4

Future ISTC Objectives and Goals

In this chapter the committee makes recommendations to the U.S. Government, to include the executive and legislative branches, on the immediate and longer-term future of the International Science and Technology Center (ISTC).

The ISTC was established to meet the perceived crisis that was created by the dissolution of the Soviet Union—that is, the threat of a large exodus of scientists and engineers with knowledge and experience in the development of weapons of mass destruction and delivery systems, which would lead to the proliferation of such weapons. Support for the ISTC was tied to the perceived crisis and in anticipation of a transition within the former Soviet Union (FSU) to a market economy, which would alleviate the crisis. The original funding plan for the ISTC, which scales down U.S. government funding to zero after five to seven years of operation, is consistent with the original conception of the program as a short-term solution to the proliferation crisis.

Now, several years into that transition and more than two years into the operation of the ISTC, it is important to address several questions regarding the future: Are the ISTC's primary goal and secondary objectives still valid? Does a point exist at which the ISTC can claim success and close its doors? How and when does the ISTC hand off its activities to indigenous control?

In the following discussion the committee addresses these and related questions, and suggests the extent to which the ISTC's objectives and goals remain appropriate today and will continue to be in the future. The committee also makes recommendations on how the ISTC can improve its activities in the short term.

The founding parties of the ISTC no doubt realized the long-term nature of the transition taking place in the FSU— that is, the transition to a science and technology infrastructure more related and responsive to a civilian economy. But at the time, long-term plans for the ISTC were less critical than the immediate threat of proliferation. With funding coming originally from the U.S. Department of Defense's Cooperative Threat Reduction (CTR) Program, and subsequently the Freedom Support Act, the ISTC has been, if not explicitly, at least by association, a short-term crisis management program with a relatively near-term end point.

In the previous chapter the committee concluded that the ISTC was successful and effective during its first two years in meeting its primary objective. This has, in turn, contributed to the larger goal of diminishing the risk of diffusion of knowledge and expertise related to weapons of mass destruction. In fact, the feared large exodus of weapons scientists and engineers from the FSU has not occurred. This is likely due, in part, to the ISTC and to many other factors, such as internal Russian controls and the loyalty of Russian scientists and engineers to their homeland.

The committee also believes the ISTC has made progress in addressing its secondary objectives. The ISTC has contributed to the integration of FSU scientists and engineers into the international science community, solving national and international technical problems, and, to a lesser degree, supporting the transition to a market-based economy.

In addition to the benefits arising from its stated objectives, the committee notes other positive features and impacts of the ISTC. First, the ISTC enjoys advantages not held by other U.S. organizations operating in the FSU. The agreement establishing the center gives the ISTC unique tax and customs advantages and the ability to address intellectual property rights issues. In fact, the ISTC's administrative infrastructure—both its international nature and the special agreements with the Russian and other FSU governments—is unparalleled in the region. It is very unlikely that the United States or any U.S. organization would be able to secure such agreements in near-term future negotiations with Russia, and continuing to utilize the agreements is an important benefit to all parties.

Second, the ISTC has contributed to important broader U.S. national security objectives, including increased integration of FSU scientists and engineers in the FSU and internationally and increased transparency and confidence building between U.S. and FSU weapons institutes. The former objective was discussed in the preceding chapter and is addressed again below; the latter is necessary if U.S. and FSU



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AN ASSESSMENT OF THE INTERNATIONAL SCIENCE AND TECHNOLOGY CENTER: Redirecting Expertise in Weapons of Mass Destruction in the Former Soviet Union 4 Future ISTC Objectives and Goals In this chapter the committee makes recommendations to the U.S. Government, to include the executive and legislative branches, on the immediate and longer-term future of the International Science and Technology Center (ISTC). The ISTC was established to meet the perceived crisis that was created by the dissolution of the Soviet Union—that is, the threat of a large exodus of scientists and engineers with knowledge and experience in the development of weapons of mass destruction and delivery systems, which would lead to the proliferation of such weapons. Support for the ISTC was tied to the perceived crisis and in anticipation of a transition within the former Soviet Union (FSU) to a market economy, which would alleviate the crisis. The original funding plan for the ISTC, which scales down U.S. government funding to zero after five to seven years of operation, is consistent with the original conception of the program as a short-term solution to the proliferation crisis. Now, several years into that transition and more than two years into the operation of the ISTC, it is important to address several questions regarding the future: Are the ISTC's primary goal and secondary objectives still valid? Does a point exist at which the ISTC can claim success and close its doors? How and when does the ISTC hand off its activities to indigenous control? In the following discussion the committee addresses these and related questions, and suggests the extent to which the ISTC's objectives and goals remain appropriate today and will continue to be in the future. The committee also makes recommendations on how the ISTC can improve its activities in the short term. The founding parties of the ISTC no doubt realized the long-term nature of the transition taking place in the FSU— that is, the transition to a science and technology infrastructure more related and responsive to a civilian economy. But at the time, long-term plans for the ISTC were less critical than the immediate threat of proliferation. With funding coming originally from the U.S. Department of Defense's Cooperative Threat Reduction (CTR) Program, and subsequently the Freedom Support Act, the ISTC has been, if not explicitly, at least by association, a short-term crisis management program with a relatively near-term end point. In the previous chapter the committee concluded that the ISTC was successful and effective during its first two years in meeting its primary objective. This has, in turn, contributed to the larger goal of diminishing the risk of diffusion of knowledge and expertise related to weapons of mass destruction. In fact, the feared large exodus of weapons scientists and engineers from the FSU has not occurred. This is likely due, in part, to the ISTC and to many other factors, such as internal Russian controls and the loyalty of Russian scientists and engineers to their homeland. The committee also believes the ISTC has made progress in addressing its secondary objectives. The ISTC has contributed to the integration of FSU scientists and engineers into the international science community, solving national and international technical problems, and, to a lesser degree, supporting the transition to a market-based economy. In addition to the benefits arising from its stated objectives, the committee notes other positive features and impacts of the ISTC. First, the ISTC enjoys advantages not held by other U.S. organizations operating in the FSU. The agreement establishing the center gives the ISTC unique tax and customs advantages and the ability to address intellectual property rights issues. In fact, the ISTC's administrative infrastructure—both its international nature and the special agreements with the Russian and other FSU governments—is unparalleled in the region. It is very unlikely that the United States or any U.S. organization would be able to secure such agreements in near-term future negotiations with Russia, and continuing to utilize the agreements is an important benefit to all parties. Second, the ISTC has contributed to important broader U.S. national security objectives, including increased integration of FSU scientists and engineers in the FSU and internationally and increased transparency and confidence building between U.S. and FSU weapons institutes. The former objective was discussed in the preceding chapter and is addressed again below; the latter is necessary if U.S. and FSU

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AN ASSESSMENT OF THE INTERNATIONAL SCIENCE AND TECHNOLOGY CENTER: Redirecting Expertise in Weapons of Mass Destruction in the Former Soviet Union relations are to move to a level of complete trust and collaboration. While the ISTC has contributed to these positive trends, the proliferation threat has not abated. Indeed, the concern is growing, with studies and reports appearing almost daily that cite actual instances or potential avenues of proliferation of weapons and weapons expertise. A staff report by the U.S. Senate Permanent Subcommittee on Investigations concluded as much, noting that “what is currently known about illicit trafficking in nuclear materials and know-how demonstrates a threat this Nation cannot ignore. . . . The threat of nuclear diversion and trafficking from the former Soviet Union is our Nation's number one national security threat.”1 Further, as noted earlier, the economic and social conditions remain poor for scientists and engineers in the FSU, and the temptation to respond to overtures from undesirable parties must be high. The ISTC has provided up to 50 percent of the staff salaries in some of the most important weapons institutes in the FSU. If this source of potential funding, and the opportunities it offers, were withdrawn precipitously, the threat could increase significantly. In particular, Arzamas-16 and other formerly closed cities will become an even higher proliferation risk than they are currently. Russia and the other republics simply are not ready to take the steps needed to continue the progress toward a stable science and engineering sector. Furthermore, as long as the deterioration and despair continues, the threat exists not only of individual defections but also of large-scale emigration and of individuals selling their knowledge and experience to states or groups of proliferation concern. RECOMMENDATION: The United States should continue core funding of the ISTC. The committee believes that providing opportunities to former weapons scientists and engineers to apply their knowledge and skills to nondefense-related research is a desirable means of addressing the nonproliferation goal. U.S. Department of State officials responsible for management of the ISTC envision a U.S. contribution of $18 million annually through 1998 and then a gradual decline to almost zero by fiscal year 2003.2 They are seeking funding from other U.S. government mission agencies and the private sector to supplant their diminishing department' s contribution. The committee agrees that the ISTC should seek other sources of funding, as discussed below, but concludes that this is not sufficient to meet U.S. national security objectives or to allow the United States to exert sufficient influence and leadership in ISTC activities. In part because of its relatively large financial contribution, the United States has played a significant role in the establishment and management of the ISTC. The center's first two executive directors were from the United States, and the United States has exerted much influence on the overall structure and administration of the ISTC. Now, with the directorship going to the European Union, U.S. financial support decreasing, and other countries and private entities being brought into the ISTC, the United States risks losing some of its influence in determining overall program direction. By continuing to provide core funding, the United States will be able to exert leadership in maintaining existing, and/or in setting new, objectives and priorities. Therefore, based on its success to date, the continuing threat of proliferation, and the other benefits to U.S. national security objectives, the committee concludes that the activities of the ISTC continue to be in the U.S. national interest and recommends that the U.S. Government continue annual core funding for the center until, and probably beyond, 2003. In recommending continued core funding for the ISTC, the committee, of course, recognizes the responsibilities of the other participating governments and other related U.S. programs. U.S. participation in, and funding of, the ISTC should be based on Russia and other FSU governments continuing to meet their obligations for funding and access to facilities. Russia, through its Ministry of Atomic Energy, provides the facilities that house the ISTC and other in-kind support. The committee heard no comments to suggest that this economic support would end, although the future political climate in Russia is difficult to predict. As noted earlier, some FSU government officials criticized the ISTC during its implementation, claiming it would be a means for the United States to steal Russia's best technologies, scientists, and engineers. Also, as noted earlier, the Russian Parliament has never formally ratified the agreement establishing the center, which might suggest some doubt about the Russian Government's long-term commitment to the ISTC. However, based on its discussions, the committee believes that the lack of formal ratification is due to the Russian Government having many other higher-priority issues to deal with and does not reflect significant active opposition to the ISTC. While some critics remain, the committee believes that the ISTC is generally well regarded. U.S. funding for the ISTC must also be done in tandem with that of the European Union and Japan. Indications are that Japan and the European Union will continue to provide at least moderate funding for the ISTC beyond 2003, although that funding may come with different restrictions on its use.3 Also, Sweden and Finland have joined the Center and contributed funds, and other countries have expressed interest in joining. Finally, the United States and the ISTC's management must continue to ensure that the center's activities comple- 1   U.S. Senate Permanent Subcommittee on Investigations, Staff Report, Washington, D.C., 1996, p. 2. 2   U.S. GAO, Weapons of Mass Destruction: Reducing the Threat From the Former Soviet Union: An Update, Report to Congress, GAO, Washington, D.C., 1995, p. 29. 3   Committee discussions with U.S. State Department officials.

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AN ASSESSMENT OF THE INTERNATIONAL SCIENCE AND TECHNOLOGY CENTER: Redirecting Expertise in Weapons of Mass Destruction in the Former Soviet Union ment and facilitate, not duplicate, other assistance and collaborative programs under way in the FSU that have similar or complementary goals. These programs are numerous: the International Science Foundation, which provided essential support at a critical time, focused on large numbers of small grants with very little bureaucracy and made an important contribution to preventing widespread disintegration of research. The new Civilian Research and Development Foundation could continue to fill this niche, although the funds available to it are much smaller. Also, the Initiatives for Proliferation Prevention (IPP) program and U.S. programs in nuclear materials control and accounting target many of the same laboratories and individuals as the ISTC and have the same secondary goal of integrating Russian scientists with the West. Of course, some overlap of goals exists and is in fact desirable. The ISTC has taken steps to ensure coordination among these and other U.S. programs, and the committee believes there has been little duplication to date. The committee notes, however, that coordination may become more difficult as the scope and number of programs expand. RECOMMENDATION: To maintain a focus on the nonproliferation goals of the U.S. Departments of Defense and Energy, these departments should increase their roles in the ISTC. The committee believes that it is crucial for the ISTC to maintain its primary focus on the nonproliferation goal. But, as noted above, wider participation and a broader scope of projects may weaken the primary goal and objectives. To further enhance U.S. influence and the commitment to nonproliferation, the committee believes the U.S. Departments of Defense and Energy should exert influence on ISTC activities through core funding and representation on the ISTC's Governing Board and staff. The ISTC's objectives and activities complement the Defense Department's nonproliferation activities in Russia and the other states of the FSU. A relatively modest contribution to ISTC's core funding can strengthen the role of the United States in the ISTC, increase the focus on the nonproliferation goal, and increase the number of ISTC-funded projects that complement the Defense Department's collaborative work with FSU scientists and engineers in nonproliferation technologies, nuclear materials protection technologies, and related areas. Therefore, the committee recommends that the Defense Department make a financial contribution to the ISTC's core financing. The Departments of Defense and Energy have made important contributions to the ISTC. They contribute to policy decisions and participate in the interagency policy review of each proposal. Also, Sandia and Los Alamos national laboratories have coordinated much of the peer review process in the United States. This interagency coordination and support are crucial for the ISTC to continue to meet U.S. national security goals. As the ISTC's executive directorship passes to the European Union, it is important that the United States maintain its ability to exert strong leadership and influence on the ISTC's overall direction and priorities. The United States should exercise its option of appointing two members to the ISTC's Governing Board, with one member from either the Defense Department or the Department of Energy. Similarly, the United States must continue to involve senior-level officials from the Departments of Energy and Defense in ISTC activities to the extent possible. RECOMMENDATION: The U.S. ISTC management should seek new funds from U.S. government mission agencies and the private sector. Core funding for the ISTC will ensure the continuation of collaborative grants aimed specifically at offering weapons scientists nonweapons-related work. This, in turn, will ensure a focus on the nonproliferation goal. The committee also notes the growing interest among U.S. agencies and their laboratories in establishing ties with FSU institutes and the opportunity that such ties offer the ISTC. The agencies' motivations and objectives vary, but they share a conviction that increased contact with FSU scientists and engineers is in the U.S. national interest. Some agencies, such as the National Aeronautics and Space Administration, have well-established arrangements with their FSU counterparts. Other agencies are just beginning to investigate ways to manage their activities in the FSU. In many cases their activities will involve high-quality FSU scientists and engineers who have not been involved in weapons research and who therefore are not the current target of the ISTC. The ISTC is in a unique position to facilitate collaborative research on joint projects while still maintaining the focus of its core grant activities on the goal of nonproliferation. The ISTC's tax, customs, and other advantages can save U.S. laboratories time and money; its financial and administrative infrastructure can save other organizations from having to set up parallel structures; and the center's good relationships with weapons institutes in the FSU can help open doors for U.S. researchers. The committee suggests the following areas of interest in which the ISTC could facilitate joint collaborative programs between U.S. institutes and/or laboratories and Russian institutes. The committee intends for these areas to be illustrative; certainly others exist. As noted in the preview chapter, there is considerable interest in this country on the part of the U.S. Department of Agriculture and others for collaboration with FSU institutes in biotechnology. The Office of Naval Research and the U.S. Army Research Laboratory are seeking to increase collaboration with their counterparts in Russia, many of which are weapons institutes. The U.S. Department of Energy's Lab-to-Lab Program, jointly funded by the Departments of Energy and Defense until fiscal year 1995 and thereafter by the De

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AN ASSESSMENT OF THE INTERNATIONAL SCIENCE AND TECHNOLOGY CENTER: Redirecting Expertise in Weapons of Mass Destruction in the Former Soviet Union partment of Energy, is designed to improve the physical protection, control, and accounting of nuclear materials. While several ISTC-funded projects already exist on related technologies, increased U.S.-Russian research utilizing the ISTC will serve U.S. nonproliferation interests in two ways: (1) additional Russian weapons scientists will be involved in nondefense-related work and (2) collaborative efforts may lead to important technical results in the area of materials protection and control. In an effort headed by the State Department, the U.S. Government is assisting the states of the FSU to improve their export control systems, which directly addresses U.S. nonproliferation goals. The success of these efforts and recommendations for their improvement are the topic of a separate NRC study.4 This committee notes that the ISTC can help promote indigenous expertise in export control by facilitating the development of export control centres at the industrial level. PRIVATE SECTOR FINANCING Earlier, the committee discussed ways that the ISTC could reinforce the transition of the FSU to a market economy, recognizing that the institutes with ISTC grants are a small part of the FSU economy and, in most cases, not those that are most likely to be the engines of economic growth for the FSU. This objective, while difficult, has the potential for large returns, particularly if the ISTC can build partnerships with the private sector either directly or through other organizations. The committee noted that the ISTC needs to be explicit about its goals and objectives in this area. ISTC officials have considered placing higher priority on projects with strong potential for commercial applications. The committee supports this course, with the qualification that projects continue to include a majority of weapons scientists and engineers. It is likely that the private sector will be willing to fund precompetitive research in such fields as biotechnology, optics, and materials science. Some have suggested that the role of the ISTC could extend beyond precompetitive research to commercialization, even to the extent of the center becoming self-sustaining (i.e., subsist without government funding). The committee does not believe this is a good idea. Commercialization depends on matters beyond the charter, scope, and competence of the ISTC. Moreover, because some Russian administrators apparently still suspect that the ISTC's fundamental purpose is industrial or national security espionage, direct involvement of the private sector in commercial activities under current ISTC programs will likely raise sensitive issues. With the proper kind of partnership with a parallel organization, it should be possible for the ISTC to capitalize on those precompetitive research and development projects that show promise for commercial success. To some degree, that parallel organization exists in the Department of Energy's Initiatives for Proliferation Prevention (IPP) program5 The IPP is designed to engage former Soviet weapons scientists and engineers in projects with commercial potential. It uses U.S. laboratories as intermediaries to facilitate U.S. private investment in weapons laboratories in the FSU, with the ultimate goal of commercialization of FSU technbologies. Thus, both the ISTC and the IPP involve weapons scientists and engineers, although because the IPP is more involved at the stages of technology prototypes and industry cost sharing, it already has in place tools for involving industry. The committee did not study the IPP in detail and therefore does not endorse it, but we do urge the ISTC and the U.S. Government to study the strengths of each organization to ensure that their efforts are complementary and not duplicative. The committee is aware of, and applauds, the interaction and exchange of information to date between IPP managers and U.S. ISTC managers. RECOMMENDATION: The ISTC should consider organizing an industrial advisory council. As the ISTC moves toward funding more applied projects, it should seek more consultation with industrial researchers and engineers and marketing managers for guidance in precompetitive research activities. The ISTC should consider organizing an industrial advisory council, made up of volunteers from industrial labs and private enterprise, to provide some guidance for its activities in applied fields. The advisory council might also include a representative of the IPP to help ensure complementarity of the two programs. RECOMMENDATION: The ISTC should expand the scope of Western collaboration and encourage more active participation by collaborators. In stressing the importance of nonproliferation, the committee does not reject the importance of the ISTC's secondary objectives. In particular, the objective of integrating FSU scientists and engineers into the international science and engineering communities contributes to the larger nonproliferation goal. The committee noted in the previous chapter that many researchers expressed the desire and need for more active participation by their Western collaborators. The ISTC should encourage this, both to ease its own monitoring burden and to contribute more significantly to the objective of integrating the scientists and engineers into the international community. 4   An NRC committee is assessing U.S. cooperative programs with the former Soviet Union in the fields of export control, including dual-use technologies, and materials protection, control, and accounting. The NRC will issue a report in early 1997. 5   The fiscal year 1994 foreign operations appropriations bill appropriated $35 million to initiate the IPP. In fiscal year 1996, the IPP received $10 million from the Department of Energy and $10 million from the Department of Defense.

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AN ASSESSMENT OF THE INTERNATIONAL SCIENCE AND TECHNOLOGY CENTER: Redirecting Expertise in Weapons of Mass Destruction in the Former Soviet Union If active collaboration with U.S., European, and Japanese scientists is key to the ISTC's longer-term viability, as the committee believes it is, a new approach may be required. The U.S. science community should play a larger role in working with Russian institutes toward proposing and funding proposals that are in areas of specific U.S. interest. In some cases, scientists and engineers in the FSU may have a technical or financial comparative advantage in particular research projects that would complement research already funded in the United States. This would serve to bring about closer face-to-face contacts by U.S. and Russian scientists and serve U.S. scientific and technological interests. To a certain degree, the other ISTC parties are moving toward this approach—for example, Japan's focus on nuclear energy projects. In addition to increasing contacts between ISTC project participants and their Western collaborators, the scope of Western contacts should be expanded. To date, U.S. collaborators have primarily been national weapons laboratories. This is natural in view of the required involvement of Russian weapons institutes as well as desirable given the nonproliferation goals of the ISTC. However, there are good reasons for increased contacts with university scientists, which could further the center 's civilian and conversion objectives. The National Science Foundation and other scientific societies and organizations already are taking steps to facilitate and fund communication and collaboration between scientists in the FSU and U.S. universities. Because of their ties to the U.S. academic community, those organizations are in a good position to further communication between former weapons scientists and engineers and U.S. universities. While the costs of active collaboration can be high and often more difficult for universities to bear, from the U.S. standpoint, the longer-term benefits of expanding contacts between our scientists and those in Russian institutes would be valuable. There are also good reasons for expanding contacts and collaboration with U.S. industrial laboratories. In the long run, wealth for the FSU in large measure will be generated by applied science and engineering, rather than basic research. The ISTC can promote the future economic viability of the FSU and, with it, increase domestic funding sources for scientific research by encouraging FSU scientists and engineers, especially from the closed cities, to collaborate with U.S. industrial researchers. Industrial researchers have more experience in market-oriented research and venture capital formation. The ISTC's priority has been, and must continue to be, reaching scientists and engineers from FSU weapons institutes. However, there are certain emerging areas of science and technology that are not necessarily found in weapons institutes but that are likely to be “wealth generators ” in the near future—for example, microelectronics, biotechnology, and computer and information technology. The ISTC, while maintaining its focus on the weapons institutes, can encourage those institutes to collaborate and seek partnerships with institutes with strengths in these emerging technologies. RECOMMENDATION: The ISTC should place more emphasis on involving biological and chemical warfare institutes in its activities. As noted in the previous chapter, only 7 percent of the scientists funded by ISTC grants at the end of 1995 had a background in chemical or biological warfare research. Because of the lingering suspicion and secrecy surrounding these institutes, it is particularly important that the ISTC continue its efforts to increase integration of these scientists. The specific challenge for the ISTC and other agencies is to establish communications across former Biopreparat and Ministry of Defense institutes. A very positive example of how the ISTC has made progress in this area is the symposium it sponsored on biological warfare issues in Pokrov in December 1995. The symposium was attended by a number of scientists, including some from the Ministry of Defense. The committee believes that the ISTC should continue its efforts in this area through similar meetings and activities. In addition, based on the committee's conclusion that U.S. biotechnology firms can benefit from collaborating with former biological warfare institutes in the FSU, the ISTC can make a difference by bringing in representatives from the biotechnology industry as partners in precompetitive research. RECOMMENDATION: The ISTC should allow grants to fund communications equipment. Computer networking and access to the Internet are no longer a luxury but an essential need. They facilitate the exchange and retrieval of information, conferencing among colleagues in different locations, and remote execution of programs. Access to computer networks is particularly important in countries such as Russia, where other means of communication remain unreliable. Yet in many institutes, particularly those outside Moscow, the committee was told that lack of adequate communications systems remains a significant problem. Scientists at the Research Center for Applied Microbiology in Obolensk, for example, admitted they have trouble communicating not only with colleagues in the West but also with other institutes in Moscow and Russia. The ISTC has funded several projects that are intended to improve communications abilities in the FSU. For example, researchers at the Scientific Production Association Luch in Podolsk are developing hardware and software for transferring medical data.6 Such projects are important, but the committee also recommends allowing grant recipients to request and allocate a percentage of funds to buy communications equipment. This will assist individual researchers and institutes in gaining access to the Internet, communicating with colleagues, and developing collaborations and thus will have an exponential impact on their future economic viability. 6   ISTC Project #52, “Hardware and software for medical wide area network,” NPO Lutch, Podolsk, Russia.