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U.S. Department of State

Daily Press Briefing

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QUESTION: USA Today has a story that the United States has declared - the administration has declared 20 companies ineligible for assistance, companies believed to be assisting - involved with Russia proliferation to Iran, that specific countries - the funds have been cut off to specific companies. They named the companies.

Has there been a finding that so many agencies or research facilities in Russia are ineligible to receive millions of dollars in US aid?

MR. RUBIN: I think what is a little misleading about that is this sort of blacklist idea. Rather, what I think is accurate is to say that we evaluate very carefully proposals to use US government funds in cooperative projects with foreign entities. This is standard procedure that we follow in such cases and, of course, we would want to scrutinize and look very skeptically at proposals involving entities that might be engaged in activities in the area of nonproliferation that concern us.

US efforts include working with entities and scientists in Russia and the NIS to redirect their expertise to the civilian economic sector so that they are provided with legitimate alternatives to working on programs of proliferation concern.

For over a year now, we have been extremely concerned and quite troubled about reports that Iran's missile program has been able to obtain technology from some Russian entities. During this period, we have worked on this subject very actively at high levels in this administration and we have incorporated our concerns in this regard into our review of proposals for US government funded cooperative projects. Such reviews assist us in ensuring that assistance is not provided to entities that may be engaged in activities of proliferation concern.

I am not in a position to discuss a specific list, other than to say that we do closely scrutinize many companies, and I can say that the list, as reported, is neither definitive nor error-free.

QUESTION: All right. Having heard all that, what does - which is helpful - but the article is beyond that. We all know you are against proliferation. We all know about Russia's promises.

MR. RUBIN: I did all that work, Barry.

QUESTION: No, that's good stuff, but their performance, evidently, falls short of US expectations and of their promises. The disappearance of Chernomyrdin probably doesn't help because he made a specific promise to Vice President Gore.

MR. RUBIN: The Russian government has confirmed that the commitments made during the Gore-Chernomyrdin era stand.

QUESTION: What about implementation? This article suggests that they have not implemented this promise and that the US has come to a conclusion that there are a lot of agencies in Russia assisted by American companies that are ineligible. If you don't want to give the number and you want to deal with the names and you won't even suggest that some of these names may not be correct, has there been a finding, apart from the watch list that exists for a year now?

MR. RUBIN: No, the impression -

QUESTION: Have you found enough fall to crack down yet?

MR. RUBIN: The impression given by this article that there is a blacklist based on a finding is incorrect; rather, there are companies that, with our increased concern about proliferation, we pay more attention to. An example of an erroneous entity is the Russian Space Agency that is on that list, and so there are flaws in that list.

What I am saying to you is that these are companies and entities that, because of our concern over the last year about proliferation, now receive extra scrutiny. But there is no ban. There is no finding that these companies have violated a sanctions law and, therefore, are going to be subject to sanctions and not being allowed to receive US assistance.

QUESTION: Well, I'm going to take your answer in good faith because the administration doesn't think there has to be a law.

MR. RUBIN: Sorry?

QUESTION: I'm going to take your reply on good faith.

MR. RUBIN: It's always in made in good faith.

QUESTION: When you spoke of law. And, of course, that's irrelevant as far as the administration is concerned. They don't need law.

MR. RUBIN: No, no, I -

QUESTION: You don't think you need enabling legislation. No, it's all right. I'm just asking, law aside, has the administration concluded that Company A, B and - Project A, B and C are ineligible because of misbehavior?

MR. RUBIN: I can not get into specific -

QUESTION: Without naming the companies.

MR. RUBIN: -- companies or specific entities. What I can tell you is that the impression given that the administration has concluded that Entity A, Company B or Organization C is banned because of proliferation activity is incorrect. What is correct is that there are a large number of entities that we scrutinize especially carefully because of our concern about proliferation. What I can say is that one of those entities that's on that list is not receiving that level of presumption against a project, and that is the Russian Space Agency.

So, rather, this is a rather informal list that has received increased prominence as a result of one of our nation's newspapers.

QUESTION: Are there actually more entities, companies, organizations on this watch list

than -

MR. RUBIN: What I can say is that it is neither exhaustive, definitive, nor error-free.

QUESTION: While we're talking about -- this is USA Today.

MR. RUBIN: Do you have something to say there, in the back?

QUESTION: Yes, I do, Mr. Rubin.

MR. RUBIN: I noticed that.

QUESTION: In your recitation of the flaws in the story, would you dispute the basic thrust of the story that it's possible that these companies could be penalized for their work?

MR. RUBIN: No.

QUESTION: You don't dispute that?

MR. RUBIN: No, no, let me try to - if you think that I only spent time on what was wrong with it, let me spend time on what was right with it. It is correct that the United States government has deep concerns about proliferation and that it has informal lists of entities where we have concerns that they might be involved in proliferation activities and, therefore, merit extra scrutiny before allowing us to engage in joint projects with them or provide assistance to them.

Many of the companies and entities in that very interesting story prepared by one of our nation's newspapers are accurate; that they are receiving extra scrutiny because of this concern.

MR. RUBIN: How is that for a balanced view, Lee?

QUESTION: I like that view better than the earlier one.

QUESTION: Would it be fair to say that these companies and entities and agencies that are on this rather informal list, as you call it, have not received any aid, whether or not they are banned from receiving it?

MR. RUBIN: Well, I think I tried to signal that certainly one of the objectives of our foreign policy is to redirect experts in the area of weaponry, missiles, and nuclear capabilities that existed in Russia away from that expertise. And so our efforts include working with entities and scientists in Russia to redirect their expertise towards the civilian economic sector so that they are provided with legitimate alternatives to working on programs of proliferation concern.

So I wouldn't rule out that there are projects affiliated with some of those entities that are designed to wean them away from work in areas where there may be a residual concern of proliferation.

QUESTION: (Inaudible) funding has been - I think -

MR. RUBIN: Right, but then I would have to talk about a specific company and a specific project. What I can say is that, overall, our objectives of our policy include working with those entities where there may be people who are able to be moved away from proliferation-prone activities towards civilian economic activities. To the extent that they are, to the extent that a program does that purpose, and to the extent that it can do that without providing residual capability to the proliferation-prone activity, we would be prepared to do that in principle. But I have been specifically prohibited from describing any particular company, any particular entity, or any particular project associated with that.

QUESTION: Just if you could deal with one - if we could get one fact here, is Bob Gallucci going over there later this week?

MR. RUBIN: To my understanding, he will be going there shortly. I don't know the exact date.

QUESTION: For what, purpose?

MR. RUBIN: To continue the work that was done through the Winser-Koptev channel to try to nail down, as much as possible, implementation of the January executive action that will hopefully make it harder and harder for Russian entities to provide assistance, wittingly or unwittingly, to the Iranian missile program.

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(The briefing concluded at 1:15 P.M.)

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