1998 Congressional Hearings
Special Weapons
Nuclear, Chemical, Biological and Missile



Export controls were developed by the United States and allied countries to protect against the transfer of sensitive technology to potential adversaries. Export controls played an important role in countering the military build-up of the Soviet union, particularly from the mid 1970's until the late 1980's, by denying the Soviets technology to enhance the qualitative capability of their weapons systems. Today the export control system is in disarray. Most of the key components of the program have disintegrated. A vast array of sensitive goods and technology has been decontrolled, making it easy for potential adversaries and hostile countries and groups to acquire technology they can leverage against us. Even the remaining controls appear to be administered loosely, and the quality of review seems to be slipshod. Critical elements of the export control program, particularly end-user checks and verification, have been scuttled to accommodate customers, especially China, the only country that will not allow post shipment checks, and the only country to get away with denying US authorities this access.

The Defense Department's role in strategic exports has been significantly reduced. In some cases, important DOD components such as the Defense Intelligence Agency, are no longer consulted on critical export decisions. In others, military agencies and the Joint Chiefs of Staff rubber stamp export control cases, or defer to policy, because they understand the exports will be approved anyway. Overall, the DOD has attempted no strategic. assessment in the context of current mission requirements or threats. Consequently, there is no unified or coherent DOD view in respect to strategic export controls, particularly in regard to China. Previous work by the JCS on assessing the impact of technology transfers on the war fighter has all but been discontinued.

The reduction of the Defense Department role in the strategic export control process is being reinforced by an ill-advised decision to remove the Defense Technology Security Administration from any policy responsibility in the process of strategic export review. DTSA is being deported to an obscure location at Dulles Airport and will not report to any senior policy official in the Defense Department, and in fact will no longer exist as a separate organization. As the founder of DTSA in the Defense Department, the only interpretation that can be put on this decision is the intention of the current DOD leadership to no longer play a role in strategic export controls.

It is my belief, and it is backed by my experience as the first Director of DTSA, that strategic export controls are an important part of our military and defense strategy. The fact that this important mission has been all but abandoned is a matter of great concern to me and, in my view, is a major mistake with future implications that are grim.

A Brief History of Strategic Ex-port Controls

Modern export controls grew out of the NATO embargo on the Soviet Union and the Warsaw Pact countries after it became clear that the relationship between NATO and the Warsaw Pact was going to be tense and hostile. In 1949 COCOM, which stands for the Coordinating Committee on Export Controls, was started within NATO, with an Italian admiral as the first COCOM chairman. Initially its responsibility was to monitor and sustain an embargo over most goods going into the Warsaw Pact. Later, some of our allies, led by great Britain, sought modification in the nature of the embargo, COCOM was spun out of NATO and began to focus on developing control lists based on strategic, rather than economic, criteria. Three separate lists emerged: a munitions list; a list of commodities (which is called the Commodity Control List in the United States, and which is the list of "dual use" technology, products and services) ; and an Atomic Energy List to control atomic and nuclear technology. Of these lists, the most complex and surely most controversial is the commodity list. Among the controlled goods are advanced electronics, high speed computers, digital telecommunications, multi-axis machine tools, and special materials and processes such as composite materials and stealth technology.

The COCOM lists were constantly negotiated and revised over the years. In the 1980's the lists focused primarily on preventing the transfer of technology to the Soviet Union which would enhance the qualitative capability of the Red Army.

In the middle 1980's a special approach was taken to China. This was done in recognition of the fact that some improvement in Chinals military capability would tie down more of the Red Army (including the Red Army, s strategic rocket forces) , and thereby help reduce a growing military threat to NATO. Accordingly, a special variation of the control list was put together for China that allowed a wider range of technology to be transferred. (This was referred to as a "green line,, for China.) Parallel to the COCOM liberalization of dual use items, for the first time military cooperation was allowed, including the sale of munitions items. Our allies and some friendly countries such as Israel developed military relations with China, with our tacit support. Later the US itself began developing a military relationship with China and sold military technology to China. But the harsh Chinese reaction to the student rebellion in 1989 and the massacre in Tienamen square, put an end to military cooperation with the United States, and most of our allies reduced their exposure too. However, after a short pause, business with China flourished, buttressed by a speed up in liberalizing the COCOM lists.

The liberalization of CCCOM was propelled by three developments. These were (more or less in order) : (1)Perestroika in the Soviet Union and pressure to release more technology to a more human-faced Soviet Union; (2) the decision by the Chinese to encourage a market-type economy. This made the Chinese market increasingly attractive to Western firms, many of whom were encouraged to invest in China; and (3) the collapse of the Soviet Union, the dissolution of the Warsaw Pact and the creation of new countries in former Soviet territories. The cumulative impact of all these changes brought about the decision by the Clinton administration to close down COCOM. once this was done, the United States moved quickly and unilaterally to make further major changes in domestic export controls. Perhaps the most dramatic and the step with the greatest impact, was the virtual decontrol of supercomputers.

The Strategic Technology Framework

During the period of an aggressive, militarizing Soviet Union, the United States sought to exploit the qualitative superiority of Western forces, despite the smaller overall scale of NATO armaments.

There were many illustrations of qualitative superiority, but none was more dramatic than the encounter between the Israeli Air Force flying American-built F15's and F16's, and the Syrian Air Force using MIGS. The decimation of the Syrian formations in 1982 over the Bekaa Valley was a triumph of US technology. Systems that proved themselves included the look-down shoot down radar systems on the F-15's, the E2C radar aircraft, and sophisticated command and control.

Even before this happened, the Soviets understood that they were falling behind technologically. Despite huge investments, the Soviet deficiencies piled up, particularly in electronics and computers. Consequently, the Kremlin organized a special directorate inside the KGB known as Directorate T with the aim of acquiring Western technology by any means necessary. Of course this included spies, agents of influence, and technology diversions. It gave rise to a special type of character working on behalf of the Soviets, which we dubbed "techno-bandits."

In the early 1980's the CIA was concerned that the Soviets were closing in on some of our technology, Especially semiconductors. The finding at the time was that the gap between the US and the Soviets would continue to close unless we had a vigorous control program in place. We were able to achieve a good control program, made possible by an effective domestic program, COCOM cooperation and agreements with neutral and non-aligned countries. Consequently, the Soviet techno-bandits found it hard going, and the control program worked well. Bu the middle 80's the gap was so wide that the Soviets had no chance to modernize most of their weapons systems. They lacked the computers, control systems and electronics for modern radars, command and control, and for advanced weapons systems.

It is important to emphasize that what made technology controls work was a combination of two factors. The first was a coherent strategic framework that was understandable to our allies and to the public. While there were frequent debates about the efficacy of certain control parameters, even about the scope of the control system (some thought it was too broad) , few in the West challenged the underlying philosophy of the controls.

The second factor was leadership. Put in the bluntest form, if the United States leads, then many nations will take their cue from us, and follow. The reason is simple: America shoulders the lion's share of the burden of the common defense of the free world. In that circumstance, if the United States says it needs export controls for security reasons, others are inclined to accept that and cooperate. Of course, this does not happen by osmosis: vigorous diplomacy, policy leadership from the White House, State Department and Defense Department, and strong enforcement are essential means of assuring success.

It follows that the combination of strategic vision and leadership remain critical to a successful export control program. Take either away, and the enterprise will fail.

Today's Strategic Environment

Today's strategic environment has fundamentally shifted because the Soviet Union and Warsaw Pact no longer exist. However, this does not mean there is an absence of threats, or that we can be complacent.

I am particularly concerned about the modernization of Chinals military forces, and the implications for stability in the Pacific. No one disagrees that China is modernizing its military; there is, however, a divergence of view over whether our interests are threatened, and how they are threatened. Some experts say that Chinals modernization is entirely normal, the result of a shift in how China is shifting its force structure and the need for more up to date hardware. Others -- I include myself in the "others" category" -- see Chinals current modernization program as potentially provocative and offensive in character.

There are a number of contrasts between China and the former Soviet Union. These need to be sorted through in structuring a strategic vision that makes sense.

The Soviet Union was more highly developed militarily than China. The Soviets committed a huge effort, at the expense of their economy, to their military build up. Literally all the scientific organizations in the USSR were involved in military R&D. The Soviet system was mostly closed to the outside world, and the Soviet economy remained a victim of the emphasis on military development.

Unlike the Soviet Union, China is a more modern trading nation supported by an overseas Chinese community with experience in trade and technology. Thanks to liberalized export controls, China is able to modernize much of its infrastructure, building an electronics and computer industry of its own. While China has a long way to go in computers and electronics, and depends on western companies, China has unprecedented access and has built or is building an impressive infrastructure to support future civil and military development.

Above all, China has been able to get technology that was forbidden to the Soviet Union. Only a decade ago Mikhail Gorbachev was visiting his Western counterparts. On one of these occasions he remarked to President Mitterand of France as follows: "Please understand, he said. We are a banana republic with nuclear weapons. We are not a modern state. We lack important capabilities, most importantly we don't have supercomputers."

China has been the primary beneficiary of the Clinton administration's decontrols of supercomputers. Indeed, most of the major producers, such as Silicon Graphics (which also owns Cray), Convex and IBM have sold more supercomputers to China than any other country since 1996. China has more than 50 supercomputers, perhaps as many as 100.

The arrival of supercomputer capability will give China unique capability. There are three general areas of importance:

1. China will have an unprecedented in-house military design capability for new weapons systems and programs which can be regarded as good as anything elsewhere;

2. China will be able to design smaller nuclear weapons for tactical nuclear weapons and for cruise missiles. This will enhance China's ability to shift the balance of power in the Pacific;

3. China will be able to use its super computer capability to crack codes, particularly commercial encryption. In fact, because of US restrictions-on commercial encryption for law enforcement reasons, the Chinese will probably be able to read any commercial encrypted traffic they desire. This leaves the whole of the US industrial complex (and Japan's too), open to exploitation by Chinals new class of "info warriors."

The administration continues to support further supercomputer liberalization and is planning to free even the most exotic supercomputers for sale to China.

The case of supercomputers is only one example among many that raise serious concern.

A few others should be mentioned. These include: (1) shifting "hot section" jet engine technology from the jurisdiction of the Department of State to the Commerce Department, and the subsequent licensing of this technology to China; (2) the shifting of satellite technology from the State Department to the Commerce Department, and the loosening of controls over supervision of satellite launches and over the technologies provided to the Chinese; (3) the licensing of sensitive high temperature vacuum furnaces to China possibly for use in their ballistic missile program; (4) the approval of cooperation between a major US commercial encryption provider and China to cooperate on encryption development projects.

Rebuilding the Strategic Export Control System

I would like to make the following suggestions to the Armed Services Committee.

(1) Initiate, under the supervision of the Armed Services Committee, a Strategic Technology Study aimed at clarifying what strategic technology needs to be protected. The findings of this study can form the basis for legislation.

(2) Support legislation to immediately re-establish the Defense Technology Security Administration before the implementation of the draft DOD Directive (number 5105.62) which, if implemented, will eliminate DTSA.

(3) Restore previous DOD Directives that define the roles of the military departments and agencies concerning strategic export controls and the roles of key DOD components such as the DIA. if this is not done, then under the newly drafted DOD Directive, the mandate for these departments, agencies and components will be eliminated entirely.

(4) Assure that DTSA reports directly to the Under Secretary for Policy in the DOD and that policy responsibility and accountability be absolutely clear for strategic exports.

(5) Restore the "dual hat" role so that the Director of DTSA also is a Deputy Under Secretary of Defense for Policy and, therefore, can credibly speak for the Secretary of Defense in interagency and in international meetings.

(6) By statute clarify the responsibility of the Secretary of Defense for strategic export controls.