(Issue No. 16, July 1992)
Sales in progress Missile proliferation provisions tightened 16 June---The Commerce Department issues an interim rule in the Federal Register listing destinations for which, beginning today, a validated license is required "when an exporter knows that the exported items will be used in the design, development, production or use of missiles." Missile projects in Brazil, China, India, Iran, North Korea, Pakistan, South Africa and the entire "Middle East" are listed.
N. Korea sanctioned second time for missile exports 23 June---The State Department has determined that Lyongaksan Machineries & Equipment Export Corporation, the Changgwang Credit Corporation (both of North Korea), the Syrian Scientific Research Center and the Syrian Ministry of Defense "have engaged in missile technology proliferation activities" that require the imposition of Missile Technology Control Regime sanctions contained in the Arms Export Control Act. For a period of two years, beginning today, no licenses for export to the above-named entities will be granted, no US government contracts can be entered into with them, and no products produced by them can be imported into the US. Because North Korea is a non-market economy, the sanctions will apply to all activities of the government related to missile development and production, as well as development or production of electronics, space systems or military aircraft. In March the same sanctions were invoked against the same two North Korean entities for missile dealings with Iran (see ASM no. 13-14 p. 1). Navy still cool to sub sales 23 June---Congress receives a report from the Secretary of the Navy (required by the FY92 DOD authorization bill) on criteria it considers when determining whether to support or oppose export licenses for US-produced submarines. The Navy's basic criterion is that no advanced technology from the US nuclear-propulsion submarines be incorporated into diesel submarines exported. Several members of Congress---motivated by concern over constituent jobs in their districts and US defense-industrial base considerations--- have been pressing the Navy to permit US shipyards to build or assemble diesel-powered submarines for export. The Navy opposes this on national security grounds. Because there are currently no diesel submarine production yards in the US, any new diesel sub export production would take place at the nuclear sub yards. The Navy believes that the potential for inadvertent incorporation of advanced silencing, propulsion or sensor technology, etc. from the US nuclear-powered sub program is high. In addition, the Navy worries that free-market competition in submarine sales will pressure US suppliers to actively seek to incorporate advanced technology in their exports, in order to become competitive in an already saturated market. (Twelve countries currently build diesel subs.) The Navy report unequivocally states: "Construction of diesel submarines for export in US shipyards would not support the US submarine shipbuilding base and could en- courage future development and operation of diesel submarines to the detriment of our own forces." Several commercial sales proposed 21 July--- The Pentagon notifies Congress of its intention to lease three naval vessels to Chile; the State Department proposes to license major defense equipment to Israel, Hong Kong and Thailand. Notes from some hearings CIA/DIA on Former Soviet Arms Industry/Sales 8 June---The Subcommittee on Technology and National Security of the Joint Economic Committee hears testimony from the CIA and DIA on economic transitions in the FSU and East Europe. CIS arms industry According to Kathleen Horste, Special Assistant for Russia and Eurasia at the DIA, Russia inherited about two-thirds of the defense-industrial infrastructure of the former USSR, and it is the only republic that "retains a sufficiently broad R&D and manufacturing base to produce a full range of strategic and conventional weapons." The Ukraine assumed about 15 percent of the total Soviet infrastructure, including some major factories for production of naval surface combatants, strategic missiles, tanks, and transport aircraft, as well as several key R&D and test facilities. The remainder of the industry (about 20 percent) is scattered among the other former republics, none of which "possesses the industrial infrastructure or economic resources to support major arms industries," she says. The Russian arms industry is in a crisis state, and massive lay-offs are imminent, Horste predicts. "Russian officials warn that up to two million defense industry workers could lose their jobs by the end of the year. ... Confronted with the prospect of widespread unemployment and the daunting economic and social costs involved in defense industry restructuring, the Russian government is reevaluating its strategy. In a concession to defense industrialists, who remain a potent political force, President Yeltsin has named former defense managers to key posts in his cabinet...." Arms sales "The Russian government is actively promoting foreign arms sales, seeing in them a means of generating much-needed hard currency and staving off unemployment in the defense sector," she says. "In a 24 February interview, President Yeltsin termed arms sales a `shock absorber' that will ease the impact of defense procurement cuts." But, she adds, there are several countervail- ing forces that make large-scale Russian weapons sales unlikely: stiff competition in a shrinking world arms market; inability to provide credit or financing for arms sales; perceived poor performance of Soviet-made weapons in the Gulf War; and the collapse of the former centralized arms sales bureaucra- cy. Due to these factors, arms deliveries from the former Soviet Union in 1991 were down 65 percent from 1989 levels, she notes. [According to CRS data, the FSU made $5 billion in arms sales in 1991.] Export controls Russia is still in the process of establishing a system for managing its weapons sales, but she says that "President Yeltsin and other CIS leaders recognize, however, that they must balance their efforts to sell arms with assurances to the west that they will control weapon exports and prevent proliferation. Government approval will no doubt be required for all legal sales. Nevertheless, the new states will have a more difficult time controlling arms transfers than their Soviet predecessors because many of the former controls over society have been removed, customs services as yet are largely ineffective, and a growing number of vendors are gaining direct access to the international market." Report Encourages Greater US-European Arms Production Integration 10 June---In a hearing before the SASC on the role of the US in Europe in the 1990s, former Army Chief of Staff Edward Meyer presents a report prepared by the Johns Hopkins Foreign Policy Institute, which notes the need for US leadership to ensure that a trans-Atlantic competition in arms production and arms sales does not increase with the end of the cold war. "As arms production winds down, cooperative agreements among Western partners are essential to avoid a dangerous competition in Third World markets and duplication of efforts in the West. Western nations should increase their efforts to promote specialization in defense production and to link US and European defense production in a coherent strategy that will promote, rather than undermine, trans-Atlantic defense cooperation." Judiciary Hearing on US Policy Toward Iraq 23 June--Frank DeGeorge, Commerce Department Inspector General, testifies before the House Judiciary Committee on his investigation into the alteration by the Commerce Department of export records for Iraq. Notation that $1 billion worth of trucks were designed for military use, and that the end-user in Iraq was a military facility, was deleted from Commerce Department licenses issued between 1985-1990 before the records, which were subpoenaed in December 1990 by a House Government Operations subcommittee, were sent to Congress. DeGeorge's investigation found no evidence that knowledge of the alterations went beyond Dennis Kloske, then-head of the Bureau of Export Administration. Kloske, who was reportedly forced out of the Commerce Department in 1991, after having criticized the Administration's export policies toward Iraq, told the Committee that higher-ups in the department, including the general counsel, were aware of and approved of at least some of the deletions. The committee also hears testimony from Frank Lemay, a mid-level State Department official in the office of the Undersecretary for Economic Affairs, who warned in a 13 October 1989 memo that US agricultural loan guarantees might have been misused by Iraq to underwrite Iraqi purchases of military equipment. Lemay's memo noted that the US Attorney for Atlanta---who had been investigating the Banca Nazionale del Lavoro---said that "there was some indication that diverted funds (and possibly direct bank-lent funds) were used to procure nuclear-related equipment." In addition, the memo stated that the director of the Agriculture Department's Commodity Credit Corporation operations division had expressed concern that commodities purchased with US loan guarantees "were bartered in Jordan and Turkey for military hardware." Lemay urged that the State Department be cautious in authorizing further Iraqi loans. Distribution of the memo was tightly restricted, Lemay testified, and his recommendations were ignored. A few weeks after his memo was circulated in 1989, $500 million in new credits were extended to Iraq. Developments in the Middle East 24 June---Edward Djerejian, Assistant Secretary of State for Near Eastern and South Asian Affairs testifies before the HFAC Europe/- Middle East Subcommittee on recent developments in the Middle East. (He reappears before the Subcommittee the following week (30 June) to continue the Q&A.) Djerejian says "Overall, our policy toward Iraq is on track, and international support for and compliance with UN sanctions remains strong, albeit not perfect." The administration, he says, has been "working closely with the Government of Jordan to establish an effective and credible sanctions enforcement regime there," but has not succeeded yet. "We have informed the Jordanians that further progress in our bilateral relationship and our ability to provide assistance to Jordan depend not only on the peace process, but also on effective Jordanian cooperation and measures to enforce UN sanctions against Iraq." Instability in the eye of the beholder He also says that Iran's "pursuit of a destabilizing arms build-up" remains a matter of serious concern to the administration. [CRS data show that from 1984-1991 Saudi Arabia took delivery of $54.3 billion of weapons, military construction and training, while during the same time Iran took delivery of $16.1 billion. During much of this period Iran was engaged in a war with Iraq, causing it to buy and expend much of this weaponry. In 1991, according to the CRS data, Saudi Arabia contracted to buy $7.8 billion, while Iran contracted to buy $1.9 billion of arms.] After extensive questioning about Syria's sponsorship of terrorism, and its lack of eligibility for US arms sales or military aid because of this, Rep. Lantos asks Djerejian how US military vehicles ended up in Syrian hands after the war. "Who gave US military vehicles to Syria? Did we do that, or did the Saudis?" Djerejian is "not sure anyone specifically gave [them away]. I think they just happened to fall into the hands of the Syrians and the Bangladeshis in the aftermath" of the war. Lantos finds it difficult to visualize a large number of military vehicles "just sort of passively" falling into Syrian hands. Djerejian states that certainly the US didn't transfer them, from which Lantos infers that the Saudis transferred them. Djerejian ducks into classification at this point, saying he can't proceed further in open session along this line of questioning.... State Dept and Salvadorans Still Sticking to their Guns? 9 July---Assistant Secretary of State Bernard W. Aronson testifies before the Subcommittee on Western Hemisphere Affairs of the House Foreign Affairs Committee. Aronson says the US is "seriously concerned" about FMLN compliance with agreed procedures for demobilization of forces, and that the weapons inventory they presented to the UN "seems to describe about one third of the weapons the FMLN actually possesses." Specifically, he claims that the FMLN drastically undercounts surface-to-air missiles. He also asserts that the FMLN continues to receive weapons from Nicaragua. Finally, he says that the State Department has "numerous strong indications that the FMLN is selling arms to the URNG guerrillas in Guatemala, and may be preparing to sell or transfer arms to other revolutionaries in Honduras and Peru." For FY93 the administration is requesting $40 million in security assistance for El Salvador: $13 million for the Demobilization and Transition Fund, "to be used to reintegrate military and FMLN ex-combatants into civilian pursuits"; and $27 million in "non-lethal assistance." This aid is essential, he says. "We expect to play a very active role in helping El Salvador's Armed Forces to reduce and restructure. Continued U.S. support, especially our emphasis on human rights and proper administration, is critical to maintain our influence and ensure compliance with the peace agreements. ... Moreover, sensitive border disagreements between El Salvador and Honduras, stemming from the "Soccer war" of 1969, are due to be decided soon at the International Court of Justice in The Hague. To create an imbalance between these two countries' military services would be dangerous and destabilizing at this time." Israeli Foreign Military Aid: The `Dotan Affair' 28 July---The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce holds a public hearing on the role of General Electric and the DOD in the illegal diversion of $40 million of Israeli military aid by an Israeli Air Force General, Rami Dotan, and Herbert Steindler, a GE aircraft engines sales manager. GE CEO John Welch and Senior Vice President Frank Doyle testify, as does Lt.Gen. Teddy Allen, Director of the Defense Security Assistance Agency (DSAA). In opening the hearing, Chairman John Dingell notes that Congress gives $5 billion of taxpayers' money away annually in foreign military aid loans and grants. This money is to be spent on weapons acquisitions authorized by the US government. In addition, he notes, each recipient of military aid must sign a loan or grant agreement stipulating "that if fraud is suspected in the use of these funds, that nation must cooperate fully in any US investigations, including making current and former government officials available for interviews by US investigators." Both of these stipulations appear to have been violated in this affair: the Israeli government has denied requests by the Department of Justice, DOD and the Subcommittee to interview General Dotan (now Private Dotan, serving a 13 year jail term) and Harold Katz, a former counsel to the Israeli Ministry of Defense who was implicated in laundering the stolen money. In his testimony, Gen. Allen says the Pentagon does "not accept Israel's position that the text of the grant agreement excuses Israeli noncompliance for reasons of `sovereignty, national security, and the public interest.' ...[T]he administration still believes that the GOI [government of Israel] is required to provide the DOJ [US Justice Dept.] with direct access to all persons involved in the Dotan case and is continuing discussions with the GOI in an effort to persuade them to do so." Allen acknowledged the possibility of a cutoff of Israeli foreign military aid this fall if Israel doesn't cooperate with the investigation. The majority of the stolen funds were transferred to Israel, according to Welch, where they were used for unauthorized projects on Israeli military bases. While the Israeli government maintains that Dotan was a "rogue operator", Dingell wonders how he could have injected tens of millions of dollars into military bases without the Israeli military leadership questioning where it came from. Doyle, a member of GE's corporate level Compliance Review Board, says that most of the GE engine division's operations are scandal-free. It is only the foreign military financing program ---and specifically direct commercial sales to Israel funded by FMF---that has been a problem. (Israel spends about 99 percent of its annual $1.8 billion in FMF on direct commercial contracts.) Dotan and Steindler were able to channel funds through front companies that the two insisted GE use as subcontractors on specific sales contracts. (Of GE's accommodation of some rather unusual business requests by Dotan, Welch said there was "clearly an over emphasis on customer-satisfaction"!) When asked if FMF was "ripe for this kind of abuse," Doyle hedges, answering only that it is a complex administrative system, and GE was "new to it," resulting in insufficient oversight of the program on GE's part. As a result of the scandal, GE restructured its foreign military sales operations to avoid the use of subcontractors. They now systematically negotiate and document FMF-funded contracts and have created special "Israel and Foreign Military Financing Program screening boards" to monitor relevant activities. Now, Doyle assures, GE is prepared to cope with the complexities of FMF sales! Gen. Allen says the DSAA is "firmly convinced that the Dotan scandal does not represent a failure of DSAA's procedures for monitoring Israel's direct commercial procurement program. ...The Dotan case is the first incident of fraud involving Israel's FMF financed commercial contracts," of which he says, there have been over $19 billion since 1971. The commercial purchasing program has never been audited, he acknowledges. Pressler Amendment & Commercial Arms to Pakistan 30 July---The Senate Foreign Relations Committee holds a hearing on the "Pressler amendment" to the Foreign Assistance Act, and the Bush Administration's adherence to it. In October 1990, President Bush was unable to make the certification necessary to permit continued US military assistance to Pakistan. Since that time, however, over $120 million in commercial arms sales to Pakistan have been licensed by the State Department. The Congressional sponsors of the measure and the State Department have differing interpretations as to whether commercial arms sales are prohibited. Sen. John Glenn, long-time Senate activist on nuclear non-proliferation and one of the principals behind the Pressler amendment, testifies on the history and intention of the amendment: The amendment "clarified---by its broad prohibition on all arms transfers under any US law---that a failure to meet these standards would lead to a cutoff of not only assistance but of military sales as well. Let me just add at this point that neither the legislative history nor the text of the amend- ment itself contains any written or implied exclusion of commercial arms sales from the scope of these sanctions. Indeed, it is useful to recall that in past testimony at least one State Department witness has also dismissed this peculiar argument for allowing commercial arms sales to continue in the event of a nuclear violation. At a hearing of this Committee on November 12, 1981, I asked Undersecretary of State James Buckley to describe how a nuclear detonation by Pakistan would affect our transfers of F-16 aircraft and he replied that such an event would, in his words: `...dramatically affect the relationship. The cash sales are part of that relationship. I cannot see drawing lines between the impact in the case of a direct cash sale versus a guaranteed or US-financed sale.'" The other principals involved in crafting and passing the amendment in 1985---Sen. Larry Pressler and Sen. Alan Cranston---also state that it was their intention that all arms transfers to Pakistan be barred if the President was unable to make the necessary certification. The State Department's Principal Deputy Legal Adviser, Michael Matheson, testifies that in the State Department's "statutory interpretation" of the Pressler Amendment, the operative language does not deal with "licensing". He says that military "assistance" is the subject of the prohibition, not commercial arms sales. Congress can and has in the past explicitly banned direct commercial sales, and it didn't do so here, he maintains. "Statutory practice" dating back to the Carter Administration demonstrates a consistent pattern of not applying the ban to direct commercial sales, he says. He cites sections 3 and 36 of the AECA and 502b of the FAA as other measures where the Administration assumes that commercial sales may be li- censed when FMS are banned. As to press and Congressional claims that the State Department had tried to sneak the commercial licenses by Congress, Matheson says the licenses were openly noted in the regular reports the State Department is required to send to Congress, as well as in a publication of the Center for Defense Trade. Senator Richard Lugar argues that, while the Pressler amendment was a good and neces- sary compromise at the time it was passed, stopping commercial arms sales to one country "will not help" redress the problem of nuclear proliferation in South Asia and asserts that two years of Pressler sanctions have made no positive impact on the situation. He makes a plug for the continued provision of F- 16 spare parts, saying that this affords us the ability to assure that the aircraft are not modified for nuclear delivery, since General Dynamics contract personnel would be present. Sen. Glenn outlines the failure of the government's decade-long "constructive engagement" policy of providing advanced conventional munitions to Pakistan in order to deter their nuclear ambitions. "The `aid-and-trade' and `waivers-for-favors' policies for restrain- ing bomb programs in both Iraq and Pakistan were complete failures," he says. From 1982-1990, the US gave Pakistan $2 billion of weapons and licensed almost $800 million in dual-use goods to facilities in Pakistan, "including certain destinations widely know to be associated with nuclear and missile pro- grams." During this same time, Pakistan made steady progress toward its acquisition of a nuclear weapon. Glenn provides for the record a list of 50 nuclear events clearly demonstrating this. Glenn recommends that the US halt all commercial arms sales---especially of F-16 spare parts, notify our friends and allies (especially France and Russia) of our decision, and encourage them not to undercut our sanctions policy by selling Pakistan nuclear delivery capable aircraft. Legislation passed and pending Iran-Iraq Arms Non-Proliferation Act of 1992 18 June---Rep. Howard Berman introduces this bill, H.R.5434, as a House companion to S.2543, introduced by Senators Mc Cain, Gore, Thurmond and Helms in April (see ASM no. 13-14). The bill would make it US policy "to oppose any transfer to Iran or Iraq of any goods or technology, including dual-use goods or technology, wherever there is reason to believe that such transfers could contribute to that country's acquiring chemical, biological, nuclear, or advanced conventional weapons." The measure differs from the Senate version in that it expands the definition of conventional arms to include "advanced military aircraft" and submarines, as well as several other types of weaponry covered by the Senate bill. Countries identified as "knowingly" making sales that would contribute to the acquisition of these types of weapons would undergo suspension of US aid for one year. In addition, the US would vote against the extension of loans or financial or technical assistance to the sanctioned country for one year in international financial institutions; codevelopment and coproduction of any items on the US munition list would be suspended for one year; technical exchange agreements would be suspended for one year; no items on the US munitions list would be exported to the country for one year. Russian Aid Bill Passes Senate 2 July---The Senate passes S.2532, the "Freedom for Russian and Emerging Eurasian Democracies and Open Markets Support Act" by a vote of 76-20. This bill authorizes $470 million in aid for Russia and the other former Soviet republics and $450 million in new aid to East European countries. The Russian and other republic aid is contingent on several considerations: whether the former Soviet republics "implement responsible security policies, including the avoidance of excessive defense expenditures, full compliance with international arms control agreements, and active participation in international efforts to prevent the proliferation of destabilizing weapons or the technology to develop such weapons." A republic would be ineligible for the US assistance if after the date of enactment it "knowingly" transfers to another country missiles or missile technology banned by the MTCR, any chemical or biological weapons or technology that would contribute significantly to the manufacture of such weapons. While the President is expressly authorized in section 110 to facilitate in the conversion of former Soviet military capabilities into civilian activities, section 137 (sponsored by Sen. Christopher Dodd) limits the amount of money the President may authorize for Soviet conversion activities "unless the President has previously obligated an amount equal to or greater than such sums in the same fiscal year for defense conversion and defense transition activities in the United States." The House Foreign Affairs Committee reported favorably on a similar bill (H.R.4547) in early June. It awaits a House vote. FY93 Foreign Operations Appropriation 25 June---The FY93 foreign aid appropriations bill (H.R.5368) is approved in the House by a 297-124 vote. The $13.8 billion bill is nearly $1.3 billion below the Bush Administration request and almost $600 million below last year's funding levels. Funding levels contained in the bill are outlined in the box and some of the specific policy contained in the bill follows. An amendment sponsored by Reps. Machtley and Hall bans IMET funds for Indonesia, due to that government's military crackdown in East Timor last fall. The Administration had requested $2.3 million in IMET money for Indonesia. The bill bars the $27 million military aid to Jordan requested by the Administration. To free it up, the President must certify that Jordan is abiding by the UN trade embargo against Iraq and is cooperating in the Middle East peace process. It provides $11 million in non-lethal military aid to El Salvador, and $29 million for El Salvador's war demobilization and transition fund. The Administration sought $13 million for the demobilization fund and $27 million in military aid. It prohibits foreign military financing assistance to Guatemala, Liberia, Malawi, Peru, Somalia, Sudan, and Zaire (and also cuts off IMET for Zaire) on human rights grounds. No ESF or FMF funds can be made available to Kenya until 30 days after the President certifies to Congress that Kenya is taking steps to release political detainees; ceasing abuse of prisoners; and restoring an independent judiciary and freedoms of expression. The bill directs the DSAA to submit a report by 1 December 1992 outlining ways that an increased human rights component could be included in all IMET training. The bill eliminates military assistance grant aid to southern flank NATO allies Greece, Turkey and Portugal, substituting market-rate based loans and thereby shaving $823 million off of the Administration's funding request. The bill places a $450 million ceiling on loans for Turkey (rather than the $543 million in grants the Administration had requested) and a $315 million ceiling on loans for Greece (instead of the $30 million in grants the Administration had requested), thereby maintaining the 7:10 ratio in security assistance to Greece and Turkey that the Administration tries every year to abolish. Security assistance "earmarks" for Israel and Egypt remain in place at $3 billion and $2.1 billion respectively. At the Administration's request, Foreign Operations Chairman David Obey dropped an amendment that would have enacted an across the board 1 percent reduction in all foreign aid accounts, which would have reduced these levels. Of Israel's grant military aid, $475 million can be used for procuring defense articles and services (including research and development) in Israel. Section 539 of the bill mandates that the President submit the annual report of sales under consideration in the upcoming calendar year (the "Javits Report") required by the Arms Export Control Act to the Appropriations Committees, as well as the Foreign Affairs/Relations Committees. Section 541 of the bill states that "none of the funds appropriated under this heading, and no employee of the Defense Security Assistance Agency, may be used to facilitate the transport of aircraft to commercial arms sales shows." Section 565 reinstates a ban on the provision of Stinger anti-aircraft missiles to "any country bordering the Persian Gulf" which had been repealed in last year's foreign operations bill. The Senate version of the FY93 foreign aid bill has not yet been marked up and reported out by the Foreign Operations Subcommittee of the Appropriations Committee. This is expected to happen in late September. United States-China Act of 1992 21 July---H.R.5318, the latest attempt to condition the renewal of China's most-favored-nation (MFN) trade status on improvements in its human rights, trade and weapons proliferation practices (see ASM no. 11-12 p. 7 and no. 9-10 p. 5) is passed by a vote of 339-62. Unless the President certifies that the Chinese government had made "overall significant progress" in the three abovenamed areas, Chinese goods produced in state-owned factories would be subject to high import tariffs. The Senate version of the bill was introduced on 4 June and referred to the Finance Committee, where it is scheduled to be marked up in early August. Landmine Ban 30 July---Citing their propensity for injuring civilian non-combatants, and their ability to remain hidden and lethal for long periods of time, Sen. Patrick Leahy introduces an amendment to the Senate FY93 DOD authorization bill which would impose a moratorium on the export of anti-personnel landmines for one year. The bill would make it US policy "to seek verifiable international agreements prohibiting the sale, transfer or export, further limiting the use, and eventually, the termination of production, possession or deployment of anti-personnel landmines." Over 35 countries around the world manufacture landmines, with many exporting them. The amendment will be considered during floor debate on the defense authorization bill in early August. Recent Congressional publications Assisting the Build-Down of the Former Soviet Military Establishment (hearings before the Senate Armed Services Committee 5 & 6 February 92) USGPO: 1992, 85 pp. Building Future Security: Strategies for Restructuring the Defense Technology and Industrial Base, Office of Technology Assessment (USGPO: June 1992) 160 pp. Crisis in East Timor and U.S. Policy Toward Indonesia (hearings before the Senate Foreign Relations Committee, 27 February & 6 March 92) USGPO: 1992, 112 pp. Developments in the Middle East (hearing before the HFAC Subcommittee on Europe and the Middle East, 17 March 92) USGPO: 1992. Lessons in Restructuring Defense Industry: The French Experience, Office of Technology Assessment (USGPO: June 1992) Need for an Independent Counsel to Investigate US Government Assistance to Iraq (hearings of the House Judiciary Committee, June 1992) USGPO: 1992 Threat of North Korean Nuclear Proliferation (hearings of the SFRC East Asian and Pacific Affairs Subcommittee, 25 November 91; 14 January & 6 February 92) USGPO: 1992, 118 pp. US-Japan Codevelopment: Update of the FS-X Program, General Accounting Office (GAO/NSIAD-92-165), 40 pp. Summary: "Conventional Arms Transfers to the Third World, 1984-91" CRS Report for Congress (92-577 F), by Richard F. Grimmett, 20 July 92, 86 pp. According to the report, the value of all arms sales made with the Third World (which excludes some seemingly Third World countries, such as Turkey, Greece and Yugoslavia) was $24.7 billion. The value of all arms actually delivered was $18.4 billion. Both of these figures represent the lowest levels in the 8- year period covered by the report. The total value of arms sales to the Third World, as defined, during 1984-1991 was $303.4 billion. United States According to the report, US foreign military sales (FMS) agreements fell from a record $19.1 billion in 1990 to $14.2 billion in 1991, but still represented 57.4 percent of all sales made. Foreign military sales to Turkey and Greece, excluded from this figure, amounted to $3.6 billion in 1991. Direct commercial sales are also excluded from this figure, but are listed separately in the report. In FY91, commercial deliveries amounted to $1.346 billion. [According to the Congressional Record of 24 January 92, a total of $12.6 billion in licenses for commercial arms exports to the Third World were granted in FY91.] At $6.7 billion, the US surpassed the USSR in value of arms deliveries last year (includes commercial sales). The USSR transferred $6.4 billion. USSR US sales agreements in 1991 were nearly three times the level of Soviet arms sales agreements, which fell from $11.8 billion in 1990 to $5 billion last year. Soviet sales accounted for 20 percent of all sales agreements made with the Third World, with Iran and China being the largest recipients of Soviet sales last year. Agreements for arms imports by eight of the former-Soviet Union's largest arms clients declined significantly during 1988-1991 from 1984-1987 levels. Cuba made no new agreements during this time; Iraq's imports declined by 88.5 percent; Syria's by 84.4 percent; Angola's by 48.5 percent; India's by 45.5 percent and Vietnam's by 43.7 percent. China China, which had peak sales of almost $5.5 billion in 1987, sold nearly $300 million worth of arms in 1991 (1 percent of the arms market). Beijing fell from the third-ranked seller in 1990 to the eighth place in 1991. China was also the 6th largest arms importer in 1991, in agreements made, buying $1 billion of weapons. West Europe At $2.8 billion in sales, the four largest European suppliers together (France, Britain, Germany and Italy) accounted for just over 11 percent of all sales made to the Third World in 1991. French sales declined precipitously from $3.3 billion in 1990 to $400 million in 1991. Britain's sales increased slightly from $1.8 to $2 billion, making the UK the third largest seller in 1991. Germany went from $315 million to $400 million in sales last year; and Italy fell from $200 million in 1990 to "virtually nil" in 1991. Recipients Saudi Arabia, contracted to buy the highest dollar volume of weapons in 1991 at $7.8 billion, with $5.6 billion of that total from the US. During 1984-1991, the Saudi kingdom was by far the largest overall importer, making agreements worth $67.7 billion. In 1991, arms deliveries to Saudi Arabia totaled $7.1 billion. Iran was the fourth largest importer in 1991, buying $1.9 billion. Iran purchased $19.8 billion of arms during 1984-1991 (including $4.8 billion from the USSR, $1.9 billion from China and $1.2 billion from the major West European suppliers during 1988-1991). In 1991, deliveries to Iran totaled $1.5 billion. Israel does not show up as a significant importer, which is odd since it receives $1.8 billion in arms grants from the US per year. Perhaps this is because Israel spends most of its FMF on commercial purchases and also spends some of the aid on domestic, Israeli projects. It does show up as a significant exporter: from 1984-1991, it ranked 10th, delivering $3.1 billion in arms to the Third World.