Block The End Run On COCOM: No Blanket Exemptions For Moscow’s Warsaw Pact Allies

(Washington, D.C.): The Bush Administration is being stampeded into responding positively to mounting pressure from the Soviet Union, its allies and U.S. business interests to make country-specific blanket exemptions to existing multilateral controls on East-West technology transfers. Under present circumstances, were the United States government to accede to this pressure, it would do possibly irreparable harm to a key bulwark of Western defenses: The multilateral technology security regime known as COCOM.(1)

Mixed Signals From Washington

Such pressure is, unfortunately, partly a result of the signals the U.S. government itself is sending. On the one hand, Washington appears to be encouraging large transfers of Western technology to the East. Prime examples of such encouragement include the following: President Bush has expressed his personal determination "to do everything [he] can to help" Gorbachev. The U.S. defense budget is being drastically cut, ostensibly on the grounds that the Soviet threat has diminished. Extremely ambitious arms control accords are in prospect that suggest an imminent — and possibly permanent — East-West detente. And a crash effort is being mounted to forge a far-reaching bilateral trade agreement that would greatly expand U.S.-Soviet commercial and financial ties.

What is more, the Bush Administration has chosen to release for sale to the USSR certain sophisticated dual-use systems (i.e., those with both military and commercial applications), notably advanced computers.(2) It is also actively considering proposals for still more significant transfers, some of which would involve extremely sensitive technologies. For example, Secretary of Commerce Robert Mosbacher has publicly expressed his support for a plan being developed by U S West to install a fiber-optic telecommunications network across the Soviet Union — an action that would greatly enhance the survivability and security of Soviet military communications. Also under consideration are transfers of six extremely senstive mainframe computers manufactured by Control Data Corporation(3) computers designed for the operation of nuclear plants and highly accurate machine tools suitable for aerospace manufacturing.

On the other hand, key Bush Administration officials have publicly professed grave concern about the dangers of liberalized technology flows to the East. For example, Secretary of Defense Richard Cheney said in September that the proposition that the Soviet military is supporting Mikhail Gorbachev’s reforms in order to improve its access vital Western technology is "a valid theory."(4) For his part, Secretary Mosbacher has on several occasions chosen to sound a note of caution about the continuing need for a prudent technology security policy.

For example, at a meeting last May of the U.S.-USSR Trade and Economic Council (USTEC) — a group infamous for its advocacy of undisciplined and open-ended sales of dual-use technology to the Soviet Union(5) — Secretary Mosbacher emphasized that "Today, tomorrow, forever — our national security needs will remain paramount….We will never trade security for profits. The export controls which we and our allies must have in place for our national security are not and cannot be on the table for negotiations."

In a subsequent address in Frankfurt, Germany in October 1989, Secretary Mosbacher added, that U.S. determination on the need for technology security "is even stronger in light of the fact that the Soviet military build-up has been continuing — despite glasnost, despite perestroika." In keeping with this sentiment, the United States government has, thus far, generally sought in COCOM’s secret deliberations to urge restraint and patience on other nations anxious to effect a wholesale dismantling of the existing technology security regime.

The East Bloc Exemption Gambit

Perhaps because of these mixed signals, advocates of greatly liberalized transfer of dual-use technology to the East have evidently made the tactical decision to do an end-run on COCOM, rather than a frontal assault on its controls limiting sales to the USSR. Toward this end, a move is now underway to grant East bloc countries such as Poland, Hungary, Czechoslovakia, and East Germany the sort of liberalized access to Western technology (up to the so-called "Green Line") that has already been established by COCOM for the People’s Republic of China. Under the proposal currently under consideration, equipment such as midsized computers, semiconductor manufacturing equipment and advanced telecommunications products could be transferred without a license.

Proponents of such exemptions maintain that advanced dual-use technology is essential to the revitalization of the economies of Eastern Europe. Moreover, the progress made by these countries to date toward democratic and economic reform is said to be indicative of an independence from the Soviet Union that should entitle them to "Green Line" status. In fact, neither of these propositions stands up to scrutiny.

    Who Really Needs Decontrol of Dual-Use Technology?

The interest of Western industries and governments in the sale of sophisticated, militarily relevant technologies is less a function of the East bloc’s genuine need for such equipment (not to be confused with the political prestige involved) than it is a reflection of the fact that that technology is what the would-be vendors have to market.

For example, West Germany has amply demonstrated its willingness to sell — legally or illegally — extremely precise machine tools to Eastern Europe. The current COCOM standard permits the sale of such tools with a plus-or-minus 10 micron accuracy (or four ten-thousandths of an inch). This degree of precision is more than sufficient for most commercial purposes; in fact, over 95% of the machine tools used by the United States’ defense industries are at or below this level. Unfortunately, no West German company currently makes such relatively inaccurate machine tools. Others like the Japanese dominate this business. To transfer German-made machine tools legitimately, COCOM’s ceiling must be raised to plus-or-minus 5 microns or even 2.5 microns accuracy.

As a practical matter, the sorts of assistance the Poles, Hungarians, Czechs, or East Germans need most to resuscitate their economies simply do not require such sophisticated technology. Their needs are for equipment that lends itself to efficient production of consumer goods and food — not state-of-the-art warplanes. The manufacture of competitive export goods can be easily satisfied within the existing COCOM standards for machine tools and other technologies which these countries are capable of absorbing.


    Still Under the Soviets’ Thumb

There are, of course, those within the East bloc who are more than happy to take whatever sophisticated technology the West is willing to release. Unfortunately for Western security, however, among those are individuals and organizations in the service of or being used by the Soviet Union as part of its technology acquisition effort. Indeed, Moscow has successfully utilized Poland, Hungary and other East European satellites for decades as cut-outs for its espionage and technology theft or diversion campaigns. Unfortunately, the Soviet Union today retains the apparatuses, personnel and — perhaps most importantly — the leverage needed to ensure that East bloc countries remain effective conduits for the acquisition of militarily relevant Western technology.

For one thing, Poland, Hungary, Czechoslovakia, and East Germany — for all of their progress toward democracy and economic reform — continue to be members in good standing of the Warsaw Pact. This alliance was imposed upon the nations of Eastern Europe by the Soviet Union to legitimize the presence of Soviet occupation forces in these countries and ensure the complete domination of their military, internal security and intelligence apparatuses by Moscow; it still serves these purposes today. In all of the East bloc countries, the military, police and intelligence services remain under the functional control of communists.(6)

Senator William Cohen (R-ME), vice-chairman of the Senate Select Committee on Intelligence recently affirmed that Poland and Hungary continue to be vital components of myriad, nefarious Soviet overseas operations. In a statement on the Senate floor on 14 November 1989, Sen. Cohen said "The intelligence services of Poland, East Germany, Czechoslovakia, Bulgaria, Hungary and Cuba continue to conduct intelligence operations in this country, not only to serve their own national interests, but also as surrogates for Soviet intelligence. This appears to be one field where countries such as Poland continue to serve Soviet interests that directly injure the national security of the United States." In late November, CIA Director William Webster noted that KGB and military GRU intelligence services had not slowed their efforts under President Gorbachev, but rather " we believe just the reverse is taking place."(7)

With respect to Soviet leverage on these states, the USSR retains numerous means of inducing the Poles, Hungarians and other satellites to collaborate in technology diversion and other activities beyond those that accrue thanks to the "moral suasion" that attends the continued presence of hundreds of thousands of Soviet troops in Eastern Europe. To name but three:

Energy Resources: Most of Eastern Europe is very heavily dependent upon Soviet sources of oil and gas to meet their national energy requirements. A cutoff — or even a substantial reduction in — Moscow’s energy supplies to Poland and Hungary, for example, would likely have catastrophic effects on those economies, especially during the winter season. Importantly, Moscow is putting itself in a position to bring precisely such pressure to bear by announcing that production shortfalls and delivery bottlenecks are impinging upon the availability of its energy exports. Reports reaching the Center for Security Policy indicate that the Soviets have already made it clear at least to the Hungarian government that it would exercise such energy leverage if Hungary is not attentive to Moscow’s political and economic desires.

The Soviet Market: The Soviet Union continues to be the major market for East bloc exports. Given the generally poor quality of these products, it is not likely that the West will become in the near-term a viable alternative to the Soviet market for such exports. Consequently, Moscow is in a credible position to threaten very real repercussions for both economies should it restrict the sale of such exports in the USSR. On the face of it, this would seem to conflict with at least as urgent Soviet requirements for imports of consumer goods. And yet, to the extent that the West is willing to rush in to satisfy such demands in the Soviet Union — especially on generous credit terms — it may have the unintended effect of increasing the Kremlin’s leverage on its erstwhile satellites.

Debt to the USSR: Most East bloc countries have considerable financial obligations to the Soviet Union. For example, Poland is estimated to owe Moscow $2 billion. The difference between a forgiving or lenient Soviet attitude toward collection of such debts and a rigid "due-and-payable" approach could be the difference between a successful long-term restructuring of these economies and even deeper financial crises for these two nations.

Discount Any "We’ll Protect Your Technology" Assurances

Regrettably, it is against this backdrop that the current proposal to exempt Poland and Hungary from certain COCOM controls must be considered. At the very least the continued involvement of these nations in the Warsaw Pact and Soviet intelligence activities along with the considerable leverage the Kremlin continues to have over the nations of Eastern Europe call into serious question the assurances related by Secretary Mosbacher when he said on 17 December 1989: "We’re willing to [open the door for transfers of higher technology to Poland and Hungary] because they have told us that they will protect us and give us the opportunity to review what they’re doing with the higher tech items."(8)

As a practical matter — even if such representations are being made in good faith — there is, under present circumstances, insufficient reason to believe that those guarantees will actually safeguard sophisticated Western technology. Officials in Hungary have indeed implied they will try to get around Western restrictions if they are denied access to technology. Moreover, there is little basis for believing that on-site inspections or other monitoring arrangements can be devised to prevent the unauthorized diversions of militarily relevant technology provided under a blanket exemption approach.

A Sensible U.S. Approach is Urgently Needed

Rather than accommodate the pressure for adoption of such an ill-advised, across-the-board approach, the Bush Administration needs to advance its own, principled and disciplined concept for assisting nations of Eastern Europe committed to sloughing off communism’s suffocating political and economic systems.

The principal features of such an approach should be:

  • Maintaining COCOM as a viable and necessary mechanism for controlling the flow of dual-use technology to potential adversaries, including redoubling of enforcement efforts.

  • Streamlining, where appropriate, COCOM procedures in order to enhance the effectiveness of this mechanism.

      The temptation must be avoided to shorten the list of controlled items simply to permit more money to be made by those who would sell the Soviets advanced military technology, irrespective of the adverse security costs associated with doing so.



  • Resisting blanket exemptions for "half-way house" nations like that of contemporary Poland and Hungary, i.e., countries that remain intimately tied to the Soviet Union’s intelligence and military apparatuses and subject to a variety of insidious forms of Soviet pressure.

      Instead, all technology transfer decisions concerning such nations should be made on a fully transparent, case-by-case basis so that the merits of each can be thoroughly debated by experts inside and outside government.



  • Demanding that individual East bloc countries meet stringent requirements before they are considered eligible for greatly liberalized access to Western technology:
    • democracy has been firmly institutionalized;

    • espionage and technology diversion schemes against the West have been halted; and

    • such countries are no longer members of a military alliance against the West.

    Under no circumstances should assurances — with or without on-site inspection rights — that Western technology will be protected be considered an adequate basis for the wholesale liberalization of technology flows in the absence of such requirements being met.

Disciplined Technology Assistance Is Good for Reform

Such a prudent and disciplined Western technology transfer policy toward the nations striving for real structural reform will do more to encourage such reform than would the more open-ended approach being encouraged by many in COCOM. This is true not only because an effective technology security policy will help ensure that external and internal resources get applied in ways that genuinely serve to improve the economic well-being of the recipient countries — as opposed to having it diverted to military-related activities. Such a policy will also help those striving for true reform to resist the inevitable and heavy-handed demands from Moscow for its erstwhile satellites’ assistance in various activities at odds with the Soviet Union’s own stated commitment to perestroika and improved relations with the West.

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1. The Coordinating Committee on Multilateral Export Controls, a voluntary association of the West’s leading industrialized nations that serves as the focal point for its technology transfer control regime.

2. Notably, Innovation International, Inc. of Boston has just obtained approval for a joint venture involving the assembly of 1 million personal computers in the USSR. These powerful minicomputers will be capable of processing 1 million instructions per second and sell for $20,000 in the United States.

3. These computers are capable of processing 8.9 million instructions per second. They can be networked to support 100 terminals and have obvious application to the operation of Soviet military nuclear facilities as well as dual-use complexes like that at Chernobyl.

4. Peter Almond, "Experts Say Soviets Play Old Shell Game with Proposed ‘Cuts,’" Washington Times, 14 September 1989, p. 3.

5. The United States government has revealed that KGB operatives have been heavily involved in the Soviet side of USTEC. Indeed, Yevgeniy P. Pitovranov, the former chairman of the Soviet Chamber of Commerce and Industry and member of USTEC’s governing board, was a lieutenant general in the KGB responsible for its technology acquisition efforts. (See the State Department’s report, Intelligence Collection in USSR Chamber of Commerce and Industry)

6. This remains the case notwithstanding the recent decision by the communists in Hungary to try to improve their electoral prospects by changing the name of their organization from the discredited Hungarian Socialist Workers’ Party to the Hungarian Socialist Party.

7. "Soviet Spying Activity on the Rise, Webster Says," Washington Times, 30 November 1989.

8. "Meet the Press," NBC News, 17 December 1989.

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