CRS Report: IB98039 - Nuclear Nonproliferation Policy

Preventing the acquisition of nuclear weapons is a longstanding goal of U.S. national security policy. Five countries are recognized as having legal status as nuclear weapons states: United States, Russia, China, United Kingdom, and France. All five signed the Nonproliferation Treaty (NPT), which recognizes only these five that tested nuclear weapons before 1968 as de jure nuclear weapons states. Three more: India, Israel, and Pakistan, have significant nuclear capabilities, but are not members of the NPT. India and Pakistan tested nuclear weapons in May 1998.

Several other countries have taken steps to acquire nuclear weapons. North Korea was producing nuclear weapons material in the early 1990s before negotiating a deal with the United States to trade its nuclear facilities for new nuclear power reactors provided by a consortium of the United States, South Korea, and Japan. That arrangement, called the Agreed Framework, remains controversial. Iraq also had a nuclear weapons program that was dismantled by a United Nations special commission after the 1991 Gulf War, although Iraq probably retains some interest and capability to reconstitute its nuclear weapons program. Iran is also suspected of having a covert nuclear weapons program.

In the early 1990s, three countries - South Africa, Argentina, and Brazil -- gave up their nuclear weapons programs and joined the Nuclear Nonproliferation Treaty (NPT). Three newly independent former Soviet republics -- Ukraine, Kazakhstan, and Belarus -- returned former Soviet weapons on their territory and also joined the NPT as non-weapon states.

Nonproliferation policy utilizes diplomatic, legal, economic, military and political means to persuade countries not to acquire nuclear weapons. Treaties such as the NPT establish international norms and institutions that support nonproliferation and provide authority for enforcement and compliance of nonproliferation obligations.

NPT obligations are verified by the International Atomic Energy Agency (IAEA), which operates a global safeguards system to deter and detect diversions of civilian nuclear technology to military purposes. The IAEA, however, failed to discover Iraq's nuclear weapons program prior to the Gulf War and has been upgrading its inspection system with U.S. assistance.

The United States also uses congressionally authorized export controls and licensing laws to control access to nuclear technology and materials and encourages other countries to adopt similar controls. Congressionally mandated sanctions against countries that try to acquire nuclear weapons- such as India, Pakistan, North Korea, Iran, and Iraq- and countries that help them- such as China and Russia- are another important tool of nonproliferation policy.

Analysts are divided on what to expect for the future of proliferation. While some expect many more countries to try acquire nuclear weapons, others suspect that very few countries will view them as beneficial to their security.

The 106^th Congress has passed legislation and held hearings on many aspects of nonproliferation, including export controls, sanctions, and military countermeasures.

MOST RECENT DEVELOPMENTS

The Senate Armed Services Committee completed its markup the FY2001 Defense Authorization May 18, which contains $1 billion for DOD and DOE Cooperative Threat Reduction programs for Russia. The House Armed Services Committee approved similar spending levels the previous week. Both the House and the Senate attached restrictions to the funding of certain projects.

The House agreed to an amendment to the Defense Authorization restricting the United States government from accepting liability for the nuclear reactors being built in North Korea as part of the deal to end North Korea's nuclear weapons program.

The five-year review of the Nuclear Nonproliferation Treaty concluded successfully May 20, easing concerns that some members of the treaty might be considering quitting.

On March 14, President Clinton signed legislation (P.L. 106-178) that includes the Iran Nonproliferation Act (H.R. 1883), which imposes sanctions on Russian firms supporting Iran's missile and nuclear programs.

The Senate Foreign Relations Committee held hearings March 28 and 30 on nonproliferation policy, highlighting Iraq and Iran.

BACKGROUND AND ANALYSIS

Nuclear Nonproliferation Policy

The United States is a leader of worldwide efforts to prevent the spread of nuclear weapons to additional nations. Since the 1950s these nonproliferation efforts have built up a broad international structure, including treaties, international organizations with inspection mechanisms, and other agreements, complemented by wide-ranging domestic legislation.

The effectiveness of U.S. and international nonproliferation efforts is brought into question when countries test nuclear weapons, as India and Pakistan did in 1998, or are discovered to have secret nuclear weapons programs, as in the cases of Iraq and North Korea. Neither India nor Pakistan had signed the Nuclear Nonproliferation Treaty (NPT), and thus did not violate an international agreement. Iraq and North Korea, however, were both parties to the NPT and violated their obligations under the treaty. Most of the rest of the world, however, accepts the idea of nonproliferation. The NPT is nearly universal, with 187 signatories.

The NPT parties agreed in 1995 to make the treaty permanent. Under the terms of the NPT, the five declared nuclear weapons states -- the United States, the United Kingdom, Russia, France and China -- agree "not in any way to assist" any non-weapons state to acquire nuclear weapons. They also agreed to reduce and eventually eliminate their own nuclear arsenals. The non-weapons states agree not to develop nuclear weapons and to allow the International Atomic Energy Agency to inspect their nuclear facilities and materials to ensure that peaceful nuclear technology is not diverted to military purposes. The NPT also guarantees non-weapons states access to peaceful nuclear technology. Besides India and Pakistan, only Israel and Cuba have not signed the NPT.

Beyond the NPT, the United States relies on various positive and negative incentives to persuade countries that may be interested in nuclear weapons not to acquire them. For countries facing security threats, the United States has provided security guarantees in the form of alliances that address the underlying motivation to acquire nuclear weapons. Japan and Germany, for example, both had nuclear weapons programs during the Second World War and might have continued to pursue nuclear weapons after the war if the United States had not included them as allies. After the Cold War, Ukraine, Belarus, and Kazakhstan relinquished their nuclear capabilities to ensure good relations with the West.

Another important nonproliferation tool is technology denial. The United States and other suppliers of nuclear technology try to prevent countries such as Iran, Iraq, India, North Korea, Pakistan, and Israel that are trying to get nuclear weapons from buying the equipment they need to produce nuclear weapons. One major problem after the Cold War has been loose controls on nuclear technology, materials, and expertise in Russia and the former Soviet republics. The concern is that countries seeking nuclear weapons might circumvent international technology controls by purchasing or stealing materials and/or expertise from inadequately secured facilities in the former Soviet Union. The United States has spent over $3 billion since the end of the Cold War helping those countries improve security for nuclear assets.

Sanctions are another way the United States tries to deter and punish proliferators. Sanctions cut off U.S. aid, economic assistance, military cooperation, and technology access to countries that violate nonproliferation agreements or take steps, such as testing nuclear weapons, that threaten U.S. national security objectives. However, sanctions are sometimes controversial, as in the case of India and Pakistan. The Executive Branch sometimes prefers not to impose sanctions to avoid damaging relations with other countries, and Congress has sometimes relaxed sanctions, as was the case with India and Pakistan after they tested nuclear weapons.

Finally, the Department of Defense tries to deter the use of nuclear weapons by maintaining a strong deterrent force. If nonproliferation and deterrence fail, the Defense Department is prepared to use military force against hostile nations possessing nuclear or other weapons of mass destruction. The military component of nonproliferation policy is often referred to as counterproliferation.

These tools have been used in different combinations with varying degrees of success throughout the nuclear era. Strongly motivated proliferators have often found ways to circumvent U.S. and international nonproliferation efforts, although not without getting caught. It is impossible to know how many countries might have tried to get nuclear weapons if the United States had not taken the lead in nonproliferation. And it remains an open question how many additional countries will try in the future.

International Nonproliferation Structures and Organizations

The International Nuclear Nonproliferation Regime

The nuclear nonproliferation regime to deter further spread of nuclear weapons consists of treaties, international organizations, and multilateral and bilateral agreements, augmented by various unilateral actions intended to prevent further proliferation.

Major components of the regime include:

The Nuclear Nonproliferation Treaty (NPT), which entered into force in 1970. It commits non-nuclear weapons members not to acquire nuclear weapons, and to allow international inspection of all their nuclear activities to verify this commitment. It commits nuclear weapons states not to assist non-weapons states to get nuclear weapons, and to pursue the goal of an end to the nuclear arms race and eventually to nuclear disarmament.

The International Atomic Energy Agency (IAEA), an international organization established in Vienna in 1957 whose safeguards system verifies NPT compliance. Non-weapons NPT parties negotiate inspection agreements with the IAEA to verify the peaceful use of their nuclear materials.

Informal international groups, including the Nuclear Suppliers Group (NSG), a committee of nuclear supplier nations that maintains multilateral guidelines for nuclear exports, and the Zangger Committee, an NPT affiliate that maintains a "trigger list" of nuclear items requiring safeguards. The NSG and Zangger guidelines were strengthened in 1992, after the Gulf War and the crisis with Iraq's nuclear weapons program. The Missile Technology Control Regime (MTCR), which restricts exports of nuclear-capable missiles, is another component of the nonproliferation structure.

The Convention on Physical Security for Nuclear Materials (1987) sets international security standards for storing, using, and transporting nuclear materials.

The Nonproliferation Treaty and the IAEA

The NPT provides the legal and institutional basis for international nonproliferation policy. Like all international agreements, it depends for its success on the good will of its participants, and does not guarantee that countries will not violate their commitments. However, to reinforce the good intentions of the signatories, the NPT set up an inspection system called safeguards, based on agreements between non-weapons states and the IAEA that permit routine inspections. The IAEA has no enforcement power; it can only report discrepancies to the U.N. By presenting the prospect that clandestine proliferation activities will be detected and exposed, the inspection system is designed to deter proliferation through international pressure, disapproval, and possible sanctions and countermeasures.

In order to prevent proliferation, IAEA inspections must be effective, and the prospect of international disapproval strong enough to deter a non-weapons NPT member from pursuing nuclear weapons development. Since the Gulf War, efforts to strengthen IAEA inspection powers have been underway, culminating in May 1997 with the adoption of a "model protocol" agreement intended to give inspectors more access to a wider array of activities, information, and facilities.

IAEA Inspections. In the aftermath of the 1991 Persian Gulf War, U.N. inspectors were surprised at the scope and progress Iraq had made toward nuclear weapons despite regular IAEA inspections. A major weakness in the existing system was that inspectors only inspected sites and facilities listed in the safeguards agreements with the agency. The Strengthened Safeguards System adopted at the May 1995 NPT extension and review conference gives inspectors strengthened ability to detect clandestine nuclear activities. Strengthened safeguards include taking environmental samples, no-notice inspections of nuclear facilities, complete access to records to confirm that all nuclear materials have been declared, remote and unattended monitoring. A new modification to IAEA safeguards agreements with member states requires an "expanded declaration" by all NPT members of nuclear-related activities such as uranium mining. It also authorizes IAEA access to any place. By March 2000, the new inspection protocol had been approved by and signed by 45 nations, and entered into force in 7.

To persuade other countries to accept the new inspections, the United States agreed to accept the new measures itself. In June 1998 the United States reached agreement with the IAEA on how the model protocol would be applied in the United States. For many years the United States has allowed the IAEA access to U.S. nuclear facilities, although the purpose of inspecting U.S. facilities for diversion is symbolic. The new agreement includes a provision that would allow the United States to restrict IAEA inspections to protect national security. Senate ratification of the agreement is necessary before it can take effect.

Enforcement. Even if IAEA inspectors detect clandestine nuclear weapons activity, the NPT contains no formal provisions for forcing a country to abandon the activity. Iraq's nuclear program was dismantled because U.N. forces militarily defeated Iraq after driving it out of Kuwait in 1991. In the absence of such military force a defiant NPT signatory could presumably continue its activities if it were willing to resist nonmilitary international pressures and disapproval. North Korea, in the inspection crisis prior to the 1994 Agreed Framework that is now in effect, violated its obligations and announced that it was withdrawing from NPT. The Security Council did not take decisive action to enforce the NPT. North Korea reversed its decision only after being promised two nuclear power reactors and shipments of fuel oil. (See section on North Korea, below.)

NPT "Discrimination"

Despite the successful recruitment of almost all nations into the NPT, and the agreement in 1995 to make it permanent, a current of discontent exists about the difference in treatment of the five declared nuclear weapons states - who get to keep their weapons - compared with all the rest.

The Nuclear Bargain: Atoms for Peace. Part of the discontent derives from the changed prospects of commercial nuclear power. When the NPT was negotiated, peaceful nuclear power was viewed as a technology with great economic potential for all countries, both industrialized and developing. Joining the NPT was a quid-pro-quo under which non-weapons states renounced nuclear weapons in return for obtaining access to the technology and materials necessary to exploit commercial nuclear power -- a concept that goes back to President Eisenhower's 1954 "Atoms for Peace" initiative (Article IV of the Nonproliferation Treaty). However, since then the economic advantage of nuclear power has declined significantly. Nuclear power is important in many countries, but is under strong competition from competing energy sources. The high capital cost of nuclear powerplants, and the technical skills required to operate them safely and economically, have been major barriers to use of nuclear energy by developing countries, even where the main alternatives are coal and imported fossil fuels. This part of the NPT bargain has thus not been very rewarding for many non-weapons states, although they continue to receive assistance in the uses of nuclear technology in medicine, agriculture, and scientific research.

The Nuclear Bargain: Disarmament. Another part of the original NPT bargain was a promise by all signatories, including the weapons states, to "pursue negotiations in good faith" for the "cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control" (Article IV). At the time the NPT was negotiated, the first goal, an early end to the arms race between the United States and the Soviet Union, must have seemed unlikely, nuclear disarmament unattainable in the foreseeable future, and "general and complete disarmament" altogether utopian.

The nuclear powers did pursue negotiations over strategic arms limitations in the 1970s and 1980s, and the abrupt end of the Cold War and the collapse of the Soviet Union made deep reductions in nuclear armaments possible. However, some non-weapon NPT states want more progress toward the goal of nuclear disarmament.

The major vehicle for efforts in this direction has been a treaty banning nuclear tests. However, the Comprehensive Test Ban Treaty (CTBT), submitted to the Senate by President Clinton in September 1997, has been controversial (see CRS Issue Brief IB92099, Nuclear Weapons: Comprehensive Test Ban Treaty and Nuclear Testing). The rejection of the CTBT by the Senate on October 13, 1999 by a vote of 48-51 was viewed by some NPT members as a rejection of U.S. obligations under the NPT. When the NPT was extended in 1995, many countries expected the CTBT to be implemented and followed by additional steps such as the Fissile Material Cutoff Treaty and more cuts in U.S. and Russian nuclear arsenals.

These unmet expectations create problems for the NPT. Some non-weapons states have hinted that they might withdraw from the NPT or find other ways to express their dissatisfaction in the perceived lack of progress toward disarmament (see CRS Report RS20528 , Nuclear Nonproliferation Treaty: Trouble at the 2000 Review Conference? ).

Proliferation Motives

Peaceful nuclear power may have lost its glitter, and the prospect of complete nuclear disarmament may be dim. On the other hand, the motives for pursuing nuclear weapons remain unchanged. A few states facing urgent security threats might view nuclear weapons as the best way to deter attack. Noting that all five of the permanent members of the United Nations Security Council are nuclear weapons states, some might view them as important for prestige. Still others might view them as effective battlefield weapons that can be used to defeat enemies and conquer territory.

Despite these motivations, many countries have abandoned nuclear weapons and have sought other ways to ensure their security. Germany and Japan, both major powers, are non-weapons states. In 1991, South Africa, having made the transition to majority rule, revealed and dismantled its clandestine program and renounced nuclear weapons. Argentina and Brazil, both of which had secret nuclear weapons programs under military governments, abandoned them under civilian rule and joined the NPT. Former Soviet republics Ukraine, Belarus and Kazakhstan returned the Soviet weapons left on their territory and joined the NPT. In these countries, nuclear weapons were seen as creating more problems than they solved. Many hoped that this trend of the early 1990s would continue.

Interest in nuclear weapons, however, did not disappear. Besides ongoing tensions in South Asia between India and Pakistan, tensions in the Middle East between Israel and its Arab neighbors, and between Iraq and Iran persist. China and Russia remain proliferation concerns as potential sources of nuclear technology, and North Korea is still a serious proliferation threat. A major concern is that other countries, especially those bordering known proliferators, might feel compelled to acquire nuclear weapons to counter the nuclear, chemical, biological or conventional weapons of their neighbors. Thus, Saudi Arabia, Egypt, Japan, Taiwan, South Korea, Turkey and perhaps others might be motivated to keep their nuclear options open if they are not able to satisfy their security needs through other means.

U.S. Nonproliferation Policy

The United States was and continues to be a leading proponent of the international nonproliferation regime. At the domestic level is a system of export control and licensing laws (and regulations) covering transfers of nuclear technology or materials, including dual-use technology that can contribute to nuclear weapons development. There are also laws requiring sanctions for violations of nonproliferation commitments, and sanctions against non-weapons states that obtain or test nuclear weapons. These sanctions were invoked in the case of India and Pakistan, but some have subsequently been suspended.

Nuclear Cooperation and Export Controls

In order to engage in international trade in nuclear technology or materials (such as nuclear fuel), U.S. companies must obtain export licenses from the Nuclear Regulatory Commission (NRC). Before an export license can be applied for, there must be in force a bilateral agreement for peaceful nuclear cooperation between the U.S. government and the government of the importing nation. The conditions necessary for drawing up and approving an agreement for cooperation, laid out in Sec. 123 of the Atomic Energy Act, include a 90-day review by Congress. In several cases, congressional review of an agreement for cooperation has been controversial; most recently, Congress allowed an agreement with China to take effect in 1997, but it is still subject to criticism. (See section on China, below.) Others have attracted less attention. Currently, agreements with Brazil, Kazakhstan, and Ukraine are under congressional review. A single agreement is in force between the United States and the members of the European Atomic Energy Community (EURATOM).

In addition to NRC's licensing and regulation role, the Department of Energy (DOE) also participates in export controls. DOE authorizes the transfer of nuclear technology to countries having agreements for nuclear cooperation with the United States via "subsequent arrangements," the details of which are spelled out in Section 131 of the Atomic Energy Act of 1954.

Finally, the Department of Commerce also is involved in regulating exports of dual-use, nuclear-related commodities under the provisions of the Export Administration Act of 1979. That law expired and successive Congresses have not passed new legislation, although there have been several attempts to do so.

Nonproliferation Legislation

The Atomic Energy Act of 1954 (P.L. 88-703, as amended) established rules for nuclear commerce which have become the international norm. The Atomic Energy Act requires that a bilateral nuclear cooperation agreement be negotiated between the United States and any foreign country before major nuclear technology can be exported to that country. The Nuclear Nonproliferation Act of 1978 (P.L. 95-242) strengthened those earlier rules and established the requirement of full scope safeguards as a condition of supply. This means that any country except the five NPT weapon-states that wants to import nuclear technology from the United States must accept IAEA safeguards on all of its nuclear facilities. This requirement has been adopted by all major nuclear suppliers except China.

Sanctions. In order to deter or punish proliferators, Congress has passed many laws imposing sanctions on countries that proliferate and those who assist them. The Arms Export Control Act and the Foreign Assistance Act contain provisions that cut off U.S. assistance to countries that illegally acquire nuclear weapons or the means to make them. These sanctions were imposed on Pakistan in the 1970s and 1980s when it was caught smuggling uranium enrichment equipment from Europe and the United States. However, the Pakistan sanctions were waived by Presidents Carter, Reagan, and Bush to allow continued U.S. aid to Pakistan. Aid was finally cut off in 1990 when President Bush did not provide the required certification that Pakistan did not possess nuclear weapons.

In 1994 Congress passed the Nuclear Proliferation Prevention Act, which requires sanctions against countries that aid or abet the acquisition of nuclear weapons or unsafeguarded nuclear weapons materials, or non-nuclear weapons countries that obtain or explode nuclear devices. Sanctions include: cutoff of U.S. assistance, stringent licensing requirements for technology exports, and opposition to loans or credits from international financial institutions. These sanctions were imposed on India and Pakistan following their nuclear tests in May 1998, but were gradually relaxed. Legislation passed in the 106^th Congress extended the President's authority to relax sanctions on India and Pakistan for a year, and the Senate passed a bill suspending sanctions on the two countries for 5 years. The FY2000 Department of Defense Appropriations bill (P.L. 106-79) extends the authority to suspend sanctions. ( See Economic Sanctions to Achieve U.S. Foreign Policy Goals: Discussion and Guide to Current Law, Dianne E Rennack and Robert D. Shuey, CRS Report 97-949 )

Critics of sanctions argue that they mainly punish U.S. firms and are often undercut by foreign countries that continue to trade with proliferators. Supporters of sanctions argue that they send a strong signal to proliferators and to other countries that proliferation has negative consequences and will disrupt "business as usual."

Federal Organization for Nonproliferation

The Departments of State, Energy, Defense, and Commerce; the intelligence community; and the U.S. Nuclear Regulatory Commission (NRC) are all involved in the formulation and implementation of nonproliferation policy.

The National Security Council is the hub of nonproliferation policy, with the primary task of reconciling nonproliferation policy with foreign, trade, and national security policies.

The State Department, in consultation with the Energy Department, negotiates U.S. agreements for nuclear cooperation and represents U.S. nonproliferation interests with other states and international organizations such as the IAEA.

The Department of Defense is responsible for counterproliferation strategy and policy, and also administers programs to help Russia guard and control its nuclear weapons complex.

The Department of Energy provides expertise in nuclear weapons to support nonproliferation policy and diplomacy, largely through its national laboratories. DOE also administers some programs to control fissile materials in the former Soviet Union.

The Nuclear Regulatory Commission licenses nuclear exports subject to concurrence by the Department of State.

The Department of Commerce oversees licensing of dual-use exports as mandated by Section 309(c) of the Nuclear Non-proliferation Act, which requires controls on "all export items, other than those licensed by the NRC, which could be, if used for purposes other than those for which the export is intended, of significance for nuclear explosive purposes."

The CIA has a Nonproliferation Center that coordinates intelligence aspects of nonproliferation policy.

Several interagency working groups coordinate the various responsibilities for nonproliferation policy.

Nuclear Proliferation in Specific Regions

India and Pakistan

The nuclear arms competition between India and Pakistan reached a turning point on May 11, 1998, when India announced an underground test of three nuclear explosive devices, and followed it two days later with claims of two more. Declaring that China, with whom India had a border war in 1962, was "encircling" India militarily, in part by providing its bitter rival Pakistan with nuclear weapons capability and missile weaponry, Indian Prime Minister Vajpayee defended the test in a letter to President Clinton as necessary to correct the "deteriorating security environment, especially the nuclear environment, faced by India for some years past."

Vajpayee's Bharatiya Janata Party (BJP) had campaigned on the issue of "induction" of nuclear weapons in the country's defense system. Pakistan had responded to the Indian statements by claiming it had the ability to conduct a nuclear test also, and by test-firing a medium-range missile in April. Two years earlier U.S. pressure persuaded the previous Indian government not to carry out a test whose preparation had been detected by satellite, but the 1998 test preparations were not detected.

India has refused to sign the NPT, and has been a bitter critic of what it calls discrimination between the five weapons states and non-weapons states. It has also criticized the Comprehensive Test Ban Treaty, but after the May 13 tests the BJP government said it would consider adhering to some of the CTBT provisions. It has not yet signed the treaty.

Pakistan has said that it was being dragged into a nuclear arms race and would like to sign the NPT and the CTBT if India would also. Nevertheless, on May 28 Pakistan announced that it had set off five nuclear blasts and, according to then-prime minister Nawaz Sharif, "settled the score with India.." Pakistan announced another test May 30. Some of the technical claims of both the Indian and Pakistani tests have been questioned. (For more details, see CRS Report 98-570, India/Pakistan Nuclear Tests and the U.S. Response.)

The Benchmarks. The tests drew widespread condemnation around the world, including United Nations Security Council Resolution 1172. Many countries cut aid and assistance to both countries. The Clinton Administration responded by imposing sanctions on Pakistan and India and setting four benchmarks that should be satisfied before relations with the United States could be improved. The benchmarks, derived from Security Council Resolution 1172, urged both countries to:

End testing and sign and ratify the CTBT;

Stop producing fissile material for weapons and support negotiations on a Fissile Material Cut-Off Treaty (FMCT);

Refrain from production and deployment of nuclear weapons and adopt a "restraint regime on nuclear weapons and their means of delivery";

Refrain from exporting nuclear weapon technology and adopt export controls consistent with international standards.

Deputy Secretary of State Strobe Talbott opened high level dialog with both countries. By May 2000 the Deputy Secretary had conducted twelve rounds of talks without achieving much progress on the benchmarks.

U.S. Sanctions on India and Pakistan. The sanctions imposed by President Clinton are contained in Section 102(b) of the Arms Export Control Act, which was enacted in the Nuclear Proliferation Prevention Act of 1994.

The prohibition on agricultural export credits to India, and especially to Pakistan, the third largest market for U.S. wheat, led Congress to pass separate legislation (S. 2282, P.L. 105-194) exempting credits, guarantees, and financial assistance to support purchase of food or agricultural commodities from the sanctions mandated by the Arms Export Control Act. In addition, the Senate adopted an amendment to the FY1999 Agriculture Appropriations Act (S. 2159) exempting the sale of food, fertilizer, medicine and medical equipment from current and future unilateral sanctions, except in the case of countries that support international terrorism or systematically deny access to food and medicine for political reasons or as a means of coercion or punishment.

The Senate also adopted an amendment to S. 2159 granting the President the authority to waive for one year the application of sanctions against India or Pakistan. The Omnibus Appropriations Act (P.L. 105-277) included the waiver authority for India and Pakistan, but not the exemptions on food and other products. The waiver authority did not extend to restrictions contained in Section 102(b)(2) (B), (C), or (G) of the Arms Export Control Act (AECA). On November 7, 1999 the President used the waiver authority granted him in the Omnibus Appropriations Act to restore the Export-Import Bank, Overseas Private Investment Corporation (OPIC) and Trade and Development Agency (TDA) programs in India and Pakistan, and lift restrictions on the activities of U.S. banks in India and Pakistan. He also restored military education and training programs. Congress passed additional sanctions waiving authority in the Defense Appropriation for FY 2000 (P.L. 106-79), which included many of the AECA sanctions with the exception of military assistance and nuclear/missile technology exports.

The President's Trip. President Clinton visited India and Pakistan in March 2000, despite the lack of progress in either country on meeting the benchmarks and renewed tensions over the disputed territory of Kashmir. The President urged both countries exercise restraint and sign the CTBT.

The Middle East and Israel

The ongoing confrontation between Arab Middle East countries and Israel has long had a nuclear undercurrent (see Weapons of Mass Destruction in the Middle East, CRS Report RL30408 ). Israel has not signed the NPT, and has made no official acknowledgment of a weapons program. It is widely considered to have developed nuclear weapons capability, although it has not openly conducted a nuclear explosion. Israel's nuclear program has stimulated calls for an "Islamic bomb." Among Israel's neighbors, rivals Iraq and Iran have been the focus of nuclear activity. Iraq, before its defeat in the Gulf War in 1991, actively pursued nuclear weapons development, despite having signed the NPT. Iran declares it has no nuclear weapons program, but the United States claims that it does. Another Islamic country, Pakistan, has nuclear weapons but has pledged not to help others to get them.

Iraq's Nuclear Weapons Program: Gone But Not Forgotten. Before the 1991 Gulf War, Iraq had an extensive covert nuclear weapons program that was built under the guise of legitimate nuclear research and development. As a member of the NPT, Iraq had allowed inspections of declared facilities by the IAEA, but successfully concealed the true nature of its nuclear program. After the war, U.N. Resolution 687 established a Special Commission and gave it authority to locate and remove Iraq's weapons of mass destruction. The U.N. Special Commission on Iraq (UNSCOM) conducted extensive investigations of Iraq's nuclear program that revealed a multi-billion dollar effort to build nuclear weapons. UNSCOM and the IAEA then eliminated Iraq's nuclear infrastructure and was putting in place a permanent monitoring system when Saddam Hussein quit cooperating with UNSCOM in 1998 and the U.N. Security Council agreed to form a new inspection unit more acceptable to Iraq and its friends on the Security Council.

The new inspection group, the U.N. Monitoring, Verification and Inspection Commission was appointed in March 2000 and will try to account for what Iraq has been doing during the many months that inspectors have been out of the country. Many experts, including former inspectors, suspect that Iraq continues its interest in nuclear weapons and other weapons of mass destruction and delivery systems.

Iran's Nuclear Program. Top U.S. officials have warned repeatedly that Iran has a program to acquire nuclear weapons. Iran has reportedly attempted to purchase nuclear materials from the former Soviet Union and nuclear equipment from many countries. The relatively effective embargo of nuclear sales to Iran is undermined by Russia's efforts to complete a nuclear power plant at Bushehr, which had been started by Germany in the 1970s under the former Shah of Iran. The revolutionary government that overthrew the Shah in 1979 abandoned the project, then unsuccessfully tried to get Germany to revive it. Russia's MINATOM agency has contracted to finish the plant with one of its own reactor designs, but progress has been slow.

Iran is a member of the NPT and allows inspections of its nuclear program. Nevertheless, many observers suspect that Iran, which possesses substantial reserves of oil and natural gas, is using its civilian nuclear program as a pretense to establish the technical basis for a nuclear weapons option.

Russia's alleged transfer of missile technology to Iran has also been cause for U.S. alarm. President Clinton vetoed legislation in the 105^th Congress authorizing sanctions against Russia for helping Iran's nuclear and missile programs. In the 106^th Congress, the House passed similar legislation (H.R. 1883) September 14, 1999, by a vote of 419-0. The Senate passed the bill February 22, 2000, and the President signed it March 14 (P.L. 106-178). The House also passed H.R. 1477 on July 19, 1999, prohibiting U.S. payments to the IAEA which would go to support Iran's Bushehr project. (See CRS Report 98-299 , Russian Missile Technology and Nuclear Reactor Transfers to Iran.)

China

China has long been a nonproliferation concern. Until 1992 it refused to join the NPT, even as one of the privileged five nuclear weapons states. It was the major supplier of Pakistan's nuclear weapons program in the 1980s and early 1990s, and also as a supplier of aid and technology to Iran.

China has gradually taken steps to abide by international nonproliferation standards. In 1985, the United States negotiated a nuclear cooperation agreement that would facilitate the export of U.S. nuclear power reactors to China. Congress, however, attached conditions to the agreement, including a requirement that the President certify to Congress that China is abiding by its nonproliferation commitments before the agreement can go into effect. The certification was not made, largely because of evidence of China's aid to Pakistan. Finally, during the October 1997 visit of Chinese President Jiang Zemin, President Clinton announced that he would certify that China had met the requirements necessary to activate the agreement. Among actions cited by President Clinton was a written Chinese agreement not to participate in any new nuclear projects with Iran.

The certification was submitted to Congress on January 12, 1998. It was required to lie before Congress for 30 days of continuous session before the agreement could take effect. Opposition to the President's action was expressed by some Members of Congress, but the agreement went into effect in March 1998 after the 30 days elapsed.

China's past involvement in Pakistan's nuclear weapons program, and India's accusation that it needed to test nuclear explosives because it was being "encircled" by China, have made China a major player in the nuclear escalation taking place in Southeast Asia. In addition, China in recent years has been expanding and modernizing its own nuclear arsenal, and has been involved with allegations of spying on U.S. weapons technology facilities in the Department of Energy. The spying evidence has led Congress to review DOE's nuclear security structure and practices.

North Korea's Noncompliance with its NPT and IAEA Obligations

North Korea joined the NPT in 1985, but delayed inspections until 1992. In February 1993, North Korea denied access by IAEA inspectors to two sites that IAEA (and U.S. intelligence) believed held evidence of clandestine nuclear work. In March 1993, North Korea notified the United Nations Security Council that it was withdrawing from the NPT, which permits withdrawal after 3 months notice. It subsequently suspended its withdrawal, but claimed to have "unique status" under the NPT, and continued to block inspections. Former CIA Director James Woolsey and Secretary of Defense William Perry warned that North Korea probably had enough plutonium for two bombs and that the fuel unloaded from the 25 MW(thermal) reactor could contain enough plutonium for several more bombs (see CRS Issue Brief IB91141, North Korea's Nuclear Weapons Program).

In October 1994, the United States signed an agreement with North Korea under which North Korea would shut down its existing reactors and reprocessing plant, and halt construction on other nuclear facilities, in return for provision of two light water reactors less suited for producing plutonium for bombs. North Korea is also receiving shipments of heavy oil to compensate for energy that theoretically might have been generated from the reactors it agreed to shut down. The deal requires North Korea to eventually resolve outstanding safeguards violations, including its undeclared plutonium, before completion of the new reactors. Many details of the deal are still being negotiated.

South Korea would actually build the reactors and pay for about 60% of the deal. Japan and other countries are to pay for the rest. The United States is paying for the oil shipments and agreed to pay for and provide safe storage of the spent nuclear fuel rods that were removed (illegally) from the 25 MW reactor. An international consortium called the Korean Peninsula Energy Development Organization (KEDO) was established in March 1995 to coordinate the reactor construction project. KEDO has negotiated several agreements with North Korea on the legal, financial and territorial aspects of the project. However, negotiations on the construction of the reactors have periodically broken down due to tensions between the two Koreas and between North Korea and Japan. In August 1998, reports that North Korea was preparing an underground site which might be part of a renewed nuclear weapons program caused alarm. Subsequent visits to the site by U.S. officials eased concerns that it housed nuclear activities. Japan declared it would not fund KEDO after North Korea fired a ballistic missile over Japanese air space on September 1,1998. North Korea subsequently agreed to a moratorium on missile tests.

The 106^th Congress has been active on North Korea, holding many hearings and passing significant legislation. In 1999, the President's special envoy, former Secretary of Defense William Perry issued a long-awaited, congressionally-mandated report on North Korea policy. The State Department continues to conduct talks with North Korea on many topics, including KEDO, missiles, food aid, bilateral relations, and recovery of American soldiers from the Korean War.

The House-passed FY2000 Foreign Operations Appropriations bill (H.R. 2606) included $35 million for KEDO, but required certification by the President that North Korea has met a number of specified requirements. The appropriation and certification requirement was included in the Consolidated Appropriations Act for FY2000 (H.R. 3194). The certification, issued February 24, 2000 included a Presidential waiver of key provisions of the certification. In addition, Representative Gilman introduced the North Korea Threat Reduction Act (H.R. 1835), which would cut off aid to North Korea unless it complies with the Agreed Framework and terminates its long-range missile program. The North Korea Threat Reduction Act of 1999 was enacted into law in P.L. 106-113. The Administration's FY2001 Foreign Operations Appropriations request included $55 million for KEDO.

In May 2000, the House passed an amendment to the FY2001 Defense Authorization offered by Representative Gilman (H.R. 4266) that would block the U.S. government from accepting any liability for accidents at the new North Korean reactors. Such liability guarantees are often required by U.S. contractors who want to minimize risks associated with foreign reactors.

Russian Nuclear Weapons, Weapons Material, and Expertise

Since the end of the Cold War, the U.S. has provided several billion dollars in assistance to help Russia improve the safety and security of the vast nuclear arsenal inherited from the former Soviet Union. One priority is to help Russia and the other former Soviet republics store and dispose of excess nuclear materials, including those from dismantled nuclear weapons. The goal is to prevent such materials from being stolen or sold to countries or groups that are not able to make the materials, but who want to make nuclear weapons (for details on Russia's nuclear weapons complex, see CRS Issue Brief IB98038, Nuclear Weapons in Russia: Safety, Security, and Control Issues).

A major goal of U.S. Cooperative Threat Reduction (CTR) programs is to prevent former Soviet weapons, material, technology, or expertise from aiding weapons development in countries such as Iraq or Iran. U.S. CTR efforts include programs to buy excess highly enriched uranium from former Soviet weapons, assistance to Russian nuclear facilities to improve their security, assistance to dispose of excess weapons materials, and programs to employ Russian weapons experts to redirect their work and persuade them from cooperating with countries like Iran. Congress has supported these programs, but has often expressed concern with their implementation.

One CTR program that has been successful but also proved difficult is the 1993 agreement to purchase 500 tonnes of Russian highly enriched uranium from weapons, which would be diluted for use in commercial nuclear power reactors. The executor of the agreement, the U.S. Enrichment Corp. (USEC), is being privatized and has complained that the Russian uranium purchase is not cost-effective. USEC has requested additional payment from Congress to compensate for the expense of the US-Russia HEU agreement.

Disposal of plutonium from weapons is another difficult problem, since the use of plutonium in power reactors is controversial. The United States has proposed, as a means of disposing of weapons plutonium from its own nuclear arsenal, a "dual track" strategy of mixing plutonium with uranium as fuel for commercial power reactors, and vitrification (dissolving in glass) of the plutonium unsuited for use in fuel. (See CRS Report 97-564, Nuclear Weapons: Disposal Options for Surplus Weapons-Usable Plutonium.)

In 1999, the Clinton Administration announced its Expanded Threat Reduction program (ETRI) to increase support for various CTR programs at the departments of Defense, Energy and State to $999 million. The ETRI includes nuclear, chemical, and biological threat reduction efforts as well as assistance to help Russia with strategic arms elimination. Congress appropriated $890 million, but cut funding for some programs such as the Department of Energy's Nuclear Cities Initiative. The Administration's FY2001 budget request for Expanded Threat Reduction is $973.6 million.

In May 2000 the House and Senate Armed Services Committees each endorsed in their versions of the FY2001 Defense Authorization bills spending an additional $1 billion to support Cooperative Threat Reduction programs in Russia, although with some restrictions on how the funds could be used.

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