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94–774 PDF 2004

NONPROLIFERATION: ASSESSING MISSILE

TECHNOLOGY EXPORT CONTROLS

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

EMERGING THREATS AND INTERNATIONAL

RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MARCH 9, 2004

Serial No. 108–165

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

MARSHA BLACKBURN, Tennessee

——— ———

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON NATIONAL SECURITY, EMERGING THREATS AND INTERNATIONAL

RELATIONS

CHRISTOPHER SHAYS, Connecticut, Chairman

MICHAEL R. TURNER, Ohio

DAN BURTON, Indiana

STEVEN C. LATOURETTE, Ohio

RON LEWIS, Kentucky

TODD RUSSELL PLATTS, Pennsylvania

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

TIM MURPHY, Pennsylvania

——— ———

DENNIS J. KUCINICH, Ohio

TOM LANTOS, California

BERNARD SANDERS, Vermont

STEPHEN F. LYNCH, Massachusetts

CAROLYN B. MALONEY, New York

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

JOHN F. TIERNEY, Massachusetts

——— ———

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

LAWRENCE J. HALLORAN, Staff Director and Counsel

J. VINCENT CHASE, Chief Investigator Member

ROBERT A. BRIGGS, Clerk

ANDREW SU, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on March 9, 2004 .............................................................................. 1

Statement of:

Borman, Matthew S., Deputy Assistant Secretary of Commerce for Export

Administration, Department of Commerce; Robert W. Maggi, Managing

Director of Defense Trade Controls, Department of State; Lieutenant

General Tome H. Walters, Jr., USAF, Defense Security Cooperation

Agency, Department of Defense, accompanied by Vann H. Van Diepen,

Director, Office of Chemical, Biological and Missile Nonproliferation,

Department of State; and Lisa Bronson, Deputy Under Secretary of

Defense for Technology Security Policy and Counterproliferation, Department of Defense ..................................................................................... 97

Feickert, Andrew, Specialist in National Defense, Congressional Research

Service; Joseph A. Christoff, Director, International Affairs and Trade

Team, U.S. General Accounting Office; and Dennis M. Gormley, senior

fellow, Monterey Institute, Center for Nonproliferation Studies .............. 8

Letters, statements, etc., submitted for the record by:

Borman, Matthew S., Deputy Assistant Secretary of Commerce for Export

Administration, Department of Commerce, prepared statement of ......... 100

Bronson, Lisa, Deputy Under Secretary of Defense for Technology Security Policy and Counterproliferation, Department of Defense, prepared

statement of ................................................................................................... 154

Christoff, Joseph A., Director, International Affairs and Trade Team,

U.S. General Accounting Office, prepared statement of ............................ 34

Feickert, Andrew, Specialist in National Defense, Congressional Research

Service, prepared statement of .................................................................... 11

Gormley, Dennis M., senior fellow, Monterey Institute, Center for Nonproliferation Studies, prepared statement of .............................................. 52

Maggi, Robert W., Managing Director of Defense Trade Controls, Department of State, prepared statement of .......................................................... 114

Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the

State of Maryland, prepared statement of .................................................. 6

Shays, Hon. Christopher, a Representative in Congress from the State

of Connecticut, prepared statement of ........................................................ 3

Walters, Lieutenant General Tome H., Jr., USAF, Defense Security Cooperation Agency, Department of Defense, prepared statement of .......... 135

(1)

NONPROLIFERATION: ASSESSING MISSILE

TECHNOLOGY EXPORT CONTROLS

TUESDAY, MARCH 9, 2004

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL SECURITY, EMERGING

THREATS AND INTERNATIONAL RELATIONS, COMMITTEE ON GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 2:05 p.m., in room

2154, Rayburn House Office Building, Hon. Michael Turner (vice

chairman of the subcommittee) presiding.

Present: Representatives Shays, Turner, Burton, Duncan,

Ruppersberger, and Tierney.

Staff present: Lawrence Halloran, staff director and counsel; J.

Vincent Chase, chief investigator; Robert A. Briggs, clerk; Anna

Laitin, minority communications and policy assistant; Earley

Green, minority chief clerk; Jean Gosa, minority assistant clerk;

and Andrew Su, minority professional staff member.

Mr. TURNER. A quorum being present, the Subcommittee on National Security, Emerging Threats and International Relations, entitled, ‘‘Nonproliferation: Assessing Missile Technology Export Controls,’’ is hereby called to order.

Cruise missiles and unmanned aerial vehicles [UAVs], pose a

growing threat to U.S. interests at home and abroad. Available, affordable and versatile, these technologies offer rogue nations and

sub-state actors access to strategic capabilities previously beyond

their reach. The burgeoning global marketplace of military and

commercial systems means our battlefield and homeland defenses

will face profound challenges from the thick catalog of pilotless machines some call the poor man’s air force.

According to the Congressional Research Service, as of last year,

161 UAV production programs operated in 50 nations. The arsenals

of 75 nations currently contain 131 different types of cruise missiles. By one estimate, an enemy with $50 million to spend could

buy just one or two advanced tactical fighters, 15 ballistic missiles

or 100 off-the-shelf, ready-to-fire cruise missiles, each carrying a

substantial conventional payload. Slower and small UAV systems

from model airplanes to GPS-enabled rotary wing craft can be effective purveyors of chemical or biological weapons. A standard

sized cargo container on the deck of a freighter approaching our

coast could conceal a cruise missile and launcher.

Numerous commercial UAV applications and the ready availability of dual-use components like guidance systems make controlling

the spread of sensitive technologies extremely difficult. Many of the

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systems sought by proliferators literally and figuratively fly under

the defensive radars arrayed against them. To prove the point, a

New Zealander with only limited aerospace expertise was able to

obtain all of the components needed to build a homemade cruise

missile last year. He apparently broke no laws while procuring an

airframe, propulsion plant and guidance and control systems for

less than $5,000.

The dimensions of this rapidly emerging threat compel us to ask,

what is being done to keep these lethal technologies from falling

into the wrong hands? Are cold war era counterproliferation strategies focused on system range and payload limits relevant against

a post-September 11 threat characterized by rapid technology innovation, miniaturization and a highly adaptable enemy? Do national

and international export control regimes effectively limit the flow

of the most advanced components that define our current technological advantage in the cruise missile and UAV fields?

To help us address these issues, we asked the General Accounting Office to assess international counterproliferation efforts and

evaluate U.S. programs to verify that UAV and cruise missile technology exports are used as intended. The GAO findings released

last week point to gaps in export license reviews and post-shipment

monitoring. GAO recommends far more aggressive use of end-use

verification and inspections by the Department of Commerce, Defense and State.

We will hear testimony this afternoon from two panels of experts.

The first will describe the scope of the problem. The second panel

will discuss the complex international and interagency export control process used to limit the diversion of critical UAV and cruise

missile technologies.

We appreciate the experience and insight of all of our witnesses

and what they bring to our oversight of these issues, and we look

forward to their testimony.

Now I would like to recognize my colleague, Mr. Ruppersberger.

[The prepared statement of Hon. Christopher Shays follows:]

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Mr. RUPPERSBERGER. Thank you, Mr. Chairman. At the center of

today’s discussion is the inherent tension between national security

and commercial concerns. This conflict has always existed, but a

world more complicated by global trade and terrorism only makes

the divide more complicated. Export controls and the laws created

to deal with them, both domestic and international laws, are based

on states dealing with states. Much of this is based on knowing

who our friends are and who our enemies are. This is the way the

world once was, but it is not that way anymore.

I understand the business concerns. They need to keep manufacturing lines running and retain highly skilled employees. International trade has allowed many in this industry, including the

AAI Corp., the developer and manufacturer of the Shadow UAV located in my district, Maryland’s Second Congressional District, to

keep production going when U.S. purchases have been sporadic.

When export controls are cumbersome or ineffective, U.S. businesses struggle to remain competitive. At a time when we need to

grow the American economy and create more jobs, I understand the

business perspective well.

But I also understand the national security concerns. Technology

improves every day, and the success found in recent conflicts make

American products attractive to our enemies as well as our allies.

With so many questions about who we are selling to, how what we

sell will be used, and potential dual uses of this technology, we cannot ignore threats to our servicemen and women serving abroad or

our homeland defense.

My experience on the House Intelligence Committee gives me another perspective on the national security aspect. It leads me to

question whether the Intelligence Community provides a satisfactory assessment of the cruise missile and UAV threat to support

export control decisions. It makes me wonder if our current export

control regimes are sufficiently adaptable to take into account any

new threats from cruise missiles or UAVs.

I don’t believe GAO included these questions in the scope of their

investigation. However, I believe these questions are critical to this

discussion and hope they will be a part of today’s or future discussions on this topic.

I would like to thank all the witnesses today for their hard work

in this area. I look forward to your testimony. Continuing these

conversations is critical to strike the right balance between commerce and security. Thank you, Mr. Chairman.

[The prepared statement of Hon. C.A. Dutch Ruppersberger follows:]

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Mr. TURNER. Thank you, Mr. Ruppersberger.

I ask unanimous consent that all members of the subcommittee

be permitted to place any opening statement in the record and that

the record remain open for 3 days for that purpose. Without objection, so ordered.

And I ask further unanimous consent that all witnesses be permitted to include their written statements in the record. Without

objection, so ordered.

I’d like to recognize our first panel, which includes Mr. Andrew

Feickert, Specialist in National Defense, Congressional Research

Service; Mr. Joseph A. Christoff, Director of the International Affairs and Trade Team, U.S. General Accounting Office; and Mr.

Dennis M. Gormley, senior fellow, Monterey Institute, Center for

Nonproliferation Studies.

Gentlemen, we do swear in our witnesses in this committee. If

you wouldn’t mind standing, please. Please raise your right hands.

[Witnesses sworn.]

Mr. TURNER. Note for the record that the witnesses responded in

the affirmative.

We’re going to begin our testimony with Mr. Feickert. We’re

going to ask that your comments be somewhere in the range of 5

to 10 minutes. We do have the light, so we’ll show you when the

5-minute period is concluded, and then you’ll have additional time

after that to wrap up your comments.

STATEMENTS OF ANDREW FEICKERT, SPECIALIST IN NATIONAL DEFENSE, CONGRESSIONAL RESEARCH SERVICE;

JOSEPH A. CHRISTOFF, DIRECTOR, INTERNATIONAL AFFAIRS AND TRADE TEAM, U.S. GENERAL ACCOUNTING OFFICE; AND DENNIS M. GORMLEY, SENIOR FELLOW, MONTEREY INSTITUTE, CENTER FOR NONPROLIFERATION STUDIES

Mr. FEICKERT. Mr. Chairman, thank you for the opportunity to

appear before you today to discuss the growing cruise missile

threat as delivery systems for both conventional weapons and

weapons of mass destruction. Cruise missiles and UAVs are no

longer the exclusive domain of a few select countries. They are

widely available throughout the world. At present there are reportedly about 130 cruise missile types——

Mr. TURNER. Mr. Feickert, I appreciate that you’ve turned on the

microphone. Could you also move it just a little bit closer, please?

Mr. FEICKERT. Yes, sir—in the hands of about 75 different countries. According to experts, there are 161 operational UAV programs in 50 different countries.

Because pilots and aircraft are not put at risk, cruise missiles

and UAVs are very attractive systems——

Mr. SHAYS. I’m sorry, Mr. Chairman. Could you just please move

the mic a little closer?

Mr. FEICKERT. Is that better, sir?

Mr. SHAYS. Yes.

Mr. TURNER. I think it’s a little bit directional. Perhaps if you’d

put it in front of you and point it directly out, it might allow us

to all hear better. Thank you.

Mr. FEICKERT. Because the pilots in aircraft are not put at risk,

cruise missiles and UAVs are very attractive systems, particularly

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in countries with small or less than capable air forces. Some analysts believe that countries with cruise missiles and UAVs might

be more inclined to conduct high-risk operations against better

equipped countries such as the United States. These systems are

easy to build or acquire. One report predicts that 6,000 to 7,000

land attack cruise missiles could be sold by the year 2015, excluding United States, Russian and Chinese sales.

Despite MTCR restrictions, many countries produce cruise missiles which fall just under the regime’s parameters or modify missiles proscribed by the MTCR to produce a less capable variant. If

acquiring a land attack cruise missile proves to be too difficult or

too expensive, it is possible to convert an antiship cruise missile

such as the SS-N–2, Styx, which is found in the inventories of more

than 20 different countries.

UAVs, which are also covered under the MTCR, can be acquired

on the international market as complete, ready-to-fly systems or

can be built from scratch or by converting an existing manned aircraft.

Most experts agree that any country or group with even a modest

aerospace program can readily build UAVs with common dual-use

aviation technologies.

These systems are very affordable. As previously noted, a country with $50 million to spend by can buy 1 or 2 advanced tactical fighters, 15 ballistic missiles or 100 cruise missiles.

The chart before you helps to further illustrate this point. In addition to being affordable, these systems are accurate. Cruise missiles with global positioning system or GPS guidance can strike

their targets within a few meters of their intended aim point. Both

cruise missiles and UAVs are versatile. Cruise missiles can be

launched from an aircraft which can significantly extend the range

or they can be launched from surface ships, submarines or also

from ground positions.

The UAV’s versatility as a dual-use system is why many experts

believe that it could be very difficult to regulate them under nonproliferation or export control regimes. But unlike the cruise missile, which has little utility outside the military arena, there are a

host of nonmilitary uses for UAVs.

Cruise missiles are very difficult to defend against because of

their small size and their ability to fly unpredictable routes at low

altitudes. Defending against cruise missiles is further complicated

if the cruise missile employs stealth technologies which are available worldwide and are being incorporated into a number of new

designs.

Cruise missiles also challenge missile defense systems. According

to defense officials, the Patriot system when currently employed in

its ballistic missile defense mode, has limited ability to detect and

engage incoming targets at 100 meters or less.

UAVs offer their own defensive challenges. Smaller propellerdriven UAVs flying slower and closer to the ground may escape detection by ground and air based radars. Higher flying larger UAVs

can employ stealth technologies which can improve their chances of

penetrating hostile airspace.

Even though cruise missiles and UAVs offer a variety of challenges, it is important to note that the majority of these systems

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pose only a local or regional threat. Currently only a few cruise

missiles and UAVs have a range of 1,000 kilometers or more.

A wide variety of conventional munitions have been developed for

cruise missiles. A less extensive array of warheads is currently

available for UAVs. This is due to the payload capacity of most of

today’s UAVs, which were originally intended to serve as information gathering platforms.

United States and foreign efforts to develop unmanned combat

aerial vehicles [UCAVs], will likely expand the conventional weapons utility of UAVs.

The United States has developed the majority of special payloads

that are currently available for cruise missiles. In 1991, the United

States reportedly used Tomahawk cruise missiles filled with chemically treated carbon graphite filaments to short out Iraqi electrical

transformers and switching stations. Special payloads under consideration for UAVs include microwave weapons as well as ballistic

missile defense interceptors. Other nations could also develop special warheads for their own systems.

Cruise missiles can deliver nuclear weapons. Currently only the

United States and Russia have nuclear cruise missiles, although

China is reportedly developing a new cruise missile with nuclear

potential. Many analysts agree that nuclear cruise missiles are currently outside the technical range of most countries, as most Third

World nuclear warhead designs are too large and too heavy for

cruise missile use.

UAVs could also be used to deliver a nuclear weapon, but in addition to size and weight constraints, the UAV’s ability to penetrate

air defenses might be somewhat limiting.

Both cruise missiles and UAVs could be effective for delivering

biological agents because of their ability to dispense payloads at

subsonic speeds, thereby ensuring survivability of the biological

agent.

Cruise missiles that use advanced guidance systems and onboard

sensors could alter their flight profiles to respond to local terrain

and weather conditions to provide optimum target coverage. While

this advanced capability may at present be within the grasp of only

a few countries, less sophisticated attacks with biological agents

using cruise missiles and UAVs are certainly within the capabilities of most countries or nonstate actors that could produce or gain

access to such weapons.

Cruise missiles and UAVs can also dispense chemical agents.

Chemical agents are generally more survivable than biological

agents, but larger chemical payloads may be required to achieve

the same level of lethality or area of coverage. Most analysts believe that developing a simple chemical warhead for a cruise missile or UAV is well within the technical capabilities of most countries that have these programs and quite possibly within the capabilities of technically adept nonstate groups.

Mr. Chairman, this concludes my remarks. Thank you for the opportunity to appear before you today, and I welcome any questions

that you might have.

[The prepared statement of Mr. Feickert follows:]

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Mr. TURNER. Thank you.

Mr. Christoff.

Mr. CHRISTOFF. Mr. Chairman, members of the committee, I am

pleased to be here today to discuss GAO’s recent report on U.S. efforts to limit the proliferation of cruise missiles and UAVs. Last

year this committee asked us to assess United States and international efforts to limit the proliferation of cruise missiles and

UAVs. In a report we released 2 weeks ago, we addressed three key

areas: First, the nature and extent of the proliferation; second, the

tools used to address proliferation risks; and third, U.S. efforts to

verify the end use of these sensitive technologies.

In summary, we found that nonproliferation tools and end-use

monitoring efforts are not keeping pace with the growing threat

from cruise missiles and UAVs, and let me now summarize our

findings and our recommendations.

First, we found that cruise missiles and UAVs pose a growing

threat to U.S. national security interests. They are accurate, inexpensive delivery systems for conventional, chemical and biological

weapons. They are difficult to detect, difficult to defeat and are

available worldwide.

For example, at least 70 nations possess about 75,000 cruise missiles, mostly antiship cruise missiles armed with high explosive

warheads. China and Russia have sold cruise missiles to Iran, Iraq,

Libya, North Korea and Syria. In addition, commercial items such

as global positioning systems and lightweight engines are increasingly available worldwide. These items have allowed countries to

expand the range and accuracy of their cruise missile systems.

The Chinese Silkworm missile you see on your left was found in

Iraq after the first Gulf war. In October 2003 the United States

found 10 additional Silkworm missiles that the Iraqis had modified

to become land attack cruise missiles. As a result, the range of the

missiles increased from 100 to 180 kilometers.

The second picture you see on your left is the U.S.-built Predator

UAV. UAVs are pilotless vehicles that operate like airplanes. They

have primarily been used for reconnaissance. Countries worldwide

are increasingly interested in acquiring and developing UAV technology; 32 nations are developing or manufacturing more than 250

models of UAVs.

We also assessed tools the United States uses to reduce the proliferation of cruise missiles and UAVs. First, multilateral export

control regimes are voluntary arrangements among supplier countries to restrict exports of sensitive technologies.

Between 1997 and 2002, the Missile Technology Control Regime

accepted six U.S. proposals to expand the list of cruise missile and

UAV technologies subject to international controls. Regime members are expected to scrutinize the listed items before approving an

export license.

However, these lists do not preclude countries from exporting

sensitive items. In addition, regime members have disagreed over

the sales of cruise missiles to countries of concern. For example,

the U.S. disagreed with France’s 1997 decision to sell its Black

Shaheen cruise missile to the United Arab Emirates.

In addition, nonmembers such as China and Israel continue to

export cruise missiles and UAV technology to countries of concern.

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The United States also uses its national export control laws to address missile proliferation but finds it difficult to identify and track

commercially available items not covered by control lists.

In addition, a gap in U.S. regulations has allowed nonstate actors

to acquire cruise missile or UAV technology without violating U.S.

laws. This gap is illustrated by the 2003 case of a New Zealand citizen who illegally obtained U.S. dual-use items to develop a cruise

missile.

Current regulations prohibit the sale of unlisted dual-use items

to 12 missile proliferation projects and 20 countries of concern.

This regulation does not apply to individuals or nonstate actors.

We recommended that the Secretary of Commerce determine

whether the regulations should be modified to close this gap.

Finally, we review the results of end-use monitoring checks completed between 1998 and 2002 by the Departments of State, Defense and Commerce. We found that the departments conducted

few checks to confirm the recipient’s cruise missiles and UAVs complied with U.S. license conditions.

The State Department conducted checks on only 4 of the 786 licenses it issued for cruise missile and UAV-related technology. The

Department of Defense conducted no checks on the more than 500

cruise missiles and related items transferred to other countries.

And the Department of Commerce conducted checks on only 29 of

nearly 2,500 cruise missile or UAV-related licenses it approved.

We recommended that the departments conduct a comprehensive

assessment of the nature and extent of compliance with license

conditions on these technologies. This assessment should include

additional end-use checks.

Mr. Chairman, members of the committee, that concludes my

statement, and I will be happy to answer your questions.

[The prepared statement of Mr. Christoff follows:]

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Mr. TURNER. Thank you, Mr. Christoff.

Mr. Gormley.

Mr. GORMLEY. Mr. Chairman, members of the committee, I’m

honored to appear before you today to illuminate how cruise missiles and unmanned aerial vehicles pose a threat that could affect

both U.S. interests and the American homeland. The timing of this

hearing and the release of the GAO report on improvements needed to better control technology exports could not come at a more

propitious time. We are at a crucial turning point, in my view, in

the proliferation of cruise missiles and UAVs, one precipitated via

events during Operation Iraqi Freedom as well as by growing evidence of terrorist plans for using UAVs.

The GAO report interestingly mentioned at least five times that

cruise missiles and UAVs pose an emerging threat to U.S. interests

abroad as well as at home. Permit me in these brief remarks to illustrate how, and I would ask that my longer statement and accompanying journal article be placed in the record.

First, in regard to threats to the U.S. homeland, cruise missiles

or UAVs might be launched from concealed locations at modest distances from their targets or brought within range and launched

from freighters or commercial container ships; in effect, two-stage

forms of delivery. Al Qaeda is believed to possess at least 15

freighters. In the aftermath of the September 11, 2001 terrorist attacks on the U.S. homeland, key U.S. decisionmakers began to take

such two-stage threats more seriously.

The 2002 National Intelligence Estimate on the ballistic missile

threat to the United States drew attention to the covert conversion

of a commercial container ship as a launching pad for a cruise missile. Even a large bulky cruise missile like the ones Iraq used to

fire at coalition forces last year could be equipped with a small internal erector for launching and still comfortably be fit within a

standard 12-meter shipping container.

Indeed, the 2002 National Intelligence Estimate argues that because such a delivery system, among several others, is less costly,

easier to acquire and more reliable than an intercontinental ballistic missile, a cruise missile attack against the American homeland

is more likely to occur than a ballistic missile attack.

The notion that a terrorist group might entertain using UAVs is

by no means far-fetched. One recent accounting of terrorist activity

notes 43 recorded cases involving 14 terrorist groups in which remote control delivery systems were either threatened, developed or

actually utilized.

Model airplanes were used or planned for use by al Qaeda to kill

leaders at the 2002 G–8 summit in Genoa, Italy. Moreover, according to the London Independent newspaper, a British national held

at Camp Delta, Guantanamo Bay, Cuba has confessed to being part

of an al Qaeda plot to acquire a drone to attack the House of Commons with anthrax.

Let me now turn to threats—conceivable threats that might affect our regional interests. Operation Iraqi Freedom demonstrates

powerfully how cruise missiles and UAVs might threaten our overseas interests. Patriot missile batteries performed immensely better than they did during the first Gulf war. All nine of Iraq’s most

threatening ballistic missile launchers were successfully interVerDate 11-MAY-2000 13:02 Aug 02, 2004 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 D:\DOCS\94774.TXT HGOVREF1 PsN: HGOVREF1
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cepted and destroyed, but the second Gulf war saw the first use of

enemy land attack cruise missiles against Patriot in combat.

American and Kuwaiti Patriot batteries failed to detect any of

Iraq’s low-flying cruise missiles, one of which came perilously close

to striking a U.S. Marine encampment on the war’s opening day.

What’s more, at least two Iraqi ultra light aircraft, which were

feared capable of carrying chemical or biological agents, were detected only after flying over thousands of U.S. troops, equipment

and command facilities prior to a U.S. Army’s divisional advance

on Baghdad.

Iraq’s use of cruise missiles and slowflying air vehicles, which

were manned but needn’t have been, also contributed to the Patriot’s unfortunate series of friendly fire incidents, two of which led

to the loss of two coalition aircraft and the deaths of three crew

members.

America’s adversaries are bound to draw important lessons from

the performance of U.S. missile defenses against Iraq. Referring to

Iraq’s use of cruise missiles, the Chief of Staff of the 32nd Army

Air and Missile Defense Command told the New York Times, ‘‘this

was a glimpse of future threats. It is a poor man’s air force; a

thinking enemy will use uncommon means such as cruise missiles

and UAVs on multiple fronts.’’

At least two reasons account for why we should anticipate an acceleration of interest in acquiring cruise missiles and UAVs. First,

countries wishing to deter U.S. military interventions were unlikely to invest heavily in cruise missiles until American missile defenses performed decisively better against ballistic missiles than

they did during the 1991 Gulf war. Patriot’s success against Iraqi

ballistic missiles in 2003 coupled with problems coping with cruise

missile attacks increases the incentive to acquire difficult to defend

against cruise missiles and UAVs.

Second, American’s adversaries are likely to appreciate the operational advantages of combining ballistic and cruise missile

launches to maximize the probability of penetrating even the best

American missile defenses. Converting small airplanes or UAVs

into weapons-carrying missiles offers a particularly attractive poor

man’s option.

When these in large numbers are combined with more expensive

and sophisticated ballistic and cruise missiles, they raise the stakes

enormously for American missile defenses.

Consider, for example, the dire and unfavorable cost exchange

arithmetic associated with current U.S. missile defenses and conceivable adversary missile threats. The guidance upgrade alone on

the Patriot PAC–2 guidance enhanced missile costs $400,000 per

missile, and each new PAC–3 interceptor roughly costs $3.5 million

dollars per interceptor. A flock of cruise missiles or converted airplanes, several orders of magnitude cheaper, could readily saturate

most economically feasible missile defense architectures. Thus, controlling the quantitative spread of cruise missiles and UAVs

through improved nonproliferation policies is an absolute necessity

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to guarantee confidence in our missile defense expenditures.

Beyond the excellent set of recommendations offered by the GAO

in its report, I would be pleased to discuss additional proposals

during our question and answer time. I thank you, Mr. Chairman.

[The prepared statement of Mr. Gormley follows:]

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Mr. TURNER. Thank you, Mr. Gormley. We’ll move to a series of

question periods of—we’ll do 5 minutes and then a rollover of additional 5 minutes for additional questions, recognizing Mr.

Ruppersberger.

Mr. RUPPERSBERGER. Sure. OK. Can you tell me how from your

perspective, all three, whoever wants to answer, the authority

agencies involved interact with the intelligence community to determine who and what the current threats are and how often are

lists of who we sell to and who we will not sell to updated on this

intel data?

Mr. CHRISTOFF. The intelligence community and the data is used

in the licensing process. In addition to doing what the departments

refer to as prelicense checks, they look at the bona fides of the companies or the countries that are—we’re selling our cruise missiles

and UAVs to and they also incorporate intelligence information

into the interagency process.

Mr. RUPPERSBERGER. Do you think it’s effective and it’s working,

the relationship with getting the data?

Mr. CHRISTOFF. We haven’t looked in detail about that part of

the licensing process. I don’t think I’d want to comment on that.

Mr. RUPPERSBERGER. OK. The way I see that you’ve looked at

your report, there are three stages. That’s before we sell. That’s the

actual transfer. And I think the focus of your report was more of

the end-use compliance. Is that correct?

Mr. CHRISTOFF. Correct.

Mr. RUPPERSBERGER. Now, do any of you believe that the current

authority provided to State and subsequently to Commerce and

DOD is adequate and do you think the GAO findings are the result

of—the GAO findings the result of inadequate authority or failure

to exercise authority they already have?

Mr. CHRISTOFF. I think it’s a failure to exercise existing authority, because the one main point that we want to make in our recommendation to do this comprehensive assessment is that you need

better information. If you only have conducted 33 post-shipment

verifications out of 4,000 licenses, it’s difficult to really thoroughly

assess the risks associated with not doing more, and therefore by

doing more PSVs, you will be able to determine what the potential

risk is and be able to determine what your priorities are, where

you should be placing your resources and how best to use that information in prelicensing decisions as well.

Mr. RUPPERSBERGER. Well, then what would you recommend?

Mr. CHRISTOFF. Well, the recommendations that we made are the

ones that we made in the report. First is that the paucity of the

number of post-shipment verifications that the three agencies have

done is insufficient. It doesn’t give them a basis for believing, as

State does, that there is no problems that have occurred in the

post-shipment verification process. So doing more, going back to

the 4,000 and doing as DOD suggested to us, a statistically valid

random sample, will give you good information about the problems

in the past and then conducting more PSVs in the future as well

and to commit to that.

Mr. RUPPERSBERGER. Do you think it needs more resources or

money?

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Mr. CHRISTOFF. It needs more information, No. 1, to then make

decisions about where the priorities and resources should be targeted.

Mr. RUPPERSBERGER. Where are you going to get the information?

Mr. CHRISTOFF. Going to look at the prior PSVs that have not

been——

Mr. RUPPERSBERGER. And that’s the only area you recommend,

looking at the prior from a random point of view?

Mr. CHRISTOFF. Looking at that, and also we recommended for

the Commerce Department to look into the existing catchall regulations to determine whether or not the scope of those regulations

should be broadened.

Mr. RUPPERSBERGER. Sometimes you need one boss, one person

in authority. Do you see any problems between DOD and Commerce working that through?

Mr. CHRISTOFF. We’ve issued prior reports that have talked

about the interagency process and the need for three departments

to work more closely together to use the intelligence information

that they have available, to make sure that they are transferring

information from one department to the other. So, yes, the interagency process can always be improved considerably.

Mr. RUPPERSBERGER. Well, then, the purpose of this hearing is

to find out how and why. How would you improve it? And I’d like

to hear from the other two also on these questions that I’m asking.

Mr. GORMLEY. Well, let me make one comment in regard to how

one might improve it. It strikes me that all of the recommendations

are necessary but not sufficient, particularly with respect to this

growing concern about a poor man’s air force. When you look at the

necessary elements to put together a poor man’s air force—there is

the concern about effects on commercial enterprise—one can certainly not conceive of regulations that make it more difficult for

people interested in, for example, recreational aircraft to require a

case-by-case review for that. That’s inconceivable, and I couldn’t

imagine that occurring.

But when one thinks about the challenges associated with turning that recreational aircraft requiring a man to fly it into a fully

autonomous cruise missile, there are serious transformation requirements associated with it, the most notable being the creation

of a fully autonomous flight control system to guide that system to

the intended target without a man piloting it.

And there are on the marketplace today—and it’s a recent phenomenon over the past 5 years—I would imagine less than 10 companies which are largely spin-offs of the large aerospace firms that

are now producing what are called variable autonomy flight control

systems. They provide the complete flight management solution for

turning a manned aircraft into an unmanned air vehicle, and it

seems to me that the impact on placing some case-by-case reviews

on these UAV flight management systems would make immense

sense in terms of making that transformation hurdle more difficult

for an individual or a terrorist group who might be interested in

turning that recreational aircraft into a weapon of terror.

There was an attempt in 2003 by the U.S. Government to introduce an antiterrorism proposal that focused on this particular poor

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man’s issue of turning airplanes into terror weapons, and because

it was not sufficiently detailed with respect to precisely what kind

of technology should be controlled, I understand that it was rejected within the Wassenaar Arrangement where it was introduced.

Now, my recommendation would be to clean up that proposal,

focus specifically on the technologies that ought to receive case-bycase review and consider it not only within the Wassenaar Arrangement but within the Missile Technology Control Regime as

well, because they have better, you know, no denial, no undercut

rules that I think would provide for a more effective basis for monitoring these transfers.

Mr. RUPPERSBERGER. OK. And what I’m trying to get to, and I

think you’re answering some of it, and what I’d like to hear from

all three, though, why do you think that there are problems now?

Lack of resources, direct funding or manpower, time, all of that, or

do you believe it’s a lack of just prioritizing? I mean, whenever we

have funding issues and what’s going on now, sometimes it’s a matter of prioritizing. Would you expand on that, Mr. Feickert?

Mr. FEICKERT. I’m really not privy to the interagency process or

what goes on in terms of regulating exports, but one solution might

be examining some of the more critical enabling technologies

that——

Mr. RUPPERSBERGER. Like you referred to, Mr. Gormley? There’s

eight groups?

Mr. FEICKERT. Well, there’s present technologies. For example,

your small fuel-efficient gas turbine engines that have commercial

applicability for business jets, guidance systems, perhaps the seekers, which are the actual guidance system used in the terminal

phases of cruise missile flight. Some analysts have suggested that

looking out into the future, things like fuel cell technology which

could be incorporated into cruise missiles and UAVs to increase

their range might be something worth considering.

Mr. RUPPERSBERGER. Any other comments on that?

Mr. GORMLEY. Let me add one additional comment. I haven’t

been in government service for over 20 years, so I don’t have direct

experience, but I have talked to many people involved——

Mr. RUPPERSBERGER. That might make you an expert.

Mr. GORMLEY [continuing]. In this process.

Mr. RUPPERSBERGER. No offense.

Mr. GORMLEY [continuing]. And I would say that what I hear

consistently from people who have—or are charged with responsibility for dealing with this area in the interagency process is

being overwhelmed by largely the issue of maintaining an awareness of rapid technological change and how that technological

change affects current regimes, and they’re simply understaffed in

my view. So it is a matter of staffing priority from——

Mr. RUPPERSBERGER. That’s the point I was trying to get out of

you, that——

Mr. GORMLEY. And I would also say a matter of priority as well.

Mr. RUPPERSBERGER. Mr. Christoff, anything further from your

perspective?

Mr. CHRISTOFF. I think also focusing on the multilateral export

control regimes. Two years ago when we looked at these different

regimes, specifically the Missile Technology Control Regime, the

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Wassenaar Arrangement, we had several recommendations about

how to improve those regimes themselves. Keep in mind these are

voluntary, nonbinding, consensus-based regimes, and so it’s important to try to have some type of accountability mechanisms put into

these different regimes. Just getting them to share information

among countries using an automated information system so that

you have timely reporting of denials is something that’s lacking, for

example, on the MTCR. So the regimes can be—an important focus

on the regimes is trying to strengthen them as well. I think it’s important.

Mr. RUPPERSBERGER. I’m sure the State Department—you don’t

have to answer the question, but do you see any possibility of

strengthening the regime cooperation? I mean, that seems to be a

huge letdown, and it’s just voluntary. And I understand if one—

there’s one violation, then everyone should abide and not deal with

that group, and that’s not the case and that happens I’m sure on

a regular basis. Do you see that? Do you see any way we could

strengthen the regime issue?

Mr. CHRISTOFF. Well, I think in some of the recommendations we

made, just in terms of getting the regimes to be a little more efficient and effective in sharing information from one country to another. When it takes anywhere from 3 and 6 months for one country to send a denial notice to another country in the MTCR, that’s

not quick enough. That’s important information that should be

transmitted immediately, such as what the nuclear suppliers group

does.

Mr. RUPPERSBERGER. What leverage do we as the United States

have to effectuate that, or would working with other countries to

effectuate that type of situation——

Mr. CHRISTOFF. Well, I think the example of the six out of the

eight proposals that the United States pushed through on the

MTCR is an excellent example of how we got more items on the

control list that just occurred in the past few months.

Mr. RUPPERSBERGER. But you don’t have China a part of the

group. Right?

Mr. CHRISTOFF. No.

Mr. RUPPERSBERGER. Who else? What other major countries are

not part of that, that we need to worry?

Mr. CHRISTOFF. Well, China is obviously the most important nonmember of the MTCR. I mean, they’ve sold cruise missiles to Iran,

Iraq, North Korea, Pakistan. That’s a critical secondary

proliferator. That’s important. You have other—those countries,

those secondary proliferators are also not members of the MTCR.

So they’re important countries that have the capability and currently manufacture cruise missiles. They’re on the cusp of exporting cruise missiles, and they’re not member of the MTCR.

Mr. RUPPERSBERGER. OK. Thank you.

Mr. TURNER. Thank you. Now to our chairman, Mr. Shays.

Mr. SHAYS. Thank you, gentlemen. Thank you, Mr. Feickert and

Mr. Christoff and Mr. Gormley, for being here.

First, which is the greater threat to national security, the UAV

or the cruise missiles?

Mr. GORMLEY. Today I would say that just looking at Operation

Iraqi Freedom, as I mentioned, where a crude first-generation antiVerDate 11-MAY-2000 13:02 Aug 02, 2004 Jkt 000000 PO 00000 Frm 00091 Fmt 6633 Sfmt 6633 D:\DOCS\94774.TXT HGOVREF1 PsN: HGOVREF1
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ship cruise missile called a Seersucker from the Silkworm family

of antiship cruise missiles was used quite effectively and undetected by our Patriot batteries and also created complications by

virtue of changing the rules of engagement so that Patriot radars

had to look both for high-angle ballistic missile—incoming ballistic

missiles and low-flying cruise missiles, which complicates the

whole issue of separating friendly returning aircraft from low-flying

cruise missiles.

So I think that event suggests to me that existing inventories of

cruise missiles, however crude, represent a serious threat, particularly when they’re combined with the use of ballistic missiles.

Now, UAVs is an interesting and more recent phenomenon, I

think, accelerated by virtue of the very effective use and prominent

use and prominent public display of the effectiveness of the Predator in Afghanistan, initially after September 11th, and then its increasing use in other conflicts and the arming of Predator to demonstrate that what had heretofore been a seemingly innocent reconnaissance system now had the capacity to deliver a payload to a

rather significant range.

So I think I would argue that existing inventories of cruise missiles represent the near-term threat and the longer term threat

comes from the UAV and particularly the opportunity that adversaries have to turn very small manned aircraft into so-called cruise

missiles or UAVs armed with weapons of mass destruction.

Mr. SHAYS. Would either of you gentlemen care to add something?

Mr. FEICKERT. Yes, sir, I do. I’m going to look at it from two perspectives, a security threat posed by foreign militaries and a security threat posed by nonstate actors. I think if you look at it from

the foreign military perspective, I believe that probably cruise missiles would pose a more immediate threat. Although they’re available and they’re relatively unsophisticated, it still requires an infrastructure, mission planning and your various mapping technologies. The fact that they can also penetrate most known air defenses also lends itself to military use.

In terms of nonstate use, if you look at some of the cruise missiles—excuse me, UAVs that are available out there, nonstate

groups tend to be a little more unsophisticated. Perhaps it might

be a little easier for them to acquire the UAV which in some cases

can be nothing more than an upscale model aircraft, radio-controlled aircraft, and perhaps employ either conventional or weapons

of mass destruction with that particular vehicle.

Mr. SHAYS. Mr. Christoff.

Mr. CHRISTOFF. Just to cap what Dennis and Andy said was the

order of priority would obviously be anticruise ship missiles. The

predominant of the 75,000 cruise missiles out there, most of them

are antiship cruise missiles. The emerging concern are land attack

cruise missiles because of the capabilities of converting—as Iraq

proved, taking an antiship cruise missile and turning it into a land

attack capability.

And then the emerging threat that I would agree is UAVs. You

couple that with nonstate actors, chem/bio concerns, and you definitely have an emerging threat.

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Mr. SHAYS. You all pretty much agree, it seems to me. I’ve been

kind of wondering how we respond—tell me the justification—I

mean, I know why we want to do it, but tell me the justification

of a country that has cruise missiles deciding that no one else can

have them. How do we sort out the logic of that, and how are we

able to convince others that makes sense?

Let me back up and say are we basically saying to those who

have them, you have them, so let’s make sure more don’t have

them? Is that our logic so we’re just arguing to those who have?

Or are we trying to make an argument to the world as well that

it won’t be in your best interest to have them because your neighbor will have it too? Walk me through that kind of philosophical

question.

Mr. CHRISTOFF. Well, it’s the philosophy of all other regimes, for

example. You know, these regimes that I’ve been referring to, the

missile technology control regime, Wassenaar, etc., these are regimes that are supplier based regimes. The belief that the existing

possessors of these missiles, these dual-use items, these nuclear

materials, etc., have an obligation and a commitment to try to reduce the supply and to educate those nonmembers about the reasons why it’s not in their best breast to obtain these sensitive technologies.

So it’s a two-prong approach of reducing the supply, and that’s

the philosophy within all the regimes, and trying to educate other

regime members about the bad effects of having those types of sensitive technologies.

Mr. SHAYS. Do either of you care to add anything?

Mr. FEICKERT. Yes, sir. In this particular case we may be a victim of our own success. Our research has indicated that a lot of

countries now consider these an integral part of their national security framework, just as in past generations new systems like

tanks and aircraft carriers developed along those lines.

There’s been some criticism by some countries of the MTCR, that

it is sort of a have and have not situation, where certain countries

are allowed to have missiles and UAVs and other countries are not.

There’s no really easy answer to that. I mean, we certainly have

a vested interest in keeping these systems out of the hands of people that intend to do us harm, but at the same time it’s very difficult to try to convince these countries, for example, like India and

Pakistan, to become members of the MTCR. That’s been one of the

central arguments of those two countries for a long time as to why

they don’t want to join that particular agreement.

Mr. SHAYS. Because I look at the UAVs and I wonder at the challenge that’s going on in our own air force—and this is somewhat

of an aside, but I’m thinking of Mitchell trying to convince our military that we should be able to use airplanes to bomb ships, and

what he did was—at least I think I recall he basically brought his

planes in lower and knocked them all out and was ultimately

court-martialed, but there was this tremendous resistance on the

part of the military to use airplanes in this way.

Do you sense from any of your work that there’s a reluctance on

the part of the Air Force to acknowledge that this type of weapon

may in fact make manned flight somewhat obsolete?

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Mr. GORMLEY. I think that is dissipating very rapidly as a byproduct of the lessons learned that come from both Afghanistan

and Operation Iraqi Freedom, but your point is well taken. If one

simply looks at the development of the Tomahawk cruise missile,

I can recall as a—while I was in government service in the late

1970’s, there was enormous resistance at first both within the U.S.

Air Force and the U.S. Navy to promoting the Tomahawk for various missions, not least because the alternative was to deliver munitions by manned aircraft. The whole development program for

the Tomahawk took an enormous amount of time before it was well

accepted that the Tomahawk could play a dominant role, and indeed not until the 1991 Persian Gulf war where the Tomahawk in

the initial attack demonstrated that it could open up corridors and

increase dramatically the effectiveness of follow-on manned aircraft

attacks, where it truly demonstrated that unmanned cruise missiles had an enormously important role to play.

Mr. SHAYS. Let me ask you, from all three of your testimonies,

I am struck by the fact that you are saying to us that cruise missile

and UAV technology is not all that cutting edge anymore. Is that

correct for the most part? So the answer basically by nodding heads

was yes.

And therefore I begin to wonder what about the sharing of the

technology, because basically they’re going to be able to bypass this

anyway. In other words, do you get the gist? So tell me how—so

we do a great job. We don’t share what we know, but so what? Respond to that.

Mr. FEICKERT. In terms of our technology sharing from just——

Mr. SHAYS. I’m going to ask you to speak a little louder.

Mr. FEICKERT. Yes, sir. In terms of technology sharing, to use

cruise missiles for example, there are a number of cruise missile

systems out there that have been developed by more than one

country. Certain countries bring certain expertise. For example, the

Indian-Russian Brahmos, an antiship cruise missile, a supersonic

cruise missile which is going to be entering service in the near future, capitalized on the strengths of the Russian propulsion system

and India’s guidance system. The French Apache has had various

foreign involvement.

Mr. SHAYS. So what you would be arguing to me would be that

they can have much more sophisticated weapons if they are able

to get the technology of others, but the bottom line is that they can

get the basic concept. So are you saying, in essence, it would be

kind of like a 1934 Ford as opposed to a 2004 Ford? It would just

be that kind of difference? It would still be a car, but it wouldn’t

be as good, still be a cruise but not as good? Is that your point?

Mr. FEICKERT. Sir, there are varying levels of technology in

cruise missiles. For example, you’ve got your Silkworm or your

STICs missiles, which are roughly equivalent to a Scud ballistic

missile. I mean, they’ve been around for a long time. They were developed in the late 1950’s, and they’re very adaptable. They’re

found in the inventories of many, many Third World countries.

And then you have some leading-edge cruise missiles like the

French Apache, the South African Torgos cruise missile, which was

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the-art. Some of these foreign cruise missiles are in a sense almost

as capable as our current Tomahawk cruise missile.

Mr. SHAYS. Mr. Chairman, I know I have a red light. Just let me

ask this question if I could. Thank you.

So what am I to infer? Let me ask you this to close. You’re basically saying there are some very sophisticated technologies in

cruise and Predator systems, but can I—and therefore the sharing

of technology there would enable people to advance more quickly,

but can I infer that a fairly simplistic cruise missile or Predator

could still do a hell of a lot of damage?

Mr. CHRISTOFF. Yes.

Mr. FEICKERT. Yes, sir. Absolutely.

Mr. SHAYS. OK. Thank you, Mr. Chairman. Did you want to say

anything, Mr. Gormley?

Mr. GORMLEY. I would simply add that the qualitative—what

you’re referring to is the qualitative spread of cruise missile and

UAV technology, and the interesting way to look at it from my view

is to suggest that the MTCR has been enormously effective in

terms of qualitatively controlling the spread of ballistic missiles. If

it could become as effective in terms of controlling the qualitative

spread of cruise missiles and UAV technology, it will have done an

immense job at achieving a slow, steady, more controllable environment within which we can improve our missile defenses to become

more effective against emerging threats.

Mr. SHAYS. But ultimately these folks are going to get these

weapons?

Mr. GORMLEY. Well, I would hope, for example, that the case of

the French transfer of the Storm Shadow version of—called the

Black Shaheen—to the United Arab Emirates was an isolated incident, and that a missile with a radar cross-section like that missile

had would not occur again. Now, that happened within the existing

regime, where France and the UK permitted that transfer to occur,

notwithstanding objections from various members. If we can prohibit or control those kinds of high quality transfers, then we’ll be

doing an important job.

Mr. SHAYS. Thank you, Mr. Chairman.

Mr. TURNER. Thank you, Mr. Chairman. I want to recognize Representative Burton from Indiana, Representative Duncan from Tennessee and Mr. Tierney from Massachusetts, who have joined us.

Mr. BURTON. Do you want to go with Mr. Tierney first, or do you

want me to go ahead?

OK. I just have a couple of questions. You know, nuclear proliferation that has been taking place over the past couple of decades scares the pants off everybody. We’re worrying about North

Korea right now and others, and after I saw the Hellfire first missile that was fired from that Predator that took out some of Osama

bin Laden’s top people, I think I came to the realization like a lot

of people that this is something—it’s a weapon of the future that

could be used for a whole host of things, and it was something that

ought to be looked at with a jaundiced eye.

And one of the things that concerns me, and you touched on it

a minute ago, was the Chinese and others selling advanced missile

technology, and I don’t know about the kind of technology we have

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in the UAV, but to a lot of countries that we might be very concerned about like Iran and others in the somewhat hostile world.

I don’t know if there’s anybody in the administration that’s here

or not that can give us an idea on what kind of pressures we could

use to bring about some changes in the policies of these other countries and in particular countries like China that are selling this

technology to our potential adversaries. What can be done or what

is being done to stem the tide of this technology getting out of

hand? I don’t think we’re going to see the end of wars in our lifetime, and I’d like for the United States to be a few jumps ahead

of the potential enemies. And I’d like to know if anybody can answer what we’re doing to try to make sure that the kind of proliferation we’re talking about doesn’t continue and what kind of

pressure we can be bringing to bear on our friends like the Chinese, ‘‘who are selling this technology.’’ Any of you want to take a

shot at that? Is there anybody in the State Department or the administration that might want to take a shot at that?

Mr. TURNER. Mr. Burton, we do have the second panel which

perhaps they should——

Mr. BURTON. Should I reserve that question for them?

Mr. TURNER. They certainly could respond on behalf of the——

Mr. BURTON. Well, if you’re out there and I have to leave, I hope

you do answer that question. I’ll try to stick around.

Mr. SHAYS. I’ll ask it.

Mr. BURTON. OK. Thank you. I think that was the only question

I have. I was just listening and I said my gosh, how do we get a

handle on this thing.

Thank you, Mr. Chairman.

Mr. TURNER. Thank you.

Mr. Tierney. No questions.

Gentlemen, when we’re talking about end-use verification and

post-shipment verification, one of the things that strikes me obviously from your testimony is that we’re not doing a good enough

job in those areas and that we can improve it.

Mr. Christoff, you talked about the recommendations that were

made in your report, which included using the existing authority

we have and expanding it on a very limited basis that we’re conducting, what would be prudent or would be necessary. But in listening to the discussion about that, it strikes me as it almost

seems as if the end use verification process would be a cradle to

grave process, that even if we just look at the initial transaction

that occurs, any verification that occurs there would not really give

us assurances that in the future that technology is not going to be

further transferred.

I’d like each of you to talk about just the process of end user verification, the post-shipment verification process, how you can see it

can be enhanced and really the issues and difficulties that we have

of being able to have an effective process.

Mr. Feickert.

Mr. FEICKERT. Yes, sir. In terms of enhancements, because

there’s such a vulnerability in terms of diversion, it would be very

easy the day after a team comes and inspects. Let’s say, for example, gas turbine engines that were destined for commercial aircraft,

it wouldn’t be that hard the day after that team leaves to perhaps

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divert those or even copy those for use in cruise missiles, or even

UAVs.

Perhaps one approach might be on the intelligence side of the

house is actual—the intent of the customer or the country or the

group, what is the intent? I would imagine they would sort of have

a feel as to whether or not these countries are even interested at

all in cruise missiles or UAVs, or possibly they want these things

for legitimate aerospace use.

So I would suggest the possibility of going a step further and

looking at intent. Is there a possibility that they’re being diverted

to a military program or are they going to be used for peaceful purposes?

Mr. CHRISTOFF. I would just reiterate what we found in our report. We can talk about additional things to do in end-use monitoring, but I think the first thing is to do it. When you have done only

4 out of 786 by the State Department, 29 out of 2,490, zero out of

500 for DOD, that suggests that there isn’t much information to

even base decisions on about, is this a problem? Is it a risk?

PSVs are important. They are important because they’re the primary vehicle that you have to check on whether or not an item is

being used as intended after it leaves our shore. It’s important because it’s good feedback into the prelicensing decision. If you know

that a country or you know that a company is not adhering to the

license conditions, then that should feed back into any future decisions about that license or future exports that you would permit.

Mr. GORMLEY. I would really defer to Mr. Christoff’s reaction, but

it seems to me—in reading the GAO report, I can’t help but think

that the issue of staffing and sufficient moneys to be consistent in

end-use assurances is an important issue; and it seems to me, providing those resources to get involved in more than the number

that have historically been the case would be a sensible approach.

So the resource issue is something that ought to be looked at closely.

Mr. TURNER. Mr. Gormley, when you were talking about the petition and its limitations and the threat of the cruise missiles and

UAV, I was struck by the fact that we’ve undertaken a huge investment in air defenses, antimissile technology. Can you give us additional thoughts as to what our current strategies are as we approach these issues and our design of our current defenses?

Mr. GORMLEY. Yes, Mr. Chairman. We have a huge investment

that the Department of Defense has made in U.S. air defenses

since the early 1950’s. But the advent of the cruise missile threat

largely makes those investments, while necessary, not nearly sufficient to deal with the emerging cruise missile and UAV threat, and

that is largely because these threats fly low under the radarscope,

so to speak. And not only do they fly low, but once they reduce

their radar cross-section or add countermeasures, they impose severe difficulties on existing U.S. missile defenses, as they did in

Operation Iraqi Freedom.

And then there’s another perverse issue and that is, when systems fly slow, our modern legacy, airborne and some ground-based

radars actually eliminate slow-flying objects that are close to the

ground in order to permit their signal processing and display systems to operate more effectively. So there are—critically, it seems

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to me—some defense priorities that we need to turn to, and one is

creating a single, integrated air picture to use and link together in

a connected system all of the radars that are looking at these

threats, including returning friendly aircraft, so that we have coverage, a common, single view of multiple aspect angles out to a

large geographic region, so that we can be in a better position to

discern friend from foe.

The second area is simply to increase our battle space by producing better sensors on our airborne platforms and better missile

seekers for our ground-based surface-to-air missile systems and airto-air missile systems.

And finally, we need to make cruise missile defenses cheaper. I

referred to the unfortunate arithmetic associated with the cost of

Patriot missiles and even the guidance upgrade for the PAC 2 system in comparison to the cost of an investment in a large number

of cheap cruise missiles or UAVs; and until we get the costs of our

seekers down, then we are going to have a difficult time as time

passes, as the quantitative threat emerges, unless we can get the

cost of our missile defenses down. And there are existing programs

that are looking at trying to radically reduce the cost of seekers,

which represent about 65 percent of the cost of an intercepter.

Mr. TURNER. Mr. Christoff, you’ve mentioned the number of enduse verification inspections that had been conducted, which, of

course, is a quantification. Did you notice anything about the enduse verification process when an inspection had been undertaken

that related to the quality of the threat? Did you notice any anticipation of an end user that might represent a greater threat for proliferation versus nonproliferation?

Mr. CHRISTOFF. You mean in terms of whether or not they set

priorities on the few that were done?

Mr. TURNER. Yes.

Mr. CHRISTOFF. The Commerce Department, for example, does

focus on certain choke-point technologies when it goes out and tries

to determine where it’s going to be doing its end use monitoring,

and I think that’s good process, good criteria that they’re applying.

So I think that’s one good example of the 29 that they did do, that

does undergo the process of looking at what are the most important

aspects of the technologies or the technologies that they want to

focus on.

Mr. TURNER. Very good. Mr. Ruppersberger.

Mr. RUPPERSBERGER. One question. Regarding the end-use monitoring for compliance, I think, Mr. Christoff, you said that there

were only 33 licenses out of 4,000 that were checked for compliance. Out of those 33, what did you find?

Mr. CHRISTOFF. You mean, what did the departments find?

Mr. RUPPERSBERGER. What did the departments find? What did

you find when you investigated the departments——

Mr. CHRISTOFF. I’d like to submit for the record all the details.

I can’t recall all the details of the 33 licenses, but in some of them

they did find that they were, ‘‘unfavorable checks’’ in a few of the

cases. Some of them did result—I think in two instances it resulted

in some criminal penalties being applied to individuals that had

not dealt with the technology appropriately. There were also ones

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in which they had favorable checks in which there were no problems.

Mr. RUPPERSBERGER. What did you find? You’re telling me what

was bad or not. What did you actually find from a factual point of

view——

Mr. CHRISTOFF. We found that the process—when the process for

end-use monitoring is conducted, the departments do go out and

look thoroughly at the extent to which the end-use efforts that the

departments are doing are accurate. They are looking at whether

or not the item is where it’s supposed to be, there is adequate security, and whether or not the item’s being used as intended. So

when the results are applied, they’re important results and they do

provide good information back to the licensing process.

Mr. RUPPERSBERGER. What happens when you find that there

are bad results? What action is taken——

Mr. CHRISTOFF. It depends on the actions. Congress can—for example, can undertake civil penalties against the company that may

be violating some of the terms and conditions of the license. Others, such as the Customs Department, can engage in criminal penalties as well.

Mr. RUPPERSBERGER. Do you know if that was done?

Mr. CHRISTOFF. Yes.

Mr. RUPPERSBERGER. It was done?

Mr. CHRISTOFF. Uh-huh.

Mr. RUPPERSBERGER. Let me ask you this, too. It seems to me

that 33 out of 4,000 is not much, and that is not really a good sampling of the entire program. Do you think there needs to be a

change in the 33 out of 4,000 as far as the random checking that

is done?

Mr. CHRISTOFF. Absolutely. And when we broached our concerns

with the departments, our original recommendation was go back

and do a comprehensive assessment.

Well, we realized that would be difficult to do, going back to all

4,000, so go back and do a sample, take a statistically valid sample

of those 4,000 and conduct PSVs——

Mr. RUPPERSBERGER. What would that be? What number do you

think that would be?

Mr. CHRISTOFF. I don’t know.

Mr. RUPPERSBERGER. I’m asking your opinion.

Mr. CHRISTOFF. I don’t know.

Mr. RUPPERSBERGER. You’re not going to talk for Mr. Gormley.

He’s telling me he’s nongovernment. What do you think?

Mr. CHRISTOFF. I know. And here I’m from the accounting office.

Mr. RUPPERSBERGER. That even makes it worse. Give it a shot

then. We won’t hold it against you.

Mr. CHRISTOFF. Right. Actually, statisticians will tell you precisely what is a statistically valid sample based on a sample size

of 4,000, and I don’t really know what it is, but certainly it has to

be more than 29 from one department and four from another department.

Mr. RUPPERSBERGER. What do you feel the reason is that we’re

not doing more?

Mr. CHRISTOFF. We’re not doing more? What the department

stated to us was that, No. 1, the resource constraints in terms of

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being able to go out there and do additional ones, and the priority,

it’s not as high a priority as let’s say Stinger missiles and

AMRAAMs, those kinds of checks as well.

Mr. RUPPERSBERGER. OK. So then it gets down to resources and

priority?

Mr. CHRISTOFF. Yes.

Mr. RUPPERSBERGER. Fine. Thank you.

Mr. TURNER. Mr. Chairman, additional questions?

Mr. SHAYS. I don’t have a lot of questions, but I’d like to know,

why were licenses for cruise missiles and UAV-related technology

issued to non-MTCR members?

Mr. CHRISTOFF. That’s a good question, I think, to direct to the

next panel; but 15 to 30 percent of those licenses that we looked

at out of 4,000 went to non-MTCR countries.

Mr. SHAYS. But you don’t know why?

Mr. CHRISTOFF. No.

Mr. SHAYS. And there were no arguments presented.

What countries should the United States be most concerned

about regarding cruise missile-UAV proliferation?

Mr. CHRISTOFF. China is No. 1. Clearly, China, having sold

cruise missiles to particular countries of concern: Pakistan, Iran,

Iraq, North Korea. And also I think I referred to these emerging

markets where you have certain countries that currently manufacture cruise missiles, but they’re not exporters and they are also not

members of the MTCR such as Egypt, Israel, Oman, Iran as well,

Pakistan.

Mr. SHAYS. So they’re making their own——

Mr. CHRISTOFF. Yes.

Mr. SHAYS. But they’re not exporting.

Mr. CHRISTOFF. Not yet.

Mr. SHAYS. But they’ve probably got technology to enable them

to create their weapons?

Mr. CHRISTOFF. Yes.

Mr. SHAYS. Thank you, Mr. Chairman.

Mr. TURNER. Thank you.

Do any members of the panel have anything else they wish to

add before we move on to the next panel?

We thank each of you for participating.

Moving on to our second panel, which will include Mr. Matthew

Borman, Deputy Assistant Secretary for Export Administration,

the Department of Commerce; Mr. Robert Maggi, Managing Director of Defense Trade Controls, Department of State, who is accompanied by Mr. Van Diepen, Director, Office of Chemical, Biological

and Missile Nonproliferation, Department of State; Lieutenant

General Walters, U.S. Air Force, Defense Security Cooperation

Agency, Department of Defense, and Ms. Lisa Bronson, Deputy

Under Secretary of Defense for Technology Security Policy and

Counterproliferation, Department of Defense.

We appreciate your attendance today, and participation. Before

you all get comfortable, perhaps you would all stand, please, so we

can administer the oath.

[Witnesses sworn.]

Mr. TURNER. Please note for the record that the witnesses have

responded in the affirmative.

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We will begin this panel with the testimony of Mr. Borman.

STATEMENTS OF MATTHEW S. BORMAN, DEPUTY ASSISTANT

SECRETARY OF COMMERCE FOR EXPORT ADMINISTRATION,

DEPARTMENT OF COMMERCE; ROBERT W. MAGGI, MANAGING DIRECTOR OF DEFENSE TRADE CONTROLS, DEPARTMENT OF STATE; LIEUTENANT GENERAL TOME H. WALTERS,

JR., USAF, DEFENSE SECURITY COOPERATION AGENCY, DEPARTMENT OF DEFENSE, ACCOMPANIED BY VANN H. VAN

DIEPEN, DIRECTOR, OFFICE OF CHEMICAL, BIOLOGICAL

AND MISSILE NONPROLIFERATION, DEPARTMENT OF

STATE; AND LISA BRONSON, DEPUTY UNDER SECRETARY OF

DEFENSE FOR TECHNOLOGY SECURITY POLICY AND

COUNTER-PROLIFERATION, DEPARTMENT OF DEFENSE

Mr. BORMAN. Thank you, Mr. Chairman and members of the

committee.

Mr. TURNER. Mr. Borman, would please move your microphone

in front of you. As we said in the last panel, these do appear to

be directional. So if you have it in front of you, it would be helpful.

Mr. BORMAN. How does that sound? Thank you.

Mr. Chairman, Mr. Vice Chairman, and members of the committee. It’s a pleasure to be here to testify before you on this important

topic. I have a short oral statement and ask that my full written

testimony be entered into the record.

The Department of Commerce’s Bureau of Industry and Security

is responsible for administering controls on U.S. Dual-use exports

for reasons of national security, foreign policy, nonproliferation,

and short supply. In this regard, the Bureau vigorously administers and enforces missile technology and anti-terrorist controls to

stem the proliferation of systems that can be used to deliver weapons of mass destruction. We carry out our mission working closely

with the Departments of Defense, State, Energy, Homeland Security, and Justice, as well as the Intelligence Community.

National security is the primary focus of Commerce’s Bureau of

Industry and Security. We are keenly aware that our Nation faces

significant threats both from terrorist groups and from countries

seeking to acquire weapons of mass destruction and the means to

deliver them. Although the export controls we administer cannot

solve all of these problems, they do have a crucial role in denying

terrorists and proliferators some of the tools they need for their

hostile operations. As requested, I will address how the Department of Commerce mitigates the proliferation risks posed by cruise

missile and UAV technology, paying particular note to the General

Accounting Office’s recent report.

We appreciate GAO’s work on this issue and note that the GAO

did not conclude that U.S.-origin items are contributing to the proliferation of cruise missile and UAV technology. Although we do

not believe GAO fully analyzed all of these issues, we are nonetheless in the process of addressing the two recommendations in the

GAO report.

Export controls are most effective when implemented on a multilateral basis. The Missile Technology Control Regime [MTCR], is

the primary multilateral organization that addresses exports of

items which can be used in cruise missiles and UAVs. The MTCR

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currently has 33 member countries, including many of the key

manufacturers and exporters of cruise missiles and UAVs.

The MTCR is highly focused on stemming the spread of missile

systems capable of delivering weapons of mass destruction. Important steps the MTCR has recently taken include amending its

guidelines to address concerns regarding terrorism, adopting new

definitions for missile range and payload to sharpen the regime’s

focus on missile systems with WMD delivery capability, expanding

controls to include short-range unmanned aerial vehicles which

could have applicability in spreading chemical and biological

agents, and also adopting catch-all controls.

I also note that two of the other multilateral export control regimes, the Wassenaar Arrangement, which deals with conventional

arms and dual-use items related to conventional arms, and the

Australia Group, which deals with chemical and biological weapons, agents and precursors, are undertaking efforts within their jurisdictions to enhance controls related to cruise missiles and UAVs.

Continuing to work within the multilateral framework is essential to the success of our nonproliferation goals, including stemming

the proliferation of cruise missiles and UAVs that could deliver

weapons of mass destruction.

Consistent with our MTCR commitments and nonproliferation

objectives, the United States implements an extensive export control system intended to stem the proliferation of weapons of mass

destruction and their delivery systems. The Department of Commerce has jurisdiction for the export of dual-use items, items that

have civilian and military applications, including items both enumerated on the Commerce list, as well as uncontrolled items. Commerce’s controls directed to preventing the proliferation of cruise

missile and UAV technology include inclusion on the Commerce

control list of all items on the MTCR annex that are not covered

by the Department of State’s munitions list, additional unilateral

antiterrorism controls on lower-level items that have missile or

other weapons applications, catch-all controls that require exporters to obtain a license for the export of any item, even an uncontrolled item, if they know or are informed that the item will be

used in or by certain countries for prohibited weapons of mass destruction or missile delivery activities.

I would note that these catch-all controls also extend to nonexport activities, such as contracting, servicing or financing of U.S.

persons anywhere in the world, regardless of whether any U.S. origin items are involved. And under this provision, a U.S. person was

criminally convicted of violating the Export Administration regulations by failing to apply for a Commerce license to broker the

transmission of material to be used as a missile propellant in Iraq;

and it is important to note that in that case the material was of

foreign origin and did not even enter U.S. territory. So the catchall controls really have quite an extensive territorial reach.

We also publish the entity list, which is a list that identifies specific end users in countries throughout the world that pose a proliferation concern. A license is required for all exports for most entities on the entity list.

We also prohibit exports and reexports of any U.S.-origin items

to persons designated by the Department of the Treasury as speVerDate 11-MAY-2000 13:02 Aug 02, 2004 Jkt 000000 PO 00000 Frm 00102 Fmt 6633 Sfmt 6633 D:\DOCS\94774.TXT HGOVREF1 PsN: HGOVREF1
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cially designated global terrorists, specially designated terrorists or

foreign terrorist organizations.

In addition, a critical component of our export control success is

our outreach program to U.S. industry. We have an extensive outreach program to inform U.S. industry of their export obligations.

Thus, we have an extensive set of controls to prevent the proliferation of missile technology, including cruise missiles and

UAVs; and this set of controls covers sensitive items, sensitive uses

of uncontrolled items, weapons of mass destruction-related activities and terrorists.

Let me now turn to what we are doing to enhance these already

robust controls. We are in the process of reviewing our existing

missile catch-all controls and have identified options for further enhancement of these controls. The options we have identified will be

submitted for interagency review shortly by the Department of

Commerce.

I would also note in this regard that our engineers, who have extensive experience and expertise in both commercial and military

aerospace applications, are skeptical that a functioning cruise missile could be constructed out of uncontrolled parts and components.

We also will undertake an assessment of dual-use exports related

to cruise missiles and UAVs to determine if U.S. exporters and foreign end users are complying with license conditions.

In conclusion, while we have an extensive system of controls that

I think minimizes the likelihood of proliferation of cruise missiles

and UAVs based on U.S.-origin technology, dual-use technology, we

are taking steps to reduce that likelihood even further.

Thank you for your attention to this important issue, and I will

be pleased to answer any questions you have after the other witnesses have testified. Thank you.

Mr. TURNER. Thank you.

[The prepared statement of Mr. Borman follows:]

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Mr. TURNER. Mr. Maggi.

Mr. MAGGI. Mr. Chairman, Mr. Tierney, Mr. Shays, thank you

very much for having us here today. It’s a real pleasure to be here

to talk about this very important issue and discuss the views from

our colleagues at the General Accounting Office.

As stewards of this Nation’s defense trade controls and exports,

we have no higher priority than ensuring that the recipients of defense articles and services comply with U.S. export control laws

and regulations. As such, and there’s so much at stake, I actually

welcome views and practical suggestions on how we can be doing

a better job. This is real important to us. I have a prepared statement, and with your permission, I’d like to have that submitted for

the record, please, sir.

To begin with, there’s an awful lot we agree about with the GAO.

They did a lot of hard work and we appreciate their views.

First of all, we’re welcoming the attention that they’ve put on the

issue of post-shipment verifications. That’s really important.

We also share the concern of the report having to do with proliferation of cruise missiles as well as UAV technologies.

We also agree that the capabilities and the use of cruise missiles

and UAVs have expanded around the world and we need to be paying attention to it.

Finally, we do agree that we need to be conducting more end-use

checks, and we’re on our way to doing that.

But there are other areas where we’re not in complete agreement. I’m not sure that we actually agree with the threat as presented in the report. I think that was quite a picture that we just

heard from our colleagues on the prior panel, and that’s a very

worrisome issue, but I’m not sure that those are things that have

occurred as a result of our system or our parts or our equipment.

The picture was an accurate one, but I’m not sure it was driven

be diversion of U.S. equipment.

Additionally, I think that with regard to concern of the homeland

danger, we’ll have to be looking at that as well.

Finally, we certainly don’t agree with the views in the report

having to do with the effectiveness of export controls. I believe that

end-use verification is very important, but of singular impatience

is the full range of activities that we take to make sure that defense goods and services are properly managed when they leave the

United States; and I think it gives a misimpression of the full degree and the range and depth of the activities we take to make

sure that the right stuff ends up in the right place.

Mr. Ruppersberger started on a very good point about balance

and tension between two priorities. For us, it’s the tension between

making sure that important weapons and technology stay out of

the hands of people we don’t want them to be in, while, at the

same time, we help our friends and allies have in their possession

the equipment and the technology available for them to help share

the burden of world peace. That’s real important for us.

Strategic balance and regional stability are our major concerns.

Last year, we adjudicated 55,000 cases worth over $90 billion. We

are headed for zero defect. We need to get every single one of those

right the first time, and to do that, we rely on a full spectrum of

tools that go beyond just post-shipment verification. They include

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the actual licensing process, preshipment checks, compliance and

enforcement activities, and very close work with other groups of

folks and other agencies.

The report, I think, could have given a little more credit to the

full range of activities that we take, including how our registration

process works, how our watch list works; how our flag system

draws attention to suspicious activities; the vetting that we do

within the Department of State and with the Department of Defense and the Department of Commerce; the work that’s done by

the Missile Tech Export Committee checking on whether or not

these technologies should be going places. The idea of establishing

and validating the bona fides of the end user and the confidence

that we have in them is important for us to know to shape our

views of who should be getting what sorts of things.

I would make note that with the exception of six Predator UAVs

for Italy, no complete systems were licensed by the Department of

State, the vast majority of the cases that were reviewed of that 786

were spare parts for UAVs that were in the possession of known

allies, and that the vast majority of the cases ended up in wellknown programs that had very high levels of transparency.

I would also make note that one of the things that allows us to

track what the cases look like is a piece of our automated process

called ‘‘commodity codes,’’ which we are updating. So sometimes

what looks like the export of an actual piece of hardware turns out

to be a license was for marketing or a spare part.

To be clear, compliance and enforcement are critical. We’ve restructured. We took an organization and made a separate office

just to focus on compliance. We’ve given them a lot of resources.

We’ve upped our compliance staff from 3 to 30 people in the last

15 years. We added 5 in the past year; there will be 10 more this

year. The growth of the people and keeping them on board will

help us with the excellence of the quality of the cases that we’re

working on.

We’ve now got a new automated system, so by doing this, augmented by computers and, particularly, attaching our computer

work with that of the Customs folks now known as ICE, we will

be able to see what actually leaves each day in a contemporaneous

way and be able to see how we track that against the use of the

end users.

And our work with the other agencies continues to be important.

Our end-use checks benefit from what goes on with, for example,

Customs and Justice. Last year, we had 665 cases that we cooperated with the Justice Department and Customs on, for a total of

over $100 million in seizures. We assessed over $63 million in fines

to folks that violated the Arms Export Control Act and the international traffic in arms regulations.

The report, in conclusion, addresses a very valid concern and

we’re concerned as well, but I don’t think it gave a complete picture

of how we do our business. Almost a third of my team is either active duty military or veterans. We’re serious about weapons and

we’re serious about the technologies surrounding them. Every day

we are mindful of our responsibility not only to the American taxpayer, but to the world community. We’re not complacent.

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We also recognize the need to stay ahead of the emerging threat.

While past performance is no guarantee of future success, it’s

worth noting that neither we nor the report are aware of any areas

in which our technologies have left and have presented a threat

back to us.

Finally, three points: We pay special attention to cruise missile

and UAV technology transactions. We are increasing the number

and effectiveness of our end-use monitoring checks, and we are increasing the quality in the way we do our targeting on UAV and

MTCR-related actions.

Thank you for your attention.

Mr. TURNER. Thank you.

[The prepared statement of Mr. Maggi follows:]

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Mr. TURNER. General.

Lieutenant General WALTERS. Mr. Chairman, distinguished

members of the committee, thank you for the opportunity to appear

before you today to discuss the Department of Defense’s controls on

items that we sell to our friends and allies.

Mr. Chairman, I have a longer written statement that I have

submitted for the record.

The Defense Security Cooperation Agency manages U.S. foreign

military sales. Those are government-to-government sales, typically, $12 to $13 billion annual. We do that to achieve very specific

goals: to strengthen America’s alliances and partnerships, to help

our friends and allies defend themselves, to build trust and influence with those friends and allies in peacetime so that we can gain

access in times of crisis and then be interoperable when we fight

together.

In all of this, there’s a dynamic tension, on the one hand providing highly capable U.S. equipment to friends and allies, but at the

same time making sure we protect ourselves, our forces around the

world, and America. We fully recognize our responsibility to make

sure the equipment we transfer only goes to the right hands and

is only used for its intended purpose.

We agree with the thrust of the GAO report to make sure foreign

end users are complying with the conditions of the transfer. We’ve

got an extensive process in the Pentagon to establish a trustworthiness of the end user before the transfer decision is made. It’s

focused on two key questions: Does the prospective user have the

capability to protect our equipment as we would; and second, does

he have the will to do that? There is no more vigorous debate over

arms transfers than the one that goes on inside the Department of

Defense before the transfer, for one simple reason: If we get it

wrong, we’re first in line to deal with the consequences.

The GAO has recommended that we beef up postshipment verification after transfer, and we will do that.

Now, the drafters of the 1996 amendment to the Arms Export

Control Act chose their words with care when they told us to establish end-use monitoring programs to the extent practicable and to

provide reasonable assurance that end users are complying with

our requirements to protect the equipment we transfer. Since the

GAO investigator spoke with us a year ago, we have published specific guidance designating manned portable air defense system,

MANPADS; Javelin attack missiles; advanced medium-range airto-air missiles, AMRAAM; night vision devices; TOW-B antitank

and antibunker land attack missiles; and now cruise missiles and

UAVs for increased postshipment verification. We’ve gotten Secretary of Defense approval for four additional manpower billets for

this purpose, and we’re in the process of hiring those people now.

We have begun work to create an end-use monitoring data base

application on a Web-based system; and we have reached agreement with the Defense Threat Reduction Agency to support our efforts in inspection visits with their manpower.

I’ll close by noting that the GAO report did not find any evidence

of misuse or diversions of military equipment transferred through

the foreign military sales system. That’s a good sign that our processes are working now. But I do agree that we can and should do

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more to raise the end-use monitoring bar higher to be clear in our

own minds that we have that reasonable assurance that those who

receive our equipment are protecting and using it properly.

Thank you, Mr. Chairman, and I look forward to the questions.

Mr. TURNER. Thank you, General.

[The prepared statement of Lietenant General Walters follows:]

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Mr. TURNER. Mr. Van Diepen.

Mr. VAN DIEPEN. Thank you, Mr. Chairman. I’ve got no statement, but I will be prepared to answer questions.

Mr. TURNER. Thank you.

Ms. Bronson.

Ms. BRONSON. Good afternoon, Mr. Chairman. Thank you for the

opportunity to appear before you today to discuss how the Defense

Technology Security Administration [DTSA], formulates its recommendations to the Departments of State and Commerce in the

development of export control lists to help prevent the spread of

missile technology. I have submitted written testimony, which I

ask be included in the record.

The Defense Technology Security Administration is a defense

field activity of the Office of the Under Secretary of Defense for

Policy. In addition to my position as the Deputy Under Secretary

of Defense for Technology, Security Policy and

Counterproliferation, I serve as the Director of DTSA. DTSA provides technical assessments of license applications referred from

the Department of State and the Department of Commerce. DTSA

also works closely with these two organizations in the development

of export control regulations and procedures.

During the past 4 years, DOD has undertaken a comprehensive

review of the U.S. munitions list. Two of the categories of the

USML review are relevant to today’s discussion. USML Category

IV controls our missiles including cruise missiles. Category VIII,

which controls military aircraft, also controls unmanned aerial vehicles or UAVs.

The Category IV review began in June 2002, when the DOD

working group for that category first met. Over the next 6 months,

a total of seven meetings were held and included technical experts

from DTSA, OSD Acquisition, Army, Navy, Air Force, the Missile

Defense Agency, and the Institute for Defense Analyses.

This working group closely examined the Category IV controls for

cruise missile systems, components, materials, test facilities, manufacturing equipment and tooling, and associated technologies. The

working group ultimately determined that the existing Category IV

control is appropriate and no new control or definition was proposed for cruise missile systems. However, new control language

was proposed for test equipment and facilities for manufacturing

equipment and tooling specific to cruise missile development and

production. Existing control language on [inaudible] and composite

materials for heat shields or nozzles was also revised to better describe the items meriting export control.

DTSA submitted the working group draft language for interagency review in October 2003, and the interagency agreement was

obtained in December 2003.

The Category VIII review was conducted in a similar fashion beginning in 2000. My written testimony describes the Category VIII

review in detail.

The Defense Technology Security Administration has provided

technical advice in support of the development and modification of

the Missile Technology Control Regime Technical Annex since

1991. As new threats evolve and technologies mature, our technical

exports develop proposals to modify the Technical Annex and

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evaluate proposals submitted by other U.S. Government agencies,

as well as by our MTCR partners.

After the September 11 terrorist attacks, the threat from the use

of crop-dusting aircraft or UAVs for spread of chemical and biological agents was highlighted. In response, DTSA recommended adding a new control in March 2002 at the U.S. Interagency Missile

Annex Review Committee. A U.S. white paper, drafted by DTSA,

was presented and discussed with our MTCR partners during the

biannual MTCR Technical Experts Meeting in April 2002.

Following the April Technical Experts Meeting, DTSA developed

a formal USG proposal to control aerosol-dispensing UAVs and presented this proposal at the September 2002, multinational Technical Experts Meeting. New controls on UAVs equipped for aerosol

spraying were ultimately adopted into the multinational Technical

Annex in April 2003.

Chairman Turner, in your opening statement, you asked whether

in today’s security environment, payload and range limits continue

to make sense. The U.S. proposal to control aerosol-dispensing

UAVs adopted by the multilateral MTCR does not have a range

limitation. This was a significant shift in thinking for the Missile

Technology Control Regime.

The new controls on UAVs equipped for aerosol spraying is just

one example of the improvements made to the Missile Technology

Control Regime Technical Annex over the past 3 years. Other examples are included in my written testimony.

Besides controlling specific hardware, it is important to control

the underlying technology and the know-how that enables production of UAVs and cruise missiles. To identify future technologies

that may yield military capabilities beyond that envisioned during

the review of the current export controls, DTSA created an interdisciplinary team to identify emerging technologies that are likely

to result in fundamental warfighting paradigm shifts. They began

their work 6 months ago.

While I must stress that our review is at the most preliminary

stages, our initial internal review identified certain enabling technologies related to UAVs for further examination. Specifically, technologies related to miniature sensors, advanced data links, and

micro-miniature guidance and navigation components have been

identified as key enabling technologies for UAVs. Although these

are only initial results, I believe that our ongoing review will underscore the importance of controlling these emerging systems and

capabilities.

Mr. Chairman, I trust my comments have addressed the specific

question raised by your staff, how does DTSA formulate its recommendations to the Departments of State and Commerce concerning export control lists? I would be happy to answer any questions

you may have regarding this subject.

Thank you.

[The prepared statement of Ms. Bronson follows:]

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Mr. TURNER. Thank you.

We will begin our questions with Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman. I thank the witnesses

for their testimony today.

Let me just start with a rather general question. The recommendations in the GAO report indicate that a gap in dual-use

export control regulations could enable individuals in most countries in the world to legally obtain, without any U.S. Government

review, U.S. dual-use items not on the Commerce control list to

help make a cruise missile or UAV.

Mr. Borman, do you accept that statement as accurate or do you

have some issue with that?

Mr. BORMAN. No. We are working, actually, to draft the regulatory change to address that, but I would note that the example

that I think gave rise to that recommendation, this individual in

New Zealand who had a Web site who claimed that he could make

a cruise missile based entirely on uncontrolled parts and components. As I said, our engineers, who have a lot of experience in

both commercial and military applications, are very skeptical that

someone could truly build, in effect, a cruise missile solely through

that method. But, nonetheless, we are looking to revise our regulations to close out that potential loophole.

Mr. TIERNEY. When do you think that revision will be done?

Mr. BORMAN. I would say within the next 6 weeks.

Mr. TIERNEY. Mr. Maggi.

Mr. MAGGI. Yes, sir.

Mr. TIERNEY. Do you accept that statement as accurate or do you

have contrary feelings and opinions about that?

Mr. MAGGI. I’m fine with Mr. Borman’s position.

Mr. TIERNEY. Now, the other statement here that concerns me is

that because the departments have conducted so few PSV visits to

monitor compliance with the U.S. Government export conditions on

transfers of cruise missiles, UAVs and related dual-use technology,

the extent of the compliance problem is unknown.

If I could just ask each of you, do you think that we have our

hands around what the extent of the problem is, or do you think

that there are large potentials out there for types of violations that

we may not be aware of because there have been so few PSVs?

Mr. BORMAN. I guess I can start from the Commerce perspective;

and the first point I’d make is that certainly I’ve seen no information that leads me to believe that U.S.-origin items, at least dualuse items, are being diverted for cruise missile or UAV proliferation. So that’s a starting point.

Having said that, we are certainly again willing to go back——

Mr. TIERNEY. Can I interrupt? I hope you don’t mind. Just that,

is it that you have seen no information because we just haven’t

done the inquiry or we haven’t made the visits or——

Mr. BORMAN. No. Well, there is information that is made available to us on a regular basis from the Intelligence Community that

relates to these issues. So the actual checks are one part of the way

we view compliance, but obviously there is other information that

comes in to us that also helps us evaluate that. I can’t say too

much more in open session, but we don’t rely solely on the end-use

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checks to determine whether particular licenses are being complied

with.

Mr. TIERNEY. With respect to the other means that you use to

monitor the situations, how much after the delivery is made do

they continue? Do they continue ad infinitum or do they stop for

a period of time, so after that we would have a concern?

Mr. BORMAN. Well, let me put it another way.

Information comes to us on a regular basis not necessarily on

specific transactions, but on actions of foreign parties that come to

the attention of others in the U.S. Government.

Mr. TIERNEY. So——

Mr. BORMAN. But let me then come back to also the GAO point.

I think one of the things that GAO could have explored further

in their report is that, as Mr. Maggi mentioned, in reviewing a license application, there’s a whole range of things we look at. And

so, for example, if the transaction is going to a foreign party that

we have previously done an end-use check on, even though it otherwise meets the criteria for a check, we usually don’t go ahead and

do that again because we have a high degree of confidence that end

user, particularly if it’s a U.S. subsidiary, for example, will comply

with the license conditions.

In some cases, we get government-to-government assurances.

And in some cases, there is technology transferred, and the technology transfer is obviously much more difficult to do an end-use

check on. It’s much easier to check on a thing than it is on technology.

And so up front in the licensing process is where we really put

a lot of emphasis in determining, is the foreign party reliable and

likely to comply with the license conditions? So while we take

GAO’s point that we certainly should look at doing more of these,

we take some issue with their view that so few of them are done

we have no idea whether compliance is there or not.

Mr. TIERNEY. Thank you.

Mr. TURNER. Thank you.

One of the issues that was discussed was concerned the Missile

Technology Control Regime and its restrictions. It seems as if a lot

of the testimony we received indicated that there needed to be an

effort to strengthen or curb proliferation through increasing the restrictions or at least the cooperation among the regime.

Could each of you talk a little bit more about that issue, giving

us some information from your perspective on the operation—the

agreement among the regime and also ways in which you can see

that it could be strengthened.

Mr. VAN DIEPEN. If I might start, Mr. Chairman, first of all, the

critical function of the MTCR is to try and put in place coordinated

export controls over the most threatening pieces of equipment and

technology from a missile proliferation standpoint, and the regime

members have put together the so-called ‘‘annex,’’ which is the list

of specific equipment and technologies that all of them have agreed

to control according to the regime’s guidelines. The fundamental

purpose is to make sure that these transfers get adequate scrutiny

and that they are looked at to make sure that they don’t inadvertently contribute to proliferation.

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So most items are subject simply to a case-by-case check against

agreed nonproliferation factors, the end result being to try and

make sure that they don’t contribute to the delivery of weapons of

mass destruction or to the activities of international terrorists, a

new aspect of MTCR controls that’s been added within the past 2

years.

Certain systems and certain technologies are subject to what’s

called a ‘‘strong presumption of denial,’’ meaning that they are so

sensitive that normally they will not be exported except on socalled rare occasions that are especially well justified in terms of

the guidelines. And certain cruise missiles have been controlled by

the MTCR from its advent in 1987.

Additional cruise missiles and UAVs were added to control in

1993; and as Ms. Bronson noted in her testimony, still further

UAVs were added to control within the last 2 years. In addition,

this past year we got agreement that so-called ‘‘catch-all controls’’

that control items, including missiles not on the MTCR Annex

when they are destined for WMD delivery, have now been made an

MTCR-wide requirement. So what started as a U.S. unilateral control is now a multilateralized MTCR control.

In addition, the MTCR technical experts continue to look for

areas, including in the UAV area and the CBW delivery area which

is related, where we continue to improve the controls. We’re looking at things like, are there additional propulsion systems, additional guidance systems that should be added to MTCR control?

And then, finally, there’s a great deal of intelligence and information exchange including on cutting-edge threats such as cruise missiles and UAVs, including on the progress of missile programs of

proliferation concern, including in the UAV area to help sensitize

all the members to the threat to the methods that proliferators use

to try and get equipment and technology. Thank you.

Mr. TURNER. Ms. Bronson, Mr. Gormley testified that the United

States had unsuccessfully attempted to introduce a measure of control over additional technology when it introduced an antiterrorism

proposal to the Wassenaar Agreement in early 2003. He stated,

‘‘expressing concern about the possible terrorist use of kit airplanes

or other manned civil aircraft’’ as a poor man’s UAV, the U.S. proposal sought export control reviews and international notifications

for all equipment systems and specifically designed components

that would enable these planes to be converted into UAVs.’’ he goes

on to recommend that the executive branch authority should redirect their efforts toward accomplishing this and redefining their

proposal. Do you have any comments on his testimony?

Ms. BRONSON. He raises an area where we don’t have controls,

and the way in which we go ahead and work our process in the

U.S. Government is to attend to get multilateral before we go

ahead and add something to the CCL.

From our perspective, adding the conversion kits for civil aircraft

to the CCL is a desirable thing to do. The specifics on how we

would go about modifying our proposal in the Wassenaar Arrangement are still under study, but it continues to be an area of concern, and we will take into account what we have heard today as

we refine that process.

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Mr. TURNER. Do you think it might be accomplished soon or are

we pretty far away from a resolution of that?

Ms. BRONSON. It is very difficult to predict how soon one can get

multinational agreement on a proposal in the Wassenaar Arrangement, so I wouldn’t even attempt to predict whether or not that

agreement could be achieved in a short period of time.

Lieutenant General WALTERS. Mr. Chairman, if I could add one

more point to that question and answer, it’s my understanding that

the components for these so-called ‘‘conversion systems’’ are already

under control, principally MTCR-controlled items, and I think the

issue we’re talking about here is sort of an additional explicit control that controls them as conversion kits themselves in addition to

the individual components that go into a conversion kit.

Mr. TURNER. Thank you.

Mr. Maggi, you testified that end-user control and end-user verification, postshipment verification, is a process that you did agree

with in the testimony that you had heard. It was something that

needed to be enhanced, increased, and was desirable. Would each

of you comment about your various agencies and what you’re doing

to increase what we might expect after this hearing in accomplishing both increased end-use verification and postshipment verification.

Mr. MAGGI. Yes, sir. Whether there had been a hearing or not,

we had already been headed for about a 20 to 25 percent increase

in the postshipment verification checks. We’ve already discussed

that it is just one part of the full range of all of the activities we

do to make sure that we understand how items are being used

after they are transferred.

Earlier, I believe it was mentioned that there was a thought

about a cradle-to-grave requirement to be watching what was going

on. That’s a very good point; and part of how that happens in many

areas is because our active duty folks from the Department of Defense are actually out there engaged with the folks that are using

some of this equipment. So our goal from the direct licensing perspective is, in fact, looking to go from about 400 to about 500

postverification checks this year with actually a desire to go higher

than that in the not too distant future.

You had asked earlier, sir, about the requirement for more resources. From our perspective, I think we’re in pretty good shape

for what we have, but the folks that are actually doing our enduse postmonitoring checks or postshipment verifications are the

country team people out at the embassies. So this will make them

work a little harder.

Mr. TURNER. Mr. Borman.

Mr. BORMAN. Again, we are in the process of reviewing both our

protocol and—for doing end-use checks particularly on these types

of items; and our records so far—and as I mentioned, it is important to take into account the other factors that come into play in

doing the postshipment verifications, the up-front work—who the

parties are, what the transactions that have been previously

checked are to the same end users.

Mr. TURNER. Does anyone else want to comment on that?

General, one of the points that our chairman had made is, regardless of what efforts the United States may undertake in conVerDate 11-MAY-2000 13:02 Aug 02, 2004 Jkt 000000 PO 00000 Frm 00168 Fmt 6633 Sfmt 6633 D:\DOCS\94774.TXT HGOVREF1 PsN: HGOVREF1
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trols or efforts to limit proliferation, this technology is technology

that is going to at some point become dated and of age where it

would be widely available and less subject to just our control or the

control of those countries who are party with us currently to agreements.

We heard in testimony from the previous panel about our efforts

for our air defenses, the limitations of the Patriot missile, and anticipation that our efforts alone might not be successful in stopping

the proliferation of these types of missiles or UAVs.

What are some of the things that you would recommend that we

look at in increasing—or anticipating a need to increase our air defenses in this area.

Lieutenant General WALTERS. That’s a very large question and

I don’t presume to be the expert in that area. I was at Asian Aerospace 2 weeks ago, at the Singapore air show. The first day, they

had a UAV conference that was attended by many countries and

hundreds of people. The numbers that we walked away with, GAO

said, 32 countries, 250 UAVs. By our quick math, I think at that

conference we calculated it to be 39 countries and 425 UAV systems. So UAVs right now are at about the Orville and Wilbur

stage. Every mom-and-pop bicycle shop operated out there is basically trying to figure out how to put together a small engine and

a set of wings and go fly those things. So horses are out of the corral when it comes to UAVs.

Now, building one and operationalizing it is an entirely different

matter and something meaningful, particularly something that’s a

threat to the U.S. homeland.

The air defenses, to get back to your question specifically about

the air defenses, trying to build—a previous witness testified to a

single integrated air picture. We have spent a lot of long time doing

that in this country, focused originally at a Soviet threat. I’m not

sure that some of that system hasn’t degraded since the fall of the

Berlin Wall.

The importance of having an integrated air picture that’s capable

of seeing very small cross-section vehicles is important to the

United States. It’s important for the homeland. It’s equally or more

important for forward deployed forces in theaters. So that’s a body

of work that the Pentagon is very hard at work on. The combined

air component commander has that as a very high, high priority to

do that. To give you a more expert opinion on the whole thrust of

air defenses, I would have to turn to other experts in the Pentagon

and ask them to give you more specific details.

Mr. TURNER [presiding]. Thank you, General.

Mr. Ruppersberger.

Mr. RUPPERSBERGER. Yes. Mr. Maggi, I interpreted from your

testimony that you felt that the GAO focused too heavily on the

compliance process. Could you walk through the compliance process and tell how it works and also what you would do to change

it?

Mr. MAGGI. I certainly am of the opinion that the report focused

on the postshipment verification part of the compliance process too

much. The entire activity that we do with regard to licensing from

my perspective is in fact compliance. Making sure that in the first

step the individual, the entity trying to export is registered with

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the Department of State, that’s the first step toward compliance.

Do we know who they are, do we know where they are, do we know

the people that run the company, do we know their background?

The second thing is, have they provided us—with regard to compliance, have they given us all the data that we need to know:

What is it, where it’s going to go, and why is it going there?

The third part of this is as we’re checking into the actual application, we have a watch list that we run names against. There’s

about 50,000 entities in that watch list, and that’s the very first

thing that happens before we go any further into the application

process.

Once we get through those parts of making sure that the application is compliant with law and regulation, we then look into the actual substance of what is it that they’re trying to transfer, and

through about a third of our cases we send them out to our colleagues in the Department of Defense and other places inside the

State Department to get their views and recommendations on how

that works.

Let me back up. You were asking me about the blue lantern

process and the postshipment verification. Well, as we go through

the beginning and the front end of the checks on this and we look

to see are there any extraordinary things that are going on, our

teams are put together with regard to the commodities that they

manage, so they’re generally pretty familiar with who the people

are that are in the industry. They also try to be pretty familiar

with who are the shippers, because those are people that we’re very

concerned about: Who are the people that are actually moving

these defense goods or services? So if a flag comes up or if this is

an unknown entity, then we’re very mindful of who those people

are.

The GAO folks did a great job in looking at the 786 cases, and

made a good point about they’re a very small number at the State

Department that were actually looked at, but in conjunction to

those, there had been in that same timeframe almost 100 checks

that had been done against the same parties that were in those

cases that came under scrutiny.

Mr. RUPPERSBERGER. Well, why wasn’t that stated? So you’re

saying it’s not 33 but it’s 100 now?

Mr. MAGGI. No. What I’m saying is the words in the GAO report

were absolutely correct. Of the 786 cases that they looked at, we

did 3 special blue lantern, end-use monitoring, post-verification

checks. But in conjunction with those, of the entities that were associated with those cases, there had already been another actually

97 checks done on the same parties in those cases in a timeframe—

in that same timeframe. So we had—Mr. Borman was saying, we

had already looked at some number of those folks in those cases

having to do with another license for another commodity or another

product going to the same end user.

Mr. RUPPERSBERGER. OK.

Mr. MAGGI. So you asked me what would I be doing. No. 1, compliance is life. Trust, yet verify. So we really believe in this stuff.

We’re automating. We’re coming up with a new system called TREX in which we’ll be able to keep track of all of the compliance

activities that are going on. It’s going to be connected with our

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main licensing system called D-Trade which came online this year

in full operation, and we’re also interoperable with the AES, the

Automated Export System that you can get from the Customs folks

at Homeland Security. By seeing what goes out every day through

this automated process, we think we will greatly improve our efficiencies and our knowledge of what we’re doing.

The next thing we’d do is continue to add more folks.

Mr. RUPPERSBERGER. OK. Thank you.

General Walters, in your testimony page 11, you state that you

rely on military departments to determine your priorities. How

does that work with the State Department and the Intelligence

Community?

Lieutenant General WALTERS. We rely on the military departments to determine what’s really—what are their crown jewels,

what’s important to them; what, if it was coming back in the other

direction, would really bother them. We go through a very complex

release process. First, we only sell to our friends. Kind of an important point to make to begin with. We look very hard at their capability and their track record and their will. And it’s important to

note that the service that’s making the determination to sell something to a country is—let’s take antiship cruise missiles and let’s

take harpoon missiles that the United States makes and sells. U.S.

Navy are the people that are deciding whether or not to sell the

harpoon to another country, and they’ve got a track record with the

countries. They’re talking to the intelligence services. The intelligence agencies get a vote.

If it’s a higher-end process system and we go through an exceptions to national disclosure policy review, joint staff gets a vote.

The U.S. Navy gets a vote. The intelligence agencies get a vote.

State Department gets a vote. So all the players get a vote, and

the most important player is, in the case of the harpoon missile,

the U.S. Navy, which is the organization that’s most concerned

with what’s going to happen if it comes back at me. And I can look

you in the eye and tell you with absolute certainty that the U.S.

Navy, in dealing with the cruise missiles, that it has worked

with—and those are the majority of the ones that we’re talking

about here—is absolutely certain that it’s maintained an edge and

is not threatened by what it sold.

Mr. RUPPERSBERGER. OK. Now, bearing in mind this is an unclassified session, does the Intelligence Community provide a satisfactory assessment of the cruise missile and UAV threat to support

export control decisions?

Lieutenant General WALTERS. To my mind they do. For our purposes and to my mind, particularly when we’re talking about a

military threat back to us, I believe that they do. In terms of pieces

and parts and technology transfer, I’ll defer to the other witnesses.

Mr. RUPPERSBERGER. Well, Mr. Maggi, could you respond to that?

Does the Intelligence Community provide a satisfactory assessment

of the cruise missile and UAV threat to support export control decisions?

Mr. MAGGI. Yes, sir.

Mr. RUPPERSBERGER. Could you elaborate?

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Mr. MAGGI. Well, you may have noticed I was smiling, because

you can never have too much intelligence, and understanding what

all the——

Mr. RUPPERSBERGER. Are you talking about personal intelligence

or—no, I’m kidding.

Mr. MAGGI. Well, that was my staff. Having that intelligence and

understanding what it means is often very difficult, and knowing

how to use it, particularly in the compliance area, is very complicated for us, because it then gets complicated with regard do

what we know, what we can share with others, how we can go to

other governments. We spoke earlier about how we induce others

to do the right thing, and frequently we aren’t able to share that

data.

Yes, we get the data we need.

Mr. RUPPERSBERGER. One of the reasons I ask the question, because there’s an ongoing debate within the Intelligence Community

of the volume that we’re getting in intelligence that because of security clearances and issues like that, there’s a lot of information

that probably should be maybe unclassified, it needs to go to different agencies that is not in order for you to do your job.

Mr. MAGGI. Well, I think we get plenty of support at the classified level. Of course, I don’t know what I don’t know, but I think

we get a pretty steady stream of data. My larger concern is not

being able to share it with other governments, to be able to point

out to them the shortcomings of people in their countries.

Mr. RUPPERSBERGER. OK. Thank you.

Mr. TURNER. Mr. Chairman.

Mr. SHAYS. Thank you. I thank the gentlemen and the lady for

being with us.

I would like to first know from each of you the point you agreed

with the most in the first panel and the point you disagreed the

most. And by the way, I appreciate you all being here for the first

panel. That’s helpful to us.

Mr. MAGGI. May I start, sir?

Mr. SHAYS. Yes.

Mr. MAGGI. The thing I agree with the most is that there’s a

threat out there, and we really need to pay attention to it. The

thing I disagree with the most is that we’re contributing to it.

Mr. SHAYS. ‘‘We’’ being?

Mr. MAGGI. We, my organization, is contributing to that threat,

the licensing process.

Mr. SHAYS. Well, weren’t they basically saying you’re contributing, but you can take steps to do a better job? You don’t disagree

you can do a better job?

Mr. MAGGI. Sir, we can definitely do a better job, but I don’t

think we’re contributing to the threat that we heard presented by

the first panel.

Mr. SHAYS. Mr. Borman.

Mr. BORMAN. I have a similar reaction, and that is I think——

Mr. SHAYS. Is your mic on?

Mr. BORMAN. The GAO report perhaps gives the impression that

there are U.S. origin items, either dual use or munitions, going into

this proliferation threat, and I just don’t think there’s any evidence

for that. But certainly we agree that there are steps that we can

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take, both on the regulatory side and on the compliance side, to

look to improve both our performance in both of those areas.

Mr. SHAYS. General.

Lieutenant General WALTERS. GAO does us a great service when

they say they’re—when they highlight the threat for both UAVs

and cruise missiles. That’s unarguable. And to the extent that they

say you can do better—a better job in postshipment verification,

yeah, we can. And so we’ll work on that. But let me put that in

context——

Mr. SHAYS. That’s really not in dispute, is it?

Lieutenant General WALTERS. No. Let me put it in context. I’m

only focused on government-to-government foreign military sales.

Well, we haven’t sold any UAVs through the foreign military sale

system, No. 1, for us, so I don’t have anything to go count in the

UAVs that we participated with.

In the cruise missiles, GAO says 500 cruise missiles. Our best

records show between 1998 and 2002, 317, of which 207 have been

delivered. The countries that they’ve been delivered to are the

United Kingdom, Canada, Denmark and Taiwan. I’ve got high

trust and confidence in those countries and in our allies.

The countries that we’ve sold but not delivered to include Imam

and South Korea and the United Arab Emirates. So there’s nothing

for me to go count at this point.

What the report doesn’t say is that we sold over 3,000 earliermodel cruise missiles, primarily harpoon—simple model—simplermodel harpoons from many years ago. We did our first tiger team—

we’ve done three tiger teams. We’ve done one to Egypt, and I was

quite pleased with what happened. Mr. Leon Yates here, who was

our end-use monitor when he went there, asked to go take a look

at their harpoon missiles that we had sold. They’re not part of

this—the GAO’s report. And the Egyptians were quite forthcoming,

and they were quite happy that we were there to visit. They took

him to their central storage facility. He went through all of their

records. They willingly, happily, led him into the facility, and he

was so impressed at the point, that he didn’t feel the need to count

serial number by serial number every single weapon that was in

there, you know.

So on the basis of a sample of one, with one country having gone

out there, I’ve got pretty reasonable assurance that at least for that

customer, that things are not seriously off track.

We’ll do more counting. There’s a problem with accounting, and

that is national sovereignty. Some of the—we have a right, and we

make it very clear that we have a right to go in and count. We ask

them to verify to us, and so they do when we sell some of these

cruise missiles, for example, and other systems. But we tell them

very clearly that we reserve the right to come in. But even so, if

I go down to Australia or the U.K. or some of our friends, they say,

come on guys; you know we’re fighting side by side with you, is this

really necessary?

So there are some sensitivities out there, and we’re going to have

to bruise a few sensitivities and step on a few toes as we increase

our sample size.

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UAVs and cruise missiles aren’t the biggest problem that I have,

and I don’t think that what we, the United States, are selling in

the UAV and cruise missiles are the problem. It’s all those others.

Mr. SHAYS. The others?

Lieutenant General WALTERS. It’s all the others. It’s China and

North Korea, and everybody else who is building other—both missiles and UAVs. So, yes, we can focus on ours, but it’s kind of like

we’re looking through a soda straw at a small piece of the problem,

and there’s this carrier looming over my shoulder. And that’s everybody else that’s selling things out there, in my view.

The biggest challenge I have in postshipment verification isn’t

the UAV and the cruise missile. It’s actually my colleague, Ms.

Bronson, who from the Defense Technology Security Agency, has

asked me to go count all night vision devices. Now, that is a much

bigger problem.

Mr. SHAYS. I was a little confused when you said your biggest

challenge was Ms. Bronson. Maybe we’re onto something here.

Lieutenant General WALTERS. She’s asking me to go count night

vision devices. Now, that’s a problem on an order of magnitude

harder.

Mr. SHAYS. Mr. Van Diepen, do you have any point that you

would strongly disagree or agree with that you wanted to highlight

from the previous panel?

Mr. VAN DIEPEN. I would strongly agree with the first panel’s

emphasis on the novel and future aspects of the UAV and cruise

missile threat, the possibility of combined ballistic missile and

cruise missile attacks, the risk of nonstate actors acquiring.

In terms of disagreement, I think there may be an overemphasis

on export control as a way of dealing with this problem, particularly the nonstate actor problem, where, frankly, someone within

the United States without exporting anything or importing anything could acquire the wherewithal to put together the kinds of

rudimentary UAVs the panel was talking about here and use them

to attack us here at home. And so export controls is only one of a

whole series of tools that one has to use to try to impede the proliferation threat.

Mr. SHAYS. Thank you. Makes you wonder, though, if we need

to be keeping a better track on what’s happening here, I mean,

from the point you make.

Ms. Bronson.

Ms. BRONSON. I would agree with two things in particular that

I heard. First, I wholeheartedly agree we need to look to the enabling technologies as we think about what are the newer controls

of the future.

Second, I agree we need to do more postshipment verifications

and end-user checks. I think that there’s a bit of an overstatement

of the effectiveness of the Iraqi cruise missile, and I want to look

a little more closely at the data that informed that judgment.

I’d also point out that the cruise missiles that are most capable

are very, very difficult to build, and we have to be careful not to

lump the ability to build the UAVs and the ability to lump effective

cruise missiles together in the same category.

Mr. SHAYS. Thank you.

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The first panel, as I heard them, said on the short-run cruise

missile, their biggest concern. In the long run it’s UAVs. And I

think they said in the long run it’s the UAVs for nongovernment

organizations, terrorist organizations. Would you disagree with

that basic position?

How do we measure the success if people are able to get this

stuff outside even the agreements we have?

Mr. MAGGI. I think, sir, the people that you’re looking at in front

of you, at least myself, we’re fighting a holding action. Over time,

technology is going to change. Over time, technologies will proceed

in a way, and our goal is to maximize it being in the hands of our

friends and allies and minimize it being in the hands of the enemies. And it’s a job we work on every day, and over time it’s just

going to all change.

Mr. SHAYS. You have this kind of—giving me this impression it’s

kind of like the finger in the dike. Is it that bad?

Mr. MAGGI. Well, it’s not a finger in the dike. There’s a whole

load of people working on this; but over time, technology—earlier

today you mentioned is this a 1938 Ford or a 2004 Ford. Well,

colloquially, if I get hit by either one of them and get run over, I’m

in trouble. So——

Mr. SHAYS. I hear you. I said I would ask a question—Mr. Burton’s question, but it was really—I just want the record to note he

asked what is being done to limit the proliferation of cruise. And

you were asked, given that we have the multilateral agreements

and we have the export controls and what else, and I think that

question was pretty much answered. So I just want the record to

show that it was answered.

Is there anything that any of you would like to put on the record

before we adjourn this hearing?

Mr. TURNER. If not, thank you, Mr. Chairman. We’ll be adjourned.

[Whereupon, at 4:19 p.m., the subcommittee was adjourned.]

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