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Newsletter:  September 2002/ Issue 3
House International Relations Committee Hearing on the Debt Reduction for Nonproliferation Act of HR 3836
Excerpts from Testimony

Testimony by Dr.Charles B. Curtis, Nuclear Threat Initiative (NTI)

Mr. Chairman and members of the Committee, it is a privilege to speak with you today. From the very outset I want to associate myself and NTI with the finding put forth in the Russian Federation Debt Reduction for Nonproliferation Act as part of S 1803 and mirrored in HR 3836. S 1803 passed the Senate Foreign Relations Committee unanimously with the strong endorsement of Senator Helms. In a similar spirit of bipartisanship, Representatives McHugh and Schiff joined Representative Tauscher in introducing HR 3836 on March 4.

September 11 convincingly demonstrates that the capacity of terrorist groups to inflict death and destruction is limited only by the power of their weapons. The United States has a vital interest in working with other nations to secure and reduce weapons of mass destruction and their constituent materials around the globe. As the debt swap legislation’s findings make clear, much of that work must be accomplished in Russia eliminating chemical weapons, destroying or converting bio-weapons facilities, creating peaceful employment opportunities for weapons scientists, securing nuclear weapons and materials, and rendering nuclear or radiological materials useless to terrorists who are seeking so desperately to acquire them.

The burden presented by these tasks is too great for the United States to tackle alone; we need assistance from our Allies. A debt swap mechanism, as envisioned by this legislation, presents a promising and creative supplemental avenue to explore in generating additional funding streams to help reduce Russia’s proliferation vulnerabilities. Converting Russian debt into increased funding for nonproliferation efforts inside Russia would make a vital contribution to global security.

At the most recent G-8 Summit in Canada for the first time since the end of the Cold War, the world’s leading economies and Russia went on record as recognizing the profound dangers we face around the world in the form of terrorists’ determination to acquire weapons of mass destruction. Moreover, the G-8 has now pledged considerable resources—$20 billion over the next 10 years—to keep the world’s most dangerous groups from acquiring the world’s most devastating weapons. Russia emerged from this summit as a full partner in the newly announced G-8 Partnership Against the Spread of Weapons and Materials of Mass Destruction. In doing so, Russia has pledged to abide by a series of stringent guidelines that are designed to promote transparency and access to facilities involved in threat reduction projects. The guidelines crafted by the G-8 require that Russia take steps to ensure that assistance provided will be exempt from taxation and accept the need to have clearly defined milestones. Russia, along with the rest of the G-8 also agreed to assure appropriate privileges and immunities for donor government representatives and contractors working on cooperation projects.

President Bush and his Administration could use the legislation before you as a vital tool to ensure that the G-8 meets its recently announced commitment to spend $20 billion over the next decade to secure vulnerable weapons and weapon materials in the former Soviet Union and elsewhere. G-8 leaders specifically mention bilateral debt for program exchanges as a possible mechanism to use in meeting this pledge debt swap would play a key role in making sure that there is a sharing of the burden in meeting the global threats we face together. Converting Russian debt into increased resources for eliminating proliferation vulnerability should lead to greater Russian involvement in securing its own weapons and materials.

In 2001, NTI commissioned a study conducted by specialists at Battelle to address the concept of a Russian debt for nonproliferation swap. This study concludes that debt reduction for nonproliferation is both useful from a burden sharing perspective and practical from an implementation standpoint.

After reading the G-8 announcement launching the Global Partnership Against the Spread of Weapons and Materials of Mass Destruction, I can see that the Administration is aware of the complications and is prepared to deal adequately with them. In addition, the Battelle report provides several useful precedents to guide this work.

Let me outline briefly the scope of what may be an acceptable and workable mechanism. One, debt agreements and conversion framework agreements should clearly define fund governance and asset protection measures. The agreement must also establish transparent systems of program and project management. And, the fund must be fully auditable according to strict requirements that have been refined over ten years of experience in monitoring US-Russian cooperative threat reduction activities. Two, there should be a mixed board of directors, with members from donor countries as well as Russia, to govern and oversee project selection and implementation criteria. Three, donors should be able to direct their contributions to specific classes (Continued on page 7) of projects. Four, there should be a debt reinstatement provision that could be used for insurance in the event that Russia did not fulfill the terms spelled out. And, five, projects should be executed through contracts with qualified and experienced Western and Russian contractors. This last principle is essential for fund administration in terms of having sufficient assurances that monies will only be expended for work performed and in accordance with suitable, mutually accepted milestones.

President Bush said it best last November when he declared that America’s number one national security priority was to prevent terrorists and those who support them from acquiring weapons of mass destruction. Russia is our natural partner in this struggle.

We know that terrorist groups have been actively seeking weapons of mass destruction. We also know that Russia is home to vast stores of nuclear, chemical and biological weapons as well as people and materials that can produce them. And, we know that we are a long way from adequately securing, consolidating and reducing these weapons and materials. What we do not know is how much time we have to work in cooperation with Russia before the next act of terrorism, an act that might very well involve a nuclear, chemical, biological or radiological weapon.

US homeland security, therefore, begins in the former Soviet Union.