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Weapons of Mass Destruction (WMD)

USIS Washington File

25 May 1999

TEXT: WHITE HOUSE RESPONSE TO COX REPORT ON CHINA ESPIONAGE

(Agrees with substance of nearly all recommendations) (2560)
Washington -- The Clinton Administration agrees with the substance of
nearly all the recommendations made in the report of the Select
Committee on U.S. National Security and Military/Commercial Concerns
with The People's Republic of China -- also called the Cox Report.
In a statement released May 25, the White House points out that the
Administration has been implementing many of the recommendations for
months, and in some cases, years.
Although the Administration shares the Committee's objective of
strengthening export controls and counterintelligence, while
encouraging legitimate commerce for peaceful purposes, the statement
said, the White House and the Committee differ on some specific
issues.
Following is the text of the White House response to the report:
(begin text)
THE WHITE HOUSE
Office of the Press Secretary
________________________________________________________________________
For Immediate Release          May 25, 1999
RESPONSE TO THE REPORT OF THE
SELECT COMMITTEE ON U.S. NATIONAL SECURITY AND
MILITARY/COMMERCIAL CONCERNS WITH
THE PEOPLE'S REPUBLIC OF CHINA
The Select Committee submitted its classified report to President
Clinton on January 4, 1999, including 38 recommendations to address
issues related to export controls and counterintelligence. On February
1, 1999, the President provided a written response to the Select
Committee's recommendations, a portion of which was declassified and
released to the public. In its response, the Administration agreed
with the Committee on the need to maintain effective measures to
prevent the diversion of U.S. technology and prevent unauthorized
disclosure of sensitive military information. This applies to our
exports worldwide. We also agree with the Committee's recommendation
to support U.S. high tech competitiveness consistent with national
security. This has been a longstanding premise of the Clinton
Administration's technology transfer policies.
In this regard, the Administration agrees with the substance of nearly
all the Committee's recommendations, many of which we have been
implementing for months, and in some cases, years. We have worked
cooperatively with the Committee to declassify as much of the report
as possible so that the American public can be informed on these
important issues, consistent with the need to protect sensitive
national security and law enforcement information. The declassified
report, released today, provides the Committee's detailed assessments
and investigations underlying its recommendations. Although the
Administration does not agree with all of the Committee's analysis, we
share the Committee's objective of strengthening export controls and
counterintelligence, while encouraging legitimate commerce for
peaceful purposes. With regard to the specific issues raised in the
report:
Security at U.S. National Laboratories
The Administration is deeply concerned about the threat that China and
other countries are seeking to acquire sensitive nuclear information
from the U.S. National Laboratories. Security at the labs has been a
long-term concern, stretching back more than two decades. In 1997, the
Administration recognized the need to respond to this threat with a
systematic effort to strengthen counterintelligence and security at
the U.S. National Laboratories. In response, President Clinton issued
a Presidential Decision Directive (PDD-61) in February 1998. This
directive is the most comprehensive and vigorous attempt ever taken to
strengthen security and counterintelligence procedures at the Labs.
The FBI, in cooperation with DOE, is continuing its investigation into
the possible source and extent of sensitive information that China may
have acquired.
We welcome the Select Committee's support for PDD-61. As the President
indicated in February, the Administration agrees with all of the
Committee's recommendations concerning lab security, and we are
carrying out these recommendations:
-- The President asked the Director of Central Intelligence to conduct
a formal Intelligence Community damage assessment on China, which was
reviewed by an independent panel headed by Admiral David Jeremiah.
This review was completed and briefed to Congress on April 21, 1999.
-- The DCI will, at the President's direction, also consider the
recommendations made by Admiral Jeremiah's group on intelligence
collection and resources.
-- President Clinton asked the DOE to lead an interagency assessment
of lab-to-lab programs with China, Russia, and other sensitive
countries, which is scheduled for completion on June 1, 1999. The
Administration believes that these programs serve the national
security interest, but we are committed to ensuring that appropriate
protections are in place to prevent compromise of classified
information.
-- Energy Secretary Bill Richardson is aggressively implementing
PDD-61 on an expedited basis, and has been following the
implementation plan that was submitted to Congress on January 5, 1999.
By the end of 1999, the DOE CI program will be as good as the best in
the U.S. Government.
-- In addition, Secretary Richardson has instituted a number of
additional actions to improve counterintelligence security and
safeguards at the National Laboratories, including in the critical
area of cyber security. Secretary Richardson ordered a 14-day
"stand-down" of all classified computers at the weapons labs, has
initiated a massive reorganization of department security functions,
and has greatly increased the cyber security posture at DOE.
-- On March 29,1999, the Department of Energy submitted to Congress
its annual Report on Safeguards and Security at the Department of
Energy Nuclear Weapons Facilities. The report found that no nuclear
material at DOE was at risk, but rated some areas "marginal". DOE
initiated a thorough upgrade of all physical security and has
committed to making all necessary upgrades so that all sites receive
the highest rating by January 2000.
-- The Director of Central Intelligence, in coordination with
appropriate agencies, is preparing a semi-annual report to Congress on
the measures that are being taken to protect against espionage efforts
by China to obtain nuclear weapons and other national security
information of strategic concern.
In addition to the above steps recommended by the Select Committee,
the President has requested Senator Warren Rudman, as Chairman of the
bipartisan President's Foreign Intelligence Advisory Board, to
evaluate security at the labs. Senator Rudman has assembled an
excellent team of Board members to examine the issue.
Finally, the President asked the National Counterintelligence Policy
Board to recommend measures to strengthen controls over nuclear
information at facilities aside from the National Laboratories that
handle nuclear weapons issues.
Missile & Space Technology
The Administration agrees with the Select Committee on the need to
ensure that the launch of U.S.-manufactured civilian satellites by
China or any other foreign country does not inadvertently transfer
missile technology. The Department of Justice is continuing to
investigate the allegations of improper transfers cited by the report,
and it is inappropriate to comment on the specifics of these cases.
The Administration also agrees with the Committee on the need to
establish procedures to ensure timely processing of licenses,
consistent with national security.
In this regard, the Administration agrees with and is carrying out all
of the Committee's recommendations concerning satellite launches:
-- The Administration has implemented the provisions of the FY99
Defense Authorization Act, by, among other things, transferring
licensing for communications satellite exports from the Department of
Commerce to the Department of State.
-- As recommended by the Select Committee, the Department of State has
developed new procedures for timely review of licenses, and is
increasing its licensing staff to ensure the procedures are
implemented properly.
-- The Department of State has taken steps to ensure that the affected
U.S. companies understand and comply with the requirements of law and
regulation for data that may be provided to the space insurance
industry. The Department of Defense is implementing several measures
proposed by the Committee to strengthen monitoring of foreign
launches. Specifically:
-- DoD has established a new organization called the Space Launch
Monitoring Division within the Technology Security Directorate of the
Defense Threat Reduction Agency, and is hiring 39 additional staff for
this function. The new division fulfills the congressional requirement
in the FY 1999 National Defense Authorization Act to recruit, train,
and maintain a staff dedicated to all aspects of monitoring the export
of space launch and satellite technology from the U.S.
-- The new dedicated, professional staff in DoD will provide
end-to-end monitoring of controlled space launch and satellite
technologies from the first export license application through to
launch -- and failure analyses if necessary. The monitors will review
and approve all technology transfer controls plans, and all controlled
technical data proposed for export. Monitors will participate in all
technical interchange meetings and other discussions involving
controlled technical data. Monitors will also deploy to launch sites
as a cohesive group with expertise in space launch security
operations, and satellite and launch vehicle technologies.
-- Plans are also in place to ensure that there are also resources
available within DoD to augment the full-time monitoring staff should
that be necessary to meet temporary surges in requirements for
monitoring of meetings and other activities. As well, State and DoD
are requiring industry to establish electronic archiving of technical
data to ensure a complete and readily accessible data base of all
controlled data exported as part of a satellite launch campaign.
-- Training for the monitor staff is being enhanced through a program
of initial and recurring training and evaluation. The training will be
managed as a formal program through the Defense Threat Reduction
Agency's training facilities at Kirtland Air Force Base in New Mexico.
The program will encompass the complete monitoring activities outlined
in the FY 1999 National Defense Authorization Act.
-- Finally, DoD is examining the recommendation regarding contracting
for security personnel to provide physical security at foreign launch
sites. DoD looks forward to a dialogue with the appropriate
congressional oversight committees on this matter.
The Administration is encouraging development of the U.S. domestic
launch industry, to reduce our dependence on foreign launch services.
Since 1994, the Administration has fostered the international
competitiveness of the U.S. commercial space launch industry by
pursuing policies and programs aimed at developing new, lower cost
U.S. capabilities to meet both government and commercial needs. For
instance, DoD is investing $3 billion in partnership with U.S.
commercial space companies to develop and begin flying two competing
families of Evolved Expendable Launch Vehicles (EELV) with a goal of
significantly reducing launch costs for government and commercial
payloads.
For the longer term, NASA has committed nearly $1 billion toward work
with industry in developing and demonstrating technology for next
generation reusable launch vehicles (RLVs). NASA's goal is to reduce
launch costs by a factor of 10 within 10 years. To address the
shifting balance from mostly government to predominantly commercial
space launches in the U.S., the Administration recently initiated an
interagency review to assess the appropriate division of roles and
responsibilities between government agencies and the U.S. commercial
space sector in managing the operation, maintenance, improvement, and
modernization of the U.S. space launch bases and ranges. Together,
these measures comprise an effective strategy aimed at strengthening
domestic U.S. space launch capabilities and our industry's
international competitiveness.
Domestic and International Export Policies
The Administration agrees with the Committee that the end of the Cold
War and dissolution of COCOM in 1994 has complicated efforts to
control transfers of militarily important dual-use goods and
technology. In this regard, the Administration agrees with the
Committee on the desirability of strengthening the Wassenaar
Arrangement to improve international coordination and reporting on the
export of militarily useful goods and technology, and to prevent
transfers of arms and sensitive dual-use items for military end-uses
if the situation in a region, or the behavior of a state is or becomes
a cause of serious concern to the participating states. All Wassenaar
members currently maintain national policies to prevent such transfers
to Iran, Iraq, Libya, and North Korea. We are making a concerted
effort this year to strengthen and enhance existing transparency
mechanisms and to expand restraint measures. We do not believe that
other countries are prepared to accept a legally binding international
regime like COCOM directed against China and we are not seeking such a
regime. We note that a COCOM-style veto could act against U.S.
interests by letting other countries block U.S. sales to our own
security partners.
The Administration agrees with the Committee on the need to enact a
new Export Administration Act with new penalties. We have operated for
too long without updated legislation in this very important area. The
Administration will work with the appropriate Committees in Congress
and U.S. industry to obtain a new Export Administration Act. The
Administration believes that the existing dual-use export licensing
system allows adequate time for careful review of license applications
and provides effective procedures to take account of national security
considerations in licensing decisions.
High Performance Computers
The Administration agrees with the Committee that we should encourage
the sale of computers to China for commercial, but not military,
purposes. The Administration has not licensed high performance
computers (HPC) to China for military purposes.
-- As recommended by the Committee, we are reviewing the potential
national security uses of various configurations of computers, the
extent to which such computers are controllable, and the various
consequences to the U.S. industrial base of imposing export controls
on such computers. Our target date for completing this review is May
1999.
-- We also agree with the Committee that we need the capability to
visit U.S. HPCs licensed for export to China to observe how they are
being used. During President Clinton's visit to China in June 1998, we
secured a long sought Chinese agreement to arrangements to conduct
on-site visits in China to help verify the civilian use of HPCs and
other dual-use technology. We have been working to expand and
strengthen this arrangement. We believe that it is not possible to
obtain agreement by China or any other country to a no-notice
verification regime for U.S. goods.
Chinese Technology Acquisition and Proliferation Activities
The Administration is well aware that China, like other countries,
seeks to obtain sensitive U.S. technology for military uses. We
maintain strict policies prohibiting the export to China of munitions
and dual-use items for military use. As recommended by the Select
Committee, the FBI and CIA plan to complete their annual comprehensive
threat assessment of PRC espionage by the end of May, 1999, and the
Inspector Generals of State, Defense, Commerce, Energy, Treasury, and
CIA expect to complete their review of export controls by June 1999.
The Administration agrees with the Select Committee on the need to
obtain more responsible export behavior by China. Through our policy
of engagement, we believe that significant gains have been realized on
this front. For example, at our initiative China has committed not to
provide assistance to unsafeguarded nuclear facilities in Pakistan or
elsewhere -- a commitment we believe is being observed by Beijing,
terminated assistance to Iran on a project of nuclear proliferation
concern and refrained from new civil and military nuclear cooperation
with Iran, stopped exports of C-802 cruise missiles to Iran, and
strengthened export controls over nuclear and chemical weapons related
materials. China has also, with our urging, ratified the Nuclear
Nonproliferation Treaty and the Chemical Weapons Convention, and has
signed the Comprehensive Test Ban Treaty, which are the key pillars of
the international nonproliferation regime. On regional security, China
has provided concrete assistance in dealing with proliferation threats
in North Korea and South Asia.
The Administration agrees with the Committee that we should seek
Chinese adherence to the MTCR. In June 1998, President Jiang announced
that China will actively study MTCR membership. The Administration
intends to continue actively pressing the Chinese on this issue and
other proliferation issues of concern.
(end text)



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