1996 Congressional Hearings
Intelligence and Security

S. HRG. 104-510

United States Department of State
Washington, D.C. 20520

May 23, 1996

Dear Mr. Chairman:

Following the February 22, 1996 hearing at which Assistant Secretary of Toby T. Gati testified, additional questions were submitted for the record. Please find enclosed the responses to those questions.

If we can be of further assistance to you, please do not hesitate to contact us-

Sincerely,

Barbara Larkin
Acting Assistant Secretary
Legislative Affairs

Enclosures:
As stated.

The Honorable
Arlen Specter, Chairman,
Select Committee on Intelligence,
United States Senate.

Q. 3) In 1991 China agreed to abide by the provisions of the Missile Technology Control Regime in order to get out of sanctions applied as a result of a transfer of missile technology to Pakistan. Last year Secretary of State Christopher said publicly that there was a large body of evidence that China had sold M-11 missiles to Pakistan. Now there are reports of China selling missiles to Iran and transferring nuclear weapons technology to Pakistan.

a) Could you elaborate on the nature and extent of China's assistance to Iran and Pakistan? Do you believe that this assistance could raise compliance concerns with China's commitment to the NPT and the MTCR? How likely is it that China will adhere to the Chemical Weapons Convention (CWC)?

A. Iran Nuclear. China has played an active role in Iran's civil nuclear program since 1985 and is engaged in a number of projects there. Chinese sales of nuclear facilities to Iran -- small research reactors and other related facilities -- have been made pursuant to IAEA safeguards. China had planned to sell Iran two small nuclear power reactors, but explained to the U.S. last fall that the deal had been suspended due to difficulties in site selection as well as Iran's contract with Russia to purchase at least one large nuclear power reactor.

We do not believe China would knowingly assist Iran to acquire nuclera weapons. We have urged China, as well as all other potential nuclear suppliers, to refrain from any nuclear cooperation with Iran give our judgement that Iran is pursuing

a nuclear weapons program. We have noted that any cooperation with Iran, even that which has no direct weapons applications, will materially enhance Iran's currently limited nuclear capabilities. We have stressed that Iran cannot be trusted to abide by its commitments under the NPT.

Pakistan Nuclear. China is providing assistance to Pakistan's civilian nuclearn program through construction of a nuclear power reactor that will be subject to IAEA safeguards. But, China also is involved in cooperation with Pakistan's unsafeguarded nuclear program in areas that raise concern.

Prior to China's NPT accession in March 1992, the U.S. had concluded that China had assisted Pakistan in developing nuclear explosives. By joining the NPT, China made a binding international commitment not to assist any non-nuclear weapon state to acquire or to develop nuclear explosives and undertook to require IAEA safeguards on certain of its nuclear exports. Under the treaty, there are only five recognized nuclear weapon states -- the U.S., the U.K., France, China, and the Soviet Union (now the Russian Federation).

We are closely monitoring Chinese behavior for any signs that Beijing is not living up to its international obligations. The transfer from late 1994 to mid-1995 of a large number of

specialized parts -- ring magnets -- to Pakistan for use in its unsafeguarded uranium enrichment program in addition to other specific forms of cooperation raise questions about Chinese compliance with its stated non-proliferation policy. With respect to the ring magnets, although they themselves are not internationally controlled items, they are the principal component of an item -- magnetic suspension bearings -- that are controlled because it is necessary for the production of uranium enrichment centrifuges.

In the 1995 Annual Arms Control Compliance Report (the so-called Pell Report), the Administration stated that, based on Beijing's longstanding nuclear ties with Islamabad, it was unclear whether Beijing had broken off its contacts with elements associated with Pakistan's nuclear weapons program. We have continuing concerns in this regard, dealing with transfers to Pakistan's unsafeguarded nuclear facilities. In addition, we have concerns about other types of interactions between China and Pakistan dealing both with weapons cooperation and production of other unsafeguarded special nuclear materials. We have made our concerns known to the Chinese government.

Pakistan Missiles. We take all reports of alleged proliferation concern very seriously, and examine closely any

reports on Chinese missile-related assistance to Pakistan. In August 1993 we imposed Category II Missile sanctions on China for its transfer of missile-related items to Pakistan. The Administration also imposed sanctions on Pakistan in this regard. The Administration has not determined that China has supplied M-11S to Pakistan.

Iran Missiles. We take all reports of alleged proliferation concern very seriously, and examine closely any reports on Chinese missile-related assistance to Iran. We continually monitor and evaluate reports of any transfers that could contribute to missile programs of concern.

NPT Compliance. The U.S. objects to any transfers from China to Pakistan or any other non-nuclear weapon state that would contravene China's NPT obligations and could help that country in the development of nuclear weapons.

At this point, the U.S. has not determined that China has violated the NPT, or that it has engaged in activities that would trigger sanctions under U.S. legislation.

With respect to current concerns about Chinese involvement in Pakistan's nuclear program, a potential finding that a specific Chinese entity sent ring magnets to Pakistan and

engaged in other types of cooperation with Pakistan's unsafeguarded nuclear facilities would raise legally distinct issues from a finding that China had violated its NPT obligations.

Such a finding on the ring magnet issue, if made, would obviously raise questions about China's NPT compliance, and whether China's actions undermine the NPT. But we have not reached the conclusion that China has failed to fulfill its NPT obligations. We seek to work with China to resolve our concerns about CHinese nuclear cooperation with third countries, including Pakistan.

MTCR Compliance. In October 1994 we negotiated with China a joint statement on missile nonproliferation in which China reaffirmed its 1991 commitment to observe the guidelines and parameters of the Missile Technology Control Regime (MTCR) and agreed to ban all exports of MTCR-class ground-to-ground missiles. We have not determined that CHina has conducted activities inconsistent with its October 1994 commitments.

CWC Adherence. We believe that China will ratify the Chemical Weapons Convention (CWC). Beijing was an active participant during negotiations in Geneva and currently is active in the CWC Prepcom in The Hague. China signed the convention when it

was first opened for signature in Paris in January 1993. China has indicated that it will submit the convention to its legislature for approbal in the first half of 1996.

The PRC realizes it is in its interests to ratify the CWC. The Convention will enhance China's security by reducing the global threat of Chemical Weapons. Participating in CWC regime will permit China to take an international leadership role in implementing the Convention. And finally, membership in the Convention will insure that China is not subject to CWC_mandated restrictions on trade in certain chemicals with non-states parties.

Q. 3) In 1991 China agreed to abide by the provisions of the Missile Technology Control Regime in order to get out of sanctions applied as a result of a transfer of missile technology to Pakistan. Last year Secretary of State Christopher said publicly that there was a large body of evidence that China had sold M-11 missiles to Pakistan. Now there are reports of China selling missiles to Iran and transferring nuclear weapons technology to Pakistan.

b) What is the likelihood that sanctions against China -- or Pakistan -- will modify their behavior?

A. In implementing our sanctions laws, the Administration does not consider the effect of sanctions as a factor that may be taken into account in deciding whether sanctionable activity has occurred. (To the extent that Sanctions would affect national security interests, the effect of sanctions may be taken into account in determining whether a waiver of sanctions is warranted.)

That said, we believe that if sanctions were imposed against China, the Chinese leadership would likely retaliate, possibly to include counter-sanctions that would target, inter-alia, U.S. economic interests. Beijing believes that it can easily replace the U.S. as a trading partner; the allure of the the China market would be too great for our EU and Japanese competitors

to resist. Even if China were to feel the pain of U.S. economic sanctions, no Chinese offical would risk having his patriotic credentials questioned by suggesting that China gave in to U.S. pressure.

With respect to Pakistan, sanctions would be unlikely to have a significant impact on Pakistani behavior. The Pakistani government considers its military programs essential to its national security.

Q. In 1994, North Korea signed the nuclear framework agreement and promised to forgo further development of nuclear weapons in return for assistance from the US and others.

a)Has North Korea been living up to its commitments under the framework agreement? Do we expect continued compliance? Does the economic situation in North Korea make compliance more or less likely?

b)How high is your confidence that the US Intelligence Community can adequately monitor North Korea's compliance, with the US-North Korean Framework Agreement? How significant are US intelligence collection shortfalls targeted against North Korea?

A. North Korea has been living up to its commitment under the agreed framework. Its nuclear facilities at Yongbyon remain frozen and under IAEA inspection; it has agreed to resume ad hoc and routine inspections by the IAEA of its facilities not coverned under the framework freeze; it is cooperating in canning the spent fuel from its nuclear reactor; it has established a good working relationship with Kedo; and it is discussing other issues of concern to the US, such as MIA remains from the Korean War. The one area where the North has moved slowly is in reestablishing inter-Korean dialogue.

The North Koreans have indicated in a variety of ways that they see the agreed framework process in their interest and are painting it in a positive light. As long as they take this view, we expect continued compliance from them.

Up to a point, we believe that the economic situation in the

North makes compliance likely. To the extent the North sees continuing possibilities of improving its external economic relations, we believe it is more likely to follow through on its commitments under the agreement.

The agreed framework was crafted so that it could be adequately monitored, and we have high confidence in the ability of the intelligence community to perform this task. US Intelligence shortfalls do not interfere with our ability to monitor compliance per se.

Q. 6) Press reports have indicated that India has made preparations to test a nuclear weapon. What is the likelihood that India will test a nuclear weapon this year? If it did so, what is the likelihood that Pakistan would respond with a nuclear test of its own? Would these nuclear tests lead to war between the two nations?

A. We were encouraged by Indian Foreign Minister Mukjerjee's statement in December 1995 that India had no plans to conduct a nuclear test.

Pakistan appears to have plans to test in the event India does so first. In March 1996, Foreign Minister Assef Ali told the Pakistani National Assembly that "if India thinks that by testing the nuclear device it can establish its manhood, there should be no doubt that Pakistan, to, has its manhood."

We find it unlikely that Indian and/or Pakistani nuclear tests would lead to a war between the two nations.

9. What is the likelihood that the current Iraniah regime will still be in power three years from now? Are sanctions likely to influence Iran's behavior over the next three years? Why or why not?

A. The regime probably will be in power three years from now. Despite signs of popular discontent, the Government remains stable and appears to be in no danger of collapse or overthrow within that time frame. U.S. sanctions have had a limited impact on Iran's economy, but have not so far substantially altered Iran's behavior. Their effect over the next three years is difficult to predict. Such factors as the price of oil and the degree of multilateral cooperation in pressuring Iran will have a major impact in their effectiveness. Steadfast resolve on our part, allowing Iran's regime to understand clearly that its behavior has consequences, will improve the chance of influencing Iran's behavior.