materials be kept out of the hands of the so-called rogue states as well as terrorist organizations.

The National Nuclear Security Administration is working with Russia to attack this problem on many fronts. For example, to improve security at sites that have weapons-usable materials, improve Russia's export control systems, and train Russian experts to take greater responsibility to ensuring security and protecting weapons of mass destruction materials.

The United States has already completed rapid security upgrades for thousands of Russian Navy warheads, and security of over 220 metric tons of Russian fissile material has been secured, enough to make roughly 20,000 nuclear devices.

Last year, Russia and the United States agreed to dispose of 68 metric tons of surplus weapons-grade plutonium, 34 metric tons in each country. The administration is currently examining alternatives to reduce the cost of this program and to make it more sustainable to Russia. A final decision is expected in about 2 months. And under the HEU purchase agreement, the United States has removed more than 130 metric tons of HEU from Russia's military programs. The United States is working with Russia to improve its ability to detect and interdict nuclear materials at border checkpoints and at airports. Some borders are thousands of miles long and pose difficult challenges, but we are tackling that problem.

The NNSA is working intensively to reduce the risk of Russia's highly trained nuclear scientists and engineers already mentioned, also, the ones that are unemployed or under-employed and would be tempted to sell their expertise to the highest bidder. The United States is taking steps to help Russia transform its closed nuclear cities by developing civilian employment opportunities for displaced workers. These objectives are pursued principally through what we call the National Nuclear Security Administration's Russia Transition Assistance Efforts, which encompass the initiatives for proliferation prevention in a program called Nuclear Cities Initiatives.

To give you a couple examples of what the initiatives for proliferation prevention system has done, we work very closely with State Department to make sure that we secure jobs for Russians in basic technology work. Currently, programs in particular on the IPP have been effectively demonstrated. We have private and public partnerships in pursuing the nonproliferation objectives. IPP has developed partnerships with former weapons scientists and technicians in over 160 institutions in the former Soviet Union.

While IPP had only $24.5 million to invest in projects during the past year, it also has required commercial partners at least to match IPP's investment projects. These matching funds requirement assisted IPP and Russian partners in identification of technologies that offer the greatest commercial promise by requiring U.S. industry to make financial commitments to development of technology at the project's initiation.

The NNSA believes that the formula that we have developed for converting former weapons scientists to commercial enterprises have been successful.

A few examples. Several energy-related technologies have been

to enhance coal and oil recovery. This technology could result in revenues exceeding $2 billion in the next 10 years.

We are seeing the successful commercialization of a wheelchair seat cushion that will prevent pressure ulcers, responsible for causing tens of thousands of deaths in the United States every year, saving Medicare $3 billion in annual costs.

The Nuclear Cities Initiative's first major commercial effort facilitates the production of kidney dialysis equipment by a joint venture established between Fresenius Medical Care Center of Lexington, Massachusetts, and the Avangard nuclear weapons assembly plant in Sarov, Russia. This has been a very successful program that will put a thousand people to work.

A year ago, virtually no westerners has ever been allowed to set foot into the Avangard facility. Now they are part of the joint venture that will use resources, buildings, and personnel that previously produced nuclear weapons to manufacture life-saving medical devices. This is truly swords in the plowshares.

Looking ahead, as we look ahead, the National Nuclear Security Administration considers new priorities. We are accelerating, an important word. The Secretary just said yesterday in Russia, we will accelerate these programs. There are on going efforts. The National Security Administration is taking advantage of a recently signed DOE Ministry of Atomic Energy access agreement and focusing on sites in Russia that hold large quantities of fissile materials. Working with the Russian Navy, we are securing approximately 4,000 nuclear weapons and have completed the Second Line of Defense program, and this now is being expanded into 12 sites. Today, the NNSA will work even harder to get the 12 up to even higher numbers.

Research and development is critical to the National Security Administration's mission. NNSA works with numerous other government agencies to develop technologies that will help detect nuclear, chemical, and biological proliferation and terrorism, and, hence, the United States' ability to address nuclear smuggling and assist local responders to respond to terrorist threat.

I would like to close by talking about the formal draft legislation. Although the administration has not taken formal position on draft legislation you are considering, NNSA respectively believes that it is not necessary. Too many layers of management can hurt, not help, effect the implementation of these programs.

The NSC's Proliferation Strategy Policy Committee chaired by Dr. Robert Joseph, Assistant to the President, provides a vehicle for interagency coordination, as it cooperates and provides over sight over nonproliferation assistance programs to Russia and the other states of the former Soviet Union. Chaired by the NSC, the Committee consists of Assistant Secretaries of Defense, from State, from DOE, from intelligence, and from the Office of the Vice President and other agencies as appropriate for the issue.

This group meets frequently to coordinate critical nonproliferation areas. Just yesterday, we had two meetings discussing nonproliferation issues.

As you know, the NSC is completing a comprehensive review of all U.S. nonproliferation programs. I applaud this review, which I

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