committee will come to order the purpose of today's hearing is to examine the proposed agreement for cooperation between the government of united states of america and the government of the united arab emirates concerning peaceful uses of nuclear energy and a whole variety of issues that are associated with that proposed agreement this marks the first appearance before congress by the new undersecretary for state of for arms control and international security our former colleague our dear friend california representative ellen tauscher madame undersecretary congratulations from the entire committee on your new appointment and your wedding vows on the same day this is a wonderful place to take a honeymoon and in addition to our congratulations to you our real joy at the fact that you never when you are doing this very important job and secondly that there is life for former members of congress i think we all want to as was made clear in our hearing that we had two weeks ago it's absolutely vital to our national security and preserve the gains of the start treaty and to further reduce the u s and russian nuclear arsenals there is no question but that there is a clear linkage between our nuclear nonproliferation and our arms control policies and we ignore that linkage our peril on to the agreement under u s law a civilian nuclear cooperation agreement is required before we can transfer significant nuclear equipment and materials to a foreign nation often read wired are often referred to as a one twenty three agreement after section one twenty three of the atomic energy act it provides the legal framework for the u s companies to export controlled civil nuclear goods by itself a one twenty three agreement transfers nothing all u s nuclear sales and exports must go through their own licensing review and approval before they leave our shores if a proposed agreement complies with all the requirements of section one twenty three as this one does then it can be brought into force by the president unless congress acts a joint resolution of disapproval within ninety days of continuous legislative session following its submission based on our mathematical geniuses calculations and  regarding the legislative schedules the review period for the u a e agreement will end on october seventeenth this is the first proposed u s nuclear cooperation agreement with the persian gulf state as such inevitably raises questions about the broader implications of civil nuclear power in that volatile region home to a number of terrorist groups and in iran seemingly determined to acquire a nuclear weapon weapons capability there are those both inside and outside congress who would prefer that the region stay nuclear free not just of weapons but also of reactors and related i share their concern but there are multiple suppliers of civil nuclear power reactors in the world today both france and south korea have already concluded similar cooperation agreements with the emirates moreover many of the gulf states  including have ample financial means to buy from them ever they choose under whatever terms those vendors are willing to offer it is unlikely that the united states would be able to bring sufficient diplomatic pressure to bear against france russia canada south korea and all the others that could do this to convince them not to sell civil nuclear equipment or fuel to the and other gulf states all of which are parties to the nonproliferation treaty or that is the context in which we consider this agreement some expressed concerns that one twenty three agreements encourage or enable the proliferation of nuclear weapons as civil reactors and some of their associated facilities can also produce material for a nuclear bomb if diverted from peaceful use in that context it is important to note that you nonproliferation conditions of the proposed us u a e agreement go beyond those required by the n p t beyond those of the nuclear suppliers group and beyond those have even our own laws it contains for the first time in any u s nuclear cooperation agreement a binding legal commitment by the foreign recipient not to engage in any uranium enrichment or spent fuel reprocessing activities nor to have any facilities for such activities if the usa violates this provision then the u s would have the legal right to terminate the agreement prohibit all current and future trends and the manned demand the return of all equipment material and facilities previously provided this is the same so called take back right this is normally reserved as a penalty for a nuclear test or a major violation event i safe guard to mean that i believe any future u s one twenty three agreement in the region with jordan kuwait other states that are seeking it should follow this model indeed this model could even be applied if one day iraq julie changes from pursuing a nuclear weapons combat capability to sell a country whose deeds match its own words in terms of its dire desire for nuclear energy other supplier states will hopefully follow our lead and include the no enrichment no reprocessing obligation in their own nuclear cooperation agreements for me the fundamental issue is not the substance of the agreement itself it is i believe the best one we have entered into as a transit point to it listen lee procure items to support its nuclear and other w m d programs expanded to conventional military programs and even to it enquire like tronics to incorporate into improvised explosive devices which have killed and maimed the u s coalition and iraqi soldiers and civilians in iraq iran if iranian affiliated banks continue to operate in dubai several of which have been sanctioned  and terrorism was as recently as last may all accounts the significantly improved performance in preventing illicit shipments of military sensitive goods to iran over the past two years yet questions remain about the extent of the u s commitment as well as the pace at which it improves its export control capabilities for example why is the usa moving so slowly to implement the comprehensive export control law it passed last the strike a balance between not antagonizing iran and supporting us average to constrain the development of iran's nuclear weapons capabilities how much leverage does this agreement give the united states to help persuade  in this area and do we have more leverage before after this nuclear cooperation agreement goes into force in closing let me note that the committee held a classified briefing two weeks ago some of these issues  classified information in this open hearing but to the greatest extent possible i hope we can use this as an opportunity to address some of the critical questions about this important nuclear cooperation agreement and i now turn to the ranking member  before our committee soon after your confirmation thank you let me also express my sincere congratulations on your very recent marriage and my colleagues and i already lament your departure from the house and we'll miss your invaluable expertise and bipartisan approach to what are so often very difficult subjects of of great importance to our country and most importantly of all we will miss your friendship on a daily basis you may have a high falutin title now but you'll always be l and let me begin my remarks mr chairman and madam undersecretary by stating my strong support for stronger ties between the u s and the united arab emirates in recent years political economic and security ties have significantly expanded the u s is becoming an important partner in the persian gulf and i support expanding that relationship put in context my concerns about moving this proposed nuclear cooperation agreement at this time for many years has been the principal conduit of goods and materials intended for nuclear programs as well as ford's ballistic missiles and advanced conventional weapons systems in addition banks and other enterprises in the u security council sanctions were imposed on iran these and other transactions were also subject to us that were ignored that we must remember in our consideration of this nuclear cooperation agreement financing it has participated in exercises of the security initiative and it has adopted a number of laws and regulations to strengthen its export controls many of us have supported a number and i referenced to a letters that i had written to president bush about these concerns and president obama about these concerns i am an equal opportunity bipartisan worrier  because regulations have yet to be fully implemented the personnel have not been hired and trained a range of other measures are waiting to be put into effect specifically on the nuclear front run some nuclear laws and regulations are yet to be fully implemented but even if all the promised reforms were already in place there simply is no record to determine if they are in fact adequate to the task particularly in light of the long history of complicity or negligence regarding trade with the rand other countries of concern for this reason along with my colleague mr royce mr sherman mr markey mr fortenberry mr burton mr bozeman mr wilson and i have full compliance with international sanctions against iran also its crackdown on the use of its territory by its own or foreign individuals and enterprises in illicit trade with iran or assisting tehran's financing rgue against requiring these standards because they say has already met them if this is in fact the case why is the administration opposed to this legislation my colleagues and i have written a letter to s also has the consequences of going beyond the u a e itself specifically its potential to undermine nonproliferation as we are where there is no sharp dividing line between the facilities agreement and does it set off a nuclear energy reaction within the region especially the region where opening pan dora's box is generally a dangerous thing to do because it is more of a tinderbox of cold region than anyplace else in the world and what this does to other countries who would like to see this kind of agreement perhaps with a more jaundiced eye of what it could lead to if they have more mon ambitions for something else down the road and i know some might argue that this might not be ideal country to do this first and some might argue otherwise it is a country that appears to have a great deal of energy resources both gas and oil it's one of those few places i guess where they dig for oil and pray that they had a hit water but they do have other greater needs so those are the concerns that i have what does this do and thinking of places like  an official the state department you want to tell us which one never buy it i don't know that we'll talk about that off the record i'm not going to be redundant and go into the things that have already been covered by the chairman the ranking member and mr to develop a lot of nuclear plants here for nuclear energy because it's clean burning is sufficient and it helps the environment and so we're doing those things over there why don't we take a hard look at doing it here in america france gets about seventy five percent of their energy from nuclear transfer a weapons systems and financial assistance to its ports to recipients such as iran hezbollah and other terrorist organizations and that's something i don't think any of us democrat or republican want to continue i'm pleased that they're making some strides with more effective export controls and financial controls but so far that doesn't appear to be enough and that's why i'm co sponsoring the legislation that the ranking member just talked about i wish you well in your  n your new duties and i look forward to having it testify before us many times and tell your husband i think you've got a good deal i'm very pleased to recognize the chairman of the subcommittee on terrorism nonproliferation and trade the gentleman from california mr sherman for the statement and then i'm secretary about two years ago i spent my honeymoon with you and our colleagues and i hope that your honeymoon is as delightful as ours was it was a dark day for congress and particularly the class of ninety six when we learned that you were leaving us but then a light shone on for at least those of us who serve on this committee and especially the nonproliferation subcommittee we learn the position you'd be taking and that you would continue to work with us the text of the agreement that you're here to discuss i think is a good one if we just look at the four corners of the agreement first is it contains a binding commitment by the u s to forego enrichment and technology second the u s will implement the additional protocol safeguards these are two elements that should be in every one two three agreement but if you look outside the text of the agreement there a couple of significant problems the first relates to jobs the supporters of this agreement say there may be ten thousand jobs at stake but no company will enter this industry in less they have protection from liability the french and the russians already do because their major entities are part of the government so they have sovereign immunity and american companies will not actually do any work in less there is something similar adopted at the u n to the convention on supplementary compensation for nuclear damages c s c and i hope and expect that that is what you a will do i would feel better about this agreement if they'd already done it i also am concerned that from what i hear the whole deal is wired for the french anyway  and this disturbs me a little bit when i realize that both kuwaiti and and immorality independence is a direct result of the actions we took in the gulf war finally and has been mentioned by the ranking member and others a e is a strong basis on which to build an effective export control system i agree with you i just think before you give them the agreement we should just have a strong basis to build an effective export control system we should have that system in place and the u a e has not had a named in force major has not adopted regulations and is simply has no basis on which to learn what transshipments are taking place so unless our intelligence pans it to them on a silver platter it's unlikely that the present system will generate any enforcement i look forward to seeing how we deal or as you know they're very compounding and that's why it's important that we get today's topic nucular cooperation with the united arab emirates right and it's even more so when the agreement has been talked of as a model which other nations across the region might elect to follow after we get this in place and i know under secretary tauscher will testify that this agreement encompasses the highest non proliferation standards contend additionally that this agreement will serve to isolate iran nuclear program and i think that's a debatable proposition that the u is committed to forego enrichment and reprocessing is a very very positive development and i think the administration is right to emphasize that if the white house is considering endorsing some sort of enrichment capability under enhanced inspections on iranian soil as has been reported i don't think that that squares i think that that personally i'd hate to be the state department official who has to explain to a middle eastern country that iran can run x number of centrifuges while they can have not before this committee in april secretary of state clinton testified that the united states is laying the foundation for what she explained was crippling sanctions against iran should the administration's engagement fail i think that's what we need to do given its extensive trade relationship would be key to any aggressive sanction effort that we might cobble together under that approach and to that end the united position that you hold and the highest was the fact that you found a wonderful partner to work with you and i know things will get much better for our side with  undersecretary and i want to join with my colleagues with my concerns on the one two three agreement which essentially promised united states cooperation on civil nuclear  power against sensitive technology being diverted to a weapons program or other non in countries like iran it will remain in effect for thirty years however  former colleague what it was a great sense of personal satisfaction to see you there but also for our nation a great sense of security we look forward to hearing your testimony about this very important program and in particular lady from california are under for could not have asked for a better person and understanding of the importance of this issue of disarmament and nonproliferation now facing our country as well the other countries of the world and i look our children our debt of gratitude people at home of course california home are very happy that you are where you are but we miss you tremendously i remember the first day that we met you were running for congress at the port of oakland there was a rally with then candidate bill clinton and he looked at you and he said my goodness you look like a member of congress and i obviously we're concerned about iran we're also concerned about the middle east and whether or other places obviously that could set off a chain of events which could be very detrimental to the region and the rest of the world so we want to make sure we get a ri slate and you have my commitment to deliver to secretary clinton your letter and from the members that i've spoken you have touched my heart but you also made very clear what your concerns are and i want to take this opportunity to testify to make sure that you hear from the exactly what the administration's position on this situation with the twenty three agreement is i look forward to working with you my capacities and your secretary of state for arms control and international security and as i said why may be working in a different part of town i will not be a stranger to this committee and as we move forward to implement president obama's arms control and international security agenda i will be at the ready to be with you and your staff and any time you require it i am here today to testify in support of the proposed u s for peaceful nuclear cooperation which president  submitted to the congress may twenty first to review pursuant to section one two three of the atomic energy act of nine hundred fifty four i would like to request that my prepared statement be included in the record of today's hearing i will present a shorter version in my oral oral testimony mr chairman the proposed agreement under review in the context of the extraordinary bilateral relationship that is developing between the united states and the united arab emirates in the last several years as the largest importer of u s goods more than fifteen billion dollars in two thousand and eight the united states and the u a e have established an enduring partnership and share a common vision for a secure stable and prosperous middle iraqi debt the united states and the u a e also work closely to bring peace and stability to afghanistan where the u s has employed combat troops also working vigorously to support pakistan pledging three hundred million dollars  a further strengthening of cooperation between our two countries in addition the agreement is a significant nonproliferation achievement for the first time a us partner has voluntarily go enrichment and processing the proposed weapons of mass destruction the means of their delivery or terrorism related activities it is well known that the u a e has been a transfer shipment hub for sensitive items and with the network for some of it activities in the last several years however has taken critical steps to address this problem it helped the united states expose and shut down the khan network by taking actions against firms and financial activities on it it takes it has taken steps to implement united states security council resolutions against north korea and iran it is taking actions to prevent the abuse of its financial system by polish it has worked closely with the united states to prevent the diversion of u countries of concern the united states is committed to working with on further steps toward establishing a comprehensive export control regime and effective export control practices earlier this year we held our annual circumstances of concern nonproliferation standpoint so require again how do we find exceptional circumstances at what point would that determination be made when would it be too late to prevent a facilitating transfers to iran how can we be certain that the promises made in this agreement will be kept and that once they receive the agreement they will continue to abide by those commitments thank you madam secretary themselves and the answer is no we're not coordinating them but of course we're aware of them and what satisfies us is that we have the strongest agreement and that is also leads me to the second question that you asked about the president's  confidence that this is an agreement that will enhance not not diminish our national security i think that what we have to do is step back and take a look at the region and understand that there are many other players on the field that are negotiating with these countries to provide civil nuclear and other kinds of energy related and what we have done i think is is set a very high bar whether to voluntarily agreed to find says to me that we have a significant opportunity here at a time when there is a lot of competition in the region from other countries to provide similar  can we use this one two three agreement as leverage to address the fact that the u a e is a vital lifeline to the iranian regime particularly with regard to refined petroleum  those don't include the fine petroleum it concern me that right after we not only kuwaiti independence but the emirates independence in the gulf war they decided to buy a french phone system and i commented at the time  nine one french phone system you get paris not the pentagon now the word seems to be that the french have been assured that they will get to build the reactors while u s firms will get the crumbs namely a contract to manage the nuclear program do you believe that american companies will get significant work in the nuclear program  you think that the french contractor has had an unfair advantage because the french government has pretty much indicated if you want that french naval base you've got to give them the trying to make it easy for iran i think is very very important for a lot of other countries that are going to follow suit here i don't think this is something that the u s would have any problem with nor anybody else see that any of us that have worked with over a period of time who don't want to fool ourselves would would would really think would be important given the fact that this is a model and  nuclear program only they have negotiated a very tight agreement that precludes any kind of enrichment or things that would concern us about nonproliferation they've done a number of different things on export this opportunity but once again all this agreement does is allow them to consider working with us to have the capability it doesn't say that they're going to have the united states contract or they're going to have you know move forward on all this does is say that this is the construct of the framework of how you would do it and then to go she ations would be get as we go into further negotiating and dialogue with them may be able to see some of the data i think it would be important for us to have that information if we can get it and i'm sure it can be handled in a very diplomatic  another question the united emirates appeared to be showing an interest in this dabbling joint ventures with us firm by the design the construction in the operations of a nuclear power plant however the government of the emirates has also reached out to numerous other countries including france and the united kingdom and so the question is will u s companies be shown any sort of preference arab emirates states that the u s shall not engage in the enrichment and reprocessing of nuclear material the agreement goes on to outline a list of safeguards to ensure that this does not come to fruition yet the majority of the safeguards involved and the question is are there any direct measures being taken by the administration to ensure negotiated voluntarily it is not something that we have forced on to them but it is about as tight as you can get and it really precludes any kind of reprocessing or transferring of material and i believe that both the  water reactors certainly in talking about the middle east looking for an appropriate partner would probably be at the top of most people's  have a one two three agreement if we don't help them and sell them to build their nuclear energy system for then turning their back on us and saying we don't need you because we have other agreements you have to benefiting from our case for the success so station of cooperation or terminations agreement should there be any you know any enrichment of uranium reprocessing of nuclear fuel within the territory or any terminations or abrogation or material and yes we have had relationships in the past where people have not done what they promised and and abrogated agreements and done things and they have caused them to have sanctions and other things i think that the u a e understands the balances and benefits of this agreement i think that we have done the best we can to balance for ourselves the potential commercial activities with what is the most important piece of this which is that that there is virtually no opportunity for transfer reprocessing or other things and that there are lots of eyes on this and that there is this agreement in advance that would be terminated immediately very visibly and i think the u a e has as voluntarily come into this agreement and i think that we have made very clear to our most important piece of this is the national security of the united states and the region in the world and that there will be no liberation of any of the materials involved in that well i hope you're right strong about his agenda for the world free of nuclear weapons in the future but at the same time that the united states is not going to unilaterally disarm and that we are certainly going to maintain our weapons while other people have them but at the same time we have an opportunity with climate change benefits and other countries for this business if we can satisfy ourselves the significant issue  if we can make sure that the guards are parts of these agreements and that we have strong agreements with good partners and that is done on a case by case basis that this is this is a good opportunity for the united then iran and north korea i want to develop nuclear weapons in the same way so we're trying to prevent them through the nonproliferation treaty we even had an international treaty ban on nuclear testing well guess what one of the permanent five  have to do with their effect of controlling exports of that technology from the and of course we have a brand new export control law passed just in august of zero seven not fully implemented regulations have been promulgated how can we be sure that the u s is going to  diligent in protecting the export preventing the export of this technology to other places in the region with folks that we're very concerned about that might get some of this technology what's your response you i really don't know where to begin but let me begin with this we just returned from russia last week and discussions nonproliferation with the russians and in terms of peace in the world of nations but as we move forward in all of these countries now wanting to get nuclear capacity could it not be that if the favored and i'm inclined to agree to go along with it because i believe that we don't do it somebody else will and we would lose control i also believe that we also balance this rush for nuclear energy in many of these countries particularly in the countries and how do we know whether or not this rush for nuclear energy for civilian purposes is not national security and our strong desire for no liberation of weapons of mass destruction at all but certainly not in a very volatile region like the middle east and with the reality of the fact that there are very aggressive partners out there from other countries that are willing to make deals and what the united states did and by the way it was the previous administration they made what we could do was make the strongest possible and i think that sure that you understand what is important that obviously national security nonproliferation is the most important piece of it but i think that what we've done is we've we've got now an freeman that is one that that we think is the best agreement that  try to say that we have many friends in the u a e meaning the united states the across palos ation of business trade and certainly  our engagement has been a positive one i believe so might i pose this question that may have been asked and i just want to hear of the how you frame it or how you perceive it and that is of course relationship with iran  and the suggestion that they have been some support for terrorist activities in particular has been on the second question is would you give a layman's explanation when you think of civil nuclear use there's certainly medical use but you think of energy when you think of the u a e you think of the region that it's been and you think that even though we support green we know it seems to be in a region where it could be self sufficient what nuclear power plant this is a region that has obviously a lot of petrochemicals but also a lot of wealth a lot of poverty and so whatever choices  other other things that are worrisome to us on a whole host of weapons of them as to having been a good friend or partner they are a very very good friend they are a very big trading partner they are very close military partner to us for the region and they are obviously a country where we have many many relationships and where we want to maintain a very strong relationship having have and certainly our competitors agreements we believe in that includes article thirteen which is a deal breaker for the agreement if if there's any kind of transfer or abrogation or any aware of those issues and that they are working closely with us and with the community generally the national community generally and they have a very strong relationship with iran there are a very strong transshipment and trading partner with them and you have no  conflict about changing governments changing the attitudes of the united states even though we have this agreement and then transfer goes into iran which is a troubling very troubled state i think everyone is aware of what would happen if this agreement is