Joe Biden, U.S. Senator for Delaware

May 21, 2008

Washington, DC – Chairman of the Senate Foreign Relations Committee Joseph R. Biden, Jr. (D-DE) held a hearing this morning entitled, “Defense Trade Cooperation with the United Kingdom and Australia.” The Committee heard testimony from John C. Rood, Acting Under Secretary for Arms Control and International Security Affairs at the State Department.

The full text of Sen. Biden’s opening statement from this morning’s hearing is below:

“Forty years ago, the Arms Export Control Act was enacted to fashion an orderly process for promoting U.S. arms sales while preventing the spread of advanced military technology and equipment to our enemies or to countries that might misuse those exports.

“Over the years, this legislation has been amended to deal with such concerns as restraints on sales to developing countries, end-use monitoring, bans on incentive payments, bans on sales to state sponsors of terrorism or sales that would help countries build weapons of mass destruction, and sanctions on persons improperly selling systems or components that breach the Missile Technology Control Regime.

“The U.S. export control regime has never been popular. It’s time-consuming. It results in some businesses being denied the right to sell their products and services. Sometimes this means that foreign competitors get the business. Sometimes our allies chafe at restrictions, especially the requirement that they secure U.S. Government approval before re-exporting arms or components with U.S. content.

“But the law has served a national purpose – of closely regulating the flow of arms to ensure that they do not disrupt regional security, and preventing the proliferation of dangerous technologies. Close congressional oversight has been essential to guarding against an Executive branch instinct to preserve alliances abroad and the defense base at home, which sometimes can conflict with other, equally significant national interests.

“Since the 1990’s, changes in the structure of the arms industry have also affected export control. More companies are multi-national now, and more weapons systems are built with components and technology from multiple countries. Projects like the Joint Strike Fighter are designed to meet the needs of multiple buyers and to promote interoperability between the United States and its allies.

“The Arms Export Control Act has long had a provision for joint projects with NATO countries – section 27 – but not all projects come within its purview. So, from time to time, our closest allies have sought broader relief from export license requirements. Canada has such broader relief, because its export control regime is patterned on ours and because U.S. and Canadian industry are closely integrated.

“Five years ago, the Administration tried unsuccessfully to grant export license relief to the United Kingdom and Australia under the provisions of section 38 of the Arms Export Control Act. Our two close allies were unable, for different reasons, to meet the standards of section 38, and the House of Representatives would not relax those standards – although the Senate was willing to do so.

“Last year, the Administration tried another approach. After speedy and secret negotiations, it signed treaties with the UK and Australia to grant them export control relief.

“The treaties before us today are based on an innovative approach to export control that may solve the problems that hampered earlier efforts to provide export license exemptions. Rather than relying solely upon the UK and Australian export control regimes, those countries will treat U.S. arms exports under the treaties as classified information – thus bringing the exports under their information security laws, such as the UK’s Official Secrets Act.

“In the UK, the intent is that by treating imported U.S. arms and technology as classified information, the British Government can require U.S. Government approval for any re-export – even for a re-export to a fellow member of the European Union. The EU bars countries from controlling the flow between its members of ‘dual use’ items that have both military and non-military uses. But it has no bar on controlling the flow of classified information.

“Similarly, in Australia, the government has no right to restrict the flow of defense items from one Australian entity to another. But it can restrict the flow of classified information.

“The old saying that ‘the devil is in the details’ surely applies to these treaties. Many details of implementation are left to the Implementing Arrangements, which were negotiated early this year and provided to the Committee. And much of what the treaties left to the Implementing Arrangements has been kicked further down the road, to procedures to be worked out by the Management Board that will implement each treaty.

“The issues left unresolved by the treaties include some significant ones:

• Procedures to determine what qualifies as an activity in support of which defense articles and services may be exported under the treaty;

• Defense articles and services to be excluded from the treaties;

• Criteria that UK and Australian facilities and personnel must meet in order to be eligible to receive exports under the treaties;

• Procedures for obtaining U.S. approval of re-exports;

• Procedures for the United States to gain access to facility records of the handling of U.S. goods and technology (especially if something is diverted, and the United States wants to find out how and why it happened); and

• Procedures for coordinating enforcement efforts.

“The Committee and the Senate will also need assurances regarding the ability to enforce the provisions of these treaties and to deal with cases in which entities are removed from an ‘Approved Community’ or previously-exported items are added to the list of items excluded from a treaty.

“Finally, the Committee and the Senate will want to look closely at the impact of these treaties on congressional prerogatives:

• If export licenses are no longer required for some exports, will there be no prior notice and review of those exports?

• If a British or Australian entity wants to re-export an item obtained without an export license, will it need U.S. Government approval?

• But will that approval be under section 3(d) of the Arms Export Control Act, and thus subject to the congressional review procedures of that part of the law? Or does section 3(d) apply only to items previously exported pursuant to that law?

• What are the implications, for Congress as well as for domestic implementation, of having a treaty state “that the provisions of this Treaty are self-executing in the United States?

“The duty of this Committee is to proceed with care and precision, so that the Senate’s action will help to ensure proper implementation and enforcement. Today’s hearing is one part of that process.

“The witness for today’s hearing is the Honorable John Rood, Acting Under Secretary of State for Arms Control and International Security. Welcome.

“I understand that other officials – from the State Department’s Office of the Legal Adviser and from other relevant Departments will also be available to answer questions concerning these treaties. I welcome them as well, and I expect that we will make use of their expertise today.”