PROLIFERATION THREAT AND COUNTER-PROLIFERATION

FROM:  U.S. DEFENSE DEPARTMENT
The Proliferation Threat and Counter-proliferation: Why It Matters for the GCC
Remarks Vann Van Diepen
Principal Deputy Assistant Secretary, Bureau of International Security and Nonproliferation Key Note Address, U.S. Gulf Cooperation Council Workshop
Dubai, United Arab Emirates
April 12, 2012
Introduction
Good Morning, Dr. Saeed Al Shamsi, Consul General Siberell, Excellencies, ladies and gentlemen.
I would like to extend my thanks to the Government of the United Arab Emirates for co-hosting with the United States this Gulf Cooperation Council Counterproliferation Workshop. It is a pleasure for me to be back in Dubai.

I am particularly pleased to be here with all of you today, and gratified that we have representatives from all the GCC countries. I think that is an indication of the importance your governments have placed on countering the threat of proliferation -- as well as an indication of the value you have placed on working together on this issue, with each other, and with the United States.

I want to take a few minutes to set the stage for the conference by outlining in broad strategic terms the threat that proliferation poses to international peace and security, to the stability of this region, and to all of the countries gathered here.

I then want to briefly discuss why it is so important for GCC countries to work to counter this proliferation threat, not only nationally, but in cooperation with each other and in cooperation with other friendly countries such as the United States.

I will then briefly note how the rest of the workshop will focus in on the broad spectrum of interlocking measures that each of us can use to combat, impede, and ultimately thwart proliferation – and by so doing improve the national security and economic viability of all of our countries.

Proliferation: The Strategic Threat
The international community has long recognized the threat that weapons of mass destruction (WMD) – nuclear, chemical, and biological weapons – and their delivery systems pose to global and regional security. And all of us are fully aware of the fact that this threat is posed not only by countries of concern, but by terrorists.

The use of WMD – especially against cities -- would have horrendous physical, psychological, and economic consequences, and could even threaten the maintenance of civil order in the countries where it is used. Even the presence of WMD in countries of concern:
can lead those countries to threaten their neighbors in order to extract political and economic concessions;
it can embolden those countries to engage in conventional aggression or terrorism against their neighbors; and
it risks promoting arms races where neighboring states decide they must acquire WMD of their own, potentially resulting in an expanding spiral of insecurity and instability.
And you are all well aware this threat is not just theoretical. It exists in the real world, and it affects this region as well as others. For example...

Iran has been acquiring, developing, and deploying for over 20 years ballistic missiles that are inherently capable of delivering WMD, missiles with ranges that easily cover all the GCC countries and even southeastern Europe. It is actively pursuing yet longer-range systems that can cover Western Europe and beyond.
Iran is violating its United Nations (UN) and International Atomic Energy Agency (IAEA) obligations by continuing to enrich uranium, in the process clearly demonstrating the technical capability to produce highly enriched uranium for use in nuclear weapons.
The IAEA has formally reported that Iran has carried out activities relevant to the development of a nuclear explosive device, some of which may be ongoing, and that these past activities included some related to the development of a nuclear payload for a ballistic missile.
There is mounting evidence that Iran did not declare and has not destroyed all aspects of its offensive chemical weapons program under the Chemical Weapons Convention – which raises questions about it declarations concerning biological weapons (BW) as well.

North Korea openly admits to developing and having tested nuclear weapons. It deploys WMD-capable ballistic missiles able to threaten its neighbors, has tried to flight-test missiles able to reach the United States, and sells missiles and missile technology to any country willing to pay – including to countries in the Middle East. North Korea also is widely believed to have substantial CW and BW programs.

Syria, too, has a large CW program and ballistic missiles capable of targeting the entire region. It has been researching biological weapons, and attempted unsuccessfully to conceal construction of a nuclear reactor that had no logical purpose other than the production of plutonium for use in nuclear weapons.

Beyond these examples of nation-state proliferation, it is clear that Al-Qaida and other terrorist groups are interested in acquiring WMD. Terrorists – both groups and individuals – can operate in any country, and can engage in attacks against any country. CW and BW in particular can be developed using technology available worldwide. Terrorists actually have used sarin nerve gas and anthrax bioweapons.

Why Counterproliferation Matters
It is very clear from these examples that all of our countries face a direct security threat from the potential for countries of concern or terrorists to use WMD directly against us. We also face the threat of political and economic instability caused by the use of WMD against others, as well as from the mere possession of WMD by countries of concern and terrorists.

In addition, however, the national and economic security of all of our countries is undermined by proliferators’ efforts to acquire WMD and their delivery systems, and the ability to make them, by misusing the territories, economies, and institutions of our countries. Proliferators do so in four key ways.

First, proliferators seek to acquire items for their WMD and missile programs directly from our countries – not just the United States, but increasingly from the other countries in this room as your economies and technology levels develop.
Second, in order to disguise their actual intention to use the items in proliferation programs, proliferators pretend that reputable countries such as yours are the destination for items they buy in third countries. Proliferators do this by:
1. falsely listing countries such as yours as end-users in export paperwork;
2. by diverting to their countries items imported into y countries such as yours from elsewhere; and
3. by having brokers and front companies – often, small import/export companies -- based in countries such as yours purchase the goods from third countries on the proliferant country’s behalf.

For example, a multi-million dollar procurement network has been using a series of companies in a third country to procure steel and aluminum alloys for use in a proliferant ballistic missile program.

Third, proliferators seek to move through countries such as yours goods they have purchased elsewhere for use in their WMD and missile programs, by misusing the common commercial practices of transit and transshipment to camouflage illicit activities. Indeed, proliferators have singled out transshipment hubs such as those in this region as a critical part of their efforts to evade the global framework of trade controls.
For example, in 2009 a UN Member State inspecting a cargo ship passing through its busy transshipment port on the way elsewhere discovered anti-tank ammunition and other munitions. The ship's manifest revealed the weapons were actually on their way to another country in violation of UN Security Council Resolutions.
Nor are proliferant transits and transshipments only by sea. Last year, during a routine check, authorities in another UN Member State discovered weapons aboard a cargo aircraft traveling through its airspace from a neighboring country to a country of concern.
Just a few weeks ago, a UN Member State discovered two independent truck shipments, one with missile-related items and one with CW-related items, moving through its territory from one neighbor to a country of concern.
Fourth, proliferators seek to use banks or middlemen in countries such as yours to pay for the items they need for their WMD and missile programs.
For example, a Chinese citizen who procures items for proliferation programs in another country used front companies and false names to route payments through New York bank accounts to sell graphite to a proliferant ballistic missile program.
Increasingly, proliferators are applying several of these approaches simultaneously.
For example, a proliferator with Canadian citizenship imported from the United States pressure transducers, dual-use items that can be used in uranium enrichment.
Since enrichment is not something that happens in Canada, that part of the transfer did not raise suspicions, as the proliferator intended.
But the proliferator then exported the items from Canada to a proliferation program by falsifying the description and cost of the shipment, and routing it via a third country.

In all of these cases, proliferators are misusing our territories and economies against our will -- using stealth, lies, and manipulation to obtain support for WMD and missile programs that directly threaten our security. These same actions by proliferators also:
subvert legitimate trade,
call into question the good reputations of our companies and ports, and
thus undermine the confidence needed for legitimate trade to grow.
This directly inhibits our countries’ economic prosperity, not just our national security. And the proliferators are not standing still. They are increasingly adaptive and creative:
seeking alternative suppliers, such as overseas distributors;
using front companies, cut-outs, and brokers to facilitate and conceal diversion;
falsifying documentation, end-users, and end-uses; and
using circuitous shipping routes and multiple transshipment points to obscure the actual destination of their shipments.

In addition, proliferators are increasingly interested in procuring items not on multilateral control lists. Proliferators use these non-listed items, which also have legitimate commercial applications, to help produce WMD and missiles, either directly or to substitute for items on the multilateral lists.

Counterproliferation Cooperation is the Answer
I hope I have clearly demonstrated the importance of the issue to all of our countries, and the magnitude of the challenge we face. The threats posed by, and activities of, proliferators are global in scope – and they bear heavily on this region as well.
It is no surprise, therefore, that the answer to countering and reducing this threat also is global in scope, and requires work in this region as well. Fortunately, the international community has developed effective methods against the proliferation threat that our countries and other responsible countries can bring to bear. Analyzing and discussing these various methods, how they work, and how to implement them will be the focus of the bulk of this workshop.

Let me briefly outline the tools and solutions that we will be discussing together.
We will start at the global and multilateral level, briefly examining the international authorities and control regimes that provide foundational sources and legal bases for combating proliferation. We also look forward in that segment to hearing more about the GCC Customs Union.

We then will move to a discussion of national level solutions, where we want to analyze the core elements of strategic trade controls and share experiences.
I noted earlier the challenge of proliferators seeking items not on, or below the thresholds of, the multilateral regime control lists, and their misuse of transshipment – both techniques proliferators commonly use against this region. So the next segment in the workshop will focus on catch-all controls and transshipment best practices.
Then the session on combating proliferation financing will highlight tools to prevent proliferators from misusing your banking systems to facilitate illicit trade.

Finally, we want to make you aware of some of the resources that are available to you to help build capacity in your countries to fight proliferation, and to implement these various tools.

And at the end of our second day together, we will have a “table top” exercise that will give us an opportunity to interact, directly and dynamically, to see how all the tools we’ve been discussing fit together in the real world. I hope this will help us develop some new ideas about how to work together and assist each other.

In conclusion, let me suggest that a recurring theme of this workshop is that the central element of effectively countering proliferation is cooperation:
cooperation between different ministries within each country, and between government and industry;
cooperation between neighbors within a region; and
cooperation with friends and trading partners from outside the region and with the broad international community.

Just as proliferators use networks to procure goods and services, we need to be a network of nonproliferators, employing best practices, and creating a layered, mutually reinforcing defense strategy against proliferation and its associated procurement efforts. All of the countries here today have a key role to play in this network. And I am quite sure that our workshop will promote the cooperation and collaboration needed to combat the proliferation threat that endangers the security and prosperity of us all.
Thank you.