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Weapons of Mass Destruction (WMD)

USIS Washington File

25 May 1999

TEXTS: WHITE HOUSE 5/25 ON CHINA SPY REPORT/RECOMMENDATIONS

(White House says most recommendations "constructive")  (3140)
Washington -- The Clinton Administration and the House Select
Committee on Intelligence share the common objective of ensuring that
U.S. national secrets are protected and that civilian technology is
not diverted for military purposes, the White House said in a May 25
statement.
"We found most of the recommendations (in the Committee's report)
constructive and we are in the process of implementing them," the
White House said. "We look forward to working with Congress on any
necessary additional measures to strengthen protections and export
controls."
An unclassified, redacted version of the Committee's report can be
found at:
http://www.house.gov/coxreport/
Following is the text of the White House statement and the text of the
select committee's recommendations, as they appear in Chapter 11 of
the report:
(begin White House text)
THE WHITE HOUSE
Office of the Press Secretary
(Aboard Air Force One)
May 25, 1999
STATEMENT BY THE PRESS SECRETARY
Release of Cox Report
The President received the classified version of the Select
Committee's report on January 4, 1999, and the President provided his
response to the recommendations of the Select Committee on February 1,
1999.
While we do not agree with all of the report's analysis, the
Administration and the Select Committee share a common objective:
ensuring that U.S. national secrets are protected and that our
civilian technology is not diverted for military purposes.
We found most of the recommendations constructive and we are in the
process of implementing them. In many cases, the Administration had
already been implementing the substance of the recommendations as a
matter of policy, practice and as required by law. We look forward to
working with Congress on any necessary additional measures to
strengthen protections and export controls.
(end White House text)
(begin Select Committee text)
Chapter 11 Text
RECOMMENDATIONS OF THE SELECT COMMITTEE
TRANSMITTED ON JANUARY 3, 1999
TO THE PRESIDENT AND CONGRESS
Nuclear Weapons
1. Semi-Annual Report by the President on PRC Espionage
The Select Committee recommends that the President report to the
Speaker and Minority Leader of the House, and the Majority Leader and
Minority Leader of the Senate, no less frequently than every six
months on the steps, including preventive action, being taken by the
Department of Energy, the Department of Defense, the Federal Bureau of
Investigation, the Central Intelligence Agency, and all other relevant
Executive departments and agencies to respond to espionage by the
People's Republic of China (PRC) as typified by the theft of
sophisticated U.S. nuclear weapons design information, and the
targeting by the PRC of U.S. nuclear weapons codes and other national
security information of strategic concern.
2. Urgent Priority to Department of Energy Counterintelligence Program
As a matter of urgent priority, the Select Committee believes the
Department of Energy must implement as quickly as possible and then
sustain an effective counterintelligence program.
To this end, the Select Committee recommends the following:
3. Implementation and Adequacy of PDD-61
The appropriate congressional committees should review, as
expeditiously as possible, the steps that the Executive branch is
taking to implement Presidential Decision Directive 61 and determine
whether the Administration is devoting, and Congress is providing,
sufficient resources to such efforts and whether additional measures
are required to put an adequate counterintelligence program in place
at the Department of Energy at the earliest possible date.
4. Comprehensive Damage Assessment
The appropriate Executive departments and agencies should conduct a
comprehensive damage assessment of the strategic implications of the
security breaches that have taken place at the National Laboratories
since the late 1970s (or earlier if relevant) to the present and
report the findings to the appropriate congressional committees.
5. Legislation to Implement Urgent and Effective Counterintelligence
The appropriate congressional committees should report legislation, if
necessary, to facilitate accomplishment of the objectives set forth
above.
6. Five-Agency Inspectors General Examination of Scientific Exchange
Program Risks to National Security
The Select Committee recommends that the Secretaries of State,
Defense, and Energy, the Attorney General, and the Director of Central
Intelligence direct their respective Inspectors General and
appropriate counterintelligence officials to examine the risks to U.S.
national security of international scientific exchange programs
between the United States and the PRC that involve the National
Laboratories. Such Executive department and agency heads shall
transmit the results of these examinations, together with their views
and recommendations, to the Speaker and the Minority Leader of the
House, the Majority and Minority Leaders of the Senate, and
appropriate congressional committees no later than July 1, 1999.
7. Congressional Examination of Whether Department of Energy Should
Maintain U.S. Nuclear Weapons Responsibility
The Select Committee recommends that the appropriate congressional
committees consider whether the current arrangements for controlling
U.S. nuclear weapons development, testing, and maintenance within the
Department of Energy are adequate to protect such weapons and related
research and technology from theft and exploitation.
8. Intelligence Community Failure to Comply with National Security
Act; Need for Congressional Oversight
In light of the fact that the heads of Executive departments and
agencies of the intelligence community failed adequately to comply
with congressional notification requirements of the National Security
Act with respect to the theft of secrets from the National
Laboratories, the Select Committee urges Congress to insist again on
strict adherence to such legal obligations.
International Actions
With respect to international actions by the United States, the Select
Committee recommends:
9. Need for PRC Compliance with the Missile Technology Control Regime
The United States should insist that the PRC adhere fully to, and
abide by, the Missile Technology Control Regime and all applicable
guidelines.
10. Need for U.S. Leadership to Enforce Missile Technology Control
Regime
The United States must vigorously enforce, and seek multilateral
compliance with, the Missile Technology Control Regime.
11. Need for U.S. Leadership to Establish Binding International
Proliferation Controls
In light of the demise of the Coordinating Committee on Multilateral
Export Controls (COCOM) and the insufficiency of the Wassenaar
Arrangement on Export Controls for Conventional Arms and Dual-Use
Goods and Technologies, the United States should work, including in
the context of the scheduled 1999 review of the Wassenaar Arrangement,
to establish new binding international controls on technology
transfers that threaten international peace and U.S. national
security.
12. U. S. Action to Improve Multilateral Tracking of Sensitive
Technology Exports
In light of the demise of COCOM and the insufficiency of the Wassenaar
Arrangement, the Select Committee recommends that the United States
take appropriate action, including in the context of the scheduled
1999 review of the Wassenaar Arrangement, to improve the sharing of
information by nations that are major exporters of technology so that
the United States can track movements of technology and enforce
technology control and re-export requirements.
13. U.S. Action to Stem Russian Weapons Proliferation to PRC
In light of the PRC's aggressive military technology acquisition
campaign and its record as a proliferator, the United States should
work to reduce the transfers of weapons systems and other militarily
significant technologies from Russia and other nations to the PRC.
These actions should include strengthening international measures,
including economic incentives, to encourage Russia to become a full
partner in stemming the proliferation of weapons.
14. New Legal Requirements for Executive Branch Reporting on
Proliferation
Appropriate congressional committees should report legislation
requiring the Secretary of State, the Director of Central
Intelligence, and the heads of other relevant Executive departments
and agencies to report in a timely fashion to appropriate
congressional committees, including the House Permanent Select
Committee on Intelligence and the Senate Select Committee on
Intelligence, on technology transfers that raise a proliferation
concern and on the implementation of all the foregoing recommendations
for international actions by the United States.
Satellite Launches
15. Implementation of the Strom Thurmond National Defense
Authorization Act for FY 1999
The Select Committee expects that the Executive branch will
aggressively implement the Satellite Export Control Provisions of the
Strom Thurmond National Defense Authorization Act for FY 1999.
16. State Department Should Have Sole Satellite Licensing Authority
To protect the national security, the congressional judgment that the
Department of State is the appropriate agency for licensing both
exports of satellites and any satellite launch failure investigations
must be faithfully and fully implemented.
17. State Department Need for Adequate Personnel and Resources for
Satellite Export Licensing
To protect the national interest in foreign commerce, the Department
of State must ensure, consistent with national security, that
satellite export licenses and notices to Congress are acted on in a
timely fashion and that exporters are informed about the progress of
their applications and have access to appropriate dispute resolution
procedures. In order to achieve the foregoing, the Executive branch
and the Congress should ensure that the Department of State has
adequate personnel and resources devoted to processing export license
applications.
18. Corrective Tax Legislation for Satellite Exports
To ensure that satellite manufacturers are not disadvantaged in such
collateral areas as tax credits by the transfer to the State
Department of responsibility to license satellite exports, the
appropriate congressional committees should report necessary
legislation.
19. Heightened Requirements for Defense Department Monitoring of
Foreign Launches
The Department of Defense must give high priority to its obligations
under the Strom Thurmond National Defense Authorization Act, including
requirements for (i) recruiting, training, and maintaining a staff
dedicated to monitoring launches in foreign countries of U.S.
satellites; and (ii) establishing and monitoring technology control
plans to prevent any transfer of information that could be used by the
PRC to improve its missile launch capabilities.
20. Defense Department, Not Satellite Firms, Should Be Responsible for
Security at Foreign Launches
The Select Committee recommends that the appropriate congressional
committees report legislation providing that, in connection with
foreign launches of U.S. satellites, the Department of Defense shall
contract for security personnel who have undergone background checks
to verify their loyalty and reliability. The number of guards shall be
sufficient to maintain 24-hour security of the satellite and all
related missile and other sensitive technology. The satellite export
licensee shall, as a condition of licensure, be required to reimburse
the Department of Defense for all associated costs of such security.
21. Need for Adequate and Permanent Force of Well Trained Defense
Department Monitors
The Department of Defense shall ensure sufficient training for space
launch campaign monitors and the assignment of adequate numbers of
monitors to space launch campaigns. The Department of Defense also
shall ensure continuity of service by monitors for the entire space
launch campaign period, from satellite marketing to launch, and, if
necessary, completion of a launch failure analysis. In addition, the
Department of Defense shall adopt measures to make service as a
monitor an attractive career opportunity.
22. Need for Full and Timely Reporting of Technology Passed to PRC,
and of Foreign Launch Security Violations
The Department of Defense monitors shall maintain logs of all
information authorized for transmission to the PRC, including copies
of any documents authorized for transmittal, and reports on
launch-related activities. Such information shall be transmitted on a
current basis to the Departments of Defense, State, and Commerce, and
to the Central Intelligence Agency. Such documents shall be retained
for at least the period of the statute of limitations for violations
of the International Traffic in Arms Regulations (ITAR). In addition,
the Department of Defense shall adopt clear written guidelines
providing monitors the responsibility and the ability to report
serious security violations, problems, and issues at the overseas
launch site directly to the headquarters office of the responsible
Defense Department agency.
23. Application of Export Control Laws to Space Launch Insurers
The Select Committee recommends that relevant Executive departments
and agencies ensure that the laws and regulations establishing and
implementing export controls are applied in full to communications
among satellite manufacturers, purchasers, and the insurance industry,
including communications after launch failures.
24. Expansion of U.S. Launch Capacity in National Security Interest
In light of the impact on U.S. national security of insufficient
domestic, commercial space-launch capacity and competition, the Select
Committee recommends that appropriate congressional committees report
legislation to encourage and stimulate further the expansion of such
capacity and competition.
High Performance Computers
The Select Committee supports the sale of computers to the PRC for
commercial but not military purposes. The Select Committee recommends
that the appropriate congressional committees report legislation that
requires the following:
25. Legislation to Require Comprehensive Testing of HPCs, Clustering,
and Massive Parallel Processing in National Security Applications
The Select Committee recommends that appropriate congressional
committees report legislation directing the Department of Energy, in
consultation with the Department of Defense, to conduct a
comprehensive review of the national security implications of
exporting high-performance computers (HPCs) to the PRC. This review
should include empirical testing of the extent to which national
security related operations can be performed using clustered,
massively-parallel processing or other combinations of computers.
26. Annual Threat Assessment of HPC Exports to PRC
The Select Committee recommends that appropriate congressional
committees report legislation directing the Intelligence Community to
conduct an annual comprehensive threat assessment of the national
security implications of the export to the PRC of HPCs and other
computers that can be clustered or combined through massively parallel
processing.
27. End Use Verification for PRC Use of HPCs
The Select Committee recommends that the appropriate congressional
committees report legislation that requires:
-- As a condition to U.S. HPC export licensing, the establishment by
the PRC of an open and transparent system by September 30, 1999, which
provides for effective end-use verification for HPCs sold or to be
sold to the PRC and, at a minimum, provides for on-site inspection of
the end-use and end-user of such HPCs, without notice, by U.S.
nationals designated by the U.S. Government.
-- Failure to establish such a system by that date should result in
the U.S. Government's lowering the performance level of HPCs that may
be exported to the PRC, the denial of export licenses for computers
destined to the PRC, or other appropriate measures.
-- An independent evaluation of the feasibility of improving end-use
verification for HPCs in the PRC, and preventing the use of such HPCs
for military purposes.
28. U.S. Leadership for Multinational HPC Export Policies
The Select Committee recommends that the appropriate congressional
committees report legislation that requires efforts by the Executive
branch to encourage other computer-manufacturing countries, especially
those countries that manufacture HPCs, to adopt similar policies
toward HPC exports to the PRC.
Export Legislation and Other Technology Controls
The Select Committee believes that it is in the national interest to
encourage commercial exports to the PRC, and to protect against the
export of militarily sensitive technologies. To this end:
29. Reauthorization of Export Administration Act
The Select Committee recommends that the appropriate congressional
committees report legislation to reenact the Export Administration
Act, with particular attention to re-establishing the higher penalties
for violation of the Act that have been allowed to lapse since 1994.
30. Prioritization of National Security Concerns With Controlled
Technologies; Continuous Updating
Relevant Executive departments and agencies should establish a
mechanism to identify, on a continuing basis, those controlled
technologies and items that are of greatest national security concern.
31. Executive Department Approvals for Exports of Greatest National
Security Concern
With respect to those controlled technologies and items that are of
greatest national security concern, current licensing procedures
should be modified:
-- To provide longer review periods when deemed necessary by any
reviewing Executive department or agency on national security grounds;
and
-- To require a consensus by all reviewing Executive departments and
agencies for license approval, subject to appeal procedures.
32. Streamlined Licensing Procedures
With respect to controlled technologies and items that are not of
greatest national security concern, current licensing procedures
should be modified to streamline the process and provide greater
transparency, predictability, and certainty.
33. Effect of Maintaining Looser National Security Controls for Hong
Kong Since Its Absorption by PRC on July 1, 1997
The Select Committee recommends that appropriate congressional
committees report legislation requiring appropriate Executive
departments and agencies to conduct an initial study, followed by
periodic reviews, of the sufficiency of customs arrangements
maintained by Hong Kong with respect to the PRC and the
appropriateness of continuing to treat the Hong Kong S.A.R.
differently from the PRC for U.S. export control purposes. Such a
study should consider, among other things, the implications of
unmonitored border crossings by vehicles of the People's Liberation
Army.
34. Mandatory Notice of PRC or Other Foreign Acquisition of U.S.
National Security Industries
The Select Committee recommends that appropriate congressional
committees report legislation amending the Defense Production Act of
1950 to require notice to the Committee on Foreign Investment in the
United States (CFIUS) by all U.S. companies that conduct national
security-related business of any planned merger, acquisition, or
takeover of the company by a foreign entity or by a U.S. entity
controlled by a foreign entity. The amendment also should require
Executive departments and agencies to notify CFIUS of their knowledge
of any such merger, acquisition, or takeover.
Intelligence/Counterintelligence Issues
35. Comprehensive Counterintelligence Threat Assessment of PRC
Espionage
Supplementing its recommendations with respect to security at the
National Laboratories, the Select Committee further recommends that
Executive departments and agencies with counterintelligence expertise
undertake a comprehensive counterintelligence threat assessment of PRC
espionage targeted against U.S. public and private entities.
36. Legislation to Improve Sharing of Sensitive Law Enforcement
Information within the Executive Branch
The Select Committee recommends that appropriate congressional
committees report legislation to authorize and direct the Department
of Justice to promptly share national security information, on a
classified basis, with appropriate Executive departments, agencies,
and entities. To achieve this objective, the Select Committee
recommends the creation of an appropriate interagency mechanism.
37. Five-Agency Inspectors General Examination of Countermeasures
Against PRC Acquisition of Militarily Sensitive Technology
The Select Committee recommends that appropriate congressional
committees require the Secretaries of State, Defense, Commerce, and
the Treasury and the Director of Central Intelligence to direct their
respective Inspectors General to investigate the adequacy of current
export controls and counterintelligence measures to protect against
the acquisition by the PRC of militarily-sensitive U.S. technology,
and to report to Congress by July 1, 1999, regarding their findings
and measures being undertaken to address deficiencies in these areas.
38. All-Source Intelligence Analysis of PRC Plans for Technology
Acquisition
The Select Committee recommends that appropriate congressional
committees report legislation directing the Intelligence Community to
undertake and maintain a current, all-source analysis of PRC aims,
goals, and objectives with respect to the acquisition of foreign, and
particularly U.S., technologies, including, for example, PRC efforts
to exploit the open character of U.S. society by penetrating
businesses, academic and social institutions, and political practices.
Such legislation should include a requirement to report on the
adequacy of resources, encouragement, and priority status accorded
all-source intelligence collection and analysis by relevant Executive
departments and agencies concerning the PRC and PRC
counterintelligence.
(end Select Committee text)



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