CFTC ISSUES ORDER OF REGISTRATION TO BURSA MALAYSIA DERIVATIVES BERHAD

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION
January 22, 2015

CFTC Issues Order of Registration for Bursa Malaysia Derivatives Berhad

Washington, DC — The U.S. Commodity Futures Trading Commission (Commission) announced today that is has issued an Order of Registration to Bursa Malaysia Derivatives Berhad (BMD), a Foreign Board of Trade located in Kuala Lumpur, Malaysia. Under the Order, BMD is permitted to provide its identified members or other participants located in the U.S. with direct access to its electronic order entry and trade matching system to trade agricultural commodity, interest rate and security index futures and option contracts.

The Commission issued the Order in accordance with Part 48 of the Commission’s regulations, which provides that such an Order may be issued to a foreign board of trade that possesses, among other things, the attributes of an established, organized exchange and that is subject to continued oversight by a regulator that provides comprehensive supervision and regulation that is comparable to the supervision and regulation exercised by the Commission.

BMD submitted an application for registration that included, among other things, representations that its regulatory regime under its regulatory authority, the Malaysian Securities Commission, satisfies the requirements for registration in Commission regulation 48.7.

Upon review of the application, the Commission has determined that BMD has demonstrated its ability to comply with the requirements of the applicable Commission regulations. Accordingly, the Commission granted BMD an Order of Registration to permit it to provide direct access to its identified members or other participants located in the U.S., subject to the terms and conditions specified in the Order. The terms and conditions applicable to the Order include, among others, that BMD shall comply with Commission regulation 48.8, Conditions of Registration, and any additional conditions that the Commission deems necessary and may impose, after appropriate notice and opportunity to respond. BMD shall also continue to fulfill each of the representations it made in support of the application for registration.

Last Updated: January 22, 2015

FRANK ROSE'S REMARKS ON MISSILE DEFENSE IN MAINZ, GERMANY

FROM:   U.S. STATE DEPARTMENT 

Implementing Missile Defense in a Global Context

Remarks

Frank A. Rose

Deputy Assistant Secretary, Bureau of Arms Control, Verification and Compliance

3AF Missile Defense Conference

Mainz, Germany

June 17, 2014

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Thank you for that kind introduction. It’s great to be back in Germany and I am particularly honored to address the 3AF Missile Defense Conference again this year.
In my remarks this morning, I would like to discuss three key issues:

• First, the Obama Administration’s commitment to ballistic missile defense (BMD) and the Fiscal Year 2015 missile defense budget request;
• Second, the significant progress the United States and our NATO partners are making in implementing the European Phased Adaptive Approach (EPAA); and;
• Third, cooperation on missile defense with allies and partners outside of Europe.

The U.S. Missile Defense Budget
It is no secret that governments around the world, including the United States, are working very hard to do more with less. This, of course, includes our investments in our national security. Despite these challenges, you will see—and the proof is in the numbers—that the United States is continuing to ensure that our missile defense priorities are funded, on track and on budget.

In March of this year, President Obama released his Fiscal Year 2015 budget submission that aligns defense program priorities and resources with the 2014 Quadrennial Defense Review (QDR). I would like to highlight for you a few of the missile defense aspects of the President’s request.

Overall, the budget request provides $8.5 billion for our missile defense programs, including $7.5 billion for the Missile Defense Agency. With regard to U.S. homeland defense, the budget request provides funding to increase the number of long-range missile defense interceptors deployed in Alaska and California from 30 to 44 by 2017. The request also funds a number of other programs to enhance the long-range BMD system such as a new kill vehicle and a new long-range discrimination radar. With regard to regional missile defense, the budget continues to provide adequate funding to complete work on the missile defense base at Devesulu, Romania and provides additional funding of $225.7 million for the missile defense base at Slupsk in Poland. The request also includes $435.4 million for the procurement of SM-3 Block IB interceptors and $263.9 for continued development of the longer-range SM-3 Block IIA interceptor.

As you can see from these numbers, the United States continues to devote significant resources to our missile defense programs. These programs are an important part of ensuring the national security of the United States, as well as our allies and partners. With regard to the EPAA, this budget request clearly signals the importance the U.S. places on the program. We believe that the resources we are allocating to our missile defense programs demonstrate our commitment to establish ever more capable missile defenses, both in Europe and other regions, to address growing ballistic missile threats. As U.S. Secretary of Defense Chuck Hagel noted in March 2013, the U.S. commitment to NATO missile defense and to the sites in Romania and Poland remains “ironclad.”

European Phased Adaptive Approach
Moving on, I would like to take a few moments to discuss the implementation of the President’s European Phased Adaptive Approach (EPAA) to missile defense. In 2009, when the President announced the EPAA, he noted that the EPAA will “provide stronger, smarter, and swifter defenses of American forces and America's Allies,” while relying on “capabilities that are proven and cost-effective.” And since then, we have been working hard to implement his vision—and we have made great progress in doing so. Earlier this month, President Obama noted in Poland that we are “on track” with the EPAA.

Phase 1 of the EPAA gained its first operational elements in 2011 with the start of a sustained deployment of an Aegis BMD-capable multi-role ship to the Mediterranean and the deployment of an AN/TPY-2 radar in Turkey. With the declaration of Interim BMD Capability at the NATO Summit in Chicago in May 2012, this radar transitioned to NATO operational control. As part of Phase 1, Spain agreed in 2011 to host four U.S. Aegis BMD-capable ships at the existing naval facility at Rota as a Spanish contribution to NATO missile defense, demonstrating its commitment to NATO’s collective defense. In February 2014, the first of four of these ships, USS Donald Cook, arrived in Rota. The next ship, USS Ross, is on its way now. The remaining two will deploy to Rota next year. In addition to their roles in NATO BMD, these ships will conduct maritime security operations, humanitarian missions, bi-lateral and multi-lateral training exercises, and they will support U.S. and NATO operations. By stationing these naval assets in Spain, we are placing them in a position to maximize their operational flexibility for missions in the Atlantic and the Mediterranean.

With regard to Phase 2, we have an agreement in force with Romania to host a U.S. Aegis Ashore site beginning in 2015. Last October, I had the honor of attending the ground-breaking ceremony at Deveselu Air Base to commemorate the start of construction for this site. When this site is operational, and combined with BMD-capable ships in the Mediterranean, NATO will gain enhanced coverage from short- and medium-range ballistic missiles launched from the Middle East. I also had the opportunity last year to visit the Lockheed-Martin facility in Moorestown, New Jersey where they built the Aegis Ashore deck house and components destined for Romania. The deck house has been disassembled and is currently in transit to Romania.

In furtherance of Phase 2, on May 21, the United States successfully conducted the first flight test involving components of the Aegis Ashore system, including the SM-3 IB interceptor. During the test, a simulated ballistic missile target was acquired, tracked, and engaged by the Aegis Weapon System. A live target missile launch was not planned for this flight test.
Before moving on to Phase 3, I would like to stress that we remain on schedule for deploying the system to Romania, with the site becoming operational in 2015.

And finally there is Phase 3. Phase 3 includes an Aegis Ashore site in Poland equipped with the new SM-3 Block IIA interceptor, per the Ballistic Missile Defense agreement between the United States and Poland which entered into force in September 2011. This site is on schedule to be operational in 2018. The interceptor site in Poland is key to the EPAA. When combined with other EPAA assets, Phase 3, which begins in the 2018 timeframe, will provide the necessary capabilities to provide ballistic missile defense coverage of all NATO European territory. So, as you can see; we are continuing to successfully implement the President’s vision for stronger, smarter and swifter missile defenses going forward.

NATO Cooperation
In addition to the support and burden sharing as part of the EPAA undertaken by Spain, Turkey, Poland and Romania, NATO Heads of State and Government noted at the Chicago Summit that there were potential opportunities for using synergies in planning, development, procurement, and deployment of NATO missile defense.
In our view, with this in mind, there are three approaches Allies can take to make valuable contributions to NATO BMD.

• First, Allies can acquire fully capable BMD systems possessing sensor, shooter and command and control capabilities.
• Second, Allies can acquire new sensors or upgrade existing ones to provide a key BMD capability.
• Third, Allies can contribute to NATO’s defense by providing air defense capability for U.S. BMD ships underway on a NATO mission.

In all of these approaches, however, the most critical requirement is NATO interoperability. While acquiring a BMD capability is, of course, good in and of itself, without interoperability, its value as a contribution to Alliance deterrence and defense is significantly diminished. It is only through interoperability that the Alliance can gain the synergistic effects from BMD cooperation that enhance the effectiveness of NATO BMD, as well as the security of all NATO members through shared battle-space awareness and reduced interceptor wastage. Given the budget challenges many allies face today, this becomes even more imperative. Looking ahead, we are hopeful that missile defense will be a key deliverable at the Alliance’s Summit later this year in Wales.

Missile Defense Developments in Other Regions
Outside the NATO context, the United States is continuing to increase and deepen its cooperation with partners and allies around the world to protect people, forces, and assets from the growing ballistic missile threats that we face. As in Europe, we are tailoring our approaches to the Middle East and the Asia-Pacific so that they reflect the unique deterrence and defense requirements of each region.

In the Middle East, we are already cooperating with our key partners bilaterally and multilaterally through venues such as the recently established U.S.-Gulf Cooperation Council (GCC) Strategic Cooperation Forum. At the September 26, 2013, Strategic Cooperation Forum (SCF), Secretary Kerry and his Foreign Ministry counterparts reaffirmed their intent, first stated at the September 28, 2012 SCF, to “work towards enhanced U.S.-GCC coordination on Ballistic Missile Defense.”

As you know, this is a time of profound change in that region and we are acutely aware of the daily threats and anxieties felt throughout the Gulf. Security cooperation has long stood at the core of the U.S.-Gulf partnership. The United States is not only committed to enhancing U.S.-GCC missile defense cooperation – we see it as a strategic imperative.

As stated in the 2010 Ballistic Missile Defense Review, a key objective of U.S. strategy is to expand international efforts and cooperation on ballistic missile defense. BMD cooperation contributes to regional stability by deterring regional actors, principally by eliminating their confidence in the effectiveness of their ballistic missiles, and assuring allies and partners of U.S. defense commitments while enhancing their ability to defend against these threats.
Less than two months ago I travelled to the Gulf to work toward enhanced U.S.—GCC coordination on ballistic missile defense. The message I delivered in the region was clear: the United States remains firmly committed to developing and deploying advanced missile defense capabilities around the world to protect our homeland, our deployed forces, as well as our friends and allies.

Several of our partners in the region have already expressed an interest in buying missile defense systems, and some have already done so. For example, the UAE has contracted to buy two THAAD batteries that, when operational, will enhance the UAE’s security as well as regional stability. The UAE also has taken delivery of its Patriot PAC-3 batteries, which provide a lower-tier, point defense of critical national assets. We look forward to advancing cooperation and interoperability with our GCC partners in the years ahead.

Additionally and separately, we are continuing our long-standing and robust cooperation with Israel on missile defense on key systems such as Arrow 3, David’s Sling, and Iron Dome.

In the Asia-Pacific, we are continuing to cooperate through our bilateral alliances. For example, the United States and Japan already are working closely to develop jointly an advanced interceptor known as the SM-3 Block IIA along with deployment of a second AN/TPY-2 radar to Japan, while continuing to work on enhancing interoperability between U.S. and Japanese forces. With the Republic of Korea, we are continuing to consult closely as it develops the Korean Air and Missile Defense system, which is designed to defend the ROK against air and missile threats from North Korea.

No Constraints
Before I conclude, let me speak about missile defense and Russia. Russia continues to demand that the United States provide it with “legally-binding” guarantees that our missile defenses will not negatively impact its strategic nuclear deterrent. What the Russians really mean is that they want legally-binding limitations or constraints on U.S. missile defenses—defenses we and our partners and allies believe must be flexible and unconstrained in order to adequately protect ourselves from emerging ballistic missile threats. Such “legally binding guarantees” would create limitations on our ability to develop and deploy future missile defense systems against regional ballistic missile threats such as those we see evolving in the Middle East and North Korea. We have repeatedly made clear to the Russian government that the United States cannot and will not accept any obligations that limit our ability to defend ourselves, our allies, and our partners, including where we deploy our BMD-capable Aegis ships.

As far as where things stand today regarding our discussions with Russia on missile defense, Russia’s intervention into the crisis in Ukraine, in violation of international law, has led to the suspension of our military-to-military dialogue and we are not currently engaging Russia on the topic of missile defense.

Conclusion
Let me conclude by saying that we have made a great deal of progress on missile defense over the past several years.

Thanks to the important work of our NATO Allies, implementation of the EPAA and NATO missile defense is going well. We are continuing to engage productively with our partners and allies in the Middle East and East Asia. And, as I noted earlier, Congress has continued to provide sufficient funding for missile defense programs, even in these times of tight budgets.
For our part, we look forward to continuing these successes and working with our allies and friends around the world to deepen our cooperation, both diplomatic and military, in pursuit of ensuring that missile defense remains a key part of deterring and defending against ballistic missile threats.

Thank you very much, and I look forward to your questions.

REMARKS ON IMPLIMENTATION OF EUROPEAN PHASED ADAPTIVE APPROACH

FROM: U.S. DEPARTMENT OF STATE EUROPEAN

Implementation of the European Phased Adaptive Approach
Remarks
Frank A. Rose
Deputy Assistant Secretary, Bureau of Arms Control, Verification and Compliance
Polish National Defense University
Warsaw, Poland
April 18, 2013

Thank you so much for inviting me to join you today. At the State Department, I am responsible for overseeing a wide range of defense policy issues, including missile defense policy. In that capacity, it was my responsibility and privilege to negotiate the details of the Ballistic Missile Defense (BMD) agreements with Poland, Romania, and Turkey that will enable the United States to implement the European Phased Adaptive Approach (or EPAA), the U.S. contribution to NATO missile defense. Poland is a strong ally and valued friend of the United States. Our bilateral defense ties run deep and are growing -- our new Aviation Detachment and Poland's agreement to host an EPAA missile defense site are but two recent examples of our partnership.

Implementation of the European Phased Adaptive Approach

Since 2009, the United States Government has focused on carrying out the vision articulated by President Obama when he announced that the EPAA would "provide stronger, smarter, and swifter defenses of American forces and America's Allies," while relying on "capabilities that are proven and cost-effective."

As you know, we have made great progress in implementing the President’s vision in Europe.

EPAA Phase One gained its first operational elements in 2011 with the start of a sustained deployment of an Aegis BMD-capable multi-role ship to the Mediterranean and the deployment of an AN/TPY-2 radar in Turkey. With the declaration of Interim Operational Capability at the NATO Summit in Chicago, this radar transitioned to NATO operational control.

Demonstrating their support for both NATO and the EPAA, Spain agreed in 2011 to host four U.S. Aegis-capable ships at the existing naval facility at Rota. These ships will arrive in the 2014- 2015 timeframe, in time for EPAA Phase Two.

For Phase Two of the EPAA, we have an agreement with Romania that was ratified in December of 2011 to host a U.S. land-based SM-3 interceptor site beginning in the 2015 timeframe. This site, combined with BMD-capable ships in the Mediterranean, will enhance coverage of NATO from short- and medium-range ballistic missiles launched from the Middle East.

And finally there is Phase 3, which is centered on the first of the three host nations to ratify their hosting agreement – Poland. The Ballistic Missile Defense Agreement between the U.S. and Poland entered into force in September of 2011. This agreement places a land-based interceptor site, similar to Phase 2, in Redzikowo, and includes the SM-3 Block IIA interceptor. This EPAA Phase 3 site is on schedule and on budget for deployment in the 2018 timeframe. The interceptor site here in Poland will be key to the EPAA. Not only will it protect Poland itself, but when combined with the rest of the EPAA assets, Phase 3 will be able to protect all of NATO Europe against ballistic missile threats from the Middle East.

On March 15, Secretary Hagel announced changes to U.S. missile defense policy to strengthen U.S. homeland missile defenses due to the growing ballistic missile threat from Iran and North Korea. One of these policy changes is that the SM-3 IIB missile defense interceptor program - the core element of EPAA Phase 4 - is being restructured into a technology development program.

With the SM-3 IIB interceptor, Phase 4 would have provided an intercept capability against ICBMs launched at the U.S. homeland from the Middle East. But the SM-3 IIB program also experienced significant delays, in part due to the U.S. Congress underfunding this interceptor. So as you know, the SM-3 IIB interceptor will no longer be developed or procured. The United States will instead strengthen its homeland defense by procuring additional Ground Based Interceptors – GBIs- for deployment at our existing missile defense site in Fort Greely, Alaska.

As Secretary Hagel announced, we will increase the number of deployed GBIs from the current 30 to 44, providing a nearly 50 percent increase in our capability.

The other two steps that Secretary Hagel announced include:
Deploying, with the support of the Japanese Government, an additional AN/TPY-2 radar in Japan. This will provide improved early warning and tracking of any missile launched from North Korea at the United States and/or Japan; and
Conducting studies for a potential additional GBI site in the United States. While the Obama Administration has not made any decision on whether to proceed with an additional site, conducting these studies would shorten the timeline for construction should that decision be made.
Finally, let me emphasize that the U.S. commitment to Phases One through Three of the EPAA and NATO missile defense remains ironclad, including the planned sites in Poland and Romania. Like the Administration, the U.S. Congress has supported, and continues to support full funding for Phases 1 through 3.

These U.S. missile defense deployments to Europe will provide the necessary capabilities to provide ballistic missile defense coverage of all NATO European territory in the 2018 timeframe.

I know that some may believe that not fielding Phase 4 may weaken the Transatlantic connection of the EPAA. I would tell you that the connection is still strong. I would emphasize that Phases One through Three of the EPAA will continue to provide important contributions to the defense of the United States homeland and U.S. deployed forces in Europe. For example, the radar deployed in Turkey as part of EPAA can provide important early tracking data on any Iranian missile launches against the United States. The interceptor site to be deployed in Poland, as well as BMD-capable ships at sea, will also be key to protecting the U.S. radar at Fylingdales, which is important to the defense of the U.S. homeland.

Cooperation With NATO Allies

Beyond our bilateral cooperation, we have also worked with our NATO Allies, including Poland, to implement a NATO missile defense effort.

After thorough and steady progress within NATO, on May 20-21 of 2012, the NATO Heads of State and Government met in Chicago for a NATO Summit and announced that NATO had achieved an interim BMD capability. This means that the Alliance has an operationally meaningful, standing peacetime BMD capability. NATO also agreed on the BMD-related command and control procedures, designated the Supreme Allied Commander Europe as the commander for this mission, and announced an interoperable command and control capability.

To support this interim BMD capability, the United States has offered EPAA assets to the Alliance as our voluntary national contributions to the BMD mission. The AN/TPY-2 radar deployed in Turkey is under NATO operational control. In addition, U.S. BMD-capable Aegis ships in Europe are also now able to operate under NATO operational control when threat conditions warrant.

These decisions have created a framework for allies to contribute and optimize their own BMD assets for our collective self-defense, and the United States welcomes and encourages such contributions from Allies. NATO BMD will be more effective should Allies provide sensors and interceptors to complement the U.S. EPAA contributions. Several NATO Allies already possess land- and sea-based sensors that could potentially be linked into the system, as well as lower tier systems that can be integrated and used to provide point defense such as PATRIOT. It is important that the systems contributed by Allies be interoperable with NATO’s Active Layered Theater Ballistic Missile Defense – or ALTBMD – command and control capability.

Cooperation With the Russian Federation

At the same time as we are developing this missile defense cooperation with NATO, we also seek to work cooperatively with Russia. We remain convinced that missile defense cooperation between the United States and Russia (and between NATO and Russia) is in the national security interests of all countries involved. For that reason, missile defense cooperation with Russia remains a Presidential priority for this Administration.

In Chicago, the NATO Allies made a very clear statement of our intent regarding strategic stability and Russia’s strategic deterrent. NATO declared in the Chicago Summit Declaration that "…the NATO missile defense in Europe will not undermine strategic stability. NATO missile defense is not directed against Russia and will not undermine Russia’s strategic deterrence capabilities." Through transparency and cooperation with the United States and NATO, Russia would see firsthand that this system is designed for ballistic missile threats from outside the Euro-Atlantic area, and that NATO missile defense systems can neither negate nor undermine Russia’s strategic deterrent capabilities.

While we seek to develop ways to cooperate with Russia on missile defense, it is important to remember that in keeping with its collective security obligations, NATO alone bears responsibility for defending the Alliance from ballistic missile threats. This is why the United States and NATO cannot agree to Russia’s proposals for "sectoral" or "joint" missile defense architectures. Just as Russia must ensure the defense of Russian territory, NATO must ensure the defense of NATO territory. NATO cannot and will not outsource its Article 5 commitments. As ballistic missile threats continue to evolve, we cannot place limits or constraints on our ability to defend ourselves, our allies, and our partners. This includes any limitations on the operating areas of our BMD-capable multi-mission Aegis ships.

Cooperation With Poland

We can’t talk about BMD cooperation without talking about our cooperation right here with the Republic of Poland.

We also now have an enduring Aviation Detachment deployed in Lask, which supports the joint training of U.S. and Polish Air Forces. And I also have to mention our vibrant and longstanding cooperation with Poland on other efforts to combat the threat of WMD and their missile delivery systems. For example, former President Bush chose Warsaw as the site of his May 2003 public call to create a common global effort to stop WMD- and missile-related shipments to and from states of proliferation concern. Poland and the United States then worked closely to heed that call by establishing the Proliferation Security Initiative. Over the following decade, 100 other nations from every part of the world joined our two countries in the PSI to improve our common efforts to take action against WMD shipments. Next month, Acting Under Secretary Gottemoeller will have the great pleasure of leading the U.S. delegation to the PSI Tenth Anniversary meeting in Warsaw not only to mark the occasion, but to continue efforts to meet the call that President Obama made in the 2009 Prague speech to ensure the PSI is a durable international effort.

I commend my Polish colleagues for their leadership within NATO and domestically on defense modernization which will lead to new and valuable skill sets for NATO. As everyone knows, Poland is leading by example. Where many NATO countries are reducing their defense modernization, Poland is focusing on it – and the "it" that I follow most closely is the Polish efforts to upgrade its Integrated Air and Missile Defense System. This has been a topic of considerable discussion with my Polish counterparts. I expect it will be a topic of continued discussion. It is clear to me that the Government of Poland intends to embark upon a substantial effort that will provide for a greater national expertise which can contribute to NATO air and missile defense capabilities.

And Poland is not only working on defense modernization – it is also a participant in the U.S. Strategic Command’s NIMBLE TITAN multinational missile defense wargame. Polish military, Ministry of Defense and Ministry of Foreign Affairs officials are working closely with over 20 countries and NATO to collaboratively think through how regional and global coalitions might be able to innovate with equipment, tactics, techniques and procedures to provide the best and most agile defense. In a world where the threats and the technology to defend are constantly evolving, it is our responsibility to think through the problems to reach the best and most efficient solutions.

Conclusion
We are proud of how much we have already achieved by working with our allies and partners to counter the threat from ballistic missiles, but admittedly, there is still much to do – and we are looking forward to achieving higher levels of BMD cooperation and effectiveness.

I am very pleased to be here today, and I look forward to your questions.


Thank you.

U.S. DEFENSE TO MOVE FROM "MAD" TO MUTUALLY ASSURED STABILITY "MAS"

The following excerpt is from the Department of Defense website:
Ballistic Missile Defense: Progress and Prospects
Remarks Ellen Tauscher
Special Envoy10th Annual Missile Defense Conference
Washington, DC
March 26, 2012
Thank you, Pat for that introduction. I have worked with Pat for a long time now and I appreciate his support, advice and service to this nation. When I retired from full-time government service, I kept the missile defense portfolio, in part, because I wanted to keep working with Pat.

Two-and-a-half years ago—and that seems like a lifetime ago in terms of government years—the Obama Administration rolled out the European Phased Adaptive Approach. Several months later, we completed the Ballistic Missile Defense Review. In Lisbon, last year, NATO committed to adopt missile defense as an Alliance mission. I continue to work with my Russian counterparts to find a path forward on missile defense cooperation. And we’re working more closely than ever with Israel on Arrow, Arrow 3, David Sling and more.

The Obama Administration has not only talked about supporting missile defense, we’ve actually done it. And, we have focused on effective systems. We have worked to protect and enhance our important homeland defense capabilities and to expand our regional missile defense capabilities. We demonstrated that again in the FY13 budget request, where every program and every agency is subject to cuts, we protected our most critical BMD capabilities to protect the U.S. homeland, our deployed forces, and our allies and partners.

I am going to focus on two issues. To start, I want to talk about the European Phased Adaptive Approach. And then I want to make the case for Missile Defense cooperation with Russia.

I’m not going to dwell on the specifics of what the EPAA will and will not do. Pat has undoubtedly given you a much better briefing on that than I can. I want to talk about the progress we have made in implementing the European Phased Adaptive Approach.
When I spoke at last year’s conference, we were hard at work on the agreements that would allow the implementation of all four phases of the European Phased Adaptive Approach. Then, during one incredible week last September, we made three announcements.

First, Turkey agreed to host the Phase 1 AN/TPY-2 radar.
Second, we signed the Ballistic Missile Defense Agreement with Romania to host the Phase 2 land-based SM-3 site. Today, both of those agreements have been finalized. The U.S.-Poland agreement for the Phase 3 land-based site entered into force as well.
And, last October, Spain agreed to serve as a home port for four Aegis destroyers. That’s not bad for government work.

The Obama Administration has put into place the key agreements needed to implement all four phases of the EPAA. Most importantly, we met President Obama’s goal to implement the first phase of the EPAA by the end of 2011. Right now, the Aegis Cruiser, the USS Vella Gulf, is providing our at-sea Phase 1 missile defense presence along with the AN/TPY-2 radar in Turkey.

The next big demonstration of our progress will come at the NATO Summit in Chicago in May. We expect NATO to announce that it has achieved an “interim capability.” That basically means that Allies will start operating under the same “playbook.”
NATO has done tremendous work in preparing the way for this interim capability since the agreement in Lisbon to develop a NATO BMD capability whose aim is to provide full coverage and protection for all NATO European populations, territories, and forces. We are especially grateful to those allies that have agreed to contribute to the NATO BMD system. We especially appreciate Turkey, Romania, Poland, and Spain for their willingness to host elements of NATO’s missile defense capabilities on their territory.
Other countries are making significant contributions as well. The Netherlands has decided to modify the SMART-L radars on their air defense frigates to give the ships a BMD sensor capability that can contribute to NATO missile defense. Germany is exploring developing an airborne infrared sensor. France has proposed a concept for a shared early warning satellite.

After Chicago, we will continue to cooperate with our NATO Allies to achieve full operational capability for NATO territorial missile defense, including all four phases of the EPAA as the U.S. contribution.

At the same time, I have been working with my Russian counterpart to develop mutually beneficial areas of cooperation. This could be a game changer for European security and for U.S.-Russian relations. And any cooperative agreement will not limit our ability to deploy missile defense systems and it can and will be done in a way that doesn’t compromise our commitment to NATO missile defense and all four phases of the EPAA.

Missile defense is one area where we can work together with Russia to end Cold War thinking and move away from Mutually Assured Destruction toward Mutually Assured Stability.

That means getting Russia inside the missile defense tent now, working alongside the U.S. and NATO, while we are in Phase 1. This way Russia will be able to see with its own eyes what all the phases of the EPAA really mean. Russia also will be able to see that we are focused on the threat from countries like Iran. NATO missile defense systems will not threaten Russia’s strategic nuclear capabilities. I’ll say it again: These systems will not threaten Russia’s strategic forces.

This cooperation is essential because Russia has not been convinced by our technical arguments that the NATO system isn’t a threat even despite Pat’s best efforts and I am grateful to him and MDA for their detailed technical responses to Russia’s inaccurate assumptions about our missile defense capabilities.

Cooperation will also allow Russia to see that the U.S. Phased Adaptive Approach to missile defense is designed to be flexible. Should the ballistic missile threat from nations like Iran be reduced, our missile defense system can adapt accordingly.
Russia has raised the issue of a legal guarantee with a set of “military-technical criteria” that could, in effect, create limitations on our ability to develop and deploy future missile defense systems. They want a piece of paper they can point to when a U.S. ship enters certain waters or when an interceptor has a certain speed.

We certainly cannot accept limitations on where we deploy our Aegis ships. These are multi-mission ships that are used for a variety of missions around the world, not just for missile defense. We also will NOT accept limitations on the capabilities and numbers of our missile defense systems.
We would be willing to agree to a political statement that our missile defenses are not directed at Russia. In fact, this is what we have been saying all along. Let me say it again: any statement will be politically binding and it would publicly proclaim our intent to cooperate and chart the direction for cooperation, not limitations.

In order to reach the point where we can engage in genuine missile defense cooperation with Russia in ways that truly benefit U.S. national security, we may need to be more transparent and continue to build trust between our two nations. We would not give away “hit to kill technology,” telemetry, or any other types of information that would compromise our national security.

We must look for opportunities for transparency measures with the Russian Federation. To that end, we have offered for the Russian Federation to view one of our Aegis SM-3 missile defense flight tests. We are not proposing to provide them with classified information.

Rather, we are offering for them to operate in international waters, giving them the time of launch of our target (which we provide to mariners and airmen as normal course). This will be a good first step in transparency measures with the Russian Federation, allowing them to see for themselves, what we are saying about our system is accurate.
I would argue that we cannot let this opportunity pass. It is too important for the future of U.S. and European security.

Now that Russia has wrapped up its elections, I am hoping my Russian colleagues see this is an opportunity that they should take sooner rather than later. Confidence takes time to build. If Russia is truly concerned about Phases 3 and 4, it would be best for Russia to start cooperating as early as possible to better understand our capabilities as they evolve. We prefer future decision-making on this issue to be made according to on-the-ground realities, not worst-case guesses. We prefer letting data and facts inform our decision making, rather than lingering Cold War paranoia.

So we will keep working to see if we can come up with a plan for cooperation. That is one of the reasons I have stayed on as Special Envoy. I want to see this cooperation reach fruition.

On March 13th, I took the full interagency Arms Control and International Security Working Group of the Presidential Bilateral Commission to Moscow for a meeting with the Russians. I then followed up with a one-on-one meeting with my counterpart Deputy Foreign Minister Ryabkov last weekend. We also continue to press in the Defense and Joint Staff channels, and we will keep moving forward in the run up to May and we will keep going long after May.

Our objective is not just winning some public relations points. It’s about creating lasting cooperation and changing outdated thinking to the benefit of U.S. security.
Transforming missile defense from an issue of contention to one of cooperation will also help move us forward on the road toward greater nuclear reductions and, eventually, elimination.

Let me close by reiterating that our cooperation with Russia will not come at the expense of our plans to defend Europe from regional ballistic missile threats or for the defense of the U.S. homeland.

President Obama, Secretary Clinton, and others have all reaffirmed our commitment to the implementation of the EPAA. We look forward to continuing our work implementing the EPAA with our NATO partners as well as consulting closely with Congress and others as we move forward.

Thank you and with that, I would be happy to take a few [easy] questions.