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Prepared Testimony of U.S. Senator Jon Kyl
House Armed Services Committee Hearing
Iraq's Weapons of Mass Destruction Program and Technology Exports
September 19, 2002

Mr. Chairman, thank you for the opportunity to testify at today's hearing.

I appreciate your providing a forum to bring us up to date on issues relevant to the consideration of the Export Administration Act. As you know, the Senate passed its version of the bill, S. 149, on September 6, 2001. At the time, along with the ranking members of the Senate Armed Services, Foreign Relations, Intelligence, and Governmental Affairs Committees, I raised serious concerns about the bill's potential negative effects on U.S. security. Unfortunately, despite our efforts to negotiate meaningful changes to the bill, it passed with only a few slight alterations.

Since then, there have been many developments that should cause us to be even more cautious in regulating the export of dual-use technologies, and should give us pause before passing a bill like S. 149.

Five days after the Senate acted, thousands of innocent people were killed in the most horrific act of terrorism in our nation's history. We now fully recognize the stark reality of the world in which we live today - one in which people who hate freedom and democracy are willing to use all means possible to achieve mass casualties among civilian populations. And, as official government statements and press reports have warned over the past year, these terrorists would like nothing more than to obtain weapons of mass destruction and the means to deliver them to achieve that end.

Also, since the Senate passed S. 149, the U.S. government has released several reports that document not only the danger of the proliferation of these weapons, but also, unfortunately, deficiencies in the U.S. export control system that only exacerbate the problem. In fact, the bipartisan U.S.-China Security Review Commission - created by the legislation that granted permanent normal trade status to China in 2000 - agreed with the conclusion of the 1998 Rumsfeld Commission that,

"The U.S. has been and is today a major, albeit unintentional, contributor to the proliferation of weapons of mass destruction (through] foreign student training in the U.S., by wide dissemination of technical information, by the illegal acquisition of U.S. designs and equipment, and by the relaxation of U.S. export control policies."

The General Accounting Office has also released three reports that should be a cause for serious concern. The first, released in April, addressed China's success in closing the gap with the U.S. in semiconductor technology. The GAO stated that, in the past five years, U.S. officials in China responsible for monitoring the end-use of semiconductors have not conducted any of

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these checks.

The second, released in August, addressed the administration's January 2002 decision to raise the control threshold for high performance computers exported to tier-3 countries, such as China. The GAO concluded that the President's report justifying that change neglected to address several of the statutory requirements, including the potential military uses of the computers and the impact of those uses on U.S. national security.

And it turns out that the one requirement that was addressed in the President's justification - the domestic and foreign availability of the computers - was based on false industry data. The GAO stated that, while the administration justified its decision based on the projected domestic and foreign availability of the computers by early 2002, only one of 10 companies cited now produces computers with that capability. The administration relied upon data from the very industry that wanted to relax the high performance computer controls for its own commercial benefit, rather than doing its own independent analyses.

As Gary Milhollin, Director of the Wisconsin Project on Nuclear Arms Control and one of the distinguished witnesses at today's hearing, noted with regard to the administration's most recent relaxation of computer controls in a recent op-ed in the Los Angeles Times,

"... it sabotages our fight against terrorism. We can't ask our allies to keep dangerous equipment away from terrorists and the countries that support them if we don't control our own sales.

"... As for Unisys (the only company cited that now produces computers with the new capability), it can't be expected to use restraint. Before the Gulf War, it sold Iraq's interior ministry an $8-million computer system specifically capable of tracking the Iraqi population, which could still be helping Saddam Hussein stay in power."

The third GAO report dealt with the Commerce Departments controls over deemed exports – transfers of technology within the United States to foreign nationals. The GAO found a number of weaknesses in the current system to control deemed exports, and concluded that those vulnerabilities could help countries of concern to improve their military capabilities. The GAO also noted that more than 90 percent of the deemed export licenses that are approved by Commerce involved China and other countries of concern, vet there is no monitoring system in place to ensure compliance with the conditions of the licenses.

The information contained in these reports is a clear indicator of the deficiencies in our current export control system and should prompt us to tighten controls over the export of dualuse technology, rather than to relax those controls. As this hearing takes place today, there is a very real possibility that this country will soon take military action against Iraq because of the threat posed by Saddam's Hussein's possession and continued development of weapons of mass destruction.

Unfortunately, there is likely an indirect connection between Saddam's ability to develop these weapons, as well as other military capabilities, and U.S. export control policies. Consider, for example, the past military assistance that Iraq has received.

Last year, press reports surfaced that the Chinese firm, Huawei Technologies - an important player for many U.S. firms who want to reach the Chinese telecom and data communications market - assisted Iraq with fiber-optics to improve its air defense system. This is the same air defense system that U.S. and British pilots have risked their lives to try to destroy as part of their patrol of the no-fly zones.

As documented by Gary Milhollin in his testimony last November to the Senate Governmental Affairs Committee, Huawei has received significant assistance from American companies, including high performance computers from Digital Equipment Corporation, IBM, Hewlett Packard, and Sun Microsystems, as well as telecommunications equipment from Qualcomm. And, last year, Motorola had an export license application pending for permission to teach Huawei how to build high-speed switching and routing equipment, which could be used to improve Iraq's air defense network.

During a press briefing this week, Secretary of Defense Donald Rumsfeld was asked about Iraq's air defenses. He stated, "They are constantly trying to improve them. They have been putting in fiber optic and they have been doing a whole series of things." When questioned further about whether China was assisting Iraq, Secretary Rumsfeld responded, “They sure did for a long time."

This is an important point that warrants repeating. Secretary Rumsfeld confirmed that the Chinese were building the fiber optic network in Iraq that we have been bombing. And it seems that the Chinese company that provided the assistance is one that has been able to buy a number of dual-use items from the U.S. In other words, U.S. pilots are risking their lives to bomb what is quite possibly U.S. technology.

The pending Export Administration Act would make it far easier for countries, like China, to obtain sensitive technologies from the United States and then, in turn, sell them to terrorist-sponsoring states, including Iraq. This seems directly counter to the objectives we are trying to achieve in our war on terrorism.

I believe that Gary Milhollin will address in more detail in his statement the specific items that EAA, as currently written, would decontrol through its mass market or foreign availability provisions. I'll just briefly mention one of those that he plans to discuss. The New York Times recently reported - and Vice President Cheney confirmed - that Iraq has sought to buy thousands of specially designed aluminum tubes, which it is believed were intended for use in Baghdad's nuclear weapons program, as components of centrifuges to enrich uranium. Under the version of EAA supported by the administration, U.S. companies would be free to sell these tubes. They would meet the bill's criteria for "mass market" status, and thus be decontrolled by

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the Secretary of Commerce. Therefore, even if they were only available for sale in the U.S. (not from foreign sources), export controls could only be maintained if the president certified every six months that failure to regulate their export constituted a serious threat to U.S. national security

It is unrealistic to think that the President will use the authority in the bill - which cannot be delegated to other officials - to set aside a mass market determination on anything but rare occasions. Yet the number and scope of potentially dangerous items that will meet this criteria is quite alarming. (I should note that this Committee's version of the bill sets higher standards for a mass market determination.)

Mr. Chairman, in closing, I appreciate the efforts of this committee and of the House International Relations Committee to make modifications to the Senate bill that would allow for greater control over the export of U.S. dual-use technology. I also agree with the administration that it is important that the United States find the proper balance between national security and trade and, to that end, that Congress pass a new Export Administration Act. But, particularly in light of developments over the past year, the bill currently pending before Congress is not the appropriate vehicle to address controls over the export of dual-use items.

It is my hope that I and my colleagues in the Senate, the Members of this committee and other Members of the House can work with the administration during the next session of Congress to develop a new EAA that will better protect U.S. national security interests.

Thank you again Mr. Chairman for the opportunity to testify at today's hearing.

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