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Export Controls: Sales of High Performance Computers to Russia's Nuclear Weapons Laboratories (Testimony, 04/15/97, GAO/T-NSIAD-97-128).

Pursuant to a congressional request, GAO discussed the sale of high
performance computers to Russia's nuclear weapons laboratories, focusing
on: (1) the Comprehensive Test Ban Treaty and its implications for high
performance computer exports to Russian laboratories; (2) U.S. export
regulations as they apply to the Russian nuclear weapons laboratories;
(3) the Russian request for such computers during the summer of 1996;
and (4) the executive branch's decision to return without action several
export license applications for high performance computers to the
Russian laboratories and the implications of that decision.

GAO noted that: (1) Russia has expressed a strong desire to obtain high
performance computers from the United States for use at its nuclear
weapons laboratories; (2) according to the Russian Minister of Atomic
Energy, such computers are needed to help Russia maintain its nuclear
stockpile, particularly in light of the Comprehensive Test Ban Treaty
prohibiting future nuclear explosions; (3) Russia attempted to obtain
high performance computers for its weapons laboratories for "civilian
purposes" from two U.S. manufacturers; (4) the manufacturers, in
compliance with the export control laws and regulations, sought an
export license for the transaction but the applications were eventually
returned by the Commerce Department without action; (5) the U.S.
government said it needed more information about how the computers would
be used; (6) subsequently, press reports began to circulate in Russia
and the United States that Russia had obtained U.S. high performance
computers from other sources, and according to officials from Russia's
Ministry of Atomic Energy, the computers would be used for nuclear
stockpile maintenance; and (7) if these press reports are correct, and
information supplied by the Russian Minister of Atomic Energy indicates
the reports are correct, such a sale would appear to be contrary to the
policy underlying U.S export control regulations and to U.S. policy
boundaries regarding cooperation with Russia's nuclear weapons program.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-NSIAD-97-128
     TITLE:  Export Controls: Sales of High Performance Computers to 
             Russia's Nuclear Weapons Laboratories
      DATE:  04/15/97
   SUBJECT:  Licenses
             Nuclear proliferation
             Supercomputers
             Export regulation
             International trade restriction
             Dual-use technologies
             Foreign trade policies
             Foreign military sales policies
             Nuclear weapons plants
             Treaties
IDENTIFIER:  Russia
             
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Cover
================================================================ COVER


Before the Subcommittee on Military Procurement, Committee on
National Security, House of Representatives

For Release on Delivery
Expected at
2:00 p.m., EST
Tuesday,
April 15, 1997

EXPORT CONTROLS - SALES OF HIGH
PERFORMANCE COMPUTERS TO RUSSIA'S
NUCLEAR WEAPONS LABORATORIES

Statement of Mr.  Harold J.  Johnson, Associate Director,
International Relations and Trade Issues, National Security and
International Affairs Division

GAO/T-NSIAD-97-128

GAO/NSIAD-97-128T

Export Controls

(711246)


Abbreviations
=============================================================== ABBREV

  CTBT - Comprehensive Test Ban Treaty
  CTP - composite theoretical performance
  MINATOM - Ministry of Atomic Energy
  MTOPS - million theoretical operations per seconds

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to discuss the sale of high
performance computers to Russia's nuclear weapons laboratories.  We
understand that your hearing today will focus primarily on the
alleged improper sales of computers to the Russian laboratories that
have been the subject of recent media attention.  As you know, those
sales are currently being investigated by the Departments of Justice
and Commerce, and by the U.S.  Customs Service, and we understand
that other witnesses here today will address that issue. 

To help understand the implications of the alleged improper sales and
the relevant policy issues, you asked us to define the context for
those sales by discussing (1) the Comprehensive Test Ban Treaty
(CTBT) and its implications for high performance computer exports to
Russian laboratories, (2) U.S.  export regulations as they apply to
the Russian nuclear weapons laboratories, (3) the Russian request for
such computers during the summer of 1996, and (4) the executive
branch's decision to return without action several export license
applications for high performance computers to the Russian
laboratories and the implications of that decision.  Although media
reports have provided some details on the exporters and items
involved in the prior license applications, we are limited by section
12(c) of the Export Administration Act of 1979 from discussing
details of the license applications in public. 


   SUMMARY
---------------------------------------------------------- Chapter 0:1

Mr.  Chairman, before I begin discussing each of the areas you asked
us to comment on, let me just briefly summarize what has occurred
regarding the sale of high performance computers to Russia.  Russia
has expressed a strong desire to obtain high performance computers
from the United States for use at its nuclear weapons laboratories. 
According to the Russian Minister of Atomic Energy, such computers
are needed to help Russia maintain its nuclear stockpile,
particularly in light of the CTBT prohibiting future nuclear
explosions.  Russia attempted to obtain high performance computers
for its weapons laboratories for "civilian purposes" from two U.S. 
manufacturers.  The manufacturers, in compliance with the export
control laws and regulations, sought an export license for the
transaction, but the applications were eventually returned by the
Commerce Department without action.  The U.S.  government said it
needed more information about how the computers would be used. 
Subsequently, press reports began to circulate in Russia and the
United States that Russia had obtained U.S.  high performance
computers from other sources, and according to officials from
Russia's Ministry of Atomic Energy, the computers would be used for
nuclear stockpile maintenance.  If these press reports are
correct--and information supplied by the Russian Minister of Atomic
Energy indicates the reports are correct--such a sale would appear to
be contrary to the policy underlying U.S.  export control regulations
and to U.S.  policy boundaries regarding cooperation with Russia's
nuclear weapons program. 


   THE COMPREHENSIVE TEST BAN AND
   HIGH PERFORMANCE COMPUTERS
---------------------------------------------------------- Chapter 0:2

With that overview, I would now like to discuss the relationship
between the sale of high performance computers to Russia and U.S. 
policies regarding cooperation with Russia relative to CTBT.  High
performance computers are playing an increasingly important role in
maintaining existing nuclear weapons stockpiles.  As you know, the
United States, Russia, and about 140 other countries have signed a
CTBT that prohibits any nuclear explosions.\1 Since nuclear
explosions are not permitted under a CTBT, the United States has
embarked on a science-based stockpile stewardship program that uses
past nuclear weapons test data, non-nuclear laboratory tests, and
computer simulations to maintain confidence in the existing U.S. 
nuclear stockpile.  Russian officials have indicated their desire to
obtain high performance computers to help them maintain their nuclear
weapons stockpiles. 

The executive branch has determined that it is in the U.S.  interest
to cooperate with Russia on the safety and security of their nuclear
weapons stockpiles, but within certain specific boundaries.  Pursuant
to this policy, discussions have been held with the Russian Ministry
of Atomic Energy (MINATOM) and other officials on the possibility of
undertaking cooperative projects under a CTBT.  Department of Energy
officials said that the policy boundaries for potential cooperative
projects are that they would be unclassified, and most importantly,
they would not enhance the performance of Russian nuclear weapons or
contribute to Russian nuclear weapons design.\2 These officials
stated that any access to computers provided to Russian scientists
will be consistent with current export control laws.  The regulations
implementing the law provide the executive branch the authority to
deny a license for any item intended for the research, development,
design, manufacture, construction, testing, operations, or
maintenance of any nuclear explosive device or other sensitive
nuclear activities.  With this in mind, the concern is that if a high
performance computer is sold to a Russian nuclear weapons laboratory,
even for ostensibly civilian purposes, how would the United States
devise a safeguard plan to detect the possible diversion of computers
from civilian uses to proscribed nuclear weapons activities? 
Clearly, there is a greater opportunity to devise such a plan if an
export license is sought. 


--------------------
\1 The CTBT will enter into force when 44 nations, named in the
treaty, deposit their instruments of ratification, but no earlier
than September 24,1998.  Three of those 44 states--India, Pakistan,
and North Korea--have not yet signed the treaty. 

\2 Los Alamos National Laboratory defines performance as the ability
of a nuclear weapon or weapon system to operate in a specified manner
(e.g.  yield, range, accuracy, radiation spectrum) under stated
conditions and is essentially equivalent to reliability. 


   POLICIES AND REGULATIONS
   AFFECTING THE EXPORT OF HIGH
   PERFORMANCE COMPUTERS
---------------------------------------------------------- Chapter 0:3

Now let me turn more specifically to the policies and regulations
affecting the export of high performance computers to Russian nuclear
weapons laboratories.  The United States has long maintained export
controls over high performance computers for national security and
nuclear non-proliferation reasons.  On October 6, 1995, the executive
branch announced a new policy for exporting high performance
computers.  This policy now focuses controls on computers that have a
significant impact on U.S.  and allied security interests and
eliminated controls that were deemed unnecessary or ineffective due
to rapid advances in computer technology.  For example, the new
policy removes licensing requirements for sales of common desk top
computers to most countries.  The policy requires companies to obtain
an export license when selling
U.S.- manufactured high performance computers to Russia and certain
other countries when the computers (1) are intended for a military
end user or an end user involved in proliferation activity and have a
composite theoretical performance (CTP)\3 of over 2,000 million
theoretical operations per second (MTOPS) or (2) are intended for a
civilian end user and have a CTP of over 7,000 MTOPS.  The policy
also requires exporters to keep accurate records of each export of a
computer over 2,000 MTOPS to any destination, whether a license is
required or not. 

The policy also outlines a number of steps that the U.S.  government
may require of the exporter or the end user to safeguard computer
exports.  Among other things, the exporter or end user may be
required to limit access to the computer or inspect computer logs and
output.  In addition, the end user may also be required to agree to
on-site inspections by U.S.  government or exporting company
officials, who would review programs and software used on the
computer, or to remote electronic monitoring of the computer. 

The policy was announced after the executive branch concluded that
computers capable of a CTP of up to 7,000 MTOPS would become widely
available in international markets within the next 2 years.  The
executive branch set a lower export control limit of 2,000 MTOPS for
military end users and end users of proliferation concern because,
while these computers may be less controllable, the United States
does not want to support proliferation or certain military efforts in
these countries. 

The U.S.  export control policy also requires that an export license
be sought for items when an exporter knows\4 that an export or
reexport will be used directly or indirectly for certain proscribed
nuclear activities, including nuclear explosive activities,
unsafeguarded nuclear activities, and certain fuel cycle activities,
whether or not they are safeguarded.  The Department of Commerce's
Bureau of Export Administration can also inform an exporter or
reexporter that an export license is required for specified items to
specified end users when the Bureau has determined that there is an
unacceptable risk of diversion to proscribed nuclear activities. 

The executive branch has commissioned a new review of high
performance computer export control policy which will be available at
the end of 1997. 


--------------------
\3 CTP is a measure used to estimate the maximum possible performance
of a computer as measured in millions of theoretical operations per
second. 

\4 The definition of knowledge in 15 CFR Part 772 includes reason to
know or reason to believe. 


   RUSSIAN REQUESTS FOR HIGH
   PERFORMANCE COMPUTER EXPORTS
---------------------------------------------------------- Chapter 0:4

In the fall of 1995, two U.S.  computer manufacturers applied for
export licenses to sell U.S.  high performance computers to the
Russian nuclear weapons laboratories known as Arzamas-16 and
Chelyabinsk-70.  According to the Commerce Department's
interpretation of section 12(c) of the Export Administration Act of
1979, I cannot provide any further details about these cases in
public.  However, according to press reports, the license
applications were submitted by Convex Computer Corporation and IBM,
and the end uses for the computers were for groundwater and
atmospheric pollution monitoring. 

In the early summer of 1996, the Russian Minister for Atomic Energy
sent a letter to the Secretary of Energy expressing his concern about
U.S.  export restrictions on high performance computers.  This letter
also requested that Russian and U.S.  officials begin discussing the
possible export of a Convex SPP 2000 computer.  This computer is more
capable than any computer known to have been in use in Russia at that
time.  Although the Commerce Department had not received an export
license application for the computer, the Secretary of Energy asked
MINATOM for additional information on how Russia planned to use the
SPP 2000 computer and the other computers for which the executive
branch was then reviewing export license applications.  The Minister
for Atomic Energy indicated that the SPP 2000 would be used to help
maintain Russia's nuclear stockpile, but that the other computers for
which export licenses were pending would be used for civilian
purposes at Russian nuclear weapons laboratories.  According to the
manufacturer, the SPP 2000, now known as the Exemplar X-Class, can be
configured with a maximum of
64 processors and the manufacturer told us that the machine has a
maximum performance rating of 22,275 MTOPS. 

Our review of computer export data indicates that it was unlikely
that Russian military and nuclear weapons laboratories had acquired
computers capable of more than approximately 3,500 MTOPS, due to a
lack of known sales of computers above that capability from the
United States or Japan, the only countries currently producing
computers above that level.  However the capabilities of the Russian
nuclear weapons laboratories, before the recently reported sales, may
have been considerably less.  The specific details are classified. 


   EXECUTIVE BRANCH DECIDES NOT TO
   ACT ON THE EXPORT LICENSE
   APPLICATIONS
---------------------------------------------------------- Chapter 0:5

Although the Russian Minister of Atomic Energy explained that MINATOM
would use the computers sought under the pending applications for
civilian end uses, the executive branch decided to return the license
applications to the exporters without action.  The Commerce
Department told the exporters that the U.S.  government was taking
this action because of insufficient information about the end use of
the computers.  Commerce Department officials told us that a decision
to return a license application without action means that the license
application had neither been approved nor denied, but that if a
license is required, such a decision blocks the export.  The
exporters can reapply for a license in the future. 

In December 1996, the State Department informed MINATOM that the
United States did not approve the export license applications under
review because the applications were inconsistent with the U.S. 
government's export control policy.  This policy seeks to prevent the
export of high powered computers for end uses or end users that
directly or indirectly support nuclear weapons activities. 


   POSSIBLE IMPROPER SALE OF HIGH
   PERFORMANCE COMPUTERS TO RUSSIA
---------------------------------------------------------- Chapter 0:6

Subsequent to the executive branch's decision to return the license
applications without action, press reports began to circulate here
and in Russia that Russia had obtained several high performance
computers from U.S.  companies, apparently without an export
license.\5 Press reports indicated that MINATOM told one of the
companies that sold them a computer without a license that the
computer would be used for modeling of earth water pollution caused
by radioactive substances.  However, MINATOM officials have stated
that the computers will be used to maintain the Russian nuclear
weapons stockpiles and the Minister of Atomic Energy indicated that
the computer would be used to confirm the reliability of Russia's
nuclear arsenal and ensure its proper working order under the terms
of the CTBT.  Because the computers Russia obtained use a technology
known as parallel processing, a number of processors can be added to
increase their performance.  If the high performance computers
allegedly acquired by Chelyabinsk-70 were to be aggregated into a
single cluster, the laboratory would have a central computer with a
CTP capability of about 9,000 MTOPS.  Through other acquisitions that
the Russian Minister indicated had been made, this capacity could be
increased to about 14,000 MTOPS. 

This concludes my prepared remarks.  My colleague and I would be
pleased to respond to any questions you may have. 

--------------------
\5 U.S.  press reports indicate that Silicon Graphics, Inc., sold
four computers to Chelyabinsk-70 in the fall of 1996 for $650,000 and
a distributor in Europe sold an IBM computer for $7 million to
MINATOM.  The New York Times has reported that Russian nuclear
officials said the computer will be used to simulate nuclear weapons
tests. 


*** End of document. ***