1
Executive Summary

The successor states of the former Soviet Union (FSU), particularly Russia, have enormous stocks of weapons-usable nuclear material and other militarily significant commodities and technologies. Preventing the flow of such items to countries of proliferation concern and to terrorist groups is a major objective of U.S. national security policy.

Russian officials have acknowledged two dozen incidents of thefts and attempted thefts of nuclear-related items in Russian facilities, including several cases involving small quantities of fissile material. Such incidents support U.S. Government assessments that, as a result of the dissolution of the Soviet Union, nuclear weapons technologies are now more accessible to nations and subnational groups seeking to acquire such weaponry than at any other time in history.

Missile components traceable to the FSU have been intercepted in Jordan en route to Iraq. Also, the Aum Shinrikyo cult, which released sarin gas in the Tokyo subway in 1995, obtained a helicopter and other support equipment from Russia, presumably for use in related activities.

Other than such anecdotal evidence, reliable information is not available about the quantities and types of sensitive commodities leaving the FSU—as items of trade or as contraband. But the stakes are so great that it is only prudent to assume that significant transfers of sensitive items are a serious possibility.

This study reviews the effectiveness of U.S. bilateral programs initiated in the early 1990s to support the efforts of Russia, Ukraine, Kazakstan, and Belarus in strengthening two important mechanisms for controlling the diffusion of militarily sensitive items, namely:



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--> 1 Executive Summary The successor states of the former Soviet Union (FSU), particularly Russia, have enormous stocks of weapons-usable nuclear material and other militarily significant commodities and technologies. Preventing the flow of such items to countries of proliferation concern and to terrorist groups is a major objective of U.S. national security policy. Russian officials have acknowledged two dozen incidents of thefts and attempted thefts of nuclear-related items in Russian facilities, including several cases involving small quantities of fissile material. Such incidents support U.S. Government assessments that, as a result of the dissolution of the Soviet Union, nuclear weapons technologies are now more accessible to nations and subnational groups seeking to acquire such weaponry than at any other time in history. Missile components traceable to the FSU have been intercepted in Jordan en route to Iraq. Also, the Aum Shinrikyo cult, which released sarin gas in the Tokyo subway in 1995, obtained a helicopter and other support equipment from Russia, presumably for use in related activities. Other than such anecdotal evidence, reliable information is not available about the quantities and types of sensitive commodities leaving the FSU—as items of trade or as contraband. But the stakes are so great that it is only prudent to assume that significant transfers of sensitive items are a serious possibility. This study reviews the effectiveness of U.S. bilateral programs initiated in the early 1990s to support the efforts of Russia, Ukraine, Kazakstan, and Belarus in strengthening two important mechanisms for controlling the diffusion of militarily sensitive items, namely:

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--> systems for materials protection, control, and accountability (MPC&A) of highly enriched uranium and plutonium, with program efforts to date having emphasized improved safeguards approaches at the facility level, and export control systems covering many types of sensitive items, including dual-use items, with the programs having given primary attention to regulatory and enforcement capabilities at the national level. Russia, Ukraine, Belarus, and Kazakstan are the focus of this effort because almost all of the fissile material of concern and the bulk of other militarily sensitive items arising from the days of the Soviet Union are found in these countries. Also, these countries were singled out for a range of U.S. cooperative security efforts in the FSU in view of the past deployment of nuclear weapons on their territories. CHALLENGES IN CONTROLLING MILITARILY SENSITIVE ITEMS Containment of "Direct-Use" Material This study addresses efforts to upgrade the security of stocks of unirradiated uranium enriched to a level of 20 percent or greater (referred to herein as highly enriched uranium or HEU) and of separated plutonium of weapons grade or reactor grade (referred to herein as plutonium). HEU and plutonium are suitable for use in constructing a nuclear weapon without further enrichment or chemical reprocessing; they are thus called direct-use material. Such material is located in hundreds of buildings at widely dispersed sites; most are in Russia, but a few are in Ukraine, Belarus, and Kazakstan. The study considered various bilateral programs involving U.S. specialists directed to the protection of HEU and plutonium, particularly those managed on the U.S. side by the Department of Energy (DOE). It did not address programs of the U.S. Department of Defense (DOD) concerning direct-use material in weapons or in other forms under the control of the Russian Ministry of Defense. The study did examine DOE efforts to address the security of nuclear fuel of the Russian Navy and civilian icebreaker fleet. The difficulty in obtaining direct-use material is a principal technical barrier preventing countries of proliferation concern, as well as subnational groups, from acquiring a nuclear weapons capability. Many other components are required to construct a nuclear weapon, but most probably can be more readily obtained than direct-use material. Efforts to prevent wide diffusion of all critical items needed for nuclear weapons have of course been pursued by the United States. Several kilograms of plutonium or several times that amount of HEU are required to construct a nuclear weapon, with the quantity depending on the composition of the material, type of weapon, and sophistication of the design. Details

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--> aside, the necessary amounts are very small compared to the many hundreds of tons of direct-use material present in the FSU, with much of it stored under uncertain and, in some cases, inadequate security arrangements. Most of the material is HEU, which is of particular concern. HEU can be used in weapons of primitive design and is more readily concealed during transport than plutonium since its radiation signature is easier to shield. Given the small quantities of direct-use material required for nuclear weapons, the first challenge is to ensure that all such material is brought under effective MPC&A systems. Then the systems must have the integrity to ensure that materials are used only in an authorized manner. Controlling Exports of Sensitive Items Effective regulatory systems for controlling exports of many types of sensitive commodities and technologies from the Soviet successor states to questionable destinations also are of critical importance. The second focal point of this study is therefore the set of bilateral programs directed to improving systems for controlling exports of such items from Russia, Ukraine, Belarus, and Kazakstan. Hundreds of enterprises and institutes developed and produced sensitive commodities in the four countries. A large number of these facilities, as well as dozens of warehouse and trading organizations, have old and new inventories of sensitive materials and equipment and also possess technical design information. The economic pressures to sell these items are intense. National systems should effectively control exports of sensitive commodities and technical data, in accordance with international norms that recognize the importance of both nonproliferation goals and legitimate trade. Of special concern are international transfers of controlled items to inappropriate end users by (a) smugglers and (b) enterprises or trading organizations that violate national export control requirements. While providing important guidance for regulating exports of many items, the existing international agreements on export control call for prohibitions or restrictions on transfers of only the most critical items. These agreements emphasize the need for transparency of international transfers rather than limitations on exports of most weapons-related items and dual-use commodities: for these items, each government, though required to establish an export licensing system, retains the prerogative to decide when an export is appropriate. Thus, if diffusion of sensitive items to countries of proliferation concern and terrorist groups is to be contained on a broad basis, the governments of Russia and the other successor states must be committed not only to establishing internationally acceptable export control machinery, but also to achieving nonproliferation goals in their national decisions on specific exports of militarily significant items. Of special note, Russia inherited a large storehouse of facilities, equipment, and technology related to biological and chemical warfare; and many of these

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--> items should be carefully controlled. While the U.S. Government has undertaken limited efforts to help contain such items, a review of such activities was beyond the scope of this study. U.S. RESPONSE FOR SECURING SENSITIVE ITEMS IN RUSSIA, UKRAINE, BELARUS, AND KAZAKSTAN The U.S. Policy Context The International Export Control Regimes For a number of years the United States, in concert with its traditional allies, has taken a variety of steps to reduce the likelihood that militarily sensitive items would move freely in international commerce. Central to this effort has been strong support for the establishment and operation of international control regimes covering exports of selected commodities and related technical information in the following areas: nuclear, chemical, biological, and advanced conventional weapons systems; missile systems; and other strategic items with both military and civilian applications. The regimes also cover the technologies needed to design or manufacture commodities in the foregoing categories. These regimes provide a very important framework for the establishment of national export control systems. They require licensing of all items that have been identified as being of concern to the international community. Therefore, they greatly complicate the efforts of states of proliferation concern or terrorist groups in obtaining access to sensitive materials, equipment, or technical data. Table 1.1 identifies the international control regimes. These regimes have established approaches for addressing export controls that have become the norms in the free market economies. Thus, even though the four countries are not members of some of the regimes, they appreciate the need to adopt similar practices if they are to be recognized as responsible trading partners. Bilateral Activities The United States has established bilateral programs with each of the four successor states to help prevent the diffusion of sensitive material and equipment, particularly direct-use nuclear material. Through such programs the U.S. Government has encouraged the key industrial countries of the region to conform as soon as possible to the requirements of the international regimes. Also, the United States has mounted diplomatic efforts to discourage proposed sales of certain sensitive items, even though such sales are not prohibited by the regimes (e.g., the Russian sale of nuclear reactor components to Iran). The MPC&A programs that are the focal points of this study are carried out

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--> TABLE 1.1 Participation in International Control Regimes   Regimea Russia Ukraine Belarus Kazakstan Nuclear NonProliferation Treaty (NPT) Ratified in 1970 (NWS)b Ratified in 1994 (NNWS)c Ratified in 1993 (NNWS)b Ratified in 1994 (NNWS)b   NPT Exporters Committee (Zangger Committee) Member since 1971         Nuclear Suppliers Group (NSG) Member since 1974 Member since 1996     Biological Biological Weapons Convention Ratified in 1975 Ratified in 1975d Ratified in 1975d     Australia Group (Biological and Chemical) Has stated that its controls are consistent with requirements Has stated that its controls are consistent with requirements     Chemical Chemical Weapons Convention Signed in 1993 Signed in 1993 Ratified in 1996 Signed in 1993 Missile Missile Technology Control Regime (MTCR) Member since 1995 Adherent since 1994     Dual-Use Technologies Wassenaar Arrangement Member since 1996 Member since 1996     Conventional Weapons a See Appendix A for a discussion of the international control regimes. b Nuclear Weapons State (NWS) Party: Under the NPT, states that detonated a nuclear explosion prior to January 1, 1967, are classified as nuc states. They are permitted to retain nuclear weapons and are not required to accept comprehensive International Atomic Energy Agency (IAEA) inspections of their nuclear activities. c Non-Nuclear Weapons States (NNWS) Party: These states are prohibited by the NPT from manufacturing or possessing nuclear weapons and are required accept IAEA inspections of all nuclear activities. d The Ukrainian and Belorussian soviet socialist republics each ratified the convention. Source: U.S. Department of State.

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--> in the broader context of a large number of programs supported by the U.S. Government. Related efforts include programs directed at reducing nuclear material stockpiles through American purchases of stocks of HEU from Kazakstan and Russia, assessing the feasibility of terminating production of plutonium in nuclear reactors in Tomsk-7 and Krasnoyarsk-26, supporting cooperative projects that encourage civilian production activities at weapons-oriented enterprises, and providing economic incentives for FSU weapons scientists and engineers to redirect their efforts to peaceful pursuits rather than be tempted to look abroad for customers for their weapons know-how. Bilateral Cooperation in Containment of Direct-Use Material and Export Control While some of the foregoing activities moved forward on a cooperative basis in the period from 1992 to 1994, the U.S. Government had considerable difficulty establishing significant cooperative programs in MPC&A and export control, despite the availability of a mandate and funding from the U.S. Congress. Nonetheless, during this period, American experts from both the public and the private sectors took advantage of limited opportunities to acquaint officials of the region with western approaches in both fields. In time, administrative and political problems in the FSU and in Washington diminished. Since the beginning of 1995 a number of U.S. Government agencies have undertaken sizable bilateral programs directed at MPC&A and export control. Tables 1.2 and 1.3 summarize the activities under U.S. Government programs to date. The characteristics of the two programs are very different. MPC&A systems concentrate on a single item—direct-use nuclear material. They limit access to areas where material is located and provide for strict control and accountability of the material. The types and locations of the facilities of interest are generally well known. The systems are designed to prevent theft or diversion of direct-use material at the facility level and in transit between facilities and, when such prevention fails, the prompt detection of missing material. Table 1.4 presents the key elements of an MPC&A system. Export control activities, by contrast, embrace many different types of materials, equipment, and technical data. They include establishment of a legal framework, a licensing procedure, enforcement mechanisms with programs for detecting and prosecuting violators of export control laws and regulations, and programs to inform exporters of their obligations. The numbers of interested government agencies and affected facilities are very large. Table 1.5 presents the elements of an export control system as set forth in the "Common Standard" developed by the former Consultative Group and Coordinating Committee for Multilateral Export Controls (COCOM). This Standard has been widely accepted by western governments. Within these two programs the U.S. agencies measure progress toward the

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--> TABLE 1.2 MPC&A Program Activities in the FSU Supported by DOE (as of July 1996) Russia Government-to-Government: Activities at eleven MINATOM sites (two fuel fabrication plants, one breeder reactor, three reactor technology institutes, five research institutes); support for Obninsk Training Center Agreement with GAN: Regulatory document development; MC&A information system: MC&A equipment; Activities at six non-MINATOM sites Laboratory-to-Laboratory: Activities at eight MINATOM sites (three plutonium sites, three uranium enrichment sites, two nuclear weapons labs, one research and development institute); Activities at Kurchatov; Activities at two naval fuel storage facilities (Northern and Pacific fleets) and the icebreaker fleet; transportation security Belarus Activities at one site (research institute) Kazakstan Activities at four sites (one low-enriched uranium fuel fabrication plant, one power-breeder reactor, two research institutes) Ukraine Activities at four sites (one power reactor complex, three research institutes) Uzbekistan Activities at one site (research institute) Latvia Activities at one site (research institute) Lithuania Activities at one site (power reactor complex) Georgia Activities at one site (research institute)   Source: U.S. Department of Energy. TABLE 1.3 U.S. Export Control Program Activities Involving Russia, Ukraine, Belarus, and Kazakstan supported by the U.S. Departments of State, Commerce, Energy, and Defense, and the U.S. Customs Service Policy-level exchanges to emphasize the importance of enactment and enforcement of export control legislation Training on the essential elements of comprehensive export control laws and enforcement regulations (except Russia) Computer automation of export control licensing procedures and provision of enforcement equipment (except Russia) Workshops on international nonproliferation export control regimes and associated control lists Seminars on government outreach to nongovernmental entities and manufacturing organizations on export control and nonproliferation Training and equipment for supporting enforcement activities Lab-to-lab programs, including technical exchanges, directed to nuclear-related exports   Source: U.S. Departments of State, Commerce, and Energy.

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--> TABLE 1.4 Components of an MPC&A System   Physical Protection Control Accounting Detection and assessment (sensors, alarms, and assessment systems such as video) X X   Delay (barriers, locks, traps, booths, active measures) X     Response (communications, interruption, neutralization) X X   Response team X     Entry-and-exit control (badges, biometrics, nuclear material detectors, metal detectors, explosive detectors) X X   Communications and display X     Measurements and measurement control (weight volume, chemical analysis, isotopic analysis, neutron, gamma, calorimetry)   X X Item control (barcodes, seals, material surveillance)   X   Records and reports     X Inventory   X X Integrated planning, implementation, and effectiveness evaluation X X X Supporting functions (personnel, procedures, training, organization, administration) X X X   Sources: NRC committee and publications of the U.S. Department of Energy. goal of nonproliferation by (a) the amount of direct-use material contained in secure MPC&A systems and (b) the extent to which functioning export control regulatory systems, including enforcement mechanisms, have been established. The agencies are well aware that such measures do not indicate the seriousness of the remaining vulnerabilities in the systems nor do they reflect the more limited progress that would be achieved without U.S. involvement. Still, the agencies recognize their usefulness as indicators of the scope of the programs and of program accomplishments. FINDINGS AND RECOMMENDATIONS TO THE U.S. GOVERNMENT CONCERNING COOPERATION IN MPC&A The committee considered but did not use structured criteria for evaluating the effectiveness of the cooperative programs. Both the joint efforts and the

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--> TABLE 1.5 Common Standard for Export Control (The Common Standard Level of Effective Protection, Developed by COCOM) Prelicensing Requirements Adequate manpower and equipment available to the licensing authorities Lists of controlled products published nationally Legal and regulatory bases for controls with sanctions for violations Awareness by industry of the objective of controls Specification of information required on license applications System of import and delivery verification certificates and end-use statements Capability to review license requests and to evaluate parties to transactions, specifications of products to be exported, and any inherent risks Postlicensing Requirements Legislation should include provisions enabling national authorities to   deter, prevent, and punish illegal exporters;   carry out checks after licenses are issued; and   monitor licensed exports (inspect goods, seize suspect shipments, apply sanctions). At the enforcement level, national authorities should provide   necessary financial and other resources;   adequate training of personnel; and   support for development of a capability to compile, assess, and distribute relevant information and to take into account all available sources of information.   Source: U.S. Department of Commerce. related activities of the governments and at the facilities are evolving rapidly. Thus, progress attributable to cooperation is not quantifiable. Also, the optimum upgrade programs against which to judge the impacts of U.S. efforts cannot be easily framed, given the political and economic uncertainties in the four successor countries and our incomplete knowledge of the status of Russian facilities. Therefore, the committee's judgments are largely qualitative in nature and are intended to provide an overall sense of the impact of cooperation. General Findings After initial delays of more than two years due primarily to a lack of interest in Moscow in cooperative arrangements that the United States considered equitable and essential, progress attributable to the joint efforts of U.S. and Russian specialists in MPC&A greatly accelerated in 1995 and 1996. DOE estimates that U.S. specialists have gained access to some of the many buildings at approximately 90 percent of the sites where direct-use material is known to be located outside the Russian Ministry of Defense complex and have initiated cooperative interactions to address many of the most pressing MPC&A issues at these sites.

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--> This is a significant political and organizational achievement, considering (a) the complexity of the tasks in transforming the Soviet approach to MPC&A, which had relied primarily on controlling people, to an approach that increasingly relies on technical measures and (b) the history of secrecy throughout the Soviet nuclear complex. But while improvements have been made at selected facilities, the task has not been completed at any Russian facility and serious efforts are only beginning at most facilities. DOE estimates that tons of direct-use material are contained in internationally acceptable MPC&A systems and that tens of tons are in partially acceptable systems, but adequate MPC&A systems for hundreds of tons must still be installed. Thus, the challenge now is to extend the organizational and political achievements to significant technical improvements, a process that is only beginning. In Ukraine, Belarus, and Kazakstan, cooperative efforts have already achieved easily discernible technical improvements. Of special interest, DOE announced in 1996 that it had completed MPC&A upgrades at the Institute of Nuclear Power Engineering in Belarus, the only known facility in Belarus with direct-use material. Several other accomplishments for which the United States can take considerable credit illustrate the importance of the program to date. Building 116 at the Kurchatov Institute of Atomic Energy in Moscow and a building at Arzamas-16 have become MPC&A models, attracting the attention of hundreds of Russian officials and specialists responsible for MPC&A programs. The Russian Ministry of Atomic Energy is using the MPC&A training center at Obninsk as the focal point for upgrading the skills of specialists from throughout the country. American specialists have successfully taken the first steps in initiating cooperative programs with Russian specialists from naval reactor fuel storage facilities and from highly sensitive nuclear weapons assembly and dismantlement facilities. In Kazakstan, the government has committed to installing complete MPC&A systems at its nuclear facilities as quickly as possible. In Ukraine, American specialists have been given access to a previously closed facility at the Sevastopol naval base, while upgrade activities proceed at the two other principal nuclear facilities. Nevertheless, the size of the Soviet nuclear complex was enormous, and much remains to be done. The need for American specialists to continue to support upgrading of MPC&A systems until such time as the institutions in all four successor countries are willing and able to continue on their own is very clear. Even in Belarus, where all upgrades are in place, visits by American specialists are important to ensure that they are maintained as designed. Having overcome significant political, cultural, and organizational hurdles, and in the absence of dramatic political change, the cooperative program should be in position to make significant progress over the next several years. As the program moves into the next stage of rapid implementation, certain overarching principles should guide cooperative efforts.

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--> For the near term it is essential that the United States sustain its involvement until counterpart institutions are in a position to assume the full burden of upgrading and maintaining MPC&A programs over the long term. Emphasis should be on upgrading the skills of specialists in the four countries, relying on local expertise and whenever possible local equipment, and establishing viable long-term funding sources—in short, actions to indigenize the implementation activities. Drawing on cooperative efforts to date, the governments and institutions in the FSU should simplify the problem by reducing the direct-use material of concern and consolidating the remaining material at fewer sites and fewer locations within sites. The cooperative programs should include more concerted efforts to minimize the possible routes to bypass the MPC&A systems. The participating specialists should enhance the program in several areas to increase the effectiveness of their joint efforts. I. Sustain the U.S. Commitment to the Program Finding: The continued flow of U.S. funds in the near term is essential because of the limited ability of the four governments to finance MPC&A upgrades. The next few years will be a critical period for upgrading systems to an acceptable level, and U.S. specialists are in a unique position to help ensure that such upgrades are given high priority and installed in a prompt and effective manner. The current level of U.S. funding of MPC&A programs is about $100 million annually. Recommendation: Continue to fund MPC&A efforts in the FSU at least at the level of fiscal year 1996 for several more years and be prepared to increase funding should particularly important high-impact opportunities arise. II. Indigenize MPC&A Capabilities Finding: Once the U.S. program ends, the cooperating governments must be committed and able to assume full responsibility for funding and maintaining upgraded MPC&A systems. The challenge is great, as economic shortfalls even for basic program support limit the domestic funds available for MPC&A. Nevertheless, ministries, institutes, and individuals must be prepared to implement adequate MPC&A programs and have access to income streams that will permit them to continue their efforts in the long term. Recommendation: Continue to emphasize the importance of MPC&A as a nonproliferation imperative at the highest political levels in the FSU.

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--> Recommendation: Prior to initiating MPC&A projects at specific facilities, obtain assurances at both the ministry and the institute levels that the upgrade programs will be sustained after improvements have been made. Financial incentives, such as support for related research activities, should be considered as a means to stimulate long-term commitments. Recommendation: Involve institute personnel to the fullest extent possible in determining how to use available funds for upgrades. Recommendation: Give greater emphasis to near-term training of local specialists. Recommendation: Reward those institutes that are making good progress in upgrading MPC&A systems by giving them preference for participation in other U.S.-financed cooperative programs. Recommendation: Encourage the establishment of new income streams that can provide adequate financial support for MPC&A programs in the long term, such as earmarking for MPC&A programs a portion of the revenues from Russian sales of HEU. Recommendation: Rely increasingly on domestically produced and locally available equipment for physical protection, detection, analysis, and related MPC&A tasks. III. Simplify the Problem Finding: The challenge of controlling small amounts of direct-use material located in hundreds of buildings, including many in a poor state of repair, seems overwhelming. If the amount of material and the number of storage areas could be substantially reduced, the time and costs involved in installing MPC&A systems also could be significantly reduced. As for Russia, the previously noted U.S. programs concerning purchase of HEU and alternative energy sources for the plutonium production reactors at Krasnoyarsk-26 and Tomsk-7 are directed to reducing the amount of direct-use material in the country. Very limited discussions have addressed the other large source of plutonium production—the nuclear fuel rod reprocessing plant at the Mayak complex. The Russian Government has shown no interest in terminating this activity. A remaining challenge is consolidation of material. Outside Russia, the future use of the small remaining stocks of direct-use material is uncertain at best. Retaining these stocks requires significant MPC&A expenditures and continued vigilance over the possibility of theft. Recommendation: In Russia, encourage consolidation of direct-use material in fewer buildings, at fewer facilities, and at fewer sites.

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--> Recommendation: Take steps to encourage the removal of all HEU at research facilities outside Russia, including the purchase of HEU when appropriate. Recommendation: For research reactors outside Russia where important and adequately financed research programs are planned in the foreseeable future, support conversion of the reactors so that they can use low-enriched uranium instead of HEU. IV. Minimize the Possibilities To Bypass MPC&A Systems Specific Finding: If an MPC&A program is to be effective, all relevant organizations and all sources of direct-use material must be addressed. Of special concern, large stocks of direct-use material are located at some Russian facilities that have not yet become active participants in the bilateral program. However, as facilities become involved in the program. there is uncertainty among both Russian and American specialists as to the precise amounts of direct-use material present. For example, at some facilities there was a practice of maintaining stocks of material "off the books," and at these and other facilities the inventory records may be unreliable. Previous control systems may not have given sufficient attention to scrap and off-specification material. Also, during a period of political and economic turmoil and expanded criminal activities, the possibility of efforts by irresponsible persons to remove material from the MPC&A systems while the systems are being evaluated for upgrades or even after such systems are in place cannot be ignored. An important oversight agency in Russia, the State Nuclear Regulatory Committee, Gosatomnadzor (GAN), suffers from a shortage of well-trained inspectors, qualified staff, and necessary analytical and related equipment, as well as uncertain administrative responsibility with regard to military-related activities. Recommendation: Ensure that all stocks of direct-use material are encompassed in the program, including icebreaker nuclear fuel, supplies at naval facilities, and off-specification and scrap material. Recommendation: Encourage rapid development of a comprehensive national material control and accounting system in Russia and the prompt incorporation of all existing direct-use material into that system. Recommendation: In Russia, increase support of GAN as an important independent agency by assisting it in developing MPC&A methodologies, training inspectors, obtaining staff support from research institutions, and procuring necessary equipment for MPC&A inspections.

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--> Recommendation: Encourage a system of incentives, possibly including monetary rewards, that will stimulate participants in MPC&A programs to report promptly to central authorities any irregularities in the implementation of MPC&A systems. Recommendation: Emphasize the importance of developing a culture among MPC&A specialists that does not tolerate shortcuts or exceptions in implementing MPC&A systems. V. Enhance the Program Finding: A number of initiatives will enhance the effectiveness of U.S. efforts. The threats of theft and diversion in the FSU differ significantly from those in the United States. The general economic and crime situation in the FSU raises the prospect of different threat scenarios than in the United States. Moreover, there are differences in the facilities that affect susceptibility to the loss of material. In the FSU, many buildings where direct-use material is stored are in poor repair, long perimeters with inadequate protection characterize some sites where material is located, and old accounting systems of dubious reliability are used at some facilities. Some local specialists are not prepared to absorb sophisticated technologies. Modest immediate enhancements at a large number of facilities may be more important than major investments at a limited number of storage locations. Another area of concern is the vulnerability of direct-use material during transport—a topic that has not been a priority in past cooperative efforts. Trucks and other vehicles that are not suitable for transporting direct-use material are in use, and the rigor of the accounting systems for tracking the movement of material is of concern. Also, the continued isolation of some facilities where MPC&A upgrades are needed limits the opportunities for specialists at one facility to learn from the experiences of their colleagues at other facilities. Finally, several agencies are usually involved in providing security for direct-use material, including responding to incidents and alarms. In Russia, the Ministry of Interior and the Federal Intelligence Service do not appear to be adequately involved in designing MPC&A upgrades, a task left largely to specialists of the Ministry for Atomic Energy or of the other concerned research organizations. Recommendation: Emphasize MPC&A approaches that respond to threat scenarios that are appropriate for the FSU, recognizing that they may differ from the threat scenarios used in the United States. Recommendation: Recognize that in the near term it may be necessary to install systems that fall short of internationally accepted standards in

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--> anticipation of subsequent refinements. In this regard, use appropriate MPC&A measures, whether they involve high-tech or low-tech approaches. Recommendation: In Russia, give greater attention to MPC&A of direct-use material during transport within and between facilities. Recommendation: Promote greater communication and cooperation among ministries and facilities involved in MPC&A in each of the countries where bilateral programs are being implemented. Recommendation: In Russia, encourage more active involvement of the Ministry of Interior in the planning, testing, and implementation of physical security systems. FINDINGS AND RECOMMENDATIONS TO THE U.S. GOVERNMENT CONCERNING COOPERATION IN EXPORT CONTROL General Findings After initial delays of more than two years owing to interagency uncertainties and procurement problems in Washington and to a lack of readiness in the FSU to initiate serious collaboration, U.S. efforts have stimulated interest and action at the policy and technical levels to strengthen export control systems in Russia and to establish new systems in Ukraine, Kazakstan, and Belarus. American specialists and their counterparts have developed a high degree of mutual confidence that their joint efforts are producing important results in critical areas, and enthusiasm of government officials of the four cooperating countries is high for the joint programs. The joint efforts, undertaken at relatively low cost, have been particularly important in developing the legal bases for export control, training cadres of specialists in a variety of relevant fields, and installing systems for more efficient processing and validation of license requests. Despite these early accomplishments, much remains to be done in the development of comprehensive and effective export control systems in the four countries. Several specific examples illustrate how American involvement has triggered new activities. In Russia, a number of enterprise managers are applying American experience in establishing new internal mechanisms to ensure compliance with regulations. U.S. support has been very important in facilitating the membership and participation of Ukraine in the Nuclear Suppliers Group and the Wassenaar Arrangement. Belarus regulatory authorities and the customs service have used American computer hardware and software in establishing information systems that have greatly enhanced their capabilities to process and track export control cases. In Kazakstan, the insistence of American specialists that presidential decrees and regulations be codified into law has provided the country with a stable legal base for export control that should withstand political shocks.

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--> But American specialists can continue to play an important role—in many cases a pivotal role—in establishing systems that in time should conform to the requirements of the international control regimes. For example, interagency regulatory mechanisms are in place in each of the four countries, but additional experience is needed to ensure the effective integration of all international control lists into the review processes. Although the customs services have greatly expanded their manpower, training of new personnel remains a priority. A few areas deserve special emphasis during the next several years. Cooperative efforts should reflect the need for the four successor countries to complete the legal, organizational, and manpower infrastructure for regulating exports of critical items. The importance of the governments continuing to strengthen implementation and enforcement capabilities is very clear. Since not all aspects of export control can receive immediate attention, priorities should focus additional efforts on urgent problems, including (a) the need to control the most sensitive items first, (b) the opportunities for promoting stewardship and internal compliance at the enterprise level, and (c) the importance of participation by adjacent states of the FSU in regional approaches to combat smuggling and unsanctioned transshipments of sensitive items. Preventing the diffusion of certain types of technical data can sometimes be more important than containing sensitive commodities, and higher priority should be given to efforts to control sensitive technical information. An important need is the evolution of a cadre of export control officials who give adequate weight to proliferation concerns in their decision making. Governments must not only have regulatory systems that operate in conformity with the procedural requirements of the international regimes but must also reflect a commitment to nonproliferation goals in their export decisions. I. Support Completion of the Legal, Organizational, and Manpower Infrastructure for Effective Export Control Specific Finding: A starting point for controlling exports of sensitive items is a legal and organizational structure that provides the capability for policy and regulatory development, licensing activities, and enforcement. Each of the four successor countries is in the process of broadening and codifying the legal basis for its programs and of providing an operational system that is staffed with well trained specialists. This long-term effort requires continued attention over a number of years. The United States has the most fully developed export control infrastructure in the world and is in a strong position to contribute in many ways. Over the long term, however, the four countries must assume responsibility for ensuring that improvements are sustained. Budgetary support in the United States for bilateral export control programs

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--> is in constant jeopardy because funding is provided through the relatively small budget of the Department of State. The fiscal year (FY) 1996 budget level of $10 million for export control cooperation worldwide, together with other funds already in the pipeline from previous appropriations to DOD, has sustained an adequate level of activity in the FSU, but the reduction of funding to less than $5 million for FY 1997 jeopardizes future progress. Further confusing the budget situation, the U.S. Customs Service and DOE recently received special appropriations to cover some of their activities in cooperative programs, while the Department of Commerce, which has much to contribute, has no access to special funds. Recommendation: Continue to fund export control efforts in the FSU at least at the level of FY 1996 for several more years and be prepared to increase funding should particularly important high-impact opportunities arise. Recommendation: Ensure that adequate resources are available to the Department of Commerce, as well as to the Departments of State, Defense, and Energy and the U.S. Customs Service, so that specialists with unique expertise can continue to participate in the programs. Recommendation: Emphasize in bilateral discussions at all levels the importance of developing capabilities to meet international requirements for export control and to ensure adherence to all relevant aspects of the international control regimes. Recommendation: Negotiate an intergovernmental agreement with Russia to help ensure the long-term stability of bilateral cooperation in the field of export control. Recommendation: Support the strengthening of institutions in the FSU that provide training and advisory services for government agencies and enterprises involved in export control. Recommendation: Involve interested American universities and nongovernmental organizations, when appropriate, in promoting training and research related to export control that involves specialists from the FSU. II. Strengthen Implementation and Enforcement Capabilities Specific Finding: In each of the four successor countries there is a considerable gap between the requirements and plans for export control activities and the implementation of effective programs for fulfilling those requirements, particu-

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--> larly in the area of enforcement. Joint programs have imparted momentum in the overall efforts of the four countries, but there are still many weaknesses. Also, it appears that there have been very few successful prosecutions of violators of export control regulations. U.S. experience has shown that highly visible prosecutions can capture the attention of many exporters. Recommendation: Continue to cooperate with counterpart agencies that have received computers and related equipment to ensure that automated licensing and customs tracking systems are installed and used as planned. Recommendation: Expand bilateral cooperation among customs officials, emphasizing training and demonstration programs that can have multiplier effects in view of the vast responsibilities of the customs services. Recommendation: Share with enforcement counterparts information on procedures used in the United States to collect evidence and prosecute parties found to be violating export control laws. Recommendation: Encourage high-visibility prosecutions of export control violators in the four countries so that local exporters become aware of the consequences of violations of export control laws and regulations. III. Focus on Critical Commodities, Stewardship and Compliance at the Enterprise Level, and Regional Approaches Specific Finding: In addition to providing the basis for comprehensive approaches to export control, strategies should focus on immediate solutions to reducing the likelihood of diffusion of sensitive items. In this regard, an emphasis on layers of protection for the most sensitive items could help reduce the most serious concerns. In addition to national review procedures and checks at customs control points, control of items at the enterprises and institutes and improved capabilities for intercepting items en route to their final destinations, including during transit through neighboring countries, could both deter and complicate the efforts of parties intent on theft or diversion of controlled items. Recommendation: Emphasize control of the most sensitive items by targeting educational and enforcement efforts on the organizations most likely to handle such items. Recommendation: Encourage the strengthening of surveillance at the enterprise level through enhanced capabilities of on-site customs officials. Recommendation: Expand interactions between officials of American

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--> companies and foreign enterprises responsible for internal export compliance programs and for industrial security and demonstrate to foreign counterparts how the U.S. private sector participates in the development of new export control regulations. Recommendation: Encourage local officials involved in the Customs Union in the FSU to strengthen approaches for monitoring transshipments of controlled items. Recommendation: Participate in cooperative programs with countries of Central Asia that emphasize the importance of countering smuggling and inappropriate transshipments of sensitive items. IV. Increase Attention to Control of Technical Data Specific Finding: Some nations and subnational groups of proliferation concern could benefit significantly from access to technical data about the design, manufacture, and/or integration of weapons system components. Yet this threat is receiving relatively little attention in the FSU. While Russia, in particular, still protects documents classified for military reasons, there is less attention to restrictions on unclassified technical data that should be controlled pursuant to international agreements concerning exports of sensitive items. Some sensitive information is considered to be intellectual property and subject to limited distribution in the absence of patent or copyright protection, but controls on such information are uncertain at best. At the same time, data controls should not unnecessarily inhibit the exchange of information that is not explicitly subject to controls and that is central to the viability of international scientific endeavors. Recommendation: Encourage counterparts in the four countries to strengthen national regulatory and organizational frameworks for regulating flows of technical data subject to export controls. Recommendation: Develop and disseminate "model" technical data provisions that could be used by institutions in the FSU in contracts with domestic or foreign organizations involving controlled items. V. Encourage Full Consideration of Proliferation Issues in Export Control Decisions Specific Finding: While bilateral activities have concentrated on establishing the machinery for export control activities, they have devoted little effort to the policy considerations that should underpin decisions, other than consistency with the limited requirements of the international regimes. Such discussions are the

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--> subject of separate diplomatic discussions when specific issues arise. Given economic realities, the governments of the successor states inevitably give less weight than would the United States to restricting trade with nations that pose proliferation risks. The involvement of strong nonproliferation advocates in the FSU in interagency deliberations can help ensure that appropriate attention is given to international security concerns in export control decisions. Recommendation: Ensure that continuing consultations on the importance of export control activities in meeting nonproliferation objectives become an integral component of U.S. bilateral relations with the successor states in both the short and the long terms, as has been the case with relations between the United States and its traditional allies. Recommendation: Promote bilateral discussions of the relationships between exports of sensitive items and proliferation concerns in many forums, at the governmental and nongovernmental levels. Recommendation: Support the development of cadres of nonproliferation specialists in the FSU who have strong linkages with both policy officials in their countries and colleagues abroad. The returns during 1995 and 1996 on U.S. investments in bilateral programs in MPC&A and export control were significant. U.S. agencies now have in place an extensive web of international arrangements involving very supportive foreign counterparts. The base of international experience can facilitate future program efforts that contribute directly to nonproliferation objectives. Cutting across all program elements is the need for the United States to emphasize cooperative rather than assistance programs. This approach will help ensure that the countries will be ready to assume full responsibility for upgrading and maintaining systems that are internationally acceptable. Despite the progress through bilateral efforts, the size of the tasks in each of the countries remains great. Reducing to an acceptable level the risk of unsanctioned transfers of weapons-related items from the FSU to states of concern or to terrorists will require many years of effort at the international, national, and facility levels by governments and specialists throughout the region. Continued participation by American specialists in the activities of these countries can accelerate the process while also providing the United States with valuable linkages to important organizations and institutions. American national security interests will be well served by a continuation of these two relatively inexpensive programs.