[Presidential Decision Directives - PDD]

The President has approved a comprehensive policy to govern transfers of conventional arms. This policy, as detailed in the attached fact sheets, serves our nation's security in two important ways. First, it supports transfers that meet the continuing security needs of the United States, its friendsand allies. Second, it restrains arms transfers that may be destabilizing or threatening to regional peace and security.

This policy reflects an approach towards arms transfers that has guided the Administration's decisions over the last two years. Specifically, the United States continues to view transfersof conventional arms as a legitimate instrument of U.S. foreign policy -- deserving U.S. government support -- when they enable us to help friends and allies deter aggression, promote regional security, and increase interoperability of U.S. forces and allied forces. Judging when a specific transfer will meet that test requires examination of the dynamics of regional power balances and the potential for destabilizing changes in those regions. The criteria guiding those case-by-case examinations are set forth in the attached guidelines for U.S. decisionmaking on conventional arms transfers.

The centerpiece of our efforts to promote multilateral restraint is our initiative to work with allies and friends to establish a successor regime to Cocom. The new regime should establish effective international controls on arms sales and the transfer of sensitive technologies -- particularly to regions of tension and to states that pose a threat to international peace and security. While pursuing multilateral restraint through this and other mechanisms such as the Un conventional arms register and regional initiatives, the United States will exercise unilateral restraint in cases where overriding national security or foreign policy interests require us to do so.

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Given the complexities of arms transfer decisions and the multiple U.S. interests involved in each arms transfer decision, the U.S. Government will continue to make arms transfer decisions on a case-by-case basis. These reviews will be guided by the criteria below.

General Criteria

All arms transfer decisions will take into account the following criteria:

-- Consistency with international agreements and arms control initiatives.

-- Appropriateness of the transfer in responding to legitimate U.S. and recipient security needs.

-- Consistency with U.S. regional stability interests, especially when considering transfers involving power projection capability or introduction of a system which may foster increased tension or contribute to an arms race.

-- The degree to which the transfer supports U.S. strategic and foreign policy interests through increased access and influence, allied burdensharing, and interoperability.

-- The impact of the proposed transfer on U.S. capabilities and technological advantage, particularly in protecting sensitive software and hardware design, development, manufacturing, and integration knowledge.

-- The impact on U.S. industry and the defense industrial base whether the sale is approved or not.

-- The degree of protection afforded sensitive technology and potential for unauthorized third-party transfer, as well as in-country diversion to unauthorized uses.

-- The risk of revealing system vulnerabilities and adversely impacting U.S. operational capabilities in the event of compromise.

-- The risk of adverse economic, political or social impact within the recipient nation and the degree to which security needs can be addressed by other means.

-- The human rights, terrorism and proliferation record of the recipient and the potential for misuse of the export in question.

-- The availability of comparable systems from foreign suppliers.

-- The ability of the recipient effectively to field, support, and appropriately employ the requested system in accordance with its intended end-use.

Upgrade Criteria

Upgrades of equipment -- particularly that of former Soviet-bloc manufacture -- is a growing segment of the market. The U.S. government should support U.S. firms' participation in that market segment to the extent consistent with our own national security and foreign policy interests. In addition to the above general criteria, the following guidelines will govern U.S. treatment of upgrades:

-- Upgrade programs must be well-defined to be considered for approval.

-- Upgrades should be consistent with general conventional arms transfer criteria outlined above.

-- There will be a presumption of denial of exports to upgrade programs that lead to a capability beyond that which the U.S. would be willing to export directly.

-- Careful review of the total scope of proposed upgrade programs is necessary to ensure that U.S. licensing decisions are consistent with U.S. policy on transfers of equivalent new systems.

-- U.S. contributions to upgrade programs initiated by foreign prime contractors should be evaluated against the same standard.

-- Protection of U.S. technologies must be ensured because of the inherent risk of technology transfer in the integration efforts that typically accompany an upgrade project.

-- Upgrades will be subject to standard USG written end use and retransfer assurances by both the integrator and final end user, with strong and specific sanctions in place for those who violate these conditions.

-- Benchmarks should be established for upgrades of specific types of systems, to provide a policy baseline against which (1) individual arms transfer proposals can be assessed and (2) proposed departures from the policy must be justified.