DEFENSE INTELLLIGENCE AGENCY
Washington, DC 20340

U-02,0109/DM-CA

21 March 2002

Honorable Bob Graham
Chairman, Select Committee On Intelligence
United States Senate
Washington, DC 20510

Dear Mr. Chairman:

On 6 February, Vice Admiral Wilson provided testimony before the Select Committee on Intelligence on the current and projected national security threats to the United States.

On 21 February, the committee forwarded several Questions for the Record the responses to which were to become part of the official transcript of the hearing.

Admiral Wilson has reviewed the responses to those questions and is herewith providing them for inclusion into the official record of the proceedings.

WILLIAM R. GRUNDMANN
Chief, Office of Congressional Affairs

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SENATE SELECT COMMITTEE ON INTELLIGENCE
World Wide Threat Hearing

6 February 2002

QUESTION AREA: (U) Terrorism

QUESTION 1: The Intelligence Community is America's early warning system against threats to American lives and property both here and overseas.
A) (U) What are the Intelligence Community's greatest strengths and deficiencies in monitoring terrorism?
B) (U) What lessons have you learned from September 11, 2001 to address any shortcomings?
C) (U) Do you believe you have sufficient resources to fight the war on terrorism?

ANSWER: A. (U) US intelligence collection against terrorists generally provides a good strategic picture of the terrorist threat, to include terrorist groups' capabilities, intentions, structure and areas of operation. Collection, however, rarely provides tactical warning of a future attack. For instance, the intelligence community can tell you that planning for a terrorist attack is nearing completion. However, we often lack the insight to provide specifics on exactly where or how that attack will be carried out.

(U) The Intelligence Community has needed, and continues to need, an experienced body of highly qualified and motivated personnel performing rigorous analysis against the terrorist target. Congruent with that is the need for more detailed data, improved information sharing among agencies, and improvements in automation. The lack of information sharing among and between members of the intelligence and law enforcement communities continues to be an issue that directly affects the quality of analysis. DIA's current initiatives to strengthen Defense terrorism analysis is based on the principles of giving analysts access to the full range of all-source reporting and applying the proper resources to more precisely direct National-level Defense intelligence analytical support for warning and Force Protection.

ANSWER: B. (U) The events of 11I September have reinforced a number of assumptions, have forced us to challenge other long held assumptions, and have taught us several new lessons. Usama Bin Ladin and his al-Qaida network do not operate under the same constraints as other terrorist organizations. While prior to 11 September, it was certainly obvious that US interests were al-Qaida's primary target, a vast majority of all reporting concerned al-Qaida interests and threats outside CONUS. Al-Qaida is creative and opportunistic. The conceptualization and initiation of planning leading to an attack using only box-cutters, and leading to over 2,000 deaths is clear enough evidence of that ingenuity.

(U) An important lesson for the Intelligence Community involves open information sharing. We are fighting a flexible enemy--certainly more flexible than the Intelligence Community structure--with a worldwide presence. To battle this enemy most effectively, the intelligence analysts must be able to have access to all "all source" information to provide a true all-source picture of the terrorist threat.

(U) A last point to make also goes back to a point raised above: information technology. As the government provides increasing resources to fight terrorism, to include money for more analysts and collectors, we expect the volume of terrorism-related information to continue to increase. The level of information inundating analysts is already one of the greatest challenges we face. To help analysts sort through ever larger piles of data, the Intelligence Community must help develop and then introduce improved tools to sort and sift this information.

ANSWER C: (U) We will provide a response to this question in the classified responses to SSCI's classified questions for the record.

QUESTION AREA: (U) The continuing threat posed by al-Qaida:

QUESTION 2: A) (U) How many Taliban and al-Qaida members have been killed, wounded or captured since September 11?
B) (U) To what extent have al-Qaida and the Taliban been effectively eliminated as a threat to U.S. interests?

ANSWER: A. (U) The exact numbers of al-Qaida killed or wounded are not known. Several hundred al-Qaida personnel have been captured in Afghanistan and Pakistan, with thousands of others apprehended worldwide. We believe the most senior al-Qaida personality killed to date was Usama Bin Ladin's senior deputy Muhammad Atef. The most senior al-Qaida personality captured to date is Ibn al-Shaykh al-Libi, perhaps the most experienced al-Qaida trainer.

ANSWER: B. (U) Al-Qaida is and will remain a serious threat to US interests at home and abroad and also pose a continuing threat to US allies and partners in the campaign against terrorism. Illustrative of this threat are the attacks that have been thwarted since 11 September. Examples include the "shoebomber" Richard Reid, disrupted attacks against US Navy assets in Southeast Asia, and arrests of North Africans in Italy who may have been planning to attack our Embassy. Pressure against the al-Qaida network has resulted in scores of arrests, disrupted terrorist attacks, and ultimately, appears to be causing the network to become increasingly decentralized. As the network becomes more decentralized, it will be more difficult for it to act in a coordinated fashion and raise and distribute funds and other material. Nonetheless, experienced, at-large al-Qaida operatives possess the ability to put together terrorist operations regardless of the ultimate disposition of senior al-Qaida leadership.

QUESTION AREA: (U) Status of U.S. Objectives in Afghanistan

QUESTION 3: (U) President Bush has indicated that among U.S. objectives in Afghanistan are the following: deliver to the U.S. all the leaders of al-Qa'ida who hide in Afghanistan; release all foreign nationals, including U.S. citizens, who have been unjustly imprisoned; closing every terrorist training camp in Afghanistan, and handing over every terrorist, and every person in their support structure, to appropriate authorities; and give the U.S. full access to terrorist training camps, so we can make sure they are no longer operating.
A) (U) Please provide an overview of the status of compliance with these demands.
B) (U) What level of commitment will need to be made to Afghanistan to prevent it from once again becoming a breeding place for international terrorism?

ANSWER: A. (U) Authorities in Afghanistan are cooperating with US and other coalition partners. Terrorists no longer are known to be training in Afghanistan. Aside from former al-Qaida fighters, DIA is not aware of any US or foreign nationals being held against their will in Afghanistan. Despite the interim goverment's best efforts and continuing coalition activities, al-Qaida retains a presence in Afghanistan. Complicating US and interim government efforts are terrain, weather, manpower issues, and the ethnic/political rivalries of the country. Fully destroying or flushing out the al-Qaida presence in Afghanistan is a long-term endeavor.

ANSWER: B. (U) A sustained and protracted campaign against terrorists worldwide will prevent al-Qaida from establishing its roots anywhere in the world. Afghanistan's unique role as a base of operations was a key factor in the expansion of the al-Qaida network from 1996-2001; the benefits al-Qaida enjoyed in Afghanistan, such as access to training, safe-haven, jihad opportunities, a common meeting place and a place where friendships are built and personal links forged, can not be allowed to be duplicated elsewhere. Constant pressure puts terrorists in the defensive mode, inhibits their ability to mount an effective terrorist operation and prevents them from establishing themselves in any one geographic location.

QUESTION AREA: (U) Nations Supporting Terrorism

QUESTION 4: (U) In his speech to a Joint Session of Congress last September 20, President Bush stated that "[f]rom this day forward, any nation that continues to harbor or support terrorism will be regarded by the United States as a hostile regime." The Secretary of State maintains a list of countries that have "repeatedly provided support for acts of international terrorism." Currently, the seven countries on this terrorism list are: Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria.
A) (U) How good is our intelligence on the terrorist related activities of these countries?
B) (U) Has the Intelligence Community noted any increase or diminution of these countries' support to terrorism since last September 11, 2001?

ANSWER: A. (U) The intelligence which links these states to terrorist activities is voluminous and very credible. The degree to which each remains involved in such activities varies greatly. Iran remains the premier state sponsor of terrorism. Iran and Iraq are both engaged in activity that poses a potential, direct terrorism threat to US personnel and facilities. The other countries support groups or engage in behavior that poses an indirect threat to broader US interests.

ANSWER: B. (U) There has been no notable change in these countries support to terrorism since 11 September. However, certain states are playing a constructive role via the provision of intelligence and/or other means in the war against terrorism.

QUESTION AREA: (U) Embassy and Overseas Facilities Security

QUESTION 5: A) (U) What is the nature and extent of the terrorist threat to U.S. diplomatic and military facilities overseas and how has it changed since September 11, 2001?
B) (U) Do you believe that the Departments of Defense and State have taken appropriate security measures to address the terrorist threat to all of their overseas facilities?

ANSWER: A. (U) DoD and DOS assets worldwide will remain an attractive target for terrorist groups. Terrorists have and will continue to target DoD facilities. Increased worldwide cognizance of the terrorist threat and increased cooperation may allay the threat to some extent.

ANSWER: B. (U) We believe that DoD has been vigilant in taking the necessary security precautions to help mitigate the terrorist threat. While more security can always be added, these requirements must constantly be balanced with our ability to continue the overseas mission.

QUESTION AREA: (U) Terrorism Issues QUESTION 6: (U) On November 13, President Bush signed a Military Order pertaining to the detention, treatment and trial of certain non-citizens in the current war on terrorism. Please describe how the IC is involved in this process, including the interrogation of prisoners?

ANSWER: (U) DIA participates in the Intelligence and Law Enforcement Communities' programs for the interrogation of detainees. In Afghanistan and Guantanamo Bay, the Army is the lead department for the interrogation of detained personnel, with DIA and other Intelligence Community personnel attached to the joint interrogation operations. Guantanamo Bay DIA/DHS personnel are under direct control of the SOUTHCOM JTF 170 commander. DIA/DHS personnel concentrate on collecting intelligence of a strategic military nature, rather than the tactical intelligence which is the Army's focus. DIA also is deeply involved in the analysis of information derived from these prisoners and providing follow up questions based on reporting fmm their interrogations. As of 3 March 2002, all 300 detainees have been interviewed and/or screened by DHS personnel at Guantanamo Bay.

QUESTION AREA: (U) Possible Terrorist Use of "Conflict Diamonds" QUESTION 7: (U) The mining and sales of diamonds by parties to armed conflicts -- particularly Angola, Sierra Leone and the Democratic Republic of the Congo -- are regarded as a significant factor fueling such hostilities. These diamonds, known as "conflict diamonds," comprise an estimated 3.7% to 15% of the value of the global diamond trade. Do you have any information that "conflict diamonds" are being used to subsidize the activities of terrorist groups, including al-Qaida?

ANSWER: (U) Several al-Qaida cell members in both Kenya and Tanzania were nominally active in both legitimate and illegitimate gem trading. Most significant was their involvement with the Tanzanite King Company based in Nairobi. However, since the August 1998 East Africa bombings, there have been no further credible indications of al-Qaida involvement in gem trading. Recent press reporting suggests that the group may still benefit from gem smuggling operations; however, the available intelligence does not support the existence of a direct business relationship between al-Qaida, the Revolutionary United Front rebels of Sierra Leone and the dictator of Liberia, Charles Taylor. Although plausible, there are few, if any, indications of direct relationships between terrorist organizations and the diamond trade.

QUESTION AREA. (U) Vietnam

QUESTION 8: A) (U) What is your assessment of the level of assistance provided by the government of Vietnam to the US on POW/MIA issues?
B) (U) Do you believe that there is any room for improvement in this area?

ANSWER: (U) These policy questions could best be answered by the Office of the Secretary of Defense, Defense POW/Missing Personnel Office (OSD/DPMO). I would merely note that, while there is always room for improvement, DIA does certify Vietnamese efforts in a report the President sends to Congress annually.

QUESTION AREA: (U) Security of the Russian Nuclear Stockpile

QUESTION 9:
A) (U) What is your assessment of the safety and security of the Russian nuclear stockpile (including weapons grade material)?
B) (U) How does the security of the Russian nuclear stockpile compare to the security of the U.S. nuclear stockpile?

ANSWER A: (U) Russia employs physical, procedural and technical measures to secure its weapons against an external threat, but many of these measures date from the Soviet era and are not designed to counter the preeminent threat faced today - an insider who attempts unauthorized actions. Moscow has maintained adequate security and control of its nuclear weapons, but a decline in military funding has stressed the nuclear security system.

(U) Security varies widely among the different types of Ministry of Atomic Energy (Minatom) facilities and other Russian institutes. Russian facilities housing weapons-usable nuclear material - uranium mulched to 20 percent or greater in uranium-235 or uranium-233 isotopes and any plutonium containing less than 8 percent of the isotope plutonium-238 - typically receive low funding, lack trained security personnel, and do not have sufficient equipment for securely storing such material. Weapons-grade and weapons-usable nuclear materials have been stolen from some Russian institutes. We assess that undetected smuggling has occurred, although we do not know the extent or magnitude of such thefts. Nevertheless, we are concerned about the total amount of material that could have been diverted over the last 10 years.

(U) Over the last six years, Moscow has recognized the need forsecurity improvements and, with assistance from the United States and other countries, has taken steps to reduce the risk of theft. Through the Cooperative Threat Reduction Program and the U.S. Department of Energy's Material Protection, Control, and Accounting Program, the United States continues to assist Russia in improving security at nuclear facilities. Russia's nuclear security has slowly improved over the last several years but risks remain

ANSWER B: (U) DIA cannot perform a comparison with U.S. practices.

QUESTION AREA: (U) Russia's Closure of Intelligence Facilities in Cuba and Vietnam

QUESTION 10: (U) On October 17, 2001, Russia announced that it will close its large electronic intelligence base in Lourdes, Cuba, as well as its naval base in Cam Ranh Bay, Vietnam.
A) (U) What is the status of the closure of these facilities?
B) (U) What will be the impact of the closure of these facilities on Russia's relations with Cuba and Vietnam?

ANSWER A: (U) The Russian Foreign Ministry and Ministry of Defense have made several statements to the press that the Russian listening post in Cuba has closed. According to the statements, only a small group of technicians remain to facilitate the transfer of equipment back to Russia. DIA has no reason to doubt the validity of these statements. The status of intelligence operations at Cam Ranh Bay Vietnam is not certain.

ANSWER B: (U) Relations between Havana and Moscow will remain lukewarm but stable. A major factor influencing Moscow's decision to close Lourdes was Cuban disregard of Russian attempts to collect its substantial Soviet-era debt.

(U) The Russian government continues to express its desire to maintain cordial relations with Cuba and expand economic ties, but has pursued debt repayment. In mid-September, it reportedly approved a draft plan that would require Cuba to repay its debt in goods and services during 2002. Relations could improve if Havana meets these new financial obligations to Moscow.

(U) The announced closure of the Russian naval base at Cam Ranh Bay has had little impact on Russian-Vietnamese relations, which remain friendly and cooperative. Both countries had anticipated the closure of the base, little used in recent years, for some time. High-level contacts have continued, with Russian Deputy Prime Minister Khristenko visiting Hanoi in January. Khristenko's trip prepared the path for a later visit by Russian Prime Minister Kasyanov. Bilateral trade is limited, growing to only $550 million in 2001; however, Russia remains an important player in Vietnam's oil and power-generation industries. Securing the repayment of Vietnam's debt to Russia remains an important objective for Moscow. Although Russia and Vietnam have remained friendly, their relationship is far less important for both states than were Sino-Soviet ties.

QUESTION AREA: (U) Russian Military Capabilities

QUESTION 11:
A) (U) If present trends continue, what will be the Russian military's capability to conduct operations 5 years from now?
B) (U) Do these trends indicate the possibility that Russia may soon have insufficient military force to retain order within Russia?

ANSWER A: (U) Russia will be unable to project significant military power beyond the former Soviet states with conventional forces for at least the next 10 years. The Russian military increasingly will rely on its shrinking strategic and non-strategic nuclear arsenals to deter or, if deterrence fails, to counter large-scale conventional assaults on Russian territory. While it will maintain conventional superiority over former Soviet states, Russia's military power, relative to others in the region and neighboring areas, will decline.

ANSWER B: (U) No, Russian military and internal security forces will remain capable of maintaining order, countering insurgency within its borders, and quelling all but the most extreme internal instabilty.

QUESTION AREA: (U) Transfer of Technology from Russia

QUESTION 12:
A) (U) What general trends has the Intelligence Community noticed of scientists, technology and conventional and unconventional military sales from Russia to other nations?
B) (U) What trends have you detected that Russian nuclear materials, BW, CW or ballistic missile-related materials or technology have found their way to the international black market?
C) (U) What are the implications of these trends for U.S. security?

ANSWER A: (U) In general terms, the Intelligence Community has noticed an increase in the number of Russian scientists working in or with the defense industries of other nations, although exact numbers and locations cannot be confirmed. This increase is consistent with the worldwide trend to collaborate on the development of new, technologically complex, and costly weapon systems. Russia, in particular, is dependent upon the funding of other nations to share the financial burden associated with the development of new and costly weapon systems. Transfers of technology are commonly associated with the joint development of weapon systems. This trend is apparent in Russia and elsewhere in the world, where development of advanced conventional weapon systems is too costly for one nation to undertake alone.

(U) With regard to unconventional weapons, Russia transfers technologies and commodities having legitimate civilian and military applications, i.e.dual-use, to a variety of nations with interests inimical to the U.S. Many of these nations target such dual-use exports, since they can be applicable to their WMD program. Due to the inherently dual-use nature of the exports, Russian exporters can more easily disguise the ultimate end-user or end-use.

ANSWER B: (U) Following a notable spike in activity in the mid-1990s, there has been a decrease in the credible instances of trafficking in Russian-origin nuclear materials. Since 1991, there have been 195 such reports (Figure 1), 32 of which included enriched uranium or plutonium. The peak period of trafficking occurred between 1992 and 1994, which accounts for 45% of the total number of incidents. The number of cases peaked in 1994 at 40 cases, then declined during the mid and late 1990s. Since 1999, the number of cases reported annually has remained in the low teens. In 80% of these reported cases, there is no independent corroboration of the incident, so what details we have must be used cautiously.

(U) Our information largely is limited to intercepted materials and may not necessarily present a true picture of the black market. Many smuggling attempts end with the capture of the smuggler, but yield no information on the buyer, if any, and we have no way of knowing how many or what kind of transactions go undetected.

(U) Following the breakup of the Soviet Union, them was reason to suspect that Russian entities with connections to organized-crime or black-markets would be interested in brokering biological weapon technologies and expertise. We have no evidence, however, of any transfer unique to biological weapons. During the mid 1930's, Russia eliminated its standing arsenal of biological weapons in favor of mobilization-production in time of war. Consequently, no agent stockpiles are believed extant to serve as a basis for proliferation. The dual-use nature of the technologies required for biological warfare has enabled those seeking such technologies from Russia to do so under an umbrella of legitimacy, largely eliminating a role for criminal elements in biotechnology transfers.

(U) Since the breakup of the Soviet Union, the Russian press has alleged that some chemical materials were sold to organized criminal groups. We can not substantiate these claims. It is entirely possible, however, that criminal elements have acquired toxic industrial chemicals, poisons, riot-control agents and even actual chemical warfare agents from various sources. We cannot rule out that thefts or illicit transfers of materials have occurred from military units, commercial facilities, and even from CW-related research, production and storage facilities -- either active sites or those that were abandoned after the breakup of the Soviet Union. The mafia could readily market such chemical materials to insurgents or to countries of concern seeking to enhance their chemical warfare capabilities, as well as to terrorist groups. Other press reports claimed that al-Qaida operatives were seeking chemical and biological materials and expertise in the Central Asian states. There is no information to substantiate whether or not al-Qaida obtained any chemical or biological warfare related material or expertise from former Soviet or Russian entities.

ANSWER C: (U) Even though the black market may not play a large role, the biological weapons threat to U.S. security likely will increase over time. Countries and entities seeking BW-enabling technologies are expected to become more adept at using legitimate acquisition of dual-use technologies and their applications for biological weapons-related purposes. DIA also judges that advancements in biotechnology will further complicate the capability to control or prevent their abuse.

QUESTION AREA: (U) The Situation in North Korea.

QUESTION 13: A) (U) What is the likelihood that North and South Korea will unify within the next 5 years and what is the likelihood that unification between North and South Korea will be a peaceful process?
B) (U) Under what circumstances would a war be likely?
C) (U) How strong is Kim Jong-il's hold on power?
D) (U) Who will likely succeed him?

ANSWER: A. (U) The likelihood that North and South Korea will reunify in the next 5 years is very low. North Korea shows few signs of meaningful economic reform or engagement with Western economics, choosing instead to emphasize its socialist ideology and military capabilities. Over the past year, Pyongyang has backed away from its willingness to engage the South and, for its part, Seoul now is less willing to provide economic assistance without reciprocal political concessions on the part of the North. It also appears unlikely that the next administration in Seoul, which will take office in February 2003, will pursue openings to the North with the determination that has been the hallmark of the now lame-duck Kim Dae Jung administration. Together with North Korea's growing anxiety (and retrenchment) over U.S. intentions associated with the global war on terrorism, these developments make it extremely wilikely that significant progress toward peaceful reunification will occur over the next five years.

ANSWER: B. (U) North Korea probably will not attack South Korea, unless the strategic environment on the peninsula changes significantly. An attempted North Korean unification by force is unlikely unless U.S. resolve and ability to defend the peninsula change and South Korea's political will to resist weakens. The greatest risk of conflict would occur if Pyongyang miscalculates the strategic equation, perhaps as a result of an internal crisis, a regional conflict, or a belief that military action by the U.S.-ROK Combined Forces Command was imminent.

ANSWER: C. (U) Kim Chong-il exercises firm control over Norih Korea and its military establishment. Kim has been careful to place staunch loyalists in positions of authority, has cultivated favor with military leaders, and has not allowed other officials to build large followings of their own. Any sudden incapacitation of Kim Chong-il, therefore, most likely would occur as the result of illness, accident, or an individual attack on his person. The institutions of government, including the armed forces, are unlikely to be threatened and, like Kim himself, other senior officials risk loss of privilege and power should they attempt substantial change to the system. Thus, party and government officials probably would support a successor who would command, while ensuring internal stability and a continuation of the status quo.

ANSWER: D.(U) Kim Chong-nam, 30, Kim Chong-il's oldest son, is rumored to be the eventual heir, assuming North Korea adheres to a hereditary succession formula, but he has not yet assumed any high-profile government or Party positions. If Kim Chong-il is incapacitated in the near term, before Kim can groom a successor, it is more likely that power will be assumed by one of the high-ranking members of the National Defense Commission, someone possessing both strong Party affiliations and the loyalty of the military. Possible candidates include Vice Marshals Cho Myong-nok, 79, and Kim Young-chun, 69, although age and health problems may limit Cho's role. It is also possible that someone like Chang Song-taek, Kim's influential brother-in-law, could assume power, provided the military remained loyal.

QUESTION AREA: (U) Trends in Conventional Arms Transfer Activities

QUESTION 14:
A) (U) What are the most recent major trends you have identified in conventional arms transfer activities with respect to sales to: the Middle East from foreign suppliers, to China by Russia, and all suppliers to Iran?
B) (U) What specific major conventional weapons systems have been transferred from Russia to: Iran, and China?

ANSWER A: (U) The Middle East. The Middle East generally has been the largest arms market in the developing world. In 1993-1996, it accounted for 55 percent of the total value of all developing nations' arms transfer agreements ($46 billion in current dollars). During 1997-2000, the region accounted for 47 percent of all such agreements ($38.4 billion in current dollars).

(U) The U.S. dominated arms transfer agreements with the Middle East during 1993-200O, with 55 percent of their total value ($46.5 billion in current dollars). France was second during these years, with 23 percent ($19.2 billion in current dollars). From 1997-2000, the United States accounted for 61 percent of arms agreements with this region ($23.4 billion in current dollars), while France accounted for 16 percent of the region's agreements ($6.2 billion in current dollars), representing most of the arms transfer agreements by the major West European suppliers with the Middle East.

(U) Future arms sales in the region will involve advanced fighter aircraft, tactical air launched missile systems, tactical air defense systems. Europe, Russia and the United States will be looked to as sources of these weapon systems.

(U) China. China's current and future arms acquisitions include fighter airrraft, major surface combatants, and advanced air defense systems. China relies heavily on Russian military technology, which can be found in all major categories of Chinese advanced conventional weapon systems. Russian technology transfer will make the lethality of China's currently deployed conventional weapons at least one generation more advanced.

(U)The following is a list of China's active arms agreements.

Aircraft

Su-30MK FLANKER (second batch)
Su-27UBK FLANKER tandem-seat trainers
A-50E MAINSTAY airborne early-warning aircraft
Mi-17 HIP helicopters
AA-12 ADDER air to air missiles

Naval

SOVREMENNYY Class guided missile destroyers
Repair for KILO Class submarines

Ground

SA-10/20 GRUMBLE SAM systems
SA-15 GAUNTLET SAM systems
Licensed production of the RPO-A SHMEL flamethrower system

(U) Iran. Over the last six years, Iran signed arms agreements with over 40 countries for military equipment valued at approximately $2.2 billion. Principal suppliers are Russia, China, and North Korea, which were responsible for almost 90 percent of the agreements and 80 percent of deliveries. Russia is Iran's leading supplier, with contracts valued at about $1 billion mainly for ground attack aircraft and naval services. China is the second leading supplier, with contracts valued at $800 million, mainly for sale and co-production of naval equipment. Other significant agreements include ballistic missile equipment and technology from Russia, North Korea and China.

(U) At the end of 2000, Russia announced it intended to withdraw from a 1995 ageement with the U.S., intending to enter into new weapons sales contracts with Iran effecyive 1 December, Russia's agreement with the U.S. had prohibited new Russian sales of tanks and other conventional weapons to Iran, but permitted Moscow to fulfill contracts for hundreds of tanks and armored personnel carriers. The deal also allowed Russia to deliver a diesel-powered submarine and a number of sophisticated torpedoes. The agreement exempted Russia from U.S. sanctions for selling weapons to Iran, in exchange for Moscow's pledge that it would end all deliveries of sophisticated conventional arms to Tehran by 31 December, 1999.

(U) Iran's primary arms negotiations are with Russia, and Moscow's ailing defense industrial sector needs new orders. Press reports claim that Russia's implementation of the bilateral agreement with the U.S. may have cost Moscow as much as $2 billion in lost sales. Potential contracts that have been under negotiation include modern air defense systems, aircraft helicopters, naval systems and ground force weapons potentially worth an additional S2 billion over the next 5 years.

(U) Since 1988, when Iran exhausted its supply of SCUD-B SRBMs during the Iran-Iraq War and was unable to procure additional missiles with which to retaliate against Iraq, Tehran has worked tirelessly to develop indigenous ballistic and cruise missile production capabilities, so that its military readiness would never again be compromised by dependence on outside suppliers. Three countries which have made the largest contribution to these long-term efforts are China, North Korea, and Russia.

(U) China has sold Iran a variety of short-range cruise missiles and completed CSS-8 SRBMS. China also has transferred to Iran a variety of key missile-related equipment, materials, and enabling technologies, but seems reluctant to transfer complete missile systems that would damage Sino-U.S. relations and unequivocally violate the Missile Technology Control Regime (MTCR), to which it gives limited support. China considers its relationship with Iran to be a long-term strategic relationship and is likely to continue provide advanced technology to Iran for the foreseeable future.

(U) North Korea, not a party to the MTCR, is less constrained by appearances and has sold Iran SCUD B and C SRBMs and associated production technology. Teheran was able successfully to assimilate this SCUD technology and has now moved on to develop the larger Shabab 3 MRBM (based on the North Korean No Dong MRBM). In addition to SRBM and MRBM development Iran is likely to develop space launch vehicles to put satellites into orbit and to establish the technical base from which it could develop IRBMs/ICBMs capable of delivering payloads to Western Europe and the United States. These systems will likely include significant inputs of technology and support from North Korea, Russia and China.

ANSWER B: (U) Equipment exports from Russia to Iran, 1997-2001:

Mi-171 HIP helicopters
KILO Class (877) submarine
BMP-2 Infantry Fighting Vehicles
Assembly Kits for BMP-2 IFV
T-72S Medium Tanks
ATGMs

(U) Equipment exports from Russia to China, 1997-2001:
Su-27 and Su-30MK FLANKER fighter aircraft
Assembly Kits for Su-27 FLANKER fighters
Ka-28 HELIX, Mi-17 and Mi-171 HIP helicopters
KILO Class (636) submarines
KIEV Class aircraft carrier
SOVREMENNYY Class Guided Missile Destroyers
SS-N-22 SUNBURN Antiship Cruise Missiles

QUESTION AREA: (U) Implications of U.S. Withdrawal from the ABM Treaty

QUESTION 15: (U) On December 13, 2001, President Bush notified Russia that the U.S. intends to withdraw from the ABM Treaty - the withdrawal to be completed in June of this year.
A) (U) How will Russia react militarily to the U.S. withdrawal from the ABM Treaty?
B) (U) What will China's likely military reaction be?
C) (U) What is the likelihood that the deployment of a U.S. ballistic missile defense will lead to the escalation of ballistic missile and tactical missile defense systems by other countries, as well as a commensurate increase in the number of ballistic and tactical missiles to overwhelm these defensive systems?

ANSWER: A. (U) Thus far, Russia's reaction to the announcement of the U.S. intention to withdraw from the ABM Treaty has been muted and low-key. This official reaction stands in contrast to past declarations of numerous steps that Moscow might take in response to U.S. withdrawal from the ABM Treaty. These measures included increasing deployment of the SS-27, Russia's most modern intercontinental ballistic missile (ICBM); deploying multiple independently-targetable re-entry vehicles (MIRV) on the single-warhead SS-27; deploying 10 warheads on an improved version of the SS-N-23 submarine-launched ballistic missiles (SLBM); retaining older ICBMs in the force; deploying ICBMs and SLBMs with penetration aids; prioritizing next-generation cruise missile development; and developing and deploying a new intermediate-range ballistic missile. Russian officials, including President Putin, now emphasize that no missile defense system exists, and it is uncertain whether it will exist at all.

(U) Although Russia retains these options and others, its ultimate response will depend on the state of the overall relationship with the U.S., as well as on the precise architecture of U.S. strategic missile defense systems and the size of U.S. strategic forces. Any military response Russia should decide on also will require it to overcome the funding shortfalls that have hindered the Russian military for the last several years.

ANSWER: B. (U) Washington's announcement of withdrawal from the ABM treaty reinforced Beijing's concerns that the United States eventually will deploy missile defense systems that will threaten the viability of China's small nuclear arsenal and its ballistic missile threat to Taiwan. In addition to attempting to rally support in the international community to oppose US missile defenses, China may be considering a number of military measures to counter them. These measures could include increasing numbers of missiles or developing multiple missile warheads for new or existing systems, employing decoys, or improving the technical characteristics of its missiles to deceive missile defenses. China already deploys short-range ballistic missiles (SRBMs) and is continuing to increase their number opposite Taiwan. It also could attempt to overwhelm missile defenses with medium-range ballistic missiles (MRBMs) and intercontinental ballistic missiles (ICBMs).

(U) China seeks to increase its ability to penetrate BMD systems while avoiding a Soviet-style arms race that would disrupt continued economic development.

ANSWER: C. (U) Regardless of US missile defense deployment, China has plans to increase production of ballistic missile and tactical missile defenses but would be further motivated to ensure survival of its nuclear deterrent if the US were to deploy a missile defense system. "Overwhelming" a BMD system is one of several measures that China is trying to take to counter a missile defense system that has not yet been developed and for which China is uncertain of the scope and range, both at the theater and at the strategic level.

(U) China's ballistic missile modernization began before it assessed that the U.S. would deploy a missile defense, but China likely will take measures to improve its ability to defeat the defense system to preserve its strategic deterrent. The measures likely will include improved penetration packages for its ICBMS, an increase in the number of deployed ICBMs, and perhaps development of a multiple warhead system for an ICBM, most likely for the CSS-4 that is large enough to deliver multiple warheads.

(U) DIA expects new production of Russian ballistic missile systems during the next five years to consist of SS-26 SRBMs, SS-27 ICBMs, SS-N-23 Sineva and Bulava-30 SLBMs. Anticipated production levels of these programs are not expected to increase beyond that which is currently projected.

(U) DIA expects that China will have strategic missile forces able to deliver about 100 warheads in the next 10 to 15 years.

(U) The likelihood of an escalation of "missile defense systems" in other countries in response to US missile defense is low. Foreign missile defense requirements will be driven by their own threat perceptions. Currently open sources indicate an interest in missile defense in Taiwan, Israel and India, in addition to the existing missile defense system around Moscow. These are not responses to U.S. deployment of missile defense. They are responses to existing missile threats.

(U) There will be an increase in the number of ballistic and tactical missiles world wide, regardless of US missile defense. North Korea, Iran, and Iraq are unlikely to eliminate their long-range missile programs because of missile defense, but are likely to develop countermeasures. Tactics are likely to emphasize salvo launches and time-on-target to attempt to overwhelm missile defense.

QUESTION AREA: (U) North Korea's Taepo Dong-2

QUESTION 16: (U) Last December's NIE on the ballistic missile threat states that "North Korea's multiple-stage Taepo Dong-2, which is capable of reaching parts of the United States with a nuclear weapon-sized (several hundred kilogram) payload, may be ready for flight-testing."
A) (U) What will be the impact of the continuation of the North's flight test moratorium on the development of this missile?
2) (U) Under what circumstances would North Korea be likely to use its missile capability against the U.S.?
C) (U) What is the current estimate of the size of North Korea's nuclear weapon arsenal?
D) (U) How confident are we that North Korea is complying with the terms of the 1994 Agreed Framework regarding plutonium production activities in Yongbyan?

ANSWER A: (U) We believe that the flight test moratorium is having minimal impact on North Korea's ability to continue its development of the Taepo Dong-2 (TD-2) ICBM/SLV, short of conducting a flight test. By precluding flight testing, the moratorium probably would delay deployment of TD-2 missiles as long as it remains in place. While it is unlikely that Pyongyang would deploy the TD-2 without a flight test, such a move is possible. Although the TD-2 may be ready for flight testing, it also is possible the North Koreans could continue development of improved components during the moratorium. These activities probably are not precluded by the moratorium.

ANSWER B: (U) North Korea likely perceives its TD-2 ballistic missile capability primarily as a tool for deterrence and political coercion. During a conflict, the North also could attempt to strike U.S. and US interests with ballistic missiles, if North Korea's leadership were attacked directly or was facing imminent destruction.

ANSWER C: (U) We judge that North Korea has produced one, possibly two nuclear weapons.

ANSWER D: (U) DIA is reasonably confident that North Korea has met its commitment to "freeze" the graphite moderated reactor at Yongbyon and to stop construction of two larger graphite moderated reactors, thus halting plutonium production at Yongbyon. North Korea has not come into compliance, however, with its IAEA Safeguards Agreement (covered under the Agreed Framework) permitting IAEA sampling and measurements to verify the amount of plutonium declared in the spent fuel rods.

QUESTION AREA: (U) Nonmissile Means for Delivering Weapons of Mass Destruction

QUESTION 17: (U) Last December's NIE on the ballistic missile threat states that "[s]everal countries could develop a mechanism to launch SRBMs [short-range ballistic missiles), MRBMs [medium-range ballistic missiles], or land-attack cruise missiles from forward-based ships or other platforms; a few are likely to do so -- more likely for cruise missiles -- before 2015."
A) (U) Which countries have the capability to threaten U.S. territory with missiles from ships or other platforms.
B) (U) Which nations are the likeliest to do so?
C) (U) What is the Intelligence Community's ability to monitor this threat and provide early warning against an attack?

ANSWER A: (U) Although we have identified the potential threat to the U.S. from short or mediwn range missiles on surface ships (especially disguised freighters), or on large aircraft, the only country known to be developing a surface ship launched capability is India, which is using navy patrol ships to launch its Dhanush ballistic missile. Also, Russia, China, France and the United Kingdom possess submarine launched ballistic missiles and deployed strategic missile submarines. The Ukraine, in concert with the US, Russia and Norway, has demonstrated the ability to launch a space launch vehicle from a converted floating drilling rig. Iran may have the capability to build a floating platform.

(U) More than 60 countries have sea or air launched antiship cruise missiles. Some of thew missiles might be converted to attack targets on land. The launch platforms are operationally difficult to employ at long distances from bases, but in the future, some countries could develop such a capability to threaten the U.S.

ANSWER B: (U) The "some of these are likely" construct in the NIE was debated and adopted because of a desire not to rule-out a technically possible capability, rather than an intention to identify specific countries. This statement probably would best apply to the countries that we usually identify as potentially hostile to the U.S.

ANSWER C. (U) We are unable to provide an unclassified response.

QUESTION AREA: (U) The Impact of HIV/AIDS and Other Infectious Diseases

QUESTION 18:
A) (U) What will be the impact of HIV/AIDS on Africa and other countries 10 years from now?
B) (U) Upon which countries is HIV/AIDS affecting the military and economy the most?
C) (U) Where do these trends seem to be heading in the long term?
D) (U) What other infectious diseases - such as tuberculosis, malaria and hepatitis - will have the most impact over the next 10 years?

ANSWER A; (U) The proportion of persons living with HIV/AIDS, characterized in Table I as the adult prevalence rate in 2001, will continue to rise worldwide during the next 10 years.

(U) The impact will be greatest in Africa, where HIV/AIDS is reversing development gains achieved in the past several decades and could create new transnational security threats. The majority of the HIV/AIDS deaths worldwide will continue to occur in Africa.

(U) Inevitably, because of their huge populations, China and India dominate any assessment of HIV/AIDS epidemics in Asia. China recently acknowledged that HIV/AIDS is well-established and will have serious implications, unless it is addressed by an aggressive campaign to prevent transmission. Beijing does not know how widespread the epidemic is, although many experts feel that China's HIV/AIDS prevalence will rise rapidly among intravenous drug users and commercial sex workers over the next 10 years. HIV/AIDS will no doubt have an impact on the military, but to what extent is unclear.

(U) India currently has low overall HIV infection rates, but even slight increases in prevalence translate into significant increases in gross numbers. An increase in India's adult HIV prevalence of just 0.1 percent, for example, would add more than half a million infected individuals. HIV in India will continue to spread through unsafe sex, administration of contaminated blood, and intravenous drug use. The impactof HIV/AIDS on the military likely will be limited by current screening policies.

(U) In Russia and Eastern Europe, more that 1 million people are infected with HIV. At the same time, Russia and Ukraine are experiencing negative population growth. Although major causes of death continue to include trauma and lifestyle diseases, such as alcoholism and coronary heart disease, soaring HIV infection rates in high-risk groups -- young intravenous-drug users and commercial sex workers --will speed population decline. Russia and Ukraine will face problems supplying enough healthy conscripts for current and future missions. Future declines in the conscript pool will contribute to the trend toward use of less-manpower-intensive military strategies. Decreases in the entry-level labor pool will not affect Soviet-era heavy industry, but may impede development of high technology and defense sectors of the economy.

ANSWER B: (U) HIV/AIDS will have the most impact on the militaries and economies of Afiican countries. The HIV prevalence within sub-Saharan militaries currently is between 20 and 60 percent. The impact on military capabilities varies across the region because of military HIV/AIDS policies, the military technology level, country-specific mores and beliefs, and the capabilities of various medical systems to provide interventions. Militaries in Botswana, Burundi, Cameroon, Cote d'Ivoire, Gabon, Kenya, Lesotho, Namibia, Rwanda, Sao Tome, South Africa, and Tanzania will be moderately degraded. Militaries in Nigeria, Swaziland, Zambia, and Zimbabwe will be most severely affected by HIV/AIDS.

(U) The macroeconomic impact of HIV/AIDS in Afiica remains difficult to gauge. Many factors apart from HIV/AIDS affect economic performance, such as drought, internal or external conflict, corruption, and economic mismanagement. Despite these factors, evidence is growing that as HIV prevalence rates rise, both total and growth-rate in national income -- gross domestic product (GDP) -- fall significantly. African countries, in which less that 5 percent of the adult population is infected, will experience a modest impact on GDP growth rate. As the HIV prevalence rate rises to 20 percent or more, as it has in a number of southern African countries, GDP growth may decline up to 2 percent a year.

(U) Botswana and South Africa are likely to experience the largest economic decline. With adult prevalence rates around 36 and 20 percent, respectively, today's 15-year-old has a greater than 50 percent chance of dying of HIV-related causes, if current infection rates are not cut drastically.

(U) Medical systems throughout Africa are unable to provide adequate preventive health care to the populations. Prevention and education remain the key to combating HIV/AIDS. Preventing HIV infection costs an estimated U.S. $2 per person. Treating HIV/AIDS illnesses is estimated to cost U.S. $300 per year per person, just for medications alone. Clearly, no country in the region can afford to maintain that level of investment in health care until an affordable HIV vaccine is developed, which is unlikely for at least 10 to 15 years.

ANSWER C: (U) Although HIV infection and death rates have slowed considerably in developed countries, owing to the growing use of preventive measures and costly new multi-drug treatment regimes, the pandemic continues to spread in much of the developing world, where 95 percent of global infections and deaths have occurred.

(U) HIV/AIDS will cause more deaths than any other single infectious disease worldwide by 2020 and may account for up to one-half or more of infectious disease deaths in the developing world alone. Africa will remain the region most severely affected; however, Eastern Europe and Central Asia are experiencing the fastest growing epidemics.

(U) Since a large proportion of the people projected to become sick and die of HIV/AIDS during the next 10 to 15 years are infected already, the economic and health care impact will intensify over the next 10 years. Few countries, particularly those in sub-Saharan Africa, have expanded their HIV prevention programs to the extent needed to decrease infection rates. International and regional organizations are providing programs for HIV education and prevention, voluntary testing and counseling, and limited medical intervention in developing countries; however, the impact of these programs is gradual creating a 3- to 7-year lag between implementation and any sustainable decrease in HIV infections. If prevention and education efforts are funded and executed effectively now, there will be a decrease in new cases in the years from 2009 to 2012.

(U) As examples, Uganda and Thailand implemented effective national programs in the 1990s that have led to declines in their HIV infection rates, because of vigorous involvement of their top leaders.

ANSWER D: (U) Lower respiratory infections, acute diarrheal diseases, malaria, hepatitis, dengue fever, and tuberculosis also will contribute to declining health, particularly in developing countries. Factors that will increase the impact of these diseases during the next 10 years include organisms that are resistant to current drug therapies, newly emerging infectious diseases, and spread of infectious agents to new geographic regions. Negative demographic and social conditions in developing countries -- such as continued urbanization, persistent poverty, and poor health care capacity -- facilitate spread of these infectious diseases.

QUESTION AREA: Criminal Organizations and Networks

QUESTION 19:
A) (U) What is the likelihood that criminal organizations and networks will expand the scale and scope of their activities over the next 10 years?
B) (U) What is the likelihood that such groups will traffic in nuclear, biological or chemical weapons?

ANSWER A. (U) DIA will defer to our Law Enforcement Agencies to answer this question.

ANSWER B: (U) As is the case with Question A, DIA is not in a position to answer this question.