U.S. Department of State

In May 2002, the Department negotiated a new Goods Review List (GRL) as part of the new Iraq export-control regime, and is working to ensure that Iraq is fully disarmed pursuant to UN Security Council Resolution 687. The Department led active diplomatic efforts with permanent members of the UN Security Council to sustain a Security Council consensus that UN Monitoring, Verification and Inspection Commission (UNMOVIC) and International Atomic Energy Agency (IAEA) inspectors
will have the unambiguous right to inspect anywhere, anytime in order to verify Iraq?s disarmament.

As a supplier to Iran, Russia remains a principal concern. Moscow is deeply aware of U.S. concerns as the Department continues to raise these issues at senior levels. Despite public announcement in the summer of 2002 about the possibility of additional Russian reactor sales to Iran, momentum toward such a deal has stopped.

China appears to be following through on its 1997 commitments to limit the sale of nuclear equipment, but some interactions between Chinese and Iranian entities are of concern to the Administration. The Department continues to address those concerns with Chinese authorities. As part of a commitment made in November 2000, China promulgated missilerelated export controls in August 2002 and CBW controls in October 2002. U.S. and Chinese technical experts met to discuss China?s new export controls.

In response to European Union (EU) requirements for accession, several central European countries have passed exportcontrol laws or amended current laws to strengthen export control mechanisms. U.S. training programs have worked so well that these countries will operate their own self-sustaining programs by FY 2004. Other countries, especially those of the former Soviet Union, are well on their way to adopting legislation and implementing regulations. Friends and allies concur with the United States on the threat of Iran?s WMD. The EU concedes that nonproliferation must be addressed in its political dialogue with Iran. Italy, Germany, and Australia have also raised nonproliferation in dialogues with Iran.

To date, the Department has been unsuccessful in getting India and Pakistan to restrain their nuclear and missile programs and in encouraging Indo-Pakistani dialogue on CBMs and other subjects, despite extensive efforts by senior Department officials. As a result of a U.S.-initiated nonproliferation dialogue, Pakistan is considering a U.S. offer to assist in achieving expert control goals. India has accepted a U.S. offer to collaborate on ways to strengthen its export controls.

Confirmation of the existence of a clandestine uranium enrichment program in North Korea sharply increased international concerns about that country?s nuclear intentions. CY 2002 ended with a series of escalating steps by North Korea pointing toward breach of not only the US-North Korea Agreed Framework, but also of its safeguards agreement with the IAEA. The freeze under the Agreed Framework and Missile Flight Test Moratorium continued until conclusion of the FY 2002, and North Korea informed Japan that it will maintain its long-range missile flight test moratorium beyond 2003. However, North Korea?s ballistic-missile exports contribute to arms races and instability in the Middle East.

In addition, negotiations with Russia were completed on implementing the agreement to cease plutonium production under the Plutonium Production Reactor Agreement (PPRA) through the shutdown of reactors rather than by core conversion. Negotiations continued on fissile material storage facility (FMSF) transparency arrangements. Bilateral meetings with Russia during FY 2002 led to decisions that specified the Russian program by January 2003. Discussions with G-8 allies and Sweden concerning plutonium disposition began in December 2002. There have been pledges of $700 million so far and additional pledges are likely by the 2003 G-8 Summit at Evian. The target date for the multilateral agreement is during the fall of 2003.

As shown in the adjacent chart [text version only], progress has been made in the effort to redirect weapons scientists in the Newly Independent States (NIS) to civilian activities (in Thousands):
FY 2000 -- 30 (Result)
FY 2001 -- 40 (Result)
FY 2002 -- 70 (Target)
FY 2002 -- 50 (Result)

All parties completed the final START I Treaty reductions by the December 2001 deadline. Completion of the START reductions demonstrates the success of this unprecedented, five-country effort to reduce strategic offensive arms significantly, from over 10,000 warheads to fewer than 6,000. The treaty will serve as the foundation for future, deeper strategic arms reductions.

Further offensive reductions were codified in the Moscow Treaty of May 2002, which built on the success of the START Treaty by requiring deeper reductions in strategic offensive arms by the United States and Russia. Each country agreed to no more than 1,700-2,200 strategic offensive arms, demonstrating their commitments to reducing strategic offensive arms to the lowest possible level.

The United States and Russia have also started addressing the threat of rogue states developing WMD and their means of delivery. Due in large part to the Department?s diplomatic and public diplomacy efforts, U.S. withdrawal from the ABM Treaty did not incur negative repercussions. Russia acquiesced, and its moderate reaction, in turn, muted the reactions of U.S. allies and China. The United States is now free to develop and deploy missile defenses. The Department will continue to work with U.S. allies, Russia, and others to address common threat perceptions and appropriate responses, as well as to establish joint cooperative missile defense development programs.

Nuclear Non-Proliferation Treaty. Cuba announced in September 2002 that it would accede to the NPT. It confirmed this decision during its plenary statement to the IAEA General Conference.

The International Atomic Energy Agency. Consultations began with a U.S. initiative in support of a phased increase of the IAEA safeguards budget for the 2004/05 biennium. Integrated safeguards adopted by the IAEA Board adequately reflected U.S. views, and should lead to effective implementation of the Additional Protocols.

Chemical Weapons Convention. Announcement by Libya and Thailand of their intent to join the CWC is very welcome. Monitoring the civilian chemical industry is a key element of the CWC. As shown in the adjacent below, through FY 2002, 148 nations have joined the CWC.

The Organization for the Prohibition of Chemical Weapons (OPCW), the implementing body of the CWC, has been in serious financial and administrative crisis. The United States succeeded in bringing about a change of leadership of the OPCW?s Technical Secretariat that will help improve CWC operations, especially in conducting inspections of civilian chemical industries around the world. As the United States has the largest civilian chemical industry in the world, it will require extra ordinary effort to ensure that the United States fully implements these obligations. Russia has the largest declared CW stockpile and needs financial assistance to build destruction facilities in order to meet its CWC obligations. Resolving congressional conditions for U.S. financial assistance is a difficult and lengthy process; significantly, three such conditions have been resolved. Due to successful international fundraising, the Gorniy facility will be the first fixed operational CW destruction facility in Russia. Destruction operations were scheduled to begin in December 2002.

Verification and transparency measures have been identified to monitor North Korea?s missile regime. While similar measures have also been identified to verify the dismantling of its nuclear weapons capability, recent steps by North Korea to breach its nuclear nonproliferation commitments have put into question the progress made in recent years on improving verification.

The Department prepared the Presidential Report to the Congress on Adherence to and Compliance with Arms Control and Nonproliferation Agreements and Commitments. The report for calendar year 2001 was submitted to the NSC in the spring of 2002, and is now in the process of being revised to address congressional requirements.

Countering the threat of biological weapons (BW) has become a priority. Effective measures to respond to the BW threat have obtained international support and are being adopted in various fora. The USG explored ways to enhance support for initiatives at the BWC Review Conference in November 2002. U.S. compliance concerns have been reiterated and additional concerns raised publicly. The United States has pursued compliance concerns regarding the BWC and the CWC on a bilateral basis with several countries.

The Department worked closely with the Department of Defense (DoD) and the intelligence community to initiate a program office and to advocate funding the replacement of the COBRA JUDY radar, critical for START verification and missile proliferation. The Department provided $400,000 to support this effort and co-chaired the interagency Nonproliferation and Arms Control Technology Working Group (NPAC TWG), which acts as a central coordinator for verification technology and
identifies shortfalls in funding for critical arms control and nonproliferation R&D projects.

Armenia is currently negotiating a date for closing a Soviet-era nuclear power plant. European Bank for Reconstruction and Development (EBRD) loans for K2R4 reactors in Ukraine are on hold until Ukraine accepts EBRD conditions. Ukraine is moving forward in power sector restructuring with experts from the G-8, EU, Ukrainian government, EBRD, and the World Bank working to make the power sector attractive to potential lenders and investors.

During the ninth session of the UN Commission on Sustainable Development (CSD), the Department convinced participants that nuclear power contributes to sustainable development. In the wake of the events of 9/11, the Department also reviewed and approved the Japanese transport plan for shipping mixed-oxide fuel to the United Kingdom, and promoted the Department of Energy?s enhanced physical protection cooperation program.