Space

Statement of James M. Bodner

Principal Deputy Under Secretary of Defense for Policy

Senate Foreign Relations Committee

Subcommittee on International Economic Policy

Export and Trade Promotion

June 7, 2000

Mr. Chairman, I would like to thank you for the opportunity to report to you today on the significant progress DoD has made in reforming satellite export control processes to improve national security while supporting legitimate space cooperation with allies and friends. I would like to address our policies and then the procedures that we have in place to implement those policies.

It is our policy to restrict the transfer of technology to any foreign destination in two sensitive areas: (1) detailed design, development and manufacturing technology for satellites; and, (2) technology that would improve foreign launch vehicles. A major focus of our policy is to ensure that U.S. technology is not transferred that would improve ballistic and other missile capabilities in countries where there are significant security risks such as China and Russia.

To implement this policy and various legislative mandates, we have developed special export controls in cooperation with our colleagues at the Department of State. These controls are embodied in a special section of the International Traffic in Arms Regulations.

We also recognize the desirability of continuing robust space cooperation with our close allies and friends. Therefore, while we have reserved the right to apply these special export controls for national security or foreign policy reasons to transactions with those allies and friends, we have been and intend to continue to apply those controls in a very selective and narrow circumstances.

Since DoD last testified before your committee in June 1999, we have been working hard to implement the satellite export control provisions of the 1999 and 2000 National Defense Authorization Acts.

As directed in those statues, the satellite and launch monitoring mission is being performed by DoD's Space Launch Monitoring Division. Based on our estimate of the monitoring and license workload the office would undertake, a 42-person staff was authorized. At the time of last year's hearing, we were just beginning to hire our first new full-time staff members. This has proven to be an extraordinary challenge since we face the same skilled labor pool shortage encountered on a daily basis by the commercial space industry.

We have achieved over 80 percent of our hiring goal, which will meet our projection of the requirement for this fiscal year.

We have also devoted significant time and energy over the last year to export control reform, which Secretary Cohen has said is a national security imperative because it is essential to protecting critical technology, promoting allied interoperability, and preserving the health of our defense industrial base. The steps that we have taken focus on improving our process so that we are performing quality license reviews in a timely way.

So far, for all munitions licenses reviewed by DoD, we have reduced the average review time for 45 days a year ago to 19 days today. A year ago, we had a backlog of more than 600 cases more than 60 days old, which we have eliminated. This has been accomplished primarily though changes in DoD processes and organization for reviewing licenses, not the addition of new staff.

Now that we have reengineered our process and organization, we intend to further improve the quality and speed of our reviews by adding 35 people to DTRA's technology security staff, an increase of about 50 percent.

We are implementing these reforms with two primary objectives. First, we are seeking to strengthen DoD's export license review process by focusing greater attention on high risk exports and by adding dedicated staff that will be trained and experienced with export controls. Currently, there are many low-risk licenses that are reviewed by the Military Departments and other DoD entities. We hope to handle these cases in DTRA, which will free up the limited resources in the Military Departments to focus on those higher-risk license cases where they have military equities and critical expertise. Second, we want to ensure that DoD is not a roadblock to the appropriate export of U.S. defense goods and services abroad, especially to our valued allies and friends. This is very important as we seek to improve interoperability and coalition warfighting capabilities with our close allies and friends that we found lacking in our Kosovo experience.

In addition to the improved export review procedures now in place throughout the Department, we have also made significant strides in the satellite and space area. The DTRA Space Launch Monitoring Division that conducts our monitoring effort is now the principal reviewer of all space-related export licenses. This synergy between license and post-license monitoring effort provides consistency and streamlined review that enhances our security and ensures that our industry is competitive. This approach is fully consistent with our view that industry and national security are best served by an approach in which we work closely with the U.S. exporter from the early stages of contact and license development through design, manufacturing and launch. Our security and our industry require a consistent approach throughout the multi-year life of satellite programs; and we believe that our dedicated team approach is focused and streamlined.

Presently, about 100 satellite and launch vehicle programs, involving 37 companies, are subject to the more rigorous "special export controls" identified in the International Traffic in Arms Regulations-controls that require some form of DoD monitoring throughout the export and launch process. This can range from a DoD presence at all technical meetings and at the launch site to simple DoD review of a company's internal control plan for authorized technology transfer.

I can describe our Space Launch Monitoring system in more detail during the question period if you would like. But let me re-emphasize that the special export controls I discussed should only be applied in very limited circumstances with a very limited focus when our allies and friends are involved. We believe that the recently published change in regulations referred to by Mr. Holum will result in an expedited and more focused license process for NATO nations and major U.S. allies.

I want to reiterate that DoD's central focus remains the task given to us in the law. We are putting our principal efforts where we believe the risks of technology loss are greatest-China and the Former Soviet Union. We have designed our monitoring program against these risks, adding a significant security element whose attention is focused on program and launch site physical security.

We believe DoD is protecting what we should-and what the law requires-in a way that ensures U.S. technology security and does not unnecessarily encumber U.S. industry. We are confident that we can continue to do better as the process and regulation changes mature. The continuing interagency discussions on improved export controls will serve the American people well, simultaneously protecting both American and national economic security.

Thank you, Mr. Chairman. I look forward to any questions the committee may have.