Nonproliferation: Strategy Needed to Strengthen Multilateral
Export Control Regimes (25-OCT-02, GAO-03-43).
Multilateral export control regimes are consensus-based,
voluntary arrangements of supplier countries that produce
technologies useful in developing weapons of mass destruction or
conventional weapons. The regimes aim to restrict trade in these
technologies to keep them from proliferating states or
terrorists. The United States seeks to improve the effectiveness
of these regimes. GAO was asked to (1) assess weaknesses of the
four regimes and (2) identify obstacles faced in trying to
strengthen them.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-43
ACCNO: A05402
TITLE: Nonproliferation: Strategy Needed to Strengthen
Multilateral Export Control Regimes
DATE: 10/25/2002
SUBJECT: Arms control agreements
Export regulation
Foreign trade agreements
Foreign trade policies
National preparedness
Nuclear proliferation
Nuclear weapons
Regulatory agencies
Voluntary compliance
Wassenaar Arrangement
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GAO-03-43
Report to Congressional Committees
United States General Accounting Office
GAO
October 2002 NONPROLIFERATION Strategy Needed to Strengthen Multilateral
Export Control Regimes
GAO- 03- 43
GAO found weaknesses that impede the ability of the multilateral export
control regimes to achieve their nonproliferation goals. A key function of
each regime is to share information related to proliferation. Yet the
regimes often lack even basic information that would allow them to assess
whether their actions are having their intended results. The regimes
cannot effectively limit or monitor efforts by countries of concern to
acquire sensitive technology without more complete and timely reporting of
licensing information and without information on when and how members
adopt and implement agreed- upon export controls. For example, GAO
confirmed that at least one member, the United States, has not reported
its denial of 27 export licenses for items controlled by the Australia
Group.
Several obstacles limit the options available to the United States in
strengthening the effectiveness of multilateral export control regimes.
The requirement to achieve consensus in each regime allows even one member
to block action in adopting needed reforms. Because the regimes are
voluntary in nature, they cannot enforce members* compliance with regime
commitments. For example, Russia exported nuclear fuel to India in a clear
violation of its commitments, threatening the viability of one regime.
The regimes have adapted to changing threats in the past. Their continued
ability to do so will determine whether they remain viable in curbing
proliferation in the future.
Multilateral export control regimes seek to prevent the proliferation of
nuclear, chemical, biological, and conventional weapons.
Sources: Defense Image Digest and GAO.
NONPROLIFERATION Strategy Needed to Strengthen Multilateral Export Control
Regimes
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 43. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Joseph Christoff (202 512- 8979) or christoffj@ gao.
gov.
Highlights of GAO- 03- 43, a report to Congressional Committees
October 2002
Multilateral export control regimes are consensus- based, voluntary
arrangements of supplier countries that produce technologies useful in
developing weapons of mass destruction or conventional weapons. The
regimes aim to restrict trade in these technologies to keep them from
proliferating states or terrorists. The United States seeks to improve the
effectiveness of these regimes. GAO was asked to (1) assess weaknesses of
the four regimes and (2) identify obstacles faced in trying to strengthen
them.
The Secretary of State should establish a strategy to strengthen these
regimes. This strategy should include ways for regime members to improve
information sharing, implement regime changes to
export controls more consistently, and identify organizational changes
that could help reform regime activities.
Commerce and State concurred with these recommendations, which will be
considered in a new review of the regimes ordered by the President.
Defense and Energy did not comment.
Page i GAO- 03- 43 Nonproliferation Letter 1
Results in Brief 2 Background 4 Multilateral Export Control Regimes Have
Helped Set Standards
and Stem Proliferation 7 Weaknesses Could Limit Regimes* Effectiveness 9
Obstacles to Strengthening Export Control Regimes 22 Conclusion 27
Recommendations for Executive Action 28 Agency Comments and Our Evaluation
29
Appendix I Scope and Methodology 31
Appendix II List of Members of Multilateral Export Control Regimes 34
Appendix III Reporting Practices of Multilateral Export Control Regimes 36
Appendix IV Comparison of Control Lists of Multilateral Export Control
Regimes 37
Appendix V Some Factors Considered in Accepting New Members to Regimes 40
Appendix VI Comments from the Department of Commerce 41
Appendix VII Comments from the Department of Energy 42 Contents
Page ii GAO- 03- 43 Nonproliferation Appendix VIII Comments from the
Department of State 43
GAO Comments 47
Appendix IX GAO Contact and Staff Acknowledgments 49 GAO Contact 49
Acknowledgments 49
Tables
Table 1: Purposes of the Multilateral Export Control Regimes 5 Table 2:
Denial Reporting Distribution Times and Procedures for
Each Regime 17 Table 3: Regime Control Lists and Items: Australia Group 37
Table 4: Regime Control Lists and Items: MTCR 38 Table 5: Regime Control
Lists and Items: Nuclear Suppliers Group 38 Table 6: Regime Control Lists
and Items: Wassenaar Arrangement 39
Figures
Figure 1: U. S. Export Denials Reported to Regimes Since 1996 11 Figure 2:
Denial Notifications for All Regimes, by Country (Total
Denials: 951) 13
Abbreviations
MTCR Missile Technology Control Regime WMD weapons of mass destruction
Page 1 GAO- 03- 43 Nonproliferation
October 25, 2002 The Honorable Jesse Helms Ranking Minority Member
Committee on Foreign Relations United States Senate
The Honorable Fred Thompson Ranking Minority Member Committee on
Governmental Affairs United States Senate
The advent of global terrorism has heightened concerns about the
longstanding threat of proliferation of weapons of mass destruction. The
Under Secretary of State for Arms Control and International Security
stated recently that preventing the next wave of terrorist acts requires,
above all, effective use, improvement, and enforcement of the multilateral
tools at U. S. disposal, including export control regimes. Multilateral
export control regimes 1 are voluntary, nonbinding arrangements among
likeminded supplier countries that aim to restrict trade in sensitive
technologies to peaceful purposes. Regime members agree to restrict such
trade through their national laws and regulations, which set up systems to
license the exports of sensitive items.
The four principal regimes are the Australia Group, which focuses on trade
in chemical and biological items; the Missile Technology Control Regime
(MTCR); the Nuclear Suppliers Group; and the Wassenaar Arrangement, which
focuses on trade in conventional weapons and related items with both
civilian and military (dual- use) applications. The United States is a
member of all four regimes. Regime members conduct a number of activities
in support of the regimes, including (1) sharing information about each
others* export licensing decisions, including certain export denials and,
in some cases, approvals; (2) adopting common export control practices and
control lists of sensitive equipment and technology into national laws or
regulations.
1 Multilateral export control regimes are referred to as either *regimes*
or *arrangements,*
and the countries invited to participate in them are variously referred to
as *members,* *participants,* or *participating states.* In this report,
we use the term *regimes* and refer to participating countries as
*members.*
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 43 Nonproliferation
Because of your interest in efforts to strengthen the multilateral export
control regimes, this report (1) describes their accomplishments, (2)
assesses their weaknesses, and (3) identifies obstacles that the United
States faces in trying to strengthen them. To address these issues, we
reviewed analyses prepared by the Departments of State, Commerce, Defense,
and the intelligence community, and studies prepared by nonproliferation
specialists in academia. We also reviewed regime documentation, including
export denial and approval information, and met with regime
representatives in Paris, France (MTCR); Vienna, Austria (the Nuclear
Suppliers Group and the Wassenaar Arrangement); and Canberra, Australia
(the Australia Group). We also interviewed officials of the governments of
Australia, Austria, Canada, France, Japan, the Netherlands, New Zealand,
and the United Kingdom, and received written responses to questions we
provided to the governments of Canada, Japan, Germany, Russia, and Hong
Kong.
Nonproliferation experts credit the Australia Group, the MTCR, the Nuclear
Suppliers Group, and the Wassenaar Arrangement with several
accomplishments. The regimes have helped set international standards for
limiting exports of sensitive items and helped stem proliferation in
particular countries of concern. For example, the Nuclear Suppliers Group
established new controls for items with both nuclear and nonnuclear uses
in the aftermath of the Persian Gulf War and revelations of Iraq*s nuclear
weapons development program. The Australia Group has helped raise the
costs of attaining a chemical weapons capability by cutting off sources of
supply and forcing proliferators to use less efficient means to produce
chemical weapons. The MTCR helped stop or delay development of missile
programs in Argentina, Brazil, and Egypt. However, because national
governments use a variety of other policy tools to combat proliferation,
it is not possible to attribute these accomplishments exclusively to the
regimes.
We identified several weaknesses in regime activities that could hinder
their goal of curbing proliferation of sensitive items and technologies.
First, not all regime members share complete and timely information on
their export licensing decisions, including denials and approvals of
exports. For example, the United States did not report any of 27 export
denials to the Australia Group between 1996 and 2001, as expected under
regime procedures. Also, about half of the members of the Wassenaar
Arrangement* the only regime with reporting time frames* did not submit
their export denials on time. Second, several factors complicate the
regime goal of applying export controls consistently. It takes some
Results in Brief
Page 3 GAO- 03- 43 Nonproliferation
members as much as 1 year to adopt agreed- upon changes to control lists
into their national laws or regulations. This lapse of time might allow
proliferators seeking sensitive items to exploit disparities in regime
members* control lists. In addition, we found significant differences in
how regime members implement agreed- upon controls, such as those for high
performance computers. Finally, export controls cannot be applied
consistently until countries joining regimes have effective export control
systems in place. According to the U. S. government, at least three
countries* Argentina, Belarus, and Russia* did not have effective control
systems in place when they became members of certain regimes.
The U. S. government faces a number of interrelated obstacles in trying to
strengthen the effectiveness of multilateral export control regimes.
First, the difficult process of making consensus- based decisions limits
options for reforming the regimes. Under the current process, a single
member can block regime decisionmaking. Second, the voluntary and
nonbinding character of the regimes means they have no explicit tools to
enforce members* compliance with their nonproliferation commitments. For
example, the Nuclear Suppliers Group had no direct means to impede
Russia*s export of nuclear fuel to India, an act that the U. S. government
said violated Russia*s commitment to that regime. Third, the rapid pace of
technological change in a globalized economy makes it difficult to keep
control lists current because these lists need to be updated more
frequently. Fourth, *secondary proliferation,* the growing capability of
nonmember countries to develop technologies used for weapons of mass
destruction and trade them with other countries of concern, undermines the
regimes* ability to prevent proliferation. For example, North Korea has
exported significant ballistic missile- related equipment, components,
materials, and technical expertise to countries of concern, including
Iran. Finally, the U. S. government has no specified or agreed- upon
criteria for assessing the regimes* effectiveness, despite the stated goal
of strengthening their effectiveness.
We are recommending that the Secretary of State, as the lead U. S. policy
representative to the multilateral export control regimes, take steps to
establish a strategy to strengthen these regimes. As part of this effort,
the Secretary should work with other regime members to increase
information sharing, improve the consistent adoption and implementation of
export controls, and assess ways to overcome organizational obstacles to
reaching decisions and enforcing members* compliance with their regime
commitments. We are also recommending that the Secretary (1) report U. S.
denials of all export licenses for items controlled by a multilateral
Page 4 GAO- 03- 43 Nonproliferation
export control regime and (2) establish criteria for assessing the
effectiveness of the regimes.
In commenting on our draft report, the Department of Commerce agreed with
our findings, conclusions, and recommendations. In its written comments,
the Department of Energy indicated that it had no comments on the report.
The Department of Defense declined to provide written comments. The
Department of State said that it will give due regard to our
recommendation to establish a strategy for enhancing the effectiveness of
the multilateral export control regimes as part of a recently announced
review of the regimes ordered by the President. However, State asserted
that our report overall did not reveal any shortcomings of
nonproliferation significance. In fact, our report highlighted the
inability of the regimes to enforce Russia*s compliance with its regime
commitments, a matter of major nonproliferation significance. We also
identified several key weaknesses in regime processes that undermine
regime effectiveness.
Multilateral export control regimes are a key policy instrument in the
overall U. S. strategy to combat the proliferation of weapons of mass
destruction and conventional weapons. Current U. S. policy calls for
enhanced multilateral cooperation of all key policy instruments*
international treaties, multilateral export control regimes, export
controls, and security assistance to other countries* in the war against
terrorism and the proliferation of weapons of mass destruction. 2
The multilateral export control regimes are voluntary, nonbinding
arrangements among like- minded supplier countries that aim to prevent the
spread of WMD and missile technology and equipment by restricting trade in
sensitive technologies to peaceful purposes. While countries make no
legally binding commitments in joining them, participating countries
undertake a political commitment to abide by the goals and principles of
the regime. The regimes operate on the basis of consensus of all members
and decisions on how to implement and interpret regime decisions are left
to the national discretion of each member. The Australia Group, the
2 This position was advanced by the Under Secretary for Export
Administration, Department of Commerce, Bureau of Industry and Security
(September 18, 2001, and February 26, 2002) and by the Under Secretary of
State for International Security and Arms Control (May 6, 2002). See U. S.
General Accounting Office Weapons of Mass Destruction: Assessing U. S.
Policy Tools for Combating Proliferation, GAO- 02- 226T (Washington, D.
C.: Nov. 7, 2001) for a description of these other policy tools.
Background
Page 5 GAO- 03- 43 Nonproliferation
MTCR, and the Nuclear Suppliers Group focus on trade related to WMD and
their delivery systems and are referred to as WMD regimes; the Wassenaar
Arrangement focuses on trade in conventional weapons and related dual- use
items.
Specifically, the Nuclear Suppliers Group and the Australia Group seek to
ensure that trade in controlled items does not contribute to nuclear or to
chemical or biological weapons proliferation (see table 1). The MTCR seeks
to limit the spread of missile- related equipment and technology. The
Wassenaar Arrangement aims to contribute to international security and
stability by promoting greater responsibility and transparency in arms and
sensitive dual- use goods and technology transfers. None of the regimes
identify specific countries as targets. Collectively, however, the regimes
strive to stop, slow, or increase the cost and risk of detection efforts
by countries* of concern to acquire sensitive technologies and
capabilities.
Table 1: Purposes of the Multilateral Export Control Regimes Regime Year
established Purpose Precipitating event Number of members
Nuclear Suppliers Group 1975 To ensure that nuclear trade for peaceful
purposes does not contribute to the proliferation of nuclear weapons or
explosive devices while not hindering such trade.
India*s 1974 nuclear explosion 40
Australia Group 1985 To ensure that the industries of the participating
countries do not assist, either purposefully or inadvertently, states
seeking to acquire a chemical and biological weapons capability.
Iraqi use of chemical weapons against Iran 33
MTCR 1987 To limit the risks of proliferation of weapons of mass
destruction (i. e., nuclear, chemical, and biological weapons), by
controlling transfers that could make a contribution to delivery systems
(other than manned aircraft) for such weapons.
Missile developments in the late 1970s and early 1980s
33 Wassenaar Arrangement 1996 To contribute to regional and international
security and stability, by promoting transparency and greater
responsibility in transfers of conventional arms and dual- use goods and
technologies, thus preventing destabilizing accumulations.
Dissolution of the Coordinating Committee for Multilateral Strategic
Export Controls
33 Sources: Australia Group, Nuclear Suppliers Group, MTCR, and Wassenaar
Arrangement.
As highlighted in table 1, three of the regimes were created in response
to major proliferation events. The Nuclear Suppliers Group was established
in 1975 after India* a nonnuclear weapons state* tested a nuclear
explosive device in 1974 and was strengthened after the1991 Gulf War and
Page 6 GAO- 03- 43 Nonproliferation
revelations of Iraq*s efforts to develop weapons of mass destruction. The
Australia Group was established in 1985 as a response to the use of
chemical weapons in the Iran- Iraq War, and the MTCR was established in
1987 in response to missile developments in the 1970s and 1980s. The
Wassenaar Arrangement, in contrast, was created in 1996 after the
dissolution of its Cold War predecessor 3 to include conventional
technologies not covered by the other regimes.
The regimes also share overlapping memberships of between 33 to 40 states
that are generally suppliers of sensitive technologies. All regimes except
the Wassenaar Arrangement have added new members in recent years.
Specifically, 28 states are members of all 4 regimes. Although China is a
major supplier, it is not a member of any of these regimes but has
declared its commitment to abide by the original 1987 guidelines and
parameters of the MTCR. In addition, China has joined a multilateral
nuclear export control group called the Zangger Committee. 4 See appendix
II for a list of the members of each regime.
All the regimes have discussed ways to address terrorism since September
11, 2001, and are still considering what more to do. For example, the
Australia Group added counterrorism as an official purpose of the regime
and added a number of items to its control list in an effort to control
the types of items that terrorists, rather than states, would seek to
develop chemical or biological weapons. These items included toxins,
biological equipment, and the transfer of knowledge. The Wassenaar
Arrangement amended its guidelines to add language exhorting its members
to continue to prevent the acquisition of conventional arms and
technologies by terrorists. The Nuclear Suppliers Group is considering
proposals to provide more guidance to governments for reviewing export
licenses for terrorism- related concerns. MTCR members in September 2002
announced
3 The Coordinating Committee for Multilateral Strategic Export Controls
was created in 1949 to control the transfer of militarily useful
technology to the Warsaw Pact countries. The end of the Cold War in 1989
and the collapse of the Soviet Union in 1992 ended the rationale for the
Coordinating Committee control regime. In 1993, the Coordinating Committee
members agreed to abolish the organization and establish a new
multilateral regime. In 1996, representatives of the 33 founding member
nations agreed to the Initial Elements of the Wassenaar Arrangement on
Export Controls for Conventional Arms and Dual- Use Goods and
Technologies.
4 The Zangger Committee, established in 1971 to consider the provisions of
article III. 2 of the Nuclear Nonproliferation Treaty, maintains a list of
nuclear items that is similar to the Nuclear Suppliers Group*s part 1
guidelines. We did not review the activities of the Zangger Committee,
except as they relate to the Nuclear Suppliers Group.
Page 7 GAO- 03- 43 Nonproliferation
that they will further study how possible changes to the MTCR guidelines
and control list may contribute to limiting the risk of controlled items
and their technology falling into the hands of terrorists.
Nonproliferation experts credit the Australia Group, the MTCR, the Nuclear
Suppliers Group, and the Wassenaar Arrangement with several
accomplishments. These include helping set international standards for
limiting exports of sensitive items and helping stem proliferation in
particular countries of concern. Because the multilateral export control
regimes are only one of several policy tools that national governments use
to combat the proliferation of weapons of mass destruction and advanced
conventional weapons, it is difficult to attribute accomplishments
exclusively to the regimes.
Each regime has helped set international standards for how countries
should control exports of sensitive technology.
In 1978, the Nuclear Suppliers Group published the first guidelines
governing exports of nuclear materials and equipment. These guidelines
established several requirements for the members to apply, including the
application of International Atomic Energy Agency safeguards at facilities
using controlled nuclear- related items. Subsequently, in 1992, the
Nuclear Suppliers Group broadened its guidelines by requiring that members
insist on full- scope safeguards as a condition of supply for their
nuclear exports. Full- scope safeguards require a country to have an
agreement with the International Atomic Energy Agency to apply inspection
and monitoring procedures for all nuclear facilities in a country, not
only those receiving a particular nuclear item from a supplier. The
Nuclear Suppliers Group, in the aftermath of the Persian Gulf War and
revelations of Iraq*s nuclear weapons development program, also created a
dual- use control regime, which established new controls for items with
nuclear and nonnuclear uses that do not trigger a requirement for
international safeguards when exported. 5
5 Previously, the Nuclear Suppliers Group control list included nuclear
equipment and material, the export of which would trigger a requirement
that International Atomic Energy Agency safeguards apply to the recipient
facility. Multilateral Export
Control Regimes Have Helped Set Standards and Stem Proliferation
Setting International Standards for Exports of Sensitive Items
Page 8 GAO- 03- 43 Nonproliferation
In 1985, the Australia Group convened its first meeting to begin
coordinating national policies aimed at restricting the proliferation of
chemical weapons and related dual- use items. In addition, in June 2002,
the Australia Group adopted a provision in its new guidelines for
licensing sensitive chemical and biological items that made it the only
regime to require its members to adopt *catch- all* controls. *Catch- all*
controls authorize a government to require an export license for items
that are not on control lists but that could contribute to a WMD
proliferation program if exported. Furthermore, the Australia Group added
controls on technology associated with dual- use biological equipment, as
well as controls on the intangible transfer of information and knowledge
that could be used for chemical and biological weapons purposes.
In 1987, the MTCR established guidelines and a control list of items as
the first international standard for responsible missile- related exports,
according to Department of State officials. In addition, from 1999 to
2001, MTCR developed an International Code of Conduct intended to create a
voluntary political commitment, open to all countries, against ballistic
missile proliferation. The code* scheduled to be launched by the
Netherlands on behalf of the European Union* is to consist of a set of
broad principles, general commitments, and modest confidence- building
measures and is intended to supplement the MTCR.
In 1996, the Wassenaar Arrangement was successfully established to
succeed the Coordinating Committee for Multilateral Strategic Export
Controls despite the opposition of some countries, according to
nonproliferation specialists. One notable accomplishment of the Wassenaar
Arrangement is the successful development of an agreement among its
members for guidelines on shoulder- fired missiles, such as the Stinger,
according to State Department officials. Although the former head of the
Wassenaar Secretariat stated that the achievements of the Wassenaar
Arrangement are limited and that *there have been no spectacular results,*
he stated that the situation would be worse without the Arrangement.
The export control regimes have helped stop, slow, or raise costs to
countries of concern of WMD, according to nonproliferation experts. For
example, the MTCR helped reduce the number of countries with ballistic
missile programs, according to Department of State officials.
Specifically, the MTCR contributed to ending sensitive ballistic missile
programs in a number of countries, including Argentina, Brazil, Egypt,
South Africa, and Taiwan. The MTCR also may have helped slow missile
development in India, Iran, Israel, North Korea, and Pakistan, whose
missile programs Stemming Proliferation in
Countries of Concern
Page 9 GAO- 03- 43 Nonproliferation
might have been further along or more advanced in the absence of the
regimes, according to nonproliferation experts. Similarly, the Nuclear
Suppliers Group helped convince Argentina and Brazil to accept full- scope
safeguards on their nuclear programs and end nuclear activities without
safeguards in exchange for expanded access to international cooperation
for peaceful nuclear purposes. 6
Regimes generally have helped raise the costs to proliferators of
acquiring sensitive technologies, according to nonproliferation experts.
They have induced most major suppliers to responsibly control their
exports and have significantly reduced the availability of technology and
equipment available to programs of concern, according to a Department of
State official. Moreover, regime members have made it more difficult, more
costly, and more time consuming for proliferators to obtain the expertise
and material needed to advance their programs. The regimes* efforts have
caused delays, forced proliferators to use elaborate procurement networks,
and forced them to rely on older, less effective technology, according to
the official. For example, the Australia Group may have raised the cost of
attaining an offensive chemical weapons capability by eliminating some
sources of supply, according to nonproliferation experts and regime public
statements. They noted that, as a result, some countries of concern have
stopped pursuing the acquisition of chemical weapons.
We identified several significant weaknesses in the activities of the
regimes that could limit their ability to curb proliferation.
Specifically, we found that regime members do not (1) share complete and
timely export licensing information or (2) harmonize their export controls
promptly to accord with regime decisions.
We found deficiencies in the sharing of export licensing information
between regime members. 7 These deficiencies could hamper the ability of
regime members to factor key information about potential proliferators
into their export licensing decisions. For example, we found that regime
6 Full- scope safeguards are International Atomic Energy Agency safeguards
on all facilities in a country that receive controlled nuclear material
and equipment. 7 We recognize that regimes also share information on
trends in proliferation, trends in proliferator procurement, the use of
front companies and brokers, and end users of concern. Such exchanges
sensitize regime members to proliferation issues of concern and provide
the *big picture* about weapons procurement, according to the Department
of State. Weaknesses Could
Limit Regimes* Effectiveness
Members Do Not Report Complete and Timely Information to Regimes
Page 10 GAO- 03- 43 Nonproliferation
members may not always share complete information in reporting export
denials to the regimes. In addition, reporting information on export
denials for Wassenaar Regime members is generally slow. Other regimes have
not set deadlines for their members to report such information and cannot
determine how long it takes members to report. Furthermore, three regimes
do not collect export information that would enable members to consult
with each other before approving licenses for exports that other members
have denied. Members lack such information because most regimes do not
expect members to report approvals of export licenses. Finally, only two
regimes use electronic data sharing systems to post and retrieve data. As
a result, we found significant delays in regime members* ability to access
information quickly for those regimes lacking this capability.
All four regimes expect members to report denials of export licenses for
controlled dual- use items. By sharing information about the licenses it
has denied, a regime member helps other members avoid inadvertently
undercutting its export licensing decisions and provides regime members
with more complete information for reviewing questionable export license
applications. 8 Appendix III describes the export denial reporting
procedures for each regime.
Despite the expectation to report export denials, the United States did
not notify the Australia Group between 1996 and 2002 that the U. S.
government denied 27 licenses to export Australia Group- controlled items
to such countries as China, India, and Syria. Fifteen of these licenses
involved chemicals that could be used for precursors for toxic chemical
agents and the remaining licenses involved other chemical or biological
equipment and technology. In contrast, the United States reported multiple
denials to each of the other regimes in the same period (see fig. 1). The
Department of State said that the United States was not required to report
these denials to the Australia Group because the U. S. government denied
them for reasons other than chemical and biological weapons
8 As part of their *no undercut* policy, three regimes specifically oblige
their members to consult with members who have denied a license before
approving a similar export. The Wassenaar Arrangement does not include
this type of *no- undercut* policy. Thus, members have no obligation to
consult before exporting items denied by other members, but are expected
to inform members after they undercut another*s denial. Members May Not
Always
Share Complete Information
Page 11 GAO- 03- 43 Nonproliferation
nonproliferation purposes. 9 However, officials of the Australia Group
Secretariat disagreed with this assertion. They stated that Australia
Group members should notify the Australia Group Chair whenever they deny
licenses to export Australia Group- controlled items, including those
controlled under another regime. Reporting such denials, they stated,
would help the Australia Group maintain its effectiveness, ensure that
other members* denials are not undercut, monitor and analyze export
trends, and promote compliance with regime commitments. Furthermore, in
its technical comments on this report, the Department of State agreed that
sharing information about export licenses is a valuable element of
information- sharing efforts, but State could not explain why it did not
share these 27 denials under the regime*s broader information exchange
activities.
Figure 1: U. S. Export Denials Reported to Regimes Since 1996
Source: GAO analysis of Department of State data.
9 State Department officials indicated that 5 of the 27 export denials
concerned the same end users in previous notifications to the Australia
Group. The officials provided written documentation for an additional 13
denials showing that they were reviewed for chemical and biological
weapons proliferation concerns. However, they could not explain why these
denials were not reported to the regime.
Page 12 GAO- 03- 43 Nonproliferation
We found that member states may not be providing complete information
regarding their export denials. We were unable to definitively establish
the reasons why other nations have not reported denials because we do not
have access to their export licensing data. However, our analysis of the
denial reporting data available to us also reveals that a significant
percentage of each regime*s membership has never reported any denials. We
found that the percentage of members in each regime that have never
reported export denials ranged from 45 percent in one regime to 65 percent
in another.
U. S. and foreign officials could not explain why some regime members have
never reported any denials. Although a 2000 analysis of one regime*s
denial reporting recommended an evaluation to determine why members were
submitting few denial notifications, we saw no evidence that the regime
had conducted such an analysis. They speculated that some members do not
do so because they (1) do not receive many export license applications for
controlled items or (2) have not denied any applications. Also, several
countries, including Australia, France, and Japan, informally discourage
exporters from applying for licenses that those governments believe they
likely would deny, according to U. S., foreign government, and regime
officials. Because such *informal denials* are not reported to the
regimes, they do not alert other regime members that a potential country
of concern may be seeking an item.
When denial notifications are aggregated for all regimes, three countries
accounted for 66 percent of all denial notifications. The United States,
relative to other regime members, has reported a large percentage of
export denials to each of the regimes. Figure 2 shows the percentage of
denial notifications by country aggregated for all the regimes. 10
10 Data cover different time periods because regimes began reporting
denial notifications at different times. Members also report denials under
*catch- all* authority* which allows governments to require licenses for
items not on control lists that might contribute to WMD proliferation if
exported* but this activity is only voluntary.
Page 13 GAO- 03- 43 Nonproliferation
Figure 2: Denial Notifications for All Regimes, by Country (Total Denials:
951) a
a References to particular country names, other than the United States,
are omitted for reasons of classification. Source: GAO analysis of
Department of State data.
All four regimes generally expect members to report denials of export
licenses for controlled dual- use items in a timely fashion. 11 Prompt
export denial reporting can help ensure that a country of concern cannot
*shop
around* after being denied a license by a regime member. According to the
chair of one regime, even a month*s delay in sharing such information
would provide a country of concern with more than enough time to shop
around for another source of a sensitive item.
The Wassenaar Arrangement is the only regime to have set deadlines for its
members* denial reporting (see app. III), but reporting by members is
slow. Members are expected to report denials of the more sensitive dual
11 For example, the Nuclear Suppliers Group expects members to report
denials of items on its Dual- Use Control List. Nuclear Suppliers Group
guidance states governments should provide *prompt* notification to other
governments of decisions not to authorize a transfer of equipment,
material, or related technology identified in the guidance. Denial
Reporting Is Slow for
Many Wassenaar Members, but Timeliness Cannot Be Assessed for Other
Regimes
Page 14 GAO- 03- 43 Nonproliferation
use items on its control lists no later than 60 days after the date of the
denial; denial notices for less sensitive items* over 75 percent of dual-
use items on Wassenaar control lists* are expected to be reported in an
aggregated format every 6 months. We found that the Wassenaar
Arrangement*s members submit these denial notifications on schedule only
about 36 percent of the time. 12 However, the Wassenaaar Arrangement
Secretariat stated that a valid picture of denial or other notifications
can be gained only when all the notifications are entered into the
database, an action that is still in process. The Secretariat noted that
any analysis done on the notifications before this milestone has been
achieved would be flawed and open to later revision once the data is
entered into the database correctly in early 2003.
U. S. government officials said that one reason that U. S. denial
reporting to regimes may not be timely is because the U. S. government
does not report export denials until after an exporter completes or
foregoes an appeal of the denial. In response to our enquiries, the
officials from the Department of Commerce*s Bureau of Industry and
Security recommended to the Department of State in August 2002 that the
United States report all denials to the appropriate regime at the time
that the exporter is first officially notified of the intent to deny the
license application. In comments on a draft of this report, the Department
of State said that it proposed to the Department of Commerce that it
either should seek the exporter*s agreement to forego appeals or that the
U. S. government should circulate a *denial on inquiry* notification to
the regime until the export application is final.
Other regimes have not set deadlines for reporting and, furthermore,
cannot determine the amount of time that elapses between the date a
government makes a denial and reports it to the regime, thus undermining
the value of the reporting system. We could not determine the time it
takes for Australia Group or Nuclear Suppliers Group members to report
export denials because their members do not report dates of export denials
uniformly. For example, a Nuclear Suppliers Group member may report its
denial *notification date* as either (1) the actual date that it denied
the export or (2) the date it transmitted the denial to the regime.
Similarly, we could not determine precise MTCR denial reporting times
because the MTCR export denial data maintained by the Department of State
records
12 The reporting data that we reviewed covers a period from 1997 through
2001, before a new electronic information- sharing system became
operational for most members.
Page 15 GAO- 03- 43 Nonproliferation
only the month of the denial. U. S. and foreign government officials
agreed that denial reporting for the regimes needs to be more timely to
improve regime effectiveness.
Access to information on a member*s decisions to approve exports to
nonmembers would help other regime members identify possible proliferation
patterns and determine whether specific exports had undercut any of their
license denials. However, only one regime, the Wassenaar Arrangement,
expects its members to share information on approved export licenses.
Because the Wassenaar Arrangement aims to prevent destabilizing
accumulations of weapons and sensitive dual- use technologies in regions
around the world, it gathers information about approved dual- use exports
for items on its more sensitive control lists and about transfers of
conventional weapons. However, according to U. S. officials, the Wassenaar
Arrangement gathers this information only once every 6 months and
aggregates it to a degree that it cannot be used constructively to
identify (1) undercuts of license denials, (2) items approved and
transferred, and (3) recipients of the items. Consistent with this theme,
we reported in April 2002 that approval reporting of certain semiconductor
manufacturing equipment lacks enough detail to reveal the equipment*s
capabilities or intended end use and is of little practical use for
determining the semiconductor manufacturing capability of the country to
which the equipment is exported. 13
The Australia Group, the MTCR, and the Nuclear Suppliers Group each have a
formal *no undercut* policy. This policy sets an expectation that whenever
a member reports an export denial to a regime, no other member will export
a similar item without first consulting with the member who denied it.
However, these regimes do not share information on the licenses that they
approve, making it difficult to assess whether the
*no undercut* expectation is being met. To address this weakness, the
United States proposed in May 2002 that the Nuclear Suppliers Group
require its members to begin reporting approval information. Department of
State officials said members discussed the feasibility of this proposal in
September 2002, but could not say if or when this proposal would be
implemented because of members* concerns about reporting proprietary
information. One Department of State official said that the regimes do not
13 U. S. General Accounting Office, Export Controls: Rapid Advances in
China*s Semiconductor Industry Underscore Need for Fundamental U. S.
Policy Review,
GAO- 02- 260 (Washington, D. C.: April 19, 2002). Not Sharing Information
on
Approved Exports Hampers Regimes
Page 16 GAO- 03- 43 Nonproliferation
need to share this information to identify undercuts because the members
are *self- policing* and their adherence to the *no undercut* policy is
based on trust.
Two regimes, the Nuclear Suppliers Group and the Wassenaar Arrangement,
have established electronic information systems for nearly instant, world-
wide communications that can help to improve the timeliness and quality of
information sharing, especially export denial reporting. The Nuclear
Suppliers Group Information Sharing System (NISS) was originally set up
around 1993, according to a Los Alamos National Laboratory official. The
Wassenaar Arrangement Information System (WAIS), operational for most
members since January 2002, allows participating countries to post export
denial notices almost as soon as the participating government issues the
denial. 14 The Australia Group has investigated setting up its own system
and, in 2001, inquired about the NISS. However, it has not made a
commitment to move to an electronic information and document management
system. Department of Commerce officials stated that the U. S. government
has some concerns about the security of information on an electronic
system for this regime and the MTCR since much of the data to be shared
would be classified.
As shown in table 2, the average time for regimes to distribute export
denials, once received from their members, ranges from as little as 2 days
for the Nuclear Suppliers Group to as much as 30 days for the MTCR. The
members of both the Nuclear Suppliers Group and Wassenaar Arrangement have
the capability to post their denial notices as soon as member governments
officially issue the denials.
14 We did not independently assess the operations and effectiveness of
either the NISS or WAIS systems. Department of State officials told us
that the WAIS is experiencing certain limitations, but that these will be
addressed in subsequent modifications to the system. Only Two Regimes Use
Electronic Data Systems to Send and Retrieve Information on Denied Exports
Page 17 GAO- 03- 43 Nonproliferation
Table 2: Denial Reporting Distribution Times and Procedures for Each
Regime Regime Frequency regimes report denied
exports to members Media for regimes to report denied exports
Australia Group Weekly Paper (physically delivered) MTCR Monthly Paper
(physically delivered) Nuclear Suppliers Group 2 days (average) Electronic
E- mail system Wassenaar Arrangement Not available a Electronic E- mail
system a Frequency could not be determined because of data limitations
noted by the Wassenaaar
Arrangement Secretariat. Source: GAO analysis of Department of State data.
We observed significant differences in timeliness of report distribution
to memberships and data retrieval among the regimes using electronic
information systems and those not using them. State Department officials
retrieved documents and export denial notifications that we requested from
the NISS and the WAIS electronic systems in minutes. In contrast, State
officials provided us with the same type of information for the MTCR and
the Australia Group 6 months after we requested it. State officials said
that this took so long because they had to manually search drawers of
paper files and that new staff could not readily find documents filed by
staff who were on leave. In addition, Department of State and Energy
officials showed us how they could search the NISS in various ways to
identify patterns of proliferators and evidence of countries of concern
shopping for controlled items among several regime members.
The electronic information systems also provide more uniform data. Before
the WAIS, the use of paper systems meant that denial reports arrived at
the Wassenaar Arrangement Secretariat in a variety of formats, with
individual data fields often presented in noncomparable ways among
members, according to government and Secretariat officials. Member
countries are more likely to provide uniform and comparable data that can
be more easily analyzed because the electronic forms have reporting fields
that must be filled in correctly before submission.
Harmonization, a goal shared by each regime, refers to efforts by regime
members to review and agree upon common control lists of sensitive items
and technologies and approaches to control them. (See app. IV for a
description of the control lists developed by each regime and examples of
the items on each list.) However, several factors undermine this goal.
Differences in How
Members Implement Export Controls Can Undermine the Regime Goal of
Harmonization
Page 18 GAO- 03- 43 Nonproliferation
First, regime members may control an item differently because some members
take significantly longer than others to adopt agreed- upon regime changes
into their national laws or regulations. In addition, only one regime
tracks whether its members have adopted regime control list changes; none
of the regimes tracks when these changes are implemented. Second, in some
cases, there are significant differences in how members implement the same
export controls that may reduce the effectiveness of common
nonproliferation efforts. Finally, export controls cannot be applied
consistently until countries joining regimes have effective export control
systems in place. According to the U. S. government, at least three
countries* Argentina, Belarus, and Russia* did not have effective control
systems in place when they became members of certain regimes.
Each regime member is expected to adopt and implement control list changes
consistently, subject to its national discretion. If agreed- upon changes
to control lists are not adopted at the same time, proliferators could
exploit these time lags to obtain sensitive technologies by focusing on
regime members that are slowest to incorporate the changes. Only the
Australia Group attempts to identify if members adopted the most recently
agreed- upon controls in their domestic regulations and laws, although it
does not track the dates that members do so. Based on our analysis, we
found some significant differences among members in the time taken to
adopt agreed- upon control list changes into their national laws or
regulations. In the case of the Wassenaar Arrangement, the European Union
adopted December 2000 plenary changes within 3 months, whereas the United
States did not adopt all these changes into export regulations until 15
months later (March 2002.) 15 In comparison, the European Union 16 adopted
Nuclear Suppliers Group plenary changes within a year of the Nuclear
Suppliers Group plenary, and Japan adopted regulations for all regime
changes within 6 months. Department of Commerce officials explained that
the U. S. regulatory process is more comprehensive and thorough than that
of some other regime members, thus requiring a longer time for the United
States to adopt regime changes. Other regime members adopt the texts of
regime control changes verbatim, while the United
15 The European Union adopted December 2000 Wassenaar Arrangement changes
in March 2001 and the United States adopted these changes in the following
phases: (1) revisions on microprocessors, graphic accelerators, and
external interconnects adopted April 9, 2001; (2) revisions on eight
categories of items adopted January 3, 2002; (3) revisions on computers
adopted March 8, 2002.
16 As of September 2002, the European Union had 15 member states. Some
Members Take Longer
Than Others to Adopt Agreedupon Changes
Page 19 GAO- 03- 43 Nonproliferation
States also explains in its regulations the purpose behind the regulatory
change and how it will affect the exporter, according to the officials.
Once regime members have adopted similar changes to export control lists
or practices, these changes can be undermined by variations in how member
states implement them. The Assistant Secretary of Commerce for Export
Administration emphasized the importance of minimizing these differences
when he said in October 2001 that member countries implement agreed- upon
control lists differently with a substantial degree of national
discretion. For example, the United States has said that its export
controls on high- performance computers, which use a measure of computer
performance to indicate when an export license is required, are consistent
with those of Wassenaar Arrangement controls. Both the U. S. and Wassenaar
Arrangement control thresholds are set at 28,000 millions of theoretical
operations per second (MTOPS); computers above this level would require a
license for export. 17 However, the United States also maintains a
*license exception* to this threshold. In January 2002, the President
announced that this control threshold would increase from 85,000 MTOPS to
190,000 MTOPS; only computers above this higher threshold to be exported
to countries such as China, India, and Russia would require a license. As
a result of this practice and of U. S. resistance to members* efforts to
remove or revise the current performance measure for computers, several
Wassenaar members have accused the United States of unilateral action at
odds with regime harmonization goals. Department of State officials
expressed concern that continued U. S. resistance without adequate
justification would cause some countries to unilaterally remove items from
their national control lists. 18 According to the Department of Commerce,
the United States and the other Wassenaar Arrangement members agreed to
raise computer control levels from 28, 000 to 190,000 MTOPS at a September
2002 Wassenaar meeting, 8 months after the United States had changed its
license exception control level.
Differences in how members implement agreed- upon export controls may
become an issue for the Australia Group as well. The Australia Group*s
June 2002 Plenary agreed to require its members to adopt *catch- all*
17 Computer exports to countries that are state sponsors or terrorism
require a license for computers above 6 MTOPS. 18 See U. S. General
Accounting Office, Export Controls: More Thorough Analysis Needed to
Justify Changes to High Performance Computer Controls, GAO- 02- 892
(Washington, D. C.: August 2, 2002). Significant Differences Found
in Members* Implementation of Controls
Page 20 GAO- 03- 43 Nonproliferation
controls* controls that authorize a government to require an export
license for items that are not on control lists but that could contribute
to a WMD proliferation program if exported* and to make this requirement
an attachment to its new guidelines. The United States has encouraged
countries to adopt catch- all controls as a way of strengthening
nonproliferation efforts. 19 However, while most members of the WMD
regimes have adopted catch- all controls, significant differences over how
members implement them raise questions about their effectiveness in
stopping proliferation. For example, under some countries* catch- all
controls, the government must show that an exporter had absolute knowledge
that an export would support a WMD proliferation activity to require a
license or to prosecute a violation of law. Under other countries* catch-
all controls, such as those of the United States, the government needs to
show only that an exporter knew or suspected that an export would support
a WMD proliferation activity. A 2001 Department of Commerce report
affirmed that different countries* standards complicate law enforcement
cooperation, and Commerce noted that even the United States faces
challenges in enforcing catch- all controls on dual- use goods because it
is difficult to detect, investigate, and prosecute cases under the U. S.
catch- all provision standard. 20
Regimes consider the implementation of an effective national export
control system a criterion for a country*s membership eligibility but in
three cases have admitted members that did not meet this criterion. (See
app. V for some factors to consider when evaluating a prospective member
to each regime.) Without an effective export control system, members
cannot ensure that they are implementing agreed- upon controls
consistently. While regime bodies, such as the chair or secretariat, do
not evaluate the export control systems of prospective members, individual
members, including the United States, have done so for each prospective
member.
19 In 1998, 21 of 29 respondents to a U. S. survey distributed to the
then- 35 Nuclear Suppliers Group members indicated that they had *catch-
all* controls in place. The report noted that at least three of the six
members that did not respond also had *catch- all* controls. In 1999, 22
of the 29 respondents to a U. S. survey distributed to the then- 32 MTCR
members noted that they had *catch- all* controls in place.
20 Foreign Policy Report, 2001 (U. S. Department of Commerce, Washington,
D. C.) Lack of Effective Export
Control Systems Weakens Harmonization Efforts
Page 21 GAO- 03- 43 Nonproliferation
Russia, Argentina, and Belarus did not have effective export control
systems in place at the time of their admission to regimes, according to
U. S. government officials and documents.
Russia does not yet have an effective export control system in place,
according to U. S. government officials, even though it is a member of
three regimes. The Soviet Union, Russia*s predecessor, was a founding
member of the Nuclear Suppliers Group. Russia also joined the Wassenaar
Arrangement when it was established in 1996. In June 2002, the Assistant
Secretary of State for Nonproliferation stated that Russia*s
implementation and enforcement of its export controls remain a cause of
concern. An unclassified January 2002 report by the Director of Central
Intelligence stated that passing export control legislation will have
little impact on key weaknesses of the Russian export control system, such
as weak enforcement and insufficient penalties for violations. 21
According to some U. S. and foreign government officials, it is better to
have certain countries such as Russia in the regimes in order to influence
their export controls and behavior or for other foreign policy reasons.
Argentina did not have in place an effective export control system when
it joined the Wassenaar Arrangement in 1996. Recognizing that Argentina
did not have export controls over dual- use items and had not adopted the
Wassenaar Arrangement control list as late as 1999, the United States
urged Argentina to pass appropriate legislation. Argentina eventually
passed legislation to adopt dual- use export controls, which went into
effect in June 2000.
Belarus had export controls in place but was not adequately enforcing
them when it became a member of the Nuclear Suppliers Group in fiscal year
2000, according to the Department State. However, the Department of State
noted that at the time Belarus joined that regime, State still had
concerns that Belarus was not adequately enforcing certain conventional
arms- related controls. Regime members sometimes accept or reject a
21 Unclassified Report to Congress on the Acquisition of Technology
Relating to Weapons of Mass Destruction and Advanced Conventional
Munitions, 1 January through 30 June 2001 (Washington, D. C.). The report
noted that, during 1998 to 1999, the Russian government stated that it had
obtained convictions for unauthorized technology transfers in three cases.
The report referred to Russian press accounts of cases in which advanced
equipment was described erroneously in export documentation and exported,
and cases in which enterprises sometimes falsely declared goods to avoid
taxes.
Page 22 GAO- 03- 43 Nonproliferation
particular country*s membership for political reasons, according to U. S.
and foreign government officials.
The U. S. government faces a number of interrelated obstacles in trying to
strengthen the multilateral export control regimes. First, and most
significant, efforts to strengthen the regimes have been hampered by a
requirement to reach consensus among all members about every decision made
and by the inability to enforce compliance with commitments in
arrangements that are voluntary and nonbinding. Second, the rapid pace of
technological change and the growing trade of sensitive items among WMD
proliferators complicates efforts to harmonize export controls and keep
control lists current. Third, the U. S. government has no specified or
agreed- upon criteria for assessing regimes* effectiveness.
U. S. and foreign government officials and nonproliferation experts all
stressed that the regimes are consensus- based organizations and depend on
the like- mindedness or cohesion of their members to be effective.
However, regimes have found it especially difficult to reach consensus on
such issues as making changes to procedures and control lists and
identifying countries to be targets of the regimes. In addition, many U.
S. and foreign government officials said that members* compliance with
regime commitments cannot be enforced because the multilateral export
control regimes are voluntary, nonbinding groups.
A single member*s objection can stalemate a regime decision. For example,
Russia has impeded consensus on several issues in the three regimes to
which it belongs* MTCR, Nuclear Suppliers Group, and the Wassenaar
Arrangement* according to several nonproliferation experts. These issues
included broadening information in denial notifications and obtaining
greater transparency into deliveries of small arms and light weapons. One
government stated that it is easier to reach consensus in the Australia
Group because Russia is not a member. On the other hand, State and
Commerce Department officials said that the need for consensusbased
decision- making can work to the U. S. advantage because it prevents a
regime from adopting proposals that the United States might oppose.
The regimes also have found it difficult to reach consensus on designating
countries that could be targets of the regimes and, therefore, would not
receive exports listed on the regimes* control lists. Some members support
the idea of designating target countries and have proposed countries to be
named, while other members disagree. For example, repeated efforts by
Obstacles to
Strengthening Export Control Regimes
Need for Consensus and Voluntary Nature of Regimes Limit Prospects for
Change
Consensus Process Makes Decision- Making Difficult
Page 23 GAO- 03- 43 Nonproliferation
Wassenaar Arrangement members to identify specific countries of concern or
even regions of unrest have failed because of a lack of consensus.
Instead, each regime member determines which countries are of concern to
it when implementing its national export controls. Nonetheless, according
to the Department of State, there is broad agreement that states whose
behavior is a cause for serious concern* Iran, Iraq, Libya, and North
Korea* will be dealt with firmly by Wassenaar members.
As an alternative to designating regime targets, the Nuclear Suppliers
Group has established conditions for supply of nuclear and nuclearrelated,
dual- use items. For example, members of the regime have agreed to supply
nuclear equipment and material only to countries that have in place a full
scope safeguards agreement with the International Atomic Energy Agency for
all facilities in the country and only upon assurances that adequate
physical protection will be maintained on the supplied items. Thus,
countries that do not meet these conditions in effect become targets of
the regime.
The Under Secretary of State for Arms Control and International Security
stated in May 2002 that U. S. nonproliferation policy goals are to stop
the development of WMD and ensure compliance with existing arms control
and nonproliferation treaties and commitments. Noncompliance can undermine
the efficacy and legitimacy of these regimes, according to the Under
Secretary.
However, the regimes do not have their own means to monitor and enforce
members* adherence to regime commitments. Instead, they rely on diplomatic
pressure to influence compliance or the occasional intelligence
information from member states to identify activities that might be
inconsistent with regime commitments. According to the Department of
State, in the most clear and serious example of a violation of regime
nonproliferation commitments, Russia shipped nuclear fuel to the Tarapur
power reactors in India in January 2001. As a Nuclear Suppliers Group
member, Russia is committed to refraining from nuclear cooperation with
any country that lacks comprehensive International Atomic Energy Agency
safeguards on all its nuclear facilities. India, which has a nuclear
weapons program, does not have such safeguards on all its facilities,
although it does have safeguards on the Tarapur reactors. Although Russia
justified the fuel supply to Tarapur based on a safety exemption to this
commitment, 32 of 34 Nuclear Suppliers Group members declared at a special
meeting in December 2000 that this shipment would be inconsistent with
Russia*s commitments to the Nuclear Suppliers Group. The fuel transfer
occurred, nonetheless. Several countries and the Regimes Lack Means to
Enforce Compliance with Commitments
Page 24 GAO- 03- 43 Nonproliferation
European Union sent demarches (diplomatic notes) to Russia protesting the
sale. The Department of State issued a February 2001 public statement that
*condemned Russia*s disregard of its Nuclear Supplier Group commitments
and urged Russia to live up to its nonproliferation obligations.*
Based on publicly available information, we found examples of other
questionable exports by Russia involving nuclear exports to Iran and
missile technology exports to Iran, India, China, and Libya. While these
cases were more ambiguous than the Tarapur case, they also raise concerns
over Russia*s compliance with its commitments. In addition, the Department
of State has provided at least 34 demarches to 11 other members of the
regimes from 1998 to 2002, questioning whether their proposed exports were
consistent with regime commitments.
Several U. S. and foreign government officials said that members*
compliance with regime commitments cannot be enforced for several reasons.
First, according to the Department of State, it is difficult to apply the
concept of enforcement to informal political commitments, such as the
export control regimes. Second, members* commitments to the regimes are
sometimes vague or left to the interpretation of each member state. Third,
officials of several governments stated that it is difficult to identify
when a foreign government is not complying with its commitments because
knowing whether an illicit technology transfer occurred with or without
prior government knowledge is sometimes impossible. Fourth, it is
difficult to encourage countries to comply with their regime commitments
because there is disagreement over which states are countries of concern,
according to some foreign government officials.
The rapid pace of technological change in a globalized world economy
complicates efforts to keep control lists current because these lists need
to be updated more frequently. The current world economy is characterized
by rapid technological innovation, globalization of business, and the
internationalization of the industrial base, according to a 2001 study. 22
The globalization of defense and commercial production activities has made
advanced military capabilities and related commercial goods and
technologies more widely available to many countries or subnational
22 Study Group on Enhancing Multilateral Export Controls For US National
Security: Final Report, April 2001 (The Henry L. Stimson Center,
Washington, D. C.). Technological Change and
Growing Supply of Sensitive Items from Proliferators Complicates Efforts
to Harmonize Export Controls
Page 25 GAO- 03- 43 Nonproliferation
groups. This has narrowed the technology gap between the United States and
other nations. 23
Rapidly evolving technologies have particularly impacted such areas as
high- performance computers, semiconductor manufacturing, and information
technologies. Several industry representatives and U. S. and foreign
government officials said that legislative or regulatory changes modifying
or removing items from control lists that no longer can be effectively
controlled cannot keep pace with rapid technology changes. As a result,
the Wassenaar Arrangement, which seeks to control items in these
technologies, has experienced prolonged discussion and disagreements over
how or even whether to maintain such items as high performance computers
on its control lists. In addition, MTCR members have disagreed on revising
parameters of items to control, such as cruise missiles and unmanned
aerial vehicles, allowing some members to seek controversial cruise
missile sales to nonmembers.
In addition, the trade of controlled items among nonmember countries with
indigenous WMD programs undermines regime efforts to effectively restrict
the exports of sensitive goods and technology. Government officials of
each of the regimes expressed their concern over *secondary
proliferation,* the growing capability of proliferators to develop WMD
technologies and trade them with other countries of concern. Traditional
recipients of WMD and missile technology such as India, Pakistan, North
Korea, and Iran could emerge as new suppliers of technology and expertise
to countries of concern, according to an unclassified 2002 report by the
Director of Central Intelligence. They are not members of multilateral
export control regimes and do not adhere to their standards. For example,
North Korea has exported significant ballistic missile- related equipment,
components, materials, and technical expertise to countries in South Asia,
North Africa, and the Middle East, including Iran. In August 2002, the
Under Secretary of State for Arms Control and International Security
called North Korea *the world*s foremost peddler of ballistic missile-
related equipment, components, materials, and technical expertise.* To
counter this trend, officials of some regime member states expressed a
desire to have all supplier countries join the regimes to encourage them
to conform to regime standards and limit the proliferation
23 We reported on this phenomenon in our report, U. S. General Accounting
Office, Export Controls: Rapid Advances in China*s Semiconductor Industry
Underscore Need for Fundamental U. S. Policy Review, GAO- 02- 260
(Washington, D. C.: April 19, 2002).
Page 26 GAO- 03- 43 Nonproliferation
of sensitive technologies. Other officials recognized, however, that such
countries would not satisfy membership criteria and would run the risk
that the cohesiveness of like- minded memberships would be eroded.
Neither the U. S. government, member governments in the regimes whom we
contacted, nor the regimes have established explicit criteria for
assessing the regimes* effectiveness. Nonetheless, the U. S. government
has an established policy of strengthening the effectiveness of the
multilateral export control regimes. 24 Various U. S. government
officials, including the President and the under secretaries and assistant
secretaries of State and Commerce have stated the policy in public
speeches or in written testimony before Congress. Furthermore, while
neither these governments nor regimes made any evaluation of the regimes*
effectiveness, they have asserted that the regimes are effective. 25 The
importance of developing criteria to assess regime effectiveness is
underscored by the Export Administration Act of 2001. 26 Pending before
the Congress at the time of this report, this act would require monitoring
of and annual reporting on the regimes* effectiveness.
Some U. S. and foreign government officials noted several possible
limitations to an effort to assess the effectiveness of the regimes.
First, multilateral export control regimes could not be assessed
separately from the entire nonproliferation system, including national
export enforcement systems and treaties. Second, demonstrating the
effectiveness of the regimes would depend on being able to prove that the
international community would be worse off without the regimes than with
them. Third, several government officials and industry representatives
noted that the mission, obligations, and political commitment of the
Wassenaar Arrangement are not as clear as those of the other regimes.
Thus, assessing the effectiveness of this regime would be especially
problematic.
24 The Under Secretary of Commerce for Industry and Security publicly
announced in September 2001 that the effectiveness of the regimes would be
strengthened by (1) improving timeliness and content of required
reporting, (2) adopting a formal denial consultation procedure, and (3)
adopting *catch- all* controls.
25 Although the Wassenaar Arrangement has a process for assessing the
Arrangement every 3 years, its 1999 assessment produced many proposals for
improving the Arrangement but no evaluation of the arrangement*s
effectiveness.
26 S. 149, Section 501 (b) and H. R. 2581, Section 501 (b). Lack of
Explicit Criteria
Poses Obstacles to Strengthening Regimes
Page 27 GAO- 03- 43 Nonproliferation
Notwithstanding these possible limitations to an effort to assess the
effectiveness of the regimes, some foreign and U. S. government officials
have proposed criteria to do so. The proposed criteria include the
following:
clarity of each regime*s mission, obligations, and political commitment;
quality, quantity, and timeliness of regime information exchanged,
including denial notifications;
strength of no- undercut provisions;
willingness and ability of the regime to adapt its practices and common
control lists to deal with new proliferation challenges;
number of participants and level of their participation;
level of compliance with regime standards;
existence of guidelines for licensing and enforcement; and
criticism from nonmembers* specifically proliferators* as evidence of a
regime*s effectiveness.
Strengthening multilateral export control regimes would help them better
meet the U. S. national security objective of preventing the proliferation
of weapons of mass destruction and conventional weapons to countries of
concern and terrorists. A key function of each regime is sharing
information related to proliferation. Yet the regimes often lack even the
basic information that would allow them to assess whether their actions
were working as intended. The regimes cannot effectively limit or monitor
efforts by proliferators to acquire sensitive technology without more
complete and timely reporting of licensing information and without more
information on when and how members adopt and implement agreed- upon
controls. Addressing these deficiencies would enhance the regimes* ability
to accomplish their nonproliferation goals. However, the consensus- based
and voluntary nature of these regimes poses organizational and political
obstacles to implementing needed reforms. In addition, the lack of
explicit criteria to assess regime effectiveness will make it difficult to
determine the success of any effort to strengthen the regimes. While the
regimes have adapted to changing threats or conditions in the past, their
continued ability to do so may determine whether the regimes remain viable
in Conclusion
Page 28 GAO- 03- 43 Nonproliferation
curbing proliferation in the future. However, the United States lacks a
coherent strategy to address the regimes* common weaknesses and overcome
the organizational and political obstacles to strengthening their
effectiveness.
To help the multilateral export control regimes achieve their stated goals
and objectives, we recommend that the Secretary of State establish a
strategy to work with other regime members to enhance the effectiveness of
the multilateral export control regimes. This strategy should identify
steps regime members should take to
(1) improve information- sharing by
establishing clearly defined standards for reporting export denials on a
more complete and timely basis;
sharing greater and more detailed information on approved exports of
sensitive transfers to nonmember countries; and
adopting automated information- sharing systems in the MTCR and
Australia Group to facilitate more timely information exchanges.
(2) adopt and implement agreed- upon regime changes to export controls
more consistently by
setting guidelines for when each regime member should adopt control list
changes into national laws and regulations and making this information
available to all members;
tracking when members adopt regime changes into national law and
regulations and making information on the timing and content of these
changes available to the membership;
establishing minimal standards for an effective national export control
system; and
periodically assessing each member*s national export control system
against these standards and reporting the results of these assessments to
the regime; Recommendations for
Executive Action
Page 29 GAO- 03- 43 Nonproliferation
(3) identify potential changes in policies and procedures by
assessing alternative processes for reaching decisions,
evaluating means for encouraging greater adherence to regime
commitments, and
conducting an annual self- assessment of regime effectiveness. To ensure
that the United States is reporting all relevant information to the
multilateral export control regimes, as expected, we recommend that the
Secretary of State report U. S. denials of all export licenses for items
controlled by a multilateral export control regime at the time the
exporter is informed of the U. S. government*s intent to deny an export
license.
To enable the U. S. government to better implement its policy of
strengthening the effectiveness of the multilateral export control
regimes, we also recommend that the Secretary of State establish criteria
to assess the effectiveness of the multilateral export control regimes.
We provided a draft of this report to the Secretaries of Commerce,
Defense, Energy, and State for their review and comment. We received
written comments from the Departments of Commerce, Energy, and State that
are reprinted in appendixes VI, VII, and VIII. The Department of Defense
declined to provide us with written comments. The Department of State also
provided us with technical comments, which we incorporated as appropriate.
The Department of Commerce agreed with our findings, conclusions, and
recommendations. Commerce agreed that strengthening the multilateral
export control regimes would serve U. S. national security objectives. In
its written comments, the Department of Energy indicated that it had no
comments on the report. The Department of State said that it will give due
regard to our recommendation to work with other regime members to
establish a strategy for enhancing the effectiveness of the multilateral
export control regimes. State also agreed with our conclusion that
information sharing of export licensing is an important element of regime
activity.
However, State asserted that our report overall did not reveal any
shortcomings of nonproliferation significance. In fact, our report
highlighted the inability of the regimes to enforce Russia*s compliance
Agency Comments
and Our Evaluation
Page 30 GAO- 03- 43 Nonproliferation
with its regime commitments, a matter of major nonproliferation
significance. Our report also identified several specific weaknesses in
the processes the regimes use to share information about each other*s
licensing decisions and to implement regime decisions. Weaknesses in
regime processes undermine the regimes* effectiveness in meeting
nonproliferation purposes.
We are sending copies of this report to appropriate congressional
committees and to the Secretary of Commerce, Secretary of Defense,
Secretary of Energy, and Secretary of State. Copies will be made available
to others upon request. In addition, this report will be available at no
charge on the GAO Web site at http:// www. gao. gov.
Please contact me at (202) 512- 8979 if you or your staff has any
questions concerning this report. A GAO contact and staff acknowledgments
are listed in appendix IX.
Joseph Christoff, Director International Affairs and Trade
Appendix I: Scope and Methodology Page 31 GAO- 03- 43 Nonproliferation
To describe accomplishments of the multilateral export control regimes, we
reviewed analyses and documents prepared by the Departments of State,
Commerce, Defense, the intelligence community, and nonproliferation
specialists in academia. We also reviewed the database of the Monterey
Institute for International Studies. Also, we reviewed plenary, working
group, and information exchange documents of the Australia Group, MTCR,
Nuclear Suppliers Group, and Wassenaar Arrangement. We met with officials
of the Departments of State, Commerce, Defense, and Energy, and the
intelligence community in Washington, D. C.; the Department of Energy*s
Los Alamos National Laboratory in Los Alamos, New Mexico; and the Center
for Nonproliferation Studies of the Monterey Institute for International
Studies in Monterey, California. We also met with officials of the
governments of Australia, Austria, Canada, France, Japan, the Netherlands,
New Zealand, and the United Kingdom. In addition, we received written
responses to questions we provided to the governments of Canada, Japan,
Germany, Russia, and Hong Kong. Also, we met with representatives of the
points of contact for the MTCR in Paris, France; and the Nuclear Suppliers
Group in Vienna, Austria; the Secretariats of the Australia Group in
Canberra, Australia; and of the Wassenaar Arrangement, including the
Director General, in Vienna, Austria. Also, we interviewed representatives
of American companies from the Alliance for Network Security, American
Electronics Association, Association for Manufacturing Technology,
American Chemistry Council, and Nuclear Energy Institute. We also met with
representatives of the International Atomic Energy Agency and the Zangger
Committee in Vienna, Austria; and of the Organization for the Prohibition
of Chemical Weapons in The Hague, The Netherlands, to identify the
relationship between the regimes and those organizations.
To assess weaknesses of the multilateral export control regimes, we
analyzed documents and studies noted above and met with officials and
representatives of the previously mentioned governments and organizations.
In addition, we reviewed listings of denial notifications for all the
regimes and approval notifications for the Wassenaar Arrangement to try to
identify timeliness and completeness of reporting. In trying to identify
the amount of time for members to report denials to each regime, we
learned that the regimes do not maintain this data in a manner that allows
such an analysis. The Department of State confirmed this limitation in
July 2002. We analyzed and compared both the means and frequency with
which regime points of contact or secretariats distribute the export
denial and, in the case of the Wassenaar Arrangement, approval
notifications to the membership. We also identified which countries have
Appendix I: Scope and Methodology
Appendix I: Scope and Methodology Page 32 GAO- 03- 43 Nonproliferation
and have not reported export denials and the percentages of export denials
for each country that has reported them. We also reviewed regulations of
the governments of the United States, Japan, and the European Union to
determine the time it took to incorporate the most recent changes from the
regimes into regulations.
To identify obstacles that the United States faces in strengthening the
regimes, we analyzed the documents and studies noted above and met with
officials and representatives of the noted governments and organizations.
We could not fully assess how regime members comply with their commitments
or how well efforts to encourage compliance work because of limited access
to key Department of State data. Even though 22 U. S. Code Section 2593a
requires a report to the Congress each January discussing compliance of
countries with various arms control agreements, including the MTCR, the
2000 and 2001 reports have not yet been provided to Congress; and the
Department of State declined to provide us access to the report drafts.
Consequently, we could not review the reports to determine how other
countries are complying with this regime. In addition, we could not fully
assess how diplomatic pressure has worked overall to stop questionable
transfers of items to nonmember countries for two reasons. The Department
of State could not tell us (1) how many demarches in total the United
States has provided to other regime members and (2) whether the
questionable transfers that the demarches protested were or were not
stopped in each case. Although State provided us with about 100 demarches
concerning questionable exports from 1998 to 2002, officials from the
Departments of Defense and Commerce indicated that the United States
delivered an estimated 100 demarches to MTCR members alone, in 2001.
We channeled all requests for regime information and documentation through
the Department of State and experienced significant delays in obtaining
these documents from the Department. After presenting State with an
initial document request in September 2001, we reduced the scope of that
request in October 2001 to accommodate State*s concerns about the size of
the request. In response to the revised request, one State office provided
requested documents by December 2001 and was prompt in fulfilling our
subsequent requests for documents. Nonetheless, we continued to experience
delays from all other State offices in receiving access to documents over
the next 7 months. State officials attributed these delays to the
Department*s time- consuming process of reviewing every document multiple
times before agreeing to provide us with access.
Appendix I: Scope and Methodology Page 33 GAO- 03- 43 Nonproliferation
We performed our work from August 2001 to September 2002 in accordance
with generally accepted government auditing standards.
Appendix II: List of Members of Multilateral Export Control Regimes
Page 34 GAO- 03- 43 Nonproliferation
Country Australia Group MTCR a Nuclear Suppliers Group Wassenaar
Arrangement Number of Regimes
Argentina 4 Australia 4 Austria 4 Belarus 1 Belgium 4 Brazil 2 Bulgaria 3
Canada 4 Cyprus 2 Czech Republic 4 Denmark 4 Finland 4 France 4 Germany 4
Greece 4 Hungary 4 Iceland 2 Ireland 4 Italy 4 Japan 4 Kazakhstan 1 Latvia
1 Luxembourg 4 Netherlands 4 New Zealand 4 Norway 4 Poland 4 Portugal 4
Romania 3 Russia 3 Slovakia 3 Slovenia 1 South Africa 2 South Korea 4
Spain 4 Sweden 4 Switzerland 4 Turkey 4 Ukraine 3
Appendix II: List of Members of Multilateral Export Control Regimes
Appendix II: List of Members of Multilateral Export Control Regimes
Page 35 GAO- 03- 43 Nonproliferation
Country Australia Group MTCR a Nuclear Suppliers Group Wassenaar
Arrangement Number of Regimes
United Kingdom 4 United States 4
Total 33 33 40 33
Legend:
represents the regimes applicable to each listed country. a Countries
pledging to abide by MTCR guidelines include the People*s Republic of
China, Israel,
Romania, and Slovakia. Sources: Center for International Trade and
Security, Nonproliferation Export Controls: A Global Evaluation, 2001 and
the Australia Group, Nuclear Suppliers Group, MTCR, and Wassenaar
Arrangement.
Appendix III: Reporting Practices of Multilateral Export Control Regimes
Page 36 GAO- 03- 43 Nonproliferation
Regime Denied exports reported Expected time frames for members
to report denied exports *No undercut* policy in effect
Australia Group Yes No Yes MTCR Yes No Yes Nuclear Suppliers Group Yes No
Yes Wassenaar Arrangement Yes Yes a
Aggregate denials within 90 days of 6- month reporting period; Individual
denials within 30 days but no longer than 60 days from date of denial
No a The Wassenaar Arrangement calls for two types of export denial
reporting: export denials in aggregate form for less sensitive (basic)
items (about 76 percent of items) on the dual- use control list and
individual export denials for sensitive items (about 24 percent of items)
on the dual- use control list.
Source: GAO analysis based on guidelines of regimes.
Appendix III: Reporting Practices of Multilateral Export Control Regimes
Appendix IV: Comparison of Control Lists of Multilateral Export Control
Regimes
Page 37 GAO- 03- 43 Nonproliferation
Each regime and treaty- related organization maintains lists of sensitive
items to be monitored and controlled, but the purpose and composition of
each list differs. The Chemical Weapons Convention list of chemicals was
intended to be as comprehensive as possible, primarily related to
countries* declarations and destruction of their chemical weapons; and its
provisions on transfers have a different goal from that of the Australia
Group, according to officials of the Organization for the Prohibition of
Chemical Weapons. Also, 20 Australia Group chemicals are not on the
Chemical Weapons Convention list, although families of chemicals are
listed. Finally, the Chemical Weapons Convention list does not focus on
chemical equipment and transfers, but the Australia Group list does.
Table 3: Regime Control Lists and Items: Australia Group a Description of
List Items Examples of Items on the List
54 dual- use chemical precursors
Dual- use chemical weapons- related production equipment
94 pathogens and toxins that affect humans, livestock animals, and/ or
food plants
Dual- use biological production equipment Chemical:
Thiodiglycol
Reaction vessels, reactors, or agitators
Heat exchangers or condensers
Multiwalled piping Biological:
Ebola virus
Bacillus anthracis
Centrifugal separators
Aerosol inhalation chambers a The United States had not yet published
regulations incorporating changes from the June 2002
Australia Group plenary at the time of this report. The changes include
the addition of eight toxins to the biological agents core list. The new
total will be 102 once revised regulations have been issued.
Source: Australia Group.
Appendix IV: Comparison of Control Lists of Multilateral Export Control
Regimes
Appendix IV: Comparison of Control Lists of Multilateral Export Control
Regimes
Page 38 GAO- 03- 43 Nonproliferation
Table 4: Regime Control Lists and Items: MTCR Description of List Items
Examples of Items on the List MTCR equipment and technology annex:
196 items in two categories. Category I Annex items include complete
missile systems, as well as major subsystems such as rocket stages,
engines, guidance sets, and reentry vehicles and are rarely licensed for
export. Transfers of production facilities for Category I items are
prohibited absolutely. Category II Annex items include other missile
related components, including cruise missiles and unmanned aerial
vehicles, not covered in Category I.
Category I* complete missile systems, as well as major subsystems:
Individual rocket stages
Reentry vehicles
Solid or liquid fuel rocket engines
Guidance sets
Thrust vector controls
Warhead safing, arming, fuzing, and firing mechanisms Category II* other
missile related components:
Propulsion components
Propellants and constituents
Propellant production technology and equipment
Missile structural composites: production technology and equipment
Avionics equipment
Reduced observables technology, materials, and devices Source: MTCR.
Table 5: Regime Control Lists and Items: Nuclear Suppliers Group a
Description of List Items Examples of Items on the List
Part 1 guidelines provide an annexed list (* Trigger List*) of 89 items
of nuclear materials and equipment that if exported require that the
recipient country have in place a full- scope safeguards agreement with
the International Atomic Energy Agency
67 items in part 2 consisting of exports of nuclear- related, dual- use
equipment, materials, and related technology
Part 1*
Special fissionable material
Nuclear reactors and equipment
Plants and equipment for reprocessing irradiated fuel elements
Plants and equipment for separation of uranium isotopes Part 2*
Machine tools
Materials (beryllium)
Lasers, laser amplifiers, and oscillators
Flash x- ray equipment a The Nuclear Suppliers Group maintains two lists
of controlled items: a list of items, called the
*Trigger List,* whose export would require international safeguards to all
nonnuclear weapons states; and a list of dual- use items. In contrast, the
Zangger Committee maintains only a Trigger List of items whose export
would require international safeguards, such as inspections and monitoring
equipment, to nonnuclear weapons states that have not signed the Nuclear
Nonproliferation Treaty. In 1971, a group of nuclear supplier countries
known as the Zangger Committee came together to agree on how to implement
and consistently interpret their obligations under Article III. 2, a
provision of the Nuclear Nonproliferation Treaty. Memberships of both
regimes are similar; a significant difference is that China is a member
only of the Zangger Committee. We did not review the activities of the
Zangger Committee except as they relate to the Nuclear Suppliers Group.
Source: Nuclear Suppliers Group.
Appendix IV: Comparison of Control Lists of Multilateral Export Control
Regimes
Page 39 GAO- 03- 43 Nonproliferation
Table 6: Regime Control Lists and Items: Wassenaar Arrangement Description
of List Items Examples of Items on the List
541 items in Appendix 5 List of Dual- Use Goods and Technologies
Wassenaar Arrangement List 1
196 items in Munitions List
7 items in Appendix 3 Specific Information Exchange on Arms Dual- use
List
General purpose integrated circuits
Optical fibre communication cables, optical fibres and accessories
Marine acoustic systems, equipment, and specially designed components
Solid rocket propulsion systems Munitions List*
Bombs, torpedoes, rockets, missiles, and related equipment and
accessories, specially designed for military use
*Military explosives* and fuels, including propellants, and related
substances
Vessels of war, special naval equipment and accessories, as follows, and
components therefore, specially designed for military use
*Aircraft,* unmanned airborne vehicles, aero- engines and
*aircraft* equipment, related equipment and components, specially designed
or modified for military use
Source: Wassenaar Arrangement.
Appendix V: Some Factors Considered in Accepting New Members to Regimes
Page 40 GAO- 03- 43 Nonproliferation
Groups Some factors to consider in reviewing potential members
Australia Group Applicant must demonstrate an established, effective,
and legally based system of national export controls;
Be a member in good standing of the Biological and Toxins Weapons
Convention and Chemical Weapons Convention;
Demonstrated compliance with all multilateral treaties banning chemical
and biological weapons activities. MTCR Whether a prospective new member
has a legally based effective export control system that puts into
effect the MTCR Guidelines and procedures;
administers and enforces such controls effectively;
demonstrates a sustained and sustainable commitment to nonproliferation;
would strengthen international nonproliferation efforts. Nuclear
Suppliers Group Enforcement of a legally based domestic export control
system that gives effect to the
commitment to act in accordance with the Nuclear Suppliers Group
Guidelines;
Ability to supply items (including items in transit) covered by the
annexes to Parts 1 and 2 of the Nuclear Suppliers Group Guidelines;
Adherence to the Guidelines and action in accordance with them;
Adherence to and compliance with one or more of various nonproliferation
treaties, including the Nuclear Nonproliferation Treaty or equivalent
international nuclear nonproliferation agreement;
Support of international efforts towards nonproliferation of WMD and of
their delivery vehicles. Wassenaar Arrangement A state*s adherence to
fully effective export controls;
Whether a state is a producer/ exporter of arms or industrial equipment,
respectively;
A state*s nonproliferation policies, control lists, and, where
applicable, guidelines of the Nuclear Suppliers Group, the MTCR and the
Australia Group; and through adherence to the Nuclear Nonproliferation
Treaty, the Biological and Toxicological Weapons Convention, the Chemical
Weapons Convention and (where applicable) START I, including the Lisbon
Protocol.
Sources: Unclassified sources are the State Department Web site http://
www. state. gov/ t/ np/ rls/ fs/ 2001/ 3528.htm; MTCR Web site http://
www. mtcr. info/ english/ partners. html; International Atomic Energy
Agency Web site http:// www. nuclearsuppliersgroup. org/ member. htm; and
Wassenaar Arrangement Web site http:// www. wassenaar. org/ docs/ IE96.
html.
Appendix V: Some Factors Considered in Accepting New Members to Regimes
Appendix VI: Comments from the Department of Commerce
Page 41 GAO- 03- 43 Nonproliferation
Appendix VI: Comments from the Department of Commerce
Appendix VII: Comments from the Department of Energy
Page 42 GAO- 03- 43 Nonproliferation
Appendix VII: Comments from the Department of Energy
Appendix VIII: Comments from the Department of State
Page 43 GAO- 03- 43 Nonproliferation
Appendix VIII: Comments from the Department of State
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
Appendix VIII: Comments from the Department of State
Page 44 GAO- 03- 43 Nonproliferation
See comment 2. See comment 1.
Appendix VIII: Comments from the Department of State
Page 45 GAO- 03- 43 Nonproliferation
See comment 6. See comment 5.
See comment 4. See comment 3.
Appendix VIII: Comments from the Department of State
Page 46 GAO- 03- 43 Nonproliferation
See comment 8. See comment 7.
Appendix VIII: Comments from the Department of State
Page 47 GAO- 03- 43 Nonproliferation
The following are GAO*s comments on the Department of State letter dated
October 16, 2002.
1. The Department provided examples of the commitments that governments
make when they become members of the multilateral export control regimes.
However, simply listing the types of export control commitments these
members make says nothing about how these commitments are implemented in
practice and whether they are effective. Therefore, it is unclear how
State can contend that regime members are effectively implementing regime
commitments.
2. We agree with State that proliferators must often look to nonregime
suppliers to obtain materials and equipment and discussed this issue in
our report.
3. We agree that it is important for regime members to share information
on trends in proliferation, procurements, the use of front companies, and
end users of concern. We also believe that it is important to collect and
share comprehensive licensing information on sensitive export transfers
and denials* the building blocks for assessing these broader trends.
4. The Department stated that it sees no utility in sharing increased
information about export approvals to nonregime members. This statement is
inconsistent with its current policy and practice. For example, on October
11, 2002, the Deputy Assistant Secretary of State for Nonproliferation
stated that regime members should share more information on export
approvals to facilitate monitoring of regime member compliance with their
*no undercut* commitments. Moreover, the U. S. government has led efforts
to increase this type of information sharing in two regimes. The Wassenaar
Arrangement already expects members to share information on export
approvals, and the U. S. government submitted a proposal to the Nuclear
Supplier*s Group in 2002 that would provide for reporting export
approvals.
5. None of the regimes systematically tracks the time regime members take
to implement agreed- upon changes in their control lists. In the absence
of this tracking, State cannot demonstrate that time lags have not
resulted in proliferators* obtaining controlled items or that the time
lags could not contribute to proliferation. GAO Comments
Appendix VIII: Comments from the Department of State
Page 48 GAO- 03- 43 Nonproliferation
6. We agree that catch- all controls have been a critical factor in
inhibiting proliferators* attempts to acquire items not on regime control
lists. However, as noted in our report, different country standards hamper
effective implementation and complicate law enforcement cooperation.
7. Our report already acknowledges that decisions based on consensus are a
double- edged sword. As we noted, while the need for consensus hampers the
adoption of important decisions, it can also prevent regime members from
adopting a position that the United States opposes.
8. During our review, we did not identify any systematic or formal
assessments of regime effectiveness routinely conducted by the regimes or
their members. Rather, regime statements sometimes assert the
effectiveness of the regimes but, as we reported, have established no
agreed upon criteria against which these assertions can be assessed.
Appendix IX: GAO Contact and Staff Acknowledgments
Page 49 GAO- 03- 43 Nonproliferation
Stephen Lord (202) 512- 4379 In addition to the individual named above,
Jeffrey D. Phillips, Eugene Beye, Lynn Cothern, Nanette Ryen, and Richard
Seldin made key contributions to this report. Appendix IX: GAO Contact and
Staff
Acknowledgments GAO Contact Acknowledgments
(320073)
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