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Strategic Analysis:
A Monthly Journal of the IDSA
The Challenge of Nuclear Export Controls
By Savita Pande
*
The arms control regime in general has seen paradigm shifts in its operation, although the guiding principle remains retention of hegemony by those who have it. The strategy of achieving it via export controls, the policy tools to reach the objective, continues to be pursued rather more vigorously. It is believed, albeit erroneously, that those curbing nuclear activities by controlling transfer of material and technology even for peaceful purposes would prevent their spread to additional states. Nothing could be farther from truth. Even the ardent champions of “tightening the export controls” agree that they can at best delay the process of acquisition of the capability. To quote David Fischer, “Export control can only hold back the inevitable,” 1 or, as a recent Rand Report “Sources of Conflict in the 2st Century” puts it, “Technologically, the watchword is diffusion. As commercial needs and standards increasingly dominate, dual-use technology—technology with both civilian and military applications—will proliferate widely, with important security implications.” 2
This paper is an attempt to look into the tenets of the export control regime in terms of both theory and practice. The first part deals with the nuclear export control regime as its exists in theory—the Zangger Committee and the Nuclear Suppliers Group (NSG). The second section deals with the impact of the regime in terms of its operation. The combat strategies used by either exploiting the loopholes in the regime or by deliberately violating the provisions have been discussed as case studies and have been put in various categories to have a better understanding of the practical aspects. A case study of India has been taken up in this section in the light of recent developments. Finally, an attempt has been made to draw some conclusions from the discussion in the paper.
I. Zangger Committee
The first important multilateral instrument of control for nuclear technology was put in place in 1974 by the Zangger Committee. The committee has its roots in Article III of the Treaty on Non-Proliferation of Nuclear Weapons (NPT) which says: “Each party to the Treaty undertakes not to provide (a) source or special fissionable material, or (b) equipment or material specially designed or prepared for the processing, use or production of special fissionable material, to any non-nuclear weapon state for peaceful purposes, unless the source or the special fissionable material shall be subject to (IAEA) safeguards required by this Article”. However, as the International Atomic Energy Agency (IAEA) is involved here only in administering the safeguards in the importing state, it is up to the exporters themselves to interpret and implement this Article. 3
In particular, the ambiguity in the phrase “equipment or material specially designed or repaired for processing from a use or production of special fissionable material” needed clarification. Between 1971 and 1974, a group of 15 states, some already party to the NPT and the others prospective parties, held a series of meetings in Vienna under the chairmanship of Claude Zangger of Switzerland. The objective was to reach a common consensus on interpretation of the phrase stated above and to reach an understanding of the conditions and procedures that would govern exports of such material in order to meet the obligations of Article III.2 on the basis of commercial competition. The group, which came to be known as the Zangger Committee, decided that its status was informal and that its decisions would not be legally binding on its members.
By 1974, the committee had arrived at a consensus on the basic “rules of the game” which were set out in two separate memoranda dated August 14, 1974. The first defined and dealt with exports of source and special fissionable material (Article III.2(a)) of the NPT); the second defined and dealt with exports of equipment and non-nuclear material (Article III.2 (b) of the NPT). The committee agreed to exchange information about actual exports, or issue of licences for exports to any non-nuclear weapon state not party to the NPT through a system of Annual Returns which are circulated on a confidential basis amongst the members each year in April.
The consensus, which formed the basis of the committee’s “undertakings”, as they are known, was formally accepted by individual member states of the committee by an exchange of notes among themselves. These amounted to unilateral declarations that the understandings would be given effect through respective domestic export legislation. Each member state (except three) wrote identical letters to the director general of the IAEA, enclosing edited versions of the two memoranda, informing him of its decisions to act in conformity with the conditions set out in them and asking him to communicate these decisions to all members of the agency. The letters and the memoranda were accordingly published as an IAEA document in INFCIRC- 209 dated September 3, 1974. The three exceptions (Belgium, Italy and Switzerland) subsequently wrote to the director general informing him of their decisions to comply with the undertakings of the Nuclear Suppliers Group set out in INFCIRC/254 dated February 1978.
The memorandum dealing with equipment and non-nuclear material became known as the “Trigger List”. Exports of items listed on it “trigger” IAEA safeguards, i.e. they will be exported only if the source or special material produced, processed or used in the equipment or material in question is subject to safeguards under an agreement with the IAEA.
Items on the original Trigger List included nuclear reactors and specified equipment, therefore, including pressure vessels fuel charging and discharging machines, control rods, pressure tubes, zirconium tubes and primary pull and pumps. Also included were exports of deuterium and heavy water exceeding specific amounts of nuclear grade graphite, reprocessing plants and equipment designed or prepared for them, fuel fabrication plants and also equipment (not including analytical instruments) designed or prepared for uranium isotope separation. 4
Attached to the original Trigger List was an annex clarifying or defining the terms described in it some detail. The passage of time and successful developments in technology have led to further clarification of Trigger List items and the original annex has grown considerably.
In November 1977, the clarifications contained in the Trigger List annex were updated to bring them into conformity with those of INFCIRC-254. However, three member states (Belgium, Italy and Switzerland) expressed the reservation that, in their opinion, the new item, “plans for the production of heavy water, deuterium and deuterium compounds and equipment specially designed or prepared thereof” (2.6.1) did not fall within the legal scope of Article 3.2 (b) of the NPT and would entail implicit modifications of it. Accordingly, they made it clear that they would act on this item on the basis of their commitment under the NSG Guidelines.
The amendments were published in IAEA document INFCIRC/209/ Mod.1 issued on December 1, 1978. In order to take account of the technological development in the field of isotope separation by the gas centrifuge process, the clarifications in the Trigger List annex concerning isotope separation plant equipment were updated to include additional details. The text of the new clarifications was published in IAEA document INFCIRC/ 209/ Mod.2 of February 1984. The clarifications concerning isotope separation plant equipment were further elaborated by the identification of items of equipment used for isotope separation by the gaseous diffusion method. The text of the clarifications was published in IAEA document INFCIRC/209/ Mod 4 of February 1990. Earlier, in 1985, the clarifications contained in the Trigger List annex concerning fuel-reprocessing plants were updated.
The Zangger Committee, therefore, produced and keeps up-to-date a list of material and equipment “specially designed or prepared” for nuclear use as well as definitions of technology, major critical components and the criteria needed to interpret the Trigger List. Dual-use items were not on the Zangger List since they were not “specially designed or prepared” for nuclear use. Since the task of the Zangger Committee was to interpret a specific Article of the NPT, it was made up of NPT parties only.
Nuclear Suppliers’ Group
The Indian nuclear test in 1974 triggered the creation of the “London Club”, or Nuclear Suppliers’ Group (NSG). The countries initially involved were Canada, France, Japan, the FRG, UK, USA and USSR. A major reason for the group’s creation was the inclusion of France, a major supplier and at that time not a party to the NPT and, thus, not a participant in the Zangger Committee. 5
An outline agreement had already been reached by 1976, at which time eight other states—Belgium, Czechoslovakia, the German Democratic Republic (GDR), Italy, the Netherlands, Poland, Sweden and Switzerland—were also invited to participate in further consultations. In 1978, following a procedure adopted by the Zangger Committee, all countries sent letters to the director general of the IAEA to inform him that they would abide by the principles, which had been agreed to in 1977. The guideliness for the export of nuclear material, equipment or technology (popularly called London Guidelines) are contained in IAEA document INFCIRC/254. These London Guidelines which apply to exports to non-nuclear weapon states, placed more stringent requirements on nuclear exports than the Zangger Committee understandings and included requirements for assurance of non-explosive use on the part of recipients, safeguards, as well as the control of re-transfers. 6
The Zangger List, in the form it had taken by the end of 1978,was incorporated in Annex A, the Trigger List of the London Guidelines, which also includes common criteria for technology transfers under the guidelines.
There are three basic principles of the guidelines. One, the transfer of items on the Trigger List should be authorised only after formal assurance from the governments of the recipients, which explicity excludes uses which would result in a nuclear explosive device; two, materials and facilities appearing on the Trigger List should be “placed under effective physical protection to prevent unauthorised use and handling”; and, three, Trigger List items should be transferred only when covered by appropriate safeguards. 7 The first and third of these principles are also part of the Zangger Committee agreements.
The guidelines stipulate that these three requirements should also apply to facilities for reprocessing enrichment or heavy water production, which utilise technology “directly transferred from the supplier or derived from the transferred facilities, or major critical components thereof”. In addition, the transfer of any such facilities, or major components thereof, or related technology requires that IAEA safeguards also apply to any facility of the same type which may be constructed and that a safeguards agreements allow the IAEA to apply safeguards to facilities identified as using transferred technology.
Apart from these, the supplier nations are urged to show utmost restraint in transferring sensitive facilities, technology and weapon usable materials. A supplier nation must also be informed if an enrichment facility or technology is to be operated in such a manner as to produce uranium enriched to greater than 20 per cent U-235; this also applies to facilities based on such technology.
There is also a prior consent clause which asks the suppliers and the recipients to agree on arrangements for reprocessing, storage, alteration, use, transfer or re-transfer of weapon-usable material which has been transferred or derived from transferred facilities. What is noteworthy is that it is not a binding commitment: suppliers “should endeavour to include such provisions whenever appropriate and practicable”. In addition, if transferred Trigger List items or items derived from transfered facilities or with the help of such equipment or technology are re-transferred, the same assurances must be given by the recipient as were required for the original transfer.
Unanimous consent is required if any of the guidelines is to be changed.
To begin with, there was no stipulation of full-scope safeguards (FSS). While FSS had been recommended by the UK and USSR in a joint proposal, objections by France, the FRG and Japan foreclosed the adoption of such an agreement. 8 The third NPT Review Conference’s final declaration included a commitment to persuade customers to accept FSS without making these a pre-requisite for the transfer. 9
These guidelines formed the basis for the first declaration for a common European Community (EC) non-proliferation policy for discussion in the IAEA’s Committee on the Assurances of Supply (CAS) and at the UN Conference on the Promotion of International Cooperation in the Peaceful Use of Nuclear Energy (UNCPICPUNE) in 1981. In these two fora, the supplier states turned down the request of threshold states to make trade independent of the assurances on non-proliferation.
It is also important to take note of the fact that the guidelines are implemented through national mechanisms of legislation and enforcement, leaving open the possibility of differences in interpretation. Provision for consultation to minimise such effects was included in the guidelines. But, in fact, other than the isolated bilateral consultations, the NSG did not meet again until 1991 by which time the Zangger List had been updated so that it had become more detailed than the NSG List.
Renewed Initiative
Triggered by the clandestine activities of Iraq at the time, and the realisation that many of the NSG countries had exported much of the technology and equipment, nuclear and otherwise, which had been used, led the (then) 26 members of the NSG to meet, the first time since 1978, in the Netherlands on March 5-7, 1991. 10
Support was expressed by several countries, including Germany and the USA, on full-scope safeguards. The issue of controlling dual-use of goods was also discussed. At the follow-up meeting in Warsaw in 1992, 27 members (Austria had joined in 1991, Ukraine and the EC were present with observer status) agreed on three initiatives: (1) making acceptance of comprehensive safeguards mandatory for countries receiving new significant nuclear exports; (2) specific guidelines were established on the export of a wide variety of dual-use technology items (called the 1992 Guidelines for Transfers of Nuclear -Related Dual-use Equipment, Material and Related Technology—INFCIRC/254/Rev.1/Part 2); (3) amendments to the 1977 Trigger List were made.
The New Trigger List
The revised Trigger List is much more specific. 11 Regarding fuel reprocessing plants and equipment especially designed or prepared for them, whereas the earlier list mentions only fuel chopping machines and critically safe tanks, the new list not only expands upon these items but also includes solvent extractors and solvent extraction equipment, chemical holding or storage vessels, plutonium nitrate to oxide conversion systems and plutonium oxide to metal production systems. For uranium, the list is much more detailed with respect to isotope separation for enrichment. While the earlier list had simply mentioned equipment of relevance in the centrifuge method of enrichment, the new list contains highly specific enumeration of rotating and static components in addition to specially designed auxiliary equipment such as feed and tails withdrawal systems and frequency changers.
Again, while the older list simply mentions gaseous diffusion barriers and gaseous diffuser holdings, the new list is more specific on these types of equipment and also includes compressors, gas blowers, rotary shaft seals, heat exchangers for cooling UF6, as well as details on auxiliary equipment for use in gaseous diffusion enrichment systems, equipment and components for use in, as well as those for, chemical exchange and ion exchange and plasma enrichment. The new list is also much more specific regarding plants or equipment designed for the production of heavy water.
The type of equipment necessary to construct the type of electromagnetic isotope separation units which Iraq was on the verge of employing, to separate large quantities of uranium, is also included. 12
Dual-Use Items
In an attached annex, the NSG agreed to the basic principle of refraining from transferring equipment, material or related technology for use by a non-nuclear weapon state in a nuclear explosive or an unsafeguarded nuclear fuel cycle activity, or, in general, when there is an unacceptable risk of diversion to such an activity, or when the transfers are contrary to the objective of averting the proliferation of nuclear weapons.
Several factors are listed which are to be taken into account when considering whether to carry out such transfers. These include: (a) whether a state is a party to the NPT, Treaty of Tlatelolco or similar nuclear non-proliferation agreement with an agreement on IAEA safeguards on all peaceful nuclear activities; (b) if the state is not a party to any such international agreement, whether facilities associated with it are not or will not be subjected to safeguards; (c) whether items are appropriate to the stated end-use; (d) whether the item is to be used in a reprocessing or enrichment facility; and (e) demonstrated support for nuclear non-proliferation by the recipient and compliance with the existing obligations in the area. Also to be considered are the previous activities of the recipient, in particular whether illegal or clandestine procurement activities have been engaged in, whether a transfer has not been authorised or whether any authorised transfer has been diverted for any purpose inconsistent with the guidelines.
These conditions, however, are not strictly required. While they approach making FSS a condition of supply, the final decision is left to the supplier. Transfers are also to be conditional on specifications from the recipients regarding the end-use locations as well as assurance that neither transferred items nor their replicas will be used in any nuclear explosive activity. For transfers to states not adhering to the guidelines, assurances must be given that supplier consent will be secured before any transferred items or replicas are re-transferred.
The list of dual-use equipment is made up of eight main categories: 13
The NPT is peculiar in so far as it requires that the non-nuclear weapon states party to it have to accept full-scope safeguards, and non-parties have to accept these on the items imported.
At the Fourth NPT Review Conference, the nuclear supplier states were urged to require, as a necessary condition, new supply arrangements, such as commitment to, and acceptance of, such safeguards. The Nuclear Non-Proliferation Act of 1978 of the United States had already pledged to restrict nuclear exports to countries accepting full-scope safeguards. The policy was also adopted by Canada in 1976, Australia and Sweden in 1977, Poland and Czechoslovakia in 1978, and Japan in 1989. 14 Germany announced a policy to that effect in 1990, and France in 1991. By March 1992, Belgium, Switzerland, the UK and Russia had accepted the provision requiring full-scope safeguards. 15 Thus, the Warsaw meeting of the Nuclear Suppliers’ Group agreed that “the transfers of material and technologies referred to in the trigger list of the Guidelines should not be authorised to a non-nuclear weapon state unless that state has brought into force an agreement with the IAEA requiring application of safeguards on all source and special fissionable materials in its current and future peaceful nuclear activities.” 16
However, the policy was not considered applicable to the then existing agreements and contracts. It was also agreed that transfers to states without full-scope safeguards could be authorised in exceptional cases when they are felt to be necessary for the safe operation of existing facilities to which safeguards are to be applied.
II. Controls in Practice: Countering Strategies 17
Case Studies
In practice, the transfer of material or technology continued with or without the knowledge of the supplier through either circumventing control legislation or exploitation of the loopholes in the regime or violating the provisions of the export control regime. This becomes clear as we look at the following case studies.
Transfer of Knowledge
The most striking case was that of A.Q. Khan, the Pakistani physicist working at the centrifuge enrichment plant at Almelo, Netherlands. He returned to Pakistan in 1975 after taking complete blueprints and knowhow on construction and engineering that he had had the opportunity to learn. Khan then became the head of the Pakistani Kahuta enrichment project and is more popularly known as the father of the Pakistani bomb.
Libyan, Pakistani and Iraqi personnel received training at Mol, Belgium. The Iraqis also learned much in the French CEA facilities, particularly after the deal on the Osiraq reactor was concluded in the mid-Seventies.
Active Assistance in Proliferating Countries
The reverse process occurs when citizens of the transferring state take their knowledge to the recipient. German physicist Weichselgartner of the Max-plank Institute at Garching, a specialist in nuclear fusion, advised his Pakistani colleagues on the technology to extract and handle tritium. He had developed two patents for the extraction, purification and concentration of tritium. The scientist spent extended time in Pakistani laboratories and taught them what he had learnt over the years in one of the best research centres. He was convicted in 1991 because the court decided that the advice was unambiguously for military purposes rather than dual-use, and had been conducted in relation to, and as part of, unlicensed export.
Transfer of Blueprints
In the early Seventies, France agreed to supply Pakistan a reprocessing plant. Under US pressure, France decided in late 1976 not to follow through with the contract. Yet, at this time, important technological information was already in Pakistan’s hands. Pakistan then argued that since the whole of the contract was not realised, it was under no obligation to accept safeguards on whatever reprocessing activities it may conduct in future. Consequently, neither the New Labs small reprocessing facilities nor the larger one at Chasma are under the supervision of the IAEA. 18
In the late Seventies, Argentina sought tenders for a second natural/heavy water moderated power reactor and, at the same time, the technology to produce heavy water for servicing the plant. Indigenous heavy water production would have made the Argentinian fuel cycle fully independent and, of course, opened the possibility to use copied technology in a second unsafeguarded military fuel cycle. Canada and West Germany competed for the contract with an agreement not to underbid the competitor’s safeguards requirement. The Canadians had a policy of requiring full-scope safeguards while the Germans did not. The two split the contract with the heavy water technology contract going to Sulzer Brothers, Switzerland. The Swiss government was in no position to stop the transfer since Swiss legislation at that time did not permit interference in technology, as opposed to hardware, transfer. Sulzer acted completely through a subsidiary company under Argentinian law (as did the Italian SNIA, assisting Argentinian reprocessing efforts.) The Germans then argued that since Argentina was not forced to accept full-scope safeguards for the supply of heavy water technology, it made no sense to deny the transfer of the reactor, and went ahead with the deal. 19
Transfer of Production Technology
There are cases of sale of equipment and parts of nuclear facilities, that is, not the facilities and the parts themselves, but the machinery to produce them. Such transfers provide the recipient with almost unlimited independence, without any external interference, to pursue its own objectives. The transfers of machine tools to shape centrifuge rotors by German and Swiss companies, notably the delivery of flow-turning lathes by H+H Metalform, which was brought into the business by another London based front company, Meed International, are a case in point. On the basis of this and another technology transfer, Iraq could plan for the first hundred cascade. 20
In 1989, China was reported to have designed a nuclear system for the Pakistani research reactor PARR-II which uses highly enriched uranium. 21
In April 1994, a US Government Accounting Office (GAO) study cited several examples of problematic sales, including the export to Pakistan of two high-tech grinding machines for manufacturing critical nuclear weapon components, even though the US government knew that the buyer was involved in the design and manufacture of nuclear weapons. 22
Transfer of Parts
From 1976-1979, the Dutch company Van Doorne Transmissie, exported some 6,500 rotor tubes for centrifuges to Pakistan. Evidence showed that company officials were aware of the designed end-use in an enrichment plant. However, they were acquitted in the court despite efforts by the Dutch government to establish that Dutch export law had been breached. The court accepted the defendant’s argument that the tubes had other possible uses (e.g., for aircraft landing gear) and were thus not “especially designed or prepared for use in a nuclear facility”, as required by the Dutch and other Zangger Group and London Suppliers export lists. 23
A German firm working frequently as a broker for Iraq’s acquisition strategy, INWAKO, approached in 1988 a small British trading company, with the request for procuring ring magnets from a British partner. Ring magnets are indispensable parts of centrifuges, holding the bearings of the rotor in balance. The British partner acquired the ring magnets through Swift Levick, an engineering company that had been involved in building the Capenhurst enrichment plant, and received the magnets.
China-Pakistan Ring Magnet Transfer
China’s assistance to Pakistan’s nuclear weapon progamme was brought into the spotlight again in 1996 by disclosure of a controversial nuclear transfer by China of ring magnets that were destined for use in Pakistan’s unsafeguarded uranium enrichment programme. According to Press reports, the Clinton Administration determined in August 1995 that China had sold 5,000 ring magnets valued at $ 70,000 to the A.Q.Khan Research Laboratory in Kahuta between December 1994 and mid-1995. This unsafeguarded gas centrifuge facility, named after the father of Pakistan’s bomb, Dr. A.Q. Khan, produced weapon grade uranium (until July 1991, when Pakistan froze the production of HEU). The custom-built ring magnets made of an advanced samarium-cobalt alloy, would enable Pakistan to upgrade and replace its enrichment centrifuges at the rate of 1,000-2,000 machines a year. The ring magnets, not on the Trigger List, are an integral part of magnetic suspension bearings, which are controlled by the Zangger Committee (which China joined recently). The American intelligence believed that the magnets could be used in special suspension bearings at the top of a spinning chamber in the centrifuges. The ring magnets could enable Pakistan to double its capacity to enrich uranium for weapon purposes. 24
While Pakistan denied that any such transfer had occurred, China said that its cooperation with Pakistan was solely for peaceful purposes. On February 20, 1996, the United States suspended the approval of a new Export-Import (Ex-Im) Bank loan to China. Following discussions between then Secretary of State Warren Christopher and Chinese Foreign Minister Qian Qichan at the Hague in April 1996, the US announced in May that no sanctions would be imposed on China subject to: (a) finding that senior level Chinese officials were not aware of the transactions; (b) China’s public commitments not to provide assistance to unsafeguarded nuclear facilities; (c) Chinese commitments to have a dialogue with the US on export controls.
As announced in Washington on May 10, China had promised not to make such transfers in future or provide any other assistance to unsafeguarded nuclear faclities; had confirmed its commitment to non-proliferation; and had agreed to consult with the US on export contol policies and other non-proliferation issues. A public statement later by the Chinese the same day, however, contained none of the pledges. The US Administration, by way of explanation, said that China did not wish to make these pledges publicly—the absence of denial from Beijing of the US statement should be taken as assent. The US secretary of state subsequently also confirmed that he had accepted an oral pledge by China’s foreign minister to that effect. 25
Transfer of Material
This includes the reports of transfer from Norway of heavy water which is used directly in the process of fission, ostensibly destined for West Germany, through a last-minute shift to the airport to Bale, from where it disappeared into the Middle East and, finally, India. Likewise, Hampel shipped Soviet heavy water, delivered in batches of below one ton—the threshold that would have triggered the request for safeguards—allegedly destinated to various places in Western Europe via Zurich and Bale to India. 26
In 1983, Lizorse, a London-based company that was part of Pakistan’s acquisition network, ordered great quantities of maraging steel from the West German-Luxembourg steel conglomerate, Arbed Saarsthal. The West German authorities, having received advanced warning of the proposed transaction from abroad, notified Arbed that no export licence would be granted. Lizorse then simply ordered 80 kg of maraging steel through several front companies. The West German Export controllers learned of the deal only after the material had already left the country, and the Customs Criminal Institute (the principal investigating body for customs crimes) opened an investigation. The analysis of a batch of steel, drawn from the production run, showed that specification of the material was slightly below the trigger level supplied on the export list. The steel was not ideal for ultracentrifuges, but presumably usable if the Pakstanis were willing to compromise somewhat on efficiency. And because trigger levels were not reached, there was no way the companies could be prosecuted.
In 1983, Degussa of West Germany reportedly shipped 95 kg of beryllium of 98 per cent purity grade to the Bhaba Atomic Research Centre (BARC) in India. An export licence was obtained, but the country of origin, the United States, was never questioned. The licence was granted after the technical evaluation of the substance by the Ministry of Research and Technology, which issued a statement that only beryllium of more than 99 per cent purity grade could be used in nuclear weapons. The Ministry of Foreign Affairs then dropped its objections to the transfer. 27
The German company NTG bought major amounts of zirconium alloys several times from the French Pechiney for exports to Pakistan. To its French partner, it explained that the material would go to India. Pechiney informed the French authorities, who, in turn, told their German counterparts about the deal. The German authorities learned from NTG that there had been earlier exports to India with due licence, but that at present no deal was planned. When in 1988 another batch of zirconium was acquired by NTG from Picheney, the French government informed the German authorities that under the London Guidelines, peaceful end-use and safeguards must be assured. Again, the German export licensing authorities got the information from NTG that there was no contract with India. This was true since the material went to Pakistan without the necessary licence. 28
Smuggling
With the disintegration of the Soviet Union, the possibility of a frightening new short cut to nuclear weapons has emerged. Although Russian nuclear weapons remain protected, stocks of plutonium and highly enriched uranium are significantly more vulnerable. Lack of adequate security and material control and accounting systems at many sites makes Russian facilities targets for possible diversion of fissile material.
Although the cases of smuggled plutonium discovered to date in Germany and Eastern Europe have involved relatively small quantities of fissile material, the capture of this material should provide only a modicum of reassurance—the smugglers who have been apprehended “may be clumsiest or the most careless, or those most likely to fall for sting operations run by the police or journalists”. 29
So far, every country that has obtained nuclear weapons has built an indigenous industry to produce fissile material, either in the form of a uranium enrichment plant or a reactor and a plutonium separation plant. Historically, building these facilities has been the hardest part of building a nuclear weapon. But poorly secured Russian materials could eliminate the need for these facilities.
Transfer of Facilities
One of the notorious cases in the 1970s was the deal between West Germany and Brazil. Apart from eight light water reactors, the contract included the complete fuel cycle, from uranium deposit exploration through enrichment to reprocessing. The government which was instrumental in bringing about the deal, began cooperation in various sectors of science and technology, including nuclear. The International Bureau of the Nuclear Research Centre, persuaded Brazil not to call for offers publicly, and kept in line the German reactor-building company, KWU. The German government, was instrumental in not concluding the “London Guidelines” for export of sensitive technologies before the agreement with Brazil was signed. The Germans “believed that the cooperative endeavour would dissuade Brazil from engaging in military nuclear projects. As it turned out, Brazil initiated a parallel programme to develop nuclear weapons. Although the technology was quite different from the one transferred under the jet nozzle enrichment process transferred under the deal, the Brazilian personnel acquired considerable basic knowhow, which they could then apply in the parallel programme. 30
The deal took an interesting and significant turn in 1990 when the Brazilian president announced that the Brazilian military had been working since 1975—when the German-Brazilian deal was concluded—on a military nuclear explosive programme, and that Brazil had helped Iraq, through a secret nuclear cooperation agreement, in developing its nuclear sector.
Yet another classic case is the transfer of a whole uranium hexafloride facility from Germany to Pakistan by the agriculture chemist, Albrecht Migule, and his small engineering company, CES Kalthoff, in 1977-80. Migule served as the main contractor to the Pakistanis: he brought the equipment, material and items needed from a large variety of firms, split them into 62 individual shipments under the false label of “laboratory equipment”, shipped them to Pakistan, and had the construction of the facility supervised by his own staff. The facility closed an essential gap in the Pakistani atomic weapons programme, namely, production of feed gas for the uranium enrichment plant. The act was discovered in the early Eighties: Migule was brought to the court and was fined DM30,000 and given an eight month prison sentence, held in suspension. 31
In the late Seventies, the Italian SNIA, one of the most proficient technology and engineering corporations of the country, supplied Iraq with hot cells for its Tuwaitha nuclear research centre. Hot cells are small laboratory facilities where irradiated material can be handled safely. It is thus a pre-requisite for small-scale extraction of plutonium from irradiated fuel. This is exactly what happened in Iraq, under the breach of the safeguards agreement with the IAEA. The hot cells were, in principle, safeguarded.
In October 1996, the US Central Intelligence Agency (CIA) reported that China had provided Pakistan with dual-use furnaces and diagnostic equipment. It remains unclear whether these transfers took place before or after China’s May 1996 pledge. On April 8, 1997, US Assistant Secretary of State Robert Einhorn said in a testimony before the Senate Foreign Relations Committee that China was continuing to aid Pakistan’s nuclear weapon programme. 32
In February 1997, Silicon Graphics of the United States was under investigation for selling four computers to the Russian Chelyabinsk-70 without obtaining the export licence. The sale of two of the computers with speeds exceeding 2000 MTOPs to Russia violated the restriction on unlicensed sales of computers. The capability of two of the computers sold was 4.4 billion MTOPS. The sale of the other two violated the export restriction that requires a validated licence for all equipment exported for use in proliferation related activities.
Silicon Graphics said it had been told that the computers would be used for “modeling of earth water pollution caused by extension of radioactive substances”. Interestingly, the deal took place despite the fact that the US Commerce Department had previously denied reports of import licence application from IBM and Hewlett Packard to sell a similar computer to Chelyabinsk-70 in November 1996. 33
India
India has a special relationship with the export control regime. The Nuclear Suppliers Group owes its origin to India’s 1974 peaceful nuclear explosion (PNE). The country, of course, has nothing to do by way of membership, since it belongs to neither group. It has the potential to emerge as a supplier, and modest beginnings have been made in this regard. For purposes of commerce as well as security, it is difficult to make a precise estimate of where it stands in the potential export market. The country has a well-defined export control system and an impeccable image as a responsible nation in not supplying any material to countries with doubtful credentials.
It would not only be unrealistic but also foolhardy to say that there is no impact on the country of the cartelisation reflected in the multilateral nuclear export control regime. The 1974 PNE saw it plunged into difficulty vis-a-vis the fuel supplies for the Tarapur power station. Moves to salvage the situation first by the Americans and then by the French also came to nought eventually. The long-term strategy to deal with export controls lies mainly in indigenous development of the denied technology/material. The short-term strategy is believed to be to look for alternative modes on a case-by-case basis. Some of them have been discussed above.
For India, technology embargo may have been a hindrance, but it has also been a motivation for self-reliance. This is apparent from some of the developemnts made by the country in response to such challenges. The Anupam supercomputer, based on the parallel processing technique, with up to 64 computers interconnected by a high speed communication system, is a typical example. Similarly, coolant channel replacement at RAPS-2 has been undertaken at considerably lower cost and radiation exposure than that achieved by the Canadians. Also, for diverse applications, software for intricate nuclear power station design as well as start up/shut down operations has been developed.
Further, when denied enriched oxide fuel for India’s fast breeder reactor, indigenously produced mixed uranium plutonium oxide fuel was introduced, for the first time by any country in the world, which has worked excellently. The list of indigenous development is endless, ranging from Kamini (a 30 kW mini-neutron source reactor, which went critical on October 29, 1996), the only reactor in the world running on U-233 isotope, to lasers and cryogenics, high speed molecular pumps, to complete designing of chemical plants.
Sanctions After Pokhran
The multilateral nuclear export control regimes have no provision for sanctions. As stated above, the provisions are to be implemented through national legislations. No country except the United States has provisions for sanctions in its national export control laws. Again, it is the only country which has sanctions linked anti-testing laws which it has invoked against India as a reaction to the latter’s conducting the Pokhran II explosions in May 1988.
The sanctions were imposed by the United States under the Nuclear Proliferation Prevention Act (NPPA), 1994, which is part of the Foreign Relations Authorisation Act. (the primary basis of these Acts are the earlier landmark legislations: (1)the Symington Amendment of 1976; (2) the Glenn Amendment of 1979; (3) the Solarz Amendment of 1985; (4) the Pressler Amendment of 1985.)
Part B of the NPPA deals with sanctions for nuclear proliferation. Seven different types of sanctions have been imposed on India. Far wider than the Glenn Amendment on which these sanctions are based, invocation of this particular provision means. 34
While the White House Fact Sheet puts the losses on account of development assistance at $142.3 million, the Government of India (GOI) figures for utilisation are much lower. Foreign Military Sales from 1987-96 amounted to $1,329million during the ten-year period. The White House Fact Sheet puts the figure at $775,000. According to one estimate, the US aid to India does not amount to more than $41 million in licences to buy military equipment. 36 There have been no sales of defence services from the US to India. As regards the International Military Education and Training Programme, the average during 1987-96 has been $263,000 per year. The number of students trained in the same period is 14. The commercial purchase of US military articles by India has been limited. It is, nevertheless, important to study the implications for the light combat aircraft (LCA) project. Commercial exports licensed under the Arms Export Act for the period 1987-96 amounted to $325 million. There has been no US financing of military sales to India since 1962.
The Ex-Im Bank’s operations consist primarily of support for exports of capital goods through long-term loans and guarantees of commercial bank financing, or medium-term loans, guarantees and insurance. The Ex-Im Bank’s sanctions will affect US exports to India. According to the bank, the action of ceasing all new approvals of financing of US exports to India would immediately affect approximately $500 million of such exports in pending transactions. Total exports to India in 1997 were placed at around $4 billion. It was, however, clarified that financing for export transactions to India authorised prior to May 13, 1998, would not be affected by the sanctions.
OPIC is the key federal agency encouraging American private investment in developing countries. The White House release had estimated the loss on account of OPIC at more than $10million. The total expenditure of OPIC in any one year is far less than $5billion. The Trade and Development Agency (TDA) is a US government agency and provides funds to US companies to conduct feasibility studies related to major projects in developing countries. Since the funding is for the US, its impact can only be on US companies.
Then there is the provision which requires the US executive director on the board of institutions such as the World Bank, Asian Development Bank (ADB), International Monetary Fund (IMF), and IFC to vote against all loans and assistance to India. From late 1974 to 1977, the US had opposed all IDA loans to India, as a requirement arising out of the “check” amendment. The US Congress had passed the amendment as a punishment for the Indian peaceful nuclear explosion. While the US was not able to get any of the credits blocked then, being alone in the opposition, the same cannot be said this time. It is pointed out that of the $19 million World Bank aid to developing nations, India’s share was about $1.5 billion in 1997. On May 26, 1998, the World Bank postponed all loans to India. These included a $130 million loan for supporting a renewable energy project; a $450 million loan for developing the power grid into a national grid operation; a $275 million loan for road improvement; and a $10 million loan for Carrier India Limited. 37
It is now believed that the World Bank and IMF loans may be restored to India as a quid pro quo to India’s signing the Comprehensive Test Ban Treaty (CTBT) in June.
In June 1998, the United States announced additional details of sanctions whereby the Bureau of Export Administration (BXA) would deny all export and re-export for dual-use items controlled for nuclear or missile non-proliferation under the Export Administration Rules (EAR) to all end-users in India. Under the Enhanced Proliferation Control Initiative, among other things, the BXA published a list of entities involved in nuclear and missile activities. All exports and re-exports of items subject to the EAR will be prohibited to these listed entities. 38 On June 25, wheat was exempted from sanctions. 39
The only country, other than the United States to impose sanctions, albeit differently, was Japan. However, like any other country, Japan does not have a sanction-linked export control regulation. On May 14, the chief cabinet secretary, Kanezo Murakoa, announced suspension of new yen loans and a cautious approach on loans to India through international financial organisations. 40 Earlier, Japan had announced suspension of grants-in-aid, excluding humanitarian assistance. Nothing was said about the soft loan fiscal package of 132 billion yen. The aid suspension was brought about by invoking the relevant provision in the ODA Charter. According to the third principle of the ODA Charter, “Full attention should be paid to the trends in the recipient countries’ military expenditure, their export and import of arms so as to maintain and strengthen international peace and stability.”
Germany froze development aid worth DM 300 million to India and was the first country to do so. The freezing of the aid, which was to be given as fresh assistance for 1998, followed cancellation of the three-day annual ODA talks after Germany condemned India for the nuclear tests. The Netherlands and Denmark also announced a freeze on aid. 41 Sweden cancelled a three-year cooperative agreement amounting to more than Rs. 400 crore.
Russia, France and Britain opposed the sanctions. In fact, in the midst of adverse global reaction to India’s nuclear tests, Russia announced that it was going to supply India with some more Kilo class submarines. India already has nine submarines of the Kilo class supplied by Russia. 42 Russia also said that the tests would not affect Russia’s plans to build a nuclear power station in Koodamkulam. Russia did not believe that it was cooperating with an unsafeguarded facility; it was cooperating with a safeguarded facility even though there are unsafeguarded facilities (in India). 43 Russia also believes the deal does not fall under the NSG because the deal predates the latter’s safeguards negotiations and this type of cooperation predates its joining the NSG. 44
The United Kingdom, while the refusing to impose sanctions, thought it should “deny the export of nuclear related goods to India where they could assist their nuclear programme”. The British government said its rules on the export of nuclear related goods to India are to be tightened, in addition to the controls which already restrict such exports. The British Foreign Office minister said that applications for dual-use technology or components to India would be looked at “with particular vigilance”. This, in all likelihood, means that the items in the Nuclear Suppliers Group Dual-Use List will be denied to the end-users in India if it felt that these might contribute to the country’s nuclear programme.
There are no multilateral sanctions on India. Both the European Union and the G-8 have talked about delay in the approval of loans to India. This may affect new commitments to India from a variety of sources.
Conclusions
The following conclusions can be drawn from the above.
The basic difference between the Zangger Committee and the NSG is that whereas the former is rooted in the NPT, the latter stands outside it. The former has different provisions for different safeguards systems between the supplier and the non-parties to the NPT. The latter, therefore, can have facility-based safeguards only. The NSG, on the other hand, insists on full-scope safeguards when they are considered necessary for the safe operation of existing facilities to which safeguards are applied. The difference is important in order to understand the Chinese policy of accepting the Zangger Committee while staying out of the NSG, despite the commonality of the Trigger List.
Even the system of full-scope safeguards has loopholes. It does not require comprehensive reporting of export, import and production of nuclear material. Transfers of nuclear material not yet suitable for fuel fabrication or enrichment, or material which is exported for peaceful non-nuclear purposes, or to a nuclear weapon state, for example, do not have to be reported, nor is to necessary to report domestic production and stockpiling of nuclear material.
During the February 1993 Board of Governors meeting, a universal-reporting scheme, including nuclear and non-nuclear material, was endorsed by the members. They were encouraged to “provide relevant information relating to their exports and imports of nuclear material” and exports of specified equipment and non-nuclear material and also invited to “provide information on their production of nuclear material and on their imports of specified equipment and non-nuclear material”. Special forms were circulated for the purpose. 46 The participation in the scheme is voluntary.
The NSG was, in a sense, an “evolution” over the Zangger Committee. The NSG stipulates that the Zangger Committee condition of “peaceful uses, safeguards and re-transfer provision” would not only apply to items themselves but also to designs and knowledge embodied in the technology. Secondly, the physical protection of these items was to be agreed upon between governments. In addition, the suppliers would exercise restraint on transferring material kplutonium and uraniumk and facilities and would insist on the right to veto the reprocessing or further enrichment of nuclear fuels.
The unanimous consent rule is applicable to the NSG but not to the Zangger Committee. That is, if a supplier member wants to change any of the guidelines ksay, for the purpose of supplyk, it has to seek the consent of all. This clause could also be one of the reasons why China is not interested in joining the NSG.
Whereas the Zangger Committee provisions seek to curb the flow of nuclear weapon related material, the NSG Guidelines also seek to regulate dual-use technologies. Control of dual-case items is inherently difficult for a number of reasons . First of all, there is often a lack of consensus on the necessity or propriety of controlling such items since it can be argued that it could have a negative impact on the development of many countries. By their very nature, dual-use items are also usually widely available and, hence, difficult to control. Indeed, placing such items on control lists may actually lead to some countries manufacturing them in order to fill the perceived need in the face of diminished supply and correspondingly higher price. Finally, the nature of dual-use items also means that it is often easy to manufacture or obtain substitutes for them—their acquisition is often attempted as a cost or time-saving expedient.
Export controls as they exist today comprise a political issue. In terms of practice, it cannot be denied that the export system as it existed and also subsequently evolved, proved to be woefully inadequate. The regime premises have been violated/circumvented in various ways ranging from transfer of knowledge to transfer of entire facilities. The determined recipients have exploited different kinds of strategies to get proscribed items.
The nuclear-haves, despite cartelisation in export of material as well as technology, have failed in their basic objective of preventing further proliferaion—i.e. stopping more countries from acquiring the capability to build nuclear weapons. Thus, Iraq, North Korea, Iran and Libya continue to be causes of concern despite the fact that these countries are parties to the NPT and have voluntarily renounced their nuclear option at the declaratory level.
The best results that export controls have achieved are delay in the projects for which the exports have been sought. While the delays have their own costs, the proponents of such export controls believe that the cost may be so high for the targetted country that it may give up its weaponisation plans. The examples cited are those of Argentina and Brazil. This, of course, is an over-optimistic assessment. In the case of Argentina and Brazil, the economy was in a very bad shape and the imposition of controls and the delay in the projects may have played an incremental role, but they definitely were not the determinant factors.
The fact that implementation of export controls depends upon the national legislation of the supplier countries introduces an element of subjectivity in them and in case of connivance between the supplier and the recipient, it is difficult to detect a violation and even more difficult to punish the violator, even if there are provisions for punishment.
Vested national interests may undermine the so-called proliferation concerns. Thus, the United States introduced waivers to its export control laws to facilitate economic and military aid to Pakistan, with the president of the country certifying that Pakistan did not have nuclear weapon capability, despite mounting clinching evidence to the contrary. The issue of export controls, apart from being a political one, has another side to it—the commercial angle. Thus, the US Westinghouse, General Electric and other US reactor firms lobbied strongly for permission to sell reactors to China. According to Xinhua reports, the sales would raise billions of dollars. The private sector-to-private sector contact may facilitate diffusion of technologies between the supplier and the recipient country directly or indirectly through friends, allies or middlemen for a variety of reasons.
It can safely be said that as far as India’s case is concerned, the May 1998 tests have blown to pieces the basic premise of the existing extremely flawed arms control regime, of which the export control regime is an integral part. That the consequences weighed on the country’s decision-makers is obvious from the fact that the tests were planned in the past but these were not executed. It is, however, strange that a country can be punished or punitive actions taken against it even if there is no direct provision for these sanctions in such a country or even if the country has not violated any commitment. Apart from the United States, no other country has direct testing linked sanctions in its national legislation.
What, then, should be India’s strategy to deal with these denials? While indigenisation is the only answer, the strategy of achieving this indigenisation needs to be pondered over. The involvement of private sector R&D and economic utilisation of resources is one of the suggested ways, particularly when it comes to dual-use technologies. 48
Endnotes
*: Research Fellow, The Institute for Defence Studies and Analyses. Back.
Note 1: David Fischer, Towards 1995: The Prospects for Ending Proliferation of Nuclear Weapons (Dartmouth, UK: UNIDIR 1993), p. 97. Back.
Note 2: lan O. Lesser, “Introduction”, in Zalmay Khalilzad and Ian O. Lesser eds., Sources of Conflict in the 21st Century: Regional Futures and US Strategy (California: Rand, 1998), p. 21 Back.
Note 3: SIPRI, Safeguards Against Nuclear Proliferation (Almqvist &Wiksell, 1975), pp. 17-23. Back.
Note 4: INFCIRC/209, Memorandum B (note9), para 5. Back.
Note 5: Richard Kokosi, Technology and the Proliferation of Nuclear Weapons (SIPRI, Oxford University Press, 1995), p. 58. Back.
Note 6: T. Strulak, “The Nuclear Suppliers Group”, The Nonproliferation Review, Fall 1993, p. 2. Back.
Note 7: INFCIRC/254/Rev./Part1/Mod.3, November 1994. Back.
Note 8: Kokoski, n. 5, citing R.Timarbaev “A Major Milestone in Controlling Nuclear Exports”, Eye on Supply, no. 6, Spring 1992, p. 58. Back.
Note 9: Text of the final document issued after the Third Review Conference on the Treaty Non-Proliferation of Nuclear Weapons. Back.
Note 10: John Simpson and Derry Howlett. “The NPT Renewal Conference: Stumbling Toward 1995”, International Security, vol.. 19, no. 1, Summer 1994, p. 48. Back.
Note 11: INFCIRC/254/Rev. 1/Mod.2, April 1994. Back.
Note 12: Mark Hibbs, “IAEA Names Some Manufacturers of Equipment Found in Iraq”, Nucleonics Week, vol. 32, no. 50, December 12, 1991, p. 7. Back.
Note 13: Annex to the Warsaw Guidelines, List of Nuclear Related Dual-use Equipment, Material and Related Technology, IAEA document INFCIRC/254/Rev.1/Part2. Back.
Note 14: Strulak, n. 6, p. 4. Back.
Note 15: Mark Hibbs and A. MacLachlan, “More Countries Agree to Full-scope Safeguards as a Condition for Export”, Nuclear Fuel, vol. 16, no. 22, p. 12; Also see vol. 32, no. 45, p. 11, and Timarbaev, n. 8, p. 16. Back.
Note 16: INFCIRC/405, May 1992, attachment p. 1. Back.
Note 17: The categories as well as cases are based on Harald Muller, “Technical Procedural and Legal Lessons Drawn from Selected Failures in the Implementation of the NPT Regime in European Nuclear and Non-Nuclear Countries”, in Hans Gunter Brunch, et al., Controlling the Development and Spread of Military Technology (VU University Press, 1992), 194-201. Back.
Note 18: Leonard Spector, Undeclared Bomb (Cambridge Mass: Ballinger Publishing House, 1988). Back.
Note 19: Leonard Spector, The New Nuclear Nations: The Spread of Nuclear Weapons (Vintage Books, 1985), pp. 59-65. Back.
Note 20: Muller, n. 17, p. 197. Back.
Note 21: Nucleonics Week, August 9, 1990. Back.
Note 22: US Government Accounting Office, “Nuclear Non-Proliferation: Export Licensing Procedures for Dual-Use Items Need to be Strengthened”, April 1994. Back.
Note 23: Spector, n. 19, pp. 35-36 Back.
Note 24: Tim Weiner, “Atom Parts Sold to Pakistan by China, US says”, New York Times, February 8, 1996, p. A1. Back.
Note 25: Programme for Promoting Nuclear Non-Proliferation (PPNN), Newsbrief, 2nd Quarter 1996, p. 13. Back.
Note 26: Muller, n. 17, p. 198. Back.
Note 27: Nuclear Fuel, February 20, 1989, p. 10. Back.
Note 28: Muller n. 17, p. 200 Back.
Note 29: David Albright and Kevin O’Neill, “Jury Rigged But Working”, The Bulletin of Atomic Scientists, January/February 1995, p. 24. Back.
Note 30: Savita Pande, The Future of the NPT (New Delhi: Lancers, 1995). Back.
Note 31: Spector, n. 19, p. 22. Back.
Note 32: Arms Control Reporter 1997, p. 454, b.236. Back.
Note 33: FBIS-SOV-March 17, 1997. Back.
Note 34: For details, see G.Balachandran, “Sanctions and the Economic Consequences”, in Amitabh Mattoo ed., India’s Nuclear Deterrent: Pokharan II and Beyond (New Delhi: Har Anand, 1999), pp. 225-235. Back.
Note 35: The Hindu, May 13, 1998.
Note 36: Sridhar Krishnaswami, “US in a Dilemma over Sanctions,” The Hindu, May 13, 1998. Back.
Note 37: The Hindu, May 27, 1998. Back.
Note 38: The Hindu, June 26, 1998. Back.
Note 39: The Hindu, May 27, 1998. Back.
Note 40: The Hindu, May 15, 1998. Back.
Note 41: The Hindu, May 14, 1998. Back.
Note 42: The Hindu, May 16, 1998. Back.
Note 43: Vladimir Radyuhin, “Nuclear Deal with India Stays”, The Hindu, May 20, 1998. Back.
Note 44: Sridhar Krishnaswami, “US Criticises Reactor Deal”, The Hindu, June 24, 1998. Back.
Note 45: Anjali Mody, “Britain Clamps Down on Nuke Exports and Contacts With India”, The Indian Express, July 11, 1998.
Note 46: “Strengthening the Effectiveness and Improving the Efficiency of the Safeguards System”, IAEA document GC (XXXVII)/1073, September 6, 1993, pp.3-4 and IAEA Bulletin, no.1, 1993, p. 40. Back.
Note 47: Nucleonics Week, December 12, 1996.
Note 48: Y.S. Rajan, “Dual-Use Technologies: What Can Be An Indian Strategy?” pp. 10-11, Paper presented at a panel discussion, United Service Institution of India (USI) on September 9, 1998. Back.