Remarks about the Importance of Export Controls

Remarks at the Southeast Europe Defense Ministerial Border Defense Conference

I am pleased to have this opportunity to discuss export controls before so many experts in the subject. I notice that there are a number of countries represented here that subscribe to our export control database, the Risk Report. I would like to thank both Mr. Harlan Strauss and Mr. Paul van Son for making it possible for my organization to provide this database to help countries with export control.

I would like to begin with a reminder of how essential export controls are to the security of the world. Every program to build weapons of mass destruction has depended on imports. In fact, imports have usually been the pacing item.

Let us consider the three countries that have not joined the Nuclear Nonproliferation Treaty – Israel, India and Pakistan. Each of these countries has depended on imports for virtually every program, every plant and every system that they have put together in the nuclear sphere. Exports have been the pacing item for all. That is true of all the reactors, of all the heavy water plants, and of Pakistan’s uranium enrichment effort. It was also true of all of the nuclear programs in Iraq. No counterproliferation effort can succeed without export control. This same is true of efforts to stop the spread of long-range missiles.

Successful export controls raise the price of all these programs. When Argentina and Brazil decided to put proliferation behind them, one of the main reasons was that it was costing them dearly in technology denial from America and other countries. Libya also made a similar decision recently – Libya decided that its nuclear bomb effort wasn’t worth the cost it was paying in international isolation.

Likewise, Iraq’s effort to make a solid-fuel nuclear missile was thwarted by the Missile Technology Control Regime, and although Iraq did manage to import a large quantity of equipment for its nuclear effort, the program went slowly enough so that it never succeeded in the time available. Iraq had to re-engineer many items that could not be obtained from abroad.

In the future, we must keep the pressure on. The future, however, will be different. We will need more cooperation than ever. Why? Because the threat is changing, and the response will have to change too.

The best example is the nuclear smuggling network set up by Pakistani scientist A.Q. Khan. What lessons does it have for us? The main one is that the management methods of globalization have spread to proliferation. We are familiar with the concepts of “out-sourcing” and “off-short production.” Well, these new methods are now being used by proliferators. A.Q. Khan’s customer in Libya placed an order; that order was filled by suppliers throughout the world. Machine tools from Europe were sent to Asia, and there they produced centrifuge parts for delivery to the Middle East, with the operation being managed by companies in the United Arab Emirates. The profits went to a Pakistani national who put them in off-shore banks.

In effect, one uses the same methods one might adopt to produce motorcycles, or vending machines, or television sets. One looks around the world for a market, and then one looks for the means to supply it.

To make matters worse, it is not clear that this activity was really against the law.
It is legal for one country that is a member of the nuclear non-proliferation treaty to export centrifuge parts to another, unless strong export controls regulate it. It is a sad fact that we don’t have such export controls in all countries of the world. In addition, it is probably not against the domestic law of a number of countries for a group of terrorists simply to move in, set up shop, and make mass destruction weapons. All countries need to look at their laws to ensure that this behavior is clearly made illegal.

Another lesson we can draw from this network is that it worked. The network managed to supply Iran, North Korea and Libya with the means to make nuclear weapons fuel, and Libya also got a tested nuclear bomb design. Iran began getting deliveries in the late 1980’s and early 1990’s; North Korea in the mid and late 1990’s; and Libya was still getting things last autumn. The United States was about a decade late in confronting the Pakistani government over Mr. Khan’s activities, more than a decade late in responding to Iran’s progress, and tardy by several years in the case of North Korea.

This was a failure in the gathering and use of intelligence information. The reaction did not come until after the harm was done. The lesson is that we must do much better, and we must acknowledge that we have to change to do that. Otherwise, we will continue to be too late. This kind of activity must be discovered and stopped before it succeeds.

To all these considerations we must now add another: terrorism. Did A.Q. Khan’s network sell only to countries, or were “sub-national groups” on his customer list as well? If orders from a country (such as Libya) can be filled by these global management methods, why not an order from a terrorist group? We cannot rule it out. The same methods could serve any customer.

The possibility that global supply networks could outfit terrorist groups is a new and frightening development. It should be seen as a direct security threat by all countries and their ministries of defense. How do we counter it? One way is to increase our cooperation.

The United States probably spends more money to gather intelligence than the rest of the world combined. Yet, we still fail to get what we need. It is becoming clear that everyone must help. Increased cooperation in gathering strategic intelligence must be a top priority for all countries concerned about terrorism.

We also need better laws and stronger enforcement. As many of you know, the United Nations Security Council has just passed U.N. Security Council Resolution 1540, calling on all countries to strengthen their anti-proliferation laws. I hope that all countries will see this as an opportunity for governments to act sooner rather than later to improve their export control performance.

Thank you for this opportunity to address this conference.