Conventional Arms Threat Reduction

Department of State Director Ann K. Ganzer

  Remarks for the 2015 Update Conference

November 2-4, 2015

(as prepared)


Good morning.  I’d like to thank Under Secretary Hirschhorn for hosting this year’s event, and for inviting me to participate in this discussion.  I welcome the opportunity to highlight some of the ways we at State’s Bureau of International Security and Nonproliferation (ISN) are supporting effective export controls around the globe within the context of the Administration’s export control reform initiative.
First a quick word about the ISN Bureau.  We in ISN are responsible for managing a broad range of U.S. nonproliferation polices, programs, agreements, and initiatives.  The proliferation of Weapons of Mass Destruction (WMD), their delivery systems, and advanced conventional weapons, as well as related materials, technologies, and expertise -- to terrorist groups or countries of concern-- is a preeminent challenge to American national security.  Combating this threat through bilateral and multilateral diplomacy is one of the highest priorities of the Department of State.  An important part of this effort involves continuously working with likeminded countries to maintain effective export controls.
On the export control reform front, I understand Kevin Wolf gave you a comprehensive rundown yesterday.  You all know DDTC is responsible for review of munitions licenses – Brian will talk about that - in ISN we handle the foreign policy review, including staffing within the State Department, for Commerce licenses.  
State ISN has successfully adapted to an increased workload brought upon by growth in the number of 600-series exports.  A key component of this has been the deployment of the single USG license processing system - “USXports” - to adjudicate all Commerce license applications.  For Fiscal Year 2014 State has reviewed 4800 cases for 600-series items.  We continue to work to identify the types of cases that the Department does not need to review in order to speed up our response time to applicants.  Finally we continue to strive for consistency.  Barring any major policy changes, if you never had a problem exporting an item when it was regulated by the ITAR, you should not be experiencing any problems or delays exporting it to the same end use and users now that it is controlled by Commerce.
One of the basic tenets of the President’s export control reform initiative is to honor our commitments to the multilateral export control regimes, the Australia Group (AG), the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group (NSG), and the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (WA).  Multilateral standards underpin the effectiveness of national export control measures and help level the playing field for international suppliers of strategic goods and technologies.  With this in mind, the State Department works with the interagency to strengthen U.S. controls and bolster export controls around the world through bilateral engagements.  In addition, the United States works in partnership with multilateral regime members to assist other countries in developing effective national strategic trade control systems.  This helps ensure that bad actors will not be able to shop around and obtain from elsewhere technology that is denied by the United States.

Our work with regime partners is a dynamic process that needs to account for technology innovations and proliferation trends in order to refine regime guidelines and their control lists to make continual progress in fighting proliferation.
A quick overview of what has been happening in the regimes:

Nuclear Suppliers Group (NSG)

The NSG 36th Consultative Group (CG), Information Exchange Meeting (IEM), and Licensing and Enforcement Experts Meeting (LEEM) took place on June 1-3, 2015, in San Carlos de Bariloche, Argentina.  These meetings were followed by the Plenary on June 4-5 in the same location.  Extensive discussion took place on criteria for membership, adherence, and proposed enhancements to NSG outreach activities.  The NSG also discussed possible membership of India in the Group.  
    Presentations in the information exchange and licensing meetings included topics such as the Iranian nuclear program, the DPRK nuclear program, trends in denial notifications, the role of financers and insurers in nonproliferation and export control, additive manufacturing, fuel cycle planning, and research reactors.
The Plenary endorsed thirteen recommendations put forth by the CG.  

Missile Technology Control Regime (MTCR)

During the October 2015 Plenary in Rotterdam, MTCR Partners highlighted the importance of the Regime working to address regional proliferation, adopted changes to the control list, and noted the importance of placing greater focus on the serious risks and challenges posed by intangible technology transfers (ITT), and proliferators’ use – or misuse - of brokering, transit, and transshipment.   Partners emphasized the importance of catch-all controls for non-listed items and nonproliferation-related visa vetting.  They also exchanged information on best practices in export control implementation and enforcement, and discussed the missile activities of the DPRK and Iran and implementation of relevant UN Security Council Resolutions (UNSCRs).   Partners also appealed to all states to support the nonproliferation aims of the Regime by adhering unilaterally to the MTCR Guidelines and Annex.   In 2015, new export controls were agreed in some areas including pneumatic and fly-by-light flight control systems for MTCR Category I systems and gel propellant rocket motors exceeding the MTCR total impulse criterion.  Partners also further clarified existing controls with respect to fiber/tow-placement machines and tape-laying machines, staging and separation mechanisms, software controls for MTCR Category I systems and several sub-systems, and several propellant substances.  Partners also agreed to the addition of a General Minimum Software Note that clarifies that the approval of any Annex item for transfer also authorizes the export to the same end user of the minimum software required for the installation, operation, maintenance, or repair of the item to ensure its safe operation as originally intended.

Australia Group (AG)

On the Chemical and Biological Weapons, or CBW front, the Australia Group or AG continues its effort to impede the flow or supplies and technology to chemical and biological weapons programs around the world.  The regime held its thirtieth anniversary plenary in Perth, Australia, in June 2015, where AG members agreed to intensify their focus on emerging technologies that can be used for CBW and expand outreach to non-member countries and industry and academic organizations to highlight the threat posed by state and non-state actors seeking to acquire the know-how to develop CBW.  Along those lines, the AG members also agreed to enhance their national efforts to control intangible transfers of AG-listed technology and to continue to share information on their approaches to visa-vetting and proliferation-sensitive brokering services.  Members also voiced their concerns about continued use of chemical weapons in Syria, and continued indications of CBW activities in the DPRK and elsewhere in the Middle East.
In addition, technical experts met during the June plenary and a February 2015 intersessional meeting to refine the AG control lists.  This culminated in a major update to the AG’s controls for human and animal viruses and bio-safety cabinets, the addition of a new chemical to the regime’s precursor control list, and revisions to the control for spray-dryers.

Biological and Toxin Weapons Convention (BWC)

In the specific area of the life sciences and biotechnology, the Australia Group – whose participants are all Parties to the Biological Weapons Convention (BWC) – serves to reinforce the Convention.  
BWC Parties are continuing to work to develop common understandings and best practices for implementing the Convention, including through export controls, by gathering information on national implementation, seeking more clearly to define what implementation requires, and providing targeted assistance to strengthen implementation around the world.   The AG works to ensure its members fulfill their legally-binding obligations under Article III of the BWC, and the two are necessary and mutually reinforcing elements of the overall regime to stem the proliferation of biological weapons.

Wassenaar Arrangement

     The Wassenaar Arrangement continues to keep pace with advances in technology and market trends.  Participating States have worked to make the existing control lists more readily understood and user-friendly for licensing authorities and exporters, and to ensure the detection and denial of undesirable exports.  The Arrangement continues work on a comprehensive and systematic review of the Wassenaar Lists to ensure their continued relevance.
In 2014, the Wassenaar Arrangement adopted new control parameters for machine tools that are less subject to environmental conditions.  Participating States also made a number of changes to controls on electronic equipment to take into account technological developments.  The Arrangement adopted new controls on fiber laser components.  In the area of aviation and propulsion, new controls were adopted on commercial satellite components, revised controls that better identify unmanned aerial vehicles of military significance, and finally, clearer controls on jet engine hot section production equipment and related technology.
Significant efforts have also been taken to promote the WA and to encourage voluntary adherence to the WA’s standards by non-WA members.  The WA continues to undertake outreach in support of its aims and objectives, in particular through post-Plenary briefings, interaction with industry, and bilateral dialogues with non-WA members.
Participating states in each of these consensus-based groups have voluntarily committed to observe coordinated export control guidelines and control lists.  These guidelines and control lists increasingly are observed by non-member adherent countries; some of the regime lists also feature in UN Security Council Resolutions (UNSCRs) on Iran and North Korea.  They are also implicitly endorsed by UNSCR 1540, which requires all UN Member States to have nonproliferation export controls to prevent the proliferation of weapons of mass destruction or their means of delivery and to prevent their acquisition by terrorist groups or other non-state actors.  As a founding member and strong supporter of these regimes, the United States welcomes expanding acceptance of their multilateral export control standards.
All four regimes continue efforts to expand their outreach and dialogue with non-participating states.  These efforts further the regimes’ nonproliferation objectives through technical interactions with unilateral adherents as well as pursuing greater international acceptance of the guidelines and control lists among the broader international community.  At the same time, there has been strong interest by some countries to become part of the regimes.

UN Security Council Resolution 1540

As many of you know, U.N. Security Council resolution 1540 (2004) requires all states to establish and maintain effective controls on the export, transit, transshipment, and re-export of WMD- and delivery system-relevant items, as well as on related trade services.  In 2015, the UN’s 1540 Committee has nearly completed compiling a set of effective national and international practices for implementing the resolution, including several submissions on export controls, most of which already appear on its website.  The 1540 Committee also has completed its initial update of the matrix of laws, regulations, and other measures taken to implement the resolution, including those on export controls, by all 193 UN member states, which will become publicly available by the end of the year.  Notably, the 1540 Committee continues to enhance its efforts to get states to work with industry, especially through the “Wiesbaden Process” meetings hosted by Germany, a process the Committee will likely expand through cooperation with an Asian partner.  These meetings play an important role in the Committee’s efforts to get industry input into its comprehensive review, which it will complete by the end of 2016 and will produce recommendations to guide the work of the Committee through the end of its current mandate in 2021.

Arms Trade Treaty (ATT)

130 countries (including the United States) have signed the Arms Trade Treaty or ATT, of those 77 have ratified.  This treaty is about keeping weapons out of the hands of terrorists and rogue actors.  It is about reducing the risk of illicit international transfers of conventional arms that will be used to carry out the world’s worst crimes.  It is about keeping Americans safe and keeping America strong.  It is about promoting international peace and global security, and about advancing important humanitarian goals.
This Treaty is not about taking away domestic freedoms.  The treaty is fully consistent with the rights of U.S. citizens, including those secured by the Second Amendment.  The ATT recognizes the freedom of individuals and states to obtain, possess, and use arms for legitimate purposes.  This treaty reaffirms the sovereign right of each country to decide for itself, consistent with its own constitution and legal requirements, how to deal with conventional arms exclusively within its borders.
Let me add one other thing that this treaty is not.  It is not about limiting a country’s sovereign right to conduct responsible arms transfers.  Indeed, the ATT is a trade regulation treaty focused exclusively on the international trade in conventional arms.  It aims to create a global framework for countries’ responsible national regulation of the international transfer of conventional arms, which the treaty recognizes as a legitimate activity that supports countries’ national security and commercial interests.
The ATT compels States Parties to undertake rigorous national assessments when making decisions to export weapons so that, in the future, rather than conventional arms being secreted out of warehouses and into the unknown, a government will need to have a control system in place to adequately review the request to authorize the export of such arms to another country.  In this way, the ATT helps establish a common international standard for regulating the international trade in conventional arms.  The Arms Trade Treaty won’t change what the U.S. does on a day-to-day basis to implement effective export and import controls on conventional arms and address illicit shipments of conventional arms.  Rather, it will induce other countries to come up to our standards.  The goals of the ATT are important goals that are also aligned with our foreign policy and national security interests.  

Export Control and Related Border Security (EXBS)

The Export Control and Related Border Security, or EXBS, program is the flagship initiative of the U.S. government designed to assist other countries in developing effective national strategic trade control systems.  EXBS is active in 67 countries worldwide and conducts each year approximately 250 outreach and capacity building activities to support partner countries in developing modern legal and regulatory frameworks; effective licensing systems; government-to-industry outreach mechanisms; stronger enforcement capabilities; and improved interagency and international coordination and cooperation.  Partner government officials, including parliamentarians, senior executive branch officials, the judiciary, and front-line licensing and enforcement personnel take part in these capacity building efforts.   
For example, in 2015, EXBS efforts led to the adoption of a sweeping new export control law in Tajikistan and resulted in significant progress on the Philippine Strategic Trade Management Act (STMA), which is pending Parliamentary approval.  EXBS experts have also provided input into new laws being drafted in Kazakhstan and Morocco.   In addition, over the past year, EXBS assistance has led to the adoption of new control lists in Serbia and the Kyrgyz Republic.  EXBS also supported a joint industry outreach seminar with the European Union in the United Arab Emirates that was attended by a number of private sector representatives from the region.  EXBS also hosted a regional conference on Countering the Financing of Proliferation of WMD to promote the establishment of national measures, such as targeted financial sanctions and better interagency coordination mechanisms, to combat illicit trade in goods and technologies that may contribute to development of weapons of mass destruction.  Finally, EXBS provided funding to support the efforts of the World Customs Organization (WCO) to develop a long-term strategic trade controls enforcement program.
EXBS outreach to partner governments, multilateral and international organizations, private industry, and other donors reduces the risk of proliferation of weapons of mass destruction (WMD) and the diversion of conventional arms.  This type of engagement and cooperation provides us with obvious security benefits while at the same time preserving our economic competitiveness by promoting common levels of control between the U.S. and other countries.
One last point that I wanted to make is that export control license review policies are subject to change and take into account new foreign policy developments.  Let’s take for example Russia.  The President announced on April 28, 2014 that, in response to Russia’s actions in Ukraine, the Department’s Directorate of Defense Trade Controls (DDTC) and Commerce/BIS continue to deny applications to export or re-export high technology defense articles or services that could contribute to Russia’s military capabilities, including its ambitious defense modernization plans.  We have instituted these export controls in response to Russia’s actions to destabilize Ukraine, and we will not reconsider the restrictions until Russia abides by international law and its commitments under the

Minsk agreements.
I would like to close by reiterating that the regimes and treaties I’ve discussed this morning continue to be dynamic.  Every year changes to the control lists and guidelines based on ever-changing and -advancing technology and proliferation trends are debated, negotiated, and agreed upon.  Every year changes in the regime control lists lead to updates of export control regulations not only in the United States, but around the world.  Multilateral export controls must be continually improved, so that national security concerns are balanced with economic considerations.  Finally, the treaties and United Nations Security Council Resolutions we discussed demonstrate a growing acceptance by the international community of the role of export control in addressing shared concerns.
The U.S. export control reform effort has helped us to better focus our attention on transactions that merit higher scrutiny while continuing to carry out our international commitments and obligations.   In the end US export control rules is, and will continue to be, recognized as the “gold standard” and our actions will be dictated by national security and foreign policy objectives.
Thank you.







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