get answers. And I would hope that if the State Department wants credibility on the issue of Iran, that if you are not, if you are going to refuse to answer questions, you would at least tell us you are going to refuse to answer questions. And it certainly compares your ability to resist the passage of this bill when there is a decision made not only to stonewall, but to dissemble about stonewalling, and to do that at the various—I hope it is not the case. I hope I will eventually get answers. But this, it is pretty preposterous.
    Chairman GILMAN. I would hope that the Administration will respond to the gentleman's request.
    Mr. EINHORN. Yes, we will. I am sorry, Congressman, that there is the appearance of dissembling or stonewalling. I will look into the request and see where it stands. And we will try to get you an answer if that is possible.
    Chairman GILMAN. Thank you.
    Mr. SHERMAN. You want to look at the July 15th, 1997, request.
    Mr. EINHORN. OK. I will do that, Congressman.
    Chairman GILMAN. Thank you very much. I ask unanimous consent that the Committee adopt the amendment in the nature of a substitute consisting of the text of the bill as amended by the Committee up to this point. This will enable us to report out a single amendment reflecting our work rather than cut it by amendments.
    Is there any objection? If not, it is so ordered.
    The gentleman from Iowa is recognized to offer a motion.

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    Mr. LEACH. Mr. Chairman, I move that the Committee report the bill to the House with the recommendation that the bill, as amended, be passed.
    Chairman GILMAN. The question is on the motion from the gentleman from Iowa, Mr. Leach. As many as in favor of the motion, signify in the usual manner.
    As many as opposed say, no.
    The ayes appear to have it. The ayes have it, and the motion is agreed to, a quorum being present. Without objection, the chief of staff is authorized to make technical, grammatical and conforming changes to the bill without objection.
    The Chairman is authorized to make motions under rule 20 of the bill on a companion bill from the Senate. I want to thank the Members for their patience. The Committee is adjourned.
    [Whereupon, at 1:35 p.m., the Committee was adjourned.]

A P P E N D I X

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