next few years, but the best way to improve communications and coordination is to make sure the people in place are committed to doing the best job possible to communicate and coordinate.

The NNSA is committed to this, and I know my colleagues around this table and the other agencies share in this commitment. Mr. Chairman, thank you for letting me appear today to address this panel. I look forward to any questions that you may have.

Senator AKAKA. Thank you very much, Mr. Baker, for your statement.

My friend and colleague, Ranking Member, Senator Cochran is here, and I would like to ask him for his statement.

OPENING STATEMENT OF SENATOR COCHRAN

Senator COCHRAN. Thank you very much, Mr. Chairman. I want to compliment you for convening this hearing on our efforts to deal with proliferation and the threat reduction programs that are designed to help make it less likely that there will be proliferation of mass destruction weapons systems from the former Soviet Union.

The President has directed that these programs be reviewed, and I am pleased that the administration has moved forward with the review and has taken steps to ensure that we are getting good value for the funds we are spending. It is deceptive and misleading for some to suggest that funding has been reduced. It is more important to look at these efforts on a program-by-program basis. Reviewed in this way, it is clear that the administration is increasing funds for programs that are contributing to our national security and to the security of others as well.

For example, the program to eliminate strategic offensive arms in Ukraine has been increased by 77 percent in order to accelerate the elimination of SS-24 ICBMs, and unlike previous years, no funds were requested to eliminate silos because they have already been eliminated.

So I am hopeful, Mr. Chairman, that the hearing will offer insight and suggestions that will be helpful to us in determining how we can put the emphasis where it ought to be put, so that we are getting good value for the dollars we are spending and that what we are spending is productive in the overall effort to reduce the threat and improve security for everyone.

Senator AKAKA. Thank you for your statement, Senator.

I would like now to call on Mr. Borman for your statement, and following that, we will have questions for you.

TESTIMONY OF MATTHEW S. BORMAN,1 DEPUTY ASSISTANT SECRETARY, BUREAU OF EXPORT ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

Mr. BORMAN. Good morning, Mr. Chairman, and thank you as well on behalf of the Department of Commerce for the opportunity to testify at this hearing on this important subject.

Over the years, I have been involved in a supporting role in several hearings that Senator Cochran had chaired on export control

related matters. So it is a pleasure to be here now at the table, as it were, to testify.

As with my colleagues, I have a longer statement which I would appreciate being put in the record, and I will summarize it orally. For several years, the Department of Commerce has played a significant role in the U.S. Government's international nonproliferation programs in the former Soviet Union. My testimony will give a brief overview of Commerce's role and then address the questions you had in your invitation letter.

Since the end of the Soviet Union, Commerce has participated in the U.S. Government's nonproliferation programs in the former Soviet Union. Commerce has worked closely with the Departments of State, Defense, Energy, and the Customs Service of the Department of Treasury to carry out the export control cooperation programs designed to enhance and, in some cases, establish export control systems in these various countries.

Commerce strongly believes that bilateral and multilateral export control cooperation is an important part of the U.S. Government's effort to stem the proliferation of weapons of mass destruction and conventional arms. Experience has shown that export controls are most effective when producing, consuming, and transit countries all cooperate and maintain similar export controls.

The overarching objective of the U.S. export control cooperation program, whether in the former Soviet Union or other countries, is to: (1), assist countries in controlling the export, reexport, and transit of all items on the various multilateral export control regime lists; that is, the Wassenaar Arrangement, Nuclear Suppliers Group, Australia Group, and Missile Technology Control Regime; (2), also have these countries implement some kind of catch-all controls to catch lower-level items that could be used for weapons of mass destruction, but are not on the regime list; and then, (3), also to control the activities of persons subject to these countries' jurisdiction if these activities could facilitate weapons of mass destruction program, brokering, financing, and technical support.

Commerce's export control cooperation, which is done primarily through funding from the State Department, consists primarily of bilateral technical workshops on specific export control issues, some multilateral conferences to encourage regional cooperation on export controls, and seminars that are targeted specifically at defense enterprises in the former Soviet Union countries, particularly Russia and Ukraine.

Over the past several years, Commerce has conducted, in conjunction with the agencies represented here and others, over 200 workshops and seminars with both government officials and industry officials in the former Soviet Union States.

There have been several notable accomplishments as a result of this program. They include comprehensive export control laws enacted in over half of the former Soviet Union countries with most of the remaining countries likely to enact such laws within the next year, significant progress on a regional transit agreement between the countries in Central Asia and the caucuses to reduce the likelihood that items will be diverted when transiting through these countries, Kazakhstan promulgating a national control list that

and the European Union have. Kazakhstan is the first former Soviet Union country to do so.

We have also received some leads on possible violations of U.S. export control laws from the context we have developed, our law enforcement officials have developed in the course of doing these cooperation programs.

Over 900 defense enterprises and other exporters in Russia and Ukraine have received detailed training and software to enable them to establish their own internal company control programs, so that they can control properly the sophisticated dual-use items and technology that they have.

Finally, we have also distributed software to train foreign export control licensing officers in 9 of the 12 former Soviet Union countries.

In addition, the enforcement arm of the Bureau of Export Administration, Department of Commerce, has an export control attache in Moscow now, and this attache essentially has two functions. One is to really work with Russian export control enforcement officials to get them to enhance their enforcement of Russia's export control law and also to help ensure that U.S. items that are exported into Russia are not diverted to improper uses.

Let me now briefly address the questions that you had posed in your invitation letter, Mr. Chairman; first, how does the Department of Commerce participate in the nonproliferation activities with Federal partners using multilateral export control regimes. The Department of Commerce, as you know, Bureau of Export Administration, is responsible for implementing the dual-use controls of the various multilateral export control regimes, and, of course, we do that in concert with the Departments of State, Energy, and Defense. We both make proposals to State Department to advance the regimes in terms of changing controls and also provide input to the Department of State when other countries make proposals to change regime controls or policy. In connection with that, whenever the regimes, for example, the missile technology control regime, have outreach efforts to non-members like transit states, the Commerce Department also participated in that with the other departments mentioned here.

Your second question, how well do Federal nonproliferation programs interact with U.S. commercial interests, from our point of view, in export control cooperation, there is quite good interaction. As Mr. Van Diepen has already mentioned, whenever we have bilateral exchanges, we always have the foreign delegations meet with representatives of U.S. exporting companies, and we think this is crucial for them to understand why U.S. companies spend time and money to comply with our export controls and also how important it is for any government to talk to its industry about controlling and consulting on export controls.

In fact, just to give you a concrete example, a few weeks ago, we had a delegation from Ukraine here. The delegation consisted of some government officials, as well as some members of the Ukrainian parliament, and in addition to meeting with Commerce, Energy, State, Defense, and the Customs Service, they also had a meeting with a U.S. exporting company and they came up here and

We also work with the various agencies represented here and any contractors they use on these various nonproliferation assistance programs that you have already heard mentioned to make sure that any delivery of goods or technologies from the United States to Russia or other countries complies with U.S. export control laws. So that is another way we interact with U.S. commercial interests in doing our programs.

That really concludes my summary. Once again, I thank you for the opportunity to testify on this important subject, and I am happy to answer whatever questions you or other Members have. Senator AKAKA. Thank you very much, Mr. Borman, for your statement.

I would like to call on my colleague, Senator Carnahan, for your

statement.

OPENING STATEMENT OF SENATOR CARNAHAN

Senator CARNAHAN. Thank you. Thank you, Mr. Chairman. I want to thank you for holding this very important hearing today. The testimony that we will hear today is especially important as the evidence mounts up that Osama bin Laden and the Al-Qaeda network were actively taking steps to acquire weapons of mass destruction.

Although these revelations are disturbing, the threat of proliferation has been a concern for some time. Over 11 months ago, Howard Baker and Lloyd Cutler presented a report on nonproliferation programs to the President, and those findings were startling. They found that 10 years after the collapse of the Soviet Union, nuclear weapons remained scattered throughout Russia in more than 100 poorly guarded depots. These weapons are not appropriately accounted for or secured. These conditions make it possible for rogue nations or terrorists to steal or to buy nuclear materials and to smuggle them out of Russia.

In fact, 3 weeks ago, the Washington Post reported that nuclear scientists had been holding talks with bin Laden's followers. In this same article, it was reported that nuclear material may have been stolen from Russia over the last 2 years.

The Baker-Cutler report suggests that the only way to stop this situation is to expand the United States' nonproliferation programs. This will require sizeable investments, including a $30 million 10-year budget for these programs overseen by the Departments of Energy, Defense, and State. I believe that this would be an important first step.

Today, I hope that we can use this hearing to evaluate the findings of this report in light of the Nation's new war on terrorism. It is imperative that the United States remain proactive in suppressing the worldwide spread of nuclear, chemical, and biological weapons. To accomplish this goal, I feel we need to upgrade our intelligence capability, more closely monitor other nations for compliance with arms control treaties, provide better compensation to former Soviet weapons scientists, and provide accounting for the thousands of weapons produced by the Soviet Union.

Currently, our government attempts to accomplish these objec

net Departments. These organizations do find work, but there is room for improvement.

Coordinating the nonproliferation activities of these agencies, as suggested by Senator Hagel's legislation, is an idea worthy of examination. Funding these nonproliferation programs needs to be one of our highest national security priorities, and I look forward to hearing from the panelists today about that.

Thank you, Mr. Chairman.

Senator AKAKA. Thank you very much for your statement, Senator Carnahan.

Now we would like to ask you questions. My first question is for all of the witnesses here today. We have talked about the National Security Council and about what they have been doing. Has the extended National Security Council review of our nonproliferation programs affected the activities of any of our current programs? In other words, has it delayed implementation of any programs or the fulfillment of their objectives?

Let me start with Mr. Van Diepen.

Mr. VAN DIEPEN. Thank you, Mr. Chairman.

As I indicated in my statement that review is in its final stages, but, certainly, as a general matter, we have not been holding back from doing necessary work while the review has been ongoing. The review is basically going to be an effort to try and prioritize and give us guidance on, as Senator Cochran said, trying to get the best bang for the buck on these programs, but we certainly have not been holding back from doing necessary work while the review has been proceeding.

Senator AKAKA. Mr. Billingslea.

Mr. BILLINGSLEA. Mr. Chairman, the review is ongoing, but it has not affected the important work that needs to be done through the CTR program.

Senator AKAKA. Mr. Baker.

Mr. BAKER. Mr. Chairman, as I said, I applaud the review. I think it is badly needed.

Our programs are continuing, the ones of securing nuclear materials. We are working night and day. As a matter of fact, just today I got 12 different teams throughout Russia securing the stuff, just today.

What has changed a little bit is our plutonium disposition because we are looking at a plutonium disposition program and coming up with alternatives on plutonium disposition in accordance with the treaty, and we will have options. The Secretary of Energy has got the pin on this, and we will get back to the White House in 2 months. A decision will be made before the next budget cycle on what option we should pursue with plutonium dispositions.

The Russians are on board on this. We met the Russians the week before last, and we have come up with options to make this program successful and to make it cheaper if that is possible. Senator AKAKA. Mr. Borman.

Mr. BORMAN. The export control cooperation programs that the Department of Commerce is involved in have not been affected in any way by the ongoing review. We have continued with our ef