Small arms pose a particularly severe threat to security and stability in several regions of the world and are closely linked to narcotics trafficking and terrorist activities. According to Michael Renner of the Worldwatch Institute, light arms have two primary sources. The armies of the former Cold War protagonists in Europe, Russia and North America represent one source. Shrinking armies and arsenals produce excess equipment that is given away or sold at low prices. The second major source is developing countries, as many civil wars are coming to an end.
Armies demobilize or disintegrate and weapons become readily available.
Numerous agreements and conventions regarding the small arms trade have sprung up within the last five years. The code of conduct, which is backed by seventeen Nobel Peace Prize winners, would establish standards for determining which nations are eligible to receive weapons transfers. In June of 1999, the European Union passed a voluntary code that committed its member governments to work toward greater consultation concerning arms transfers. In addition, evidence suggesting that Indonesia used British-made jets during the conflict in East Timor has raised questions within the United Kingdom about its arms transfer policy. This would build on and globalize the standards incorporated in previous regional organizations' conventions.