NATO PA - 168 STC 04 E - NUCLEAR WEAPONS PROLIFERATION

Assemblée parlementaire de l'OTAN

168 STC 04 E - NUCLEAR WEAPONS PROLIFERATION

PIERRE CLAUDE NOLIN (CANADA)
CHAIRMAN AND ACTING GENERAL RAPPORTEUR

TABLE OF CONTENTS

I. INTRODUCTION

II. THE NUCLEAR NON PROLIFERATION AND COUNTER PROLIFERATION REGIMES

A. THE NUCLEAR NON-PROLIFERATION TREATY
B. THE ROLE OF THE IAEA AND THE ADDITIONAL PROTOCOL
C. THE COMPREHENSIVE NUCLEAR-TEST-BAN TREATY
D. THE NUCLEAR SUPPLIERS GROUP
E. THE G8 GLOBAL PARTNERSHIP AND THE PROLIFERATION SECURITY INITIATIVE

III. RECENT NUCLEAR PROLIFERATION CASES

A. NORTH KOREA
1. North Korea's proliferation activities
B. IRAN
C. PAKISTAN
D. LIBYA
E. THE NUCLEAR WEAPONS BLACK MARKET

IV. STRENGTHENING NUCLEAR NON-PROLIFERATION

A. PRESIDENT BUSH PROPOSALS
B. SECRETARY STRAW PROPOSALS
C. DR. ELBARADEI PROPOSALS

V. CONCLUSION

I. INTRODUCTION*

1. Nuclear weapons are by far the most powerful instruments of destruction produced by mankind. Some have indeed argued that atomic and nuclear armaments are the only true "weapons of mass destruction" (WMD). For more than 50 years, the international community has struggled to make the acquisition and development of such weapons more difficult and less desirable. However, the establishment of a sophisticated international legal non-proliferation regime, centred on the 1968 Nuclear Non-proliferation Treaty (NPT), and associated diplomatic efforts have not stopped countries from seeking to acquire nuclear weapons.

2. About 30 countries have at different stages sought to acquire nuclear weapons, and nine are known to have succeeded. Of these nine, five: China, France, Russia, the United Kingdom and the United States, are recognised by the NPT as nuclear-weapon states and enjoy special rights under international law. Three more countries possess nuclear weapons but remain outside the NPT: India, Israel, and Pakistan. In the first decade after the end of the Cold War, a series of events had seemed to be bringing the so-called "nuclear age" to a close. Russia and the United States signed agreements to reduce the two major nuclear arsenals in the world. Belarus, Kazakhstan, and Ukraine unilaterally eliminated all the nuclear weapons they had inherited from the Soviet Union. South Africa dismantled its nuclear weapons thus making Africa a nuclear-weapons-free continent. In the 1990s, the international community concluded a set of agreements and negotiations aimed at strengthening the NPT.

3. In 1998, however, both India and Pakistan conducted nuclear tests and declared their intention to deploy nuclear weapons. Currently, India is thought to possess enough weapons-grade plutonium to produce 50 to 90 nuclear warheads, while Pakistan may have produced enough weapons-grade uranium to assemble between 30 and 50 nuclear warheads. At the end of 2002, after agreeing in the mid-1990s to freeze its nuclear weapons programme, North Korea acknowledged its clandestine uranium enrichment programme and forced inspectors of the International Atomic Energy Agency (IAEA) out of the country. Subsequently, Pyongyang restarted its plutonium production facilities and announced its withdrawal from the NPT. It has since stated that it reprocessed the spent fuel that had been under safeguards and expanded its "deterrent". In 2003, the discovery that Iran had secretly built a uranium enrichment facility and a heavy water production plant sparked concerns about Tehran's compliance with the NPT. Although Iran made what should have been a comprehensive nuclear declaration in October 2003 and signed the IAEA additional protocol two months later, in February 2004 it was discovered that the country had blueprints for an advanced centrifuge design usable for uranium enrichment that it had withheld from nuclear inspectors. Finally, following Libya's announcement, in December 2003, to renounce its prohibited weapons programmes, investigations uncovered the role of Dr. Abdul Qadeer Khan, the father of Pakistan's nuclear bomb, in providing Iran, North Korea and Libya with the designs and technology to produce fuel for nuclear weapons, as well as nuclear weapons design information to Libya. Such revelations were followed by the discovery of a worldwide nuclear black market spanning from Europe to Africa to East Asia and involving private companies and middlemen as well as states.

4. These recent developments assume an even more worrying connotation in the light of September 11 and the global struggle against terrorism. An increased availability of nuclear, as well as chemical and biological weapons to failing states or to countries that support terrorist groups represents the greatest threat to global security. In particular, the existence of a network that can deliver technologies for producing material usable in weapons makes it extremely urgent to strengthen non-proliferation efforts.

5. The NPT provides the norm and the foundation for an international regime to prevent the spread of nuclear weapons. It has led several states to abandon their nuclear weapons programmes, but it has also suffered major blows. Moreover, the nuclear non-proliferation regime reflects the climate of the Cold War, during which it was negotiated and established. Many, including your Rapporteur, believe that it is possible - and necessary - to strengthen this regime and adapt it to the threats of the 21st century.

6. Proposals to strengthen the nuclear non-proliferation regime and combat the spread of nuclear weapons have recently been put forward by both US President George W. Bush and Dr. Mohamed ElBaradei, IAEA Director General. Although favouring slightly different approaches on some aspects, both plans seem to converge on a few significant elements: strengthening the IAEA in its work against nuclear proliferation (first of all by requiring all states to sign the Additional Protocol for enhanced nuclear safeguards); tightening controls over the exports of nuclear material and technology; and controlling sensitive parts of the nuclear fuel cycle, such as the production of new fuel, the processing of weapon-usable material, and the disposal of spent fuel and radioactive waste. Proposals for strengthening the global nuclear non-proliferation regime have also been put forward by UK Foreign Secretary Jack Straw.

7. This report will briefly describe the current nuclear non-proliferation regime and other initiatives to curb the illicit acquisition of nuclear material and technology. It will then analyse recent events in the area of nuclear proliferation, notably in Iran, Libya, North Korea and Pakistan. Finally, your Rapporteur will outline recent proposals to strengthen the nuclear non-proliferation regime with a view to formulate his own comprehensive set of recommendations for the Committee to approve during its Autumn session.

II. THE NUCLEAR NON PROLIFERATION AND COUNTER PROLIFERATION REGIMES

A. THE NUCLEAR NON-PROLIFERATION TREATY

8. The 1968 Nuclear Non-proliferation Treaty is the backbone of the international non-proliferation regime. With its 188 members, the NPT is the most widely adhered and successful multilateral arms control agreement in history: only three states, India, Israel, and Pakistan, remain outside the treaty and only one, North Korea, has announced its withdrawal from it. NPT members fall into one of two categories: the five nuclear-weapon states (China, France, Russia, United Kingdom and United States), and non-nuclear-weapon states (NNWS). The two groups have committed themselves to each other. The NNWS undertook not to acquire nuclear weapons and put their civil programmes under IAEA safeguards. The five nuclear-weapon states gave a commitment to pursue negotiations towards general and complete disarmament (under Article VI) and to facilitate the transfer of peaceful nuclear technology under safeguards. Thus, the NPT aims to halt the 'vertical' spread of nuclear weapons by existing nuclear powers as well as the 'horizontal' spread from nuclear aspirants - effectively freezing the distribution of nuclear weapons in 1968.

9. All members, including nuclear-weapon states, are called upon in Article VI to "pursue negotiations in good faith" on effective measures to stop the nuclear arms race "at an early date" and dismantle their arsenals. In both the conclusions of the 1995 NPT Review Conference and the Final Document from the 2000 NPT Review Conference, the five nuclear weapon states pledged to reduce their nuclear arsenals in accordance with Article VI. In the document of 2000, NPT parties also agreed to 13 practical steps to implement Article VI, which included ratification of the Comprehensive Nuclear-Test-Ban Treaty (CTBT); early entry into force of the Strategic Offensive Arms Reduction Treaty (START) II and conclusion of START III; preservation of the Anti-Ballistic Missile (ABM) Treaty; concrete agreed measures to reduce the operational status of nuclear weapons; and a diminishing role for nuclear weapons in security policies. As we will see in paragraphs 79 through 85, the five nuclear-weapon states have adopted different approaches to fulfil their nuclear disarmament obligations.

10. Although non-nuclear-weapon states accepted in 1968 that the IAEA carry out inspections to guarantee that their nuclear programmes were limited to peaceful uses, the NPT does not clearly draw the "red lines" of nuclear bomb making - for example, it does not ban or limit the production of enriched uranium or plutonium, both of which are vital for the development of a nuclear warhead. This factor exposes the treaty's greatest drawback as NNWS can acquire equipment in a piecemeal fashion and eventually build an indigenous nuclear weapon. Recent events in North Korea, Iran, Libya and Pakistan clearly demonstrate this.

11. Critics maintain that the NPT fails in its efforts to be a disincentive to NNWS to acquire nuclear weapons. The treaty states that parties have "the inalienable right...to develop research, production and use of nuclear energy for peaceful purposes without discrimination" and in conformity with the treaty's non-proliferation articles. Some claim that this factor made nuclear programmes easily attainable, providing states that otherwise would not have pursued such programmes more likely to "go nuclear". However, others argue that, had it not been for the NPT, many more countries could have acquired nuclear weapons. Moreover, without the NPT norm and incentive, Belarus, Kazakhstan, and Ukraine probably would not have given their inherited weapons up; South Africa would not have renounced its nuclear weapons; and Argentina and Brazil would not have abandoned their nuclear weapons programmes.

12. The treaty was declared in force indefinitely in 1995, yet Article X permits states to withdraw if they give three month's notice and a statement describing the "extraordinary events it regards as having jeopardized its supreme interests". More importantly, there is no mention of the consequences of violating the treaty and engaging in the transfer, receipt or illegal development of nuclear weapons. Violations are to be investigated by the IAEA and then reported to the UN Security Council (SC), which can decide what action eventually to take. The treaty is now reviewed every five years and amendments may be introduced provided they receive approval by majority vote. The NPT is inflexible when it comes to addressing nuclear states outside the treaty - i.e., India, Pakistan and Israel. According to the Article IX.3, a nuclear weapons state is defined as one that has manufactured and exploded a nuclear weapon prior to 1 January 1967. Non-signatories who possess nuclear weapons must abandon their weapons in order to enter the NPT.

13. All NATO members are strong supporters of the NPT, which they consider a "pre-eminent non-proliferation and disarmament mechanism". In replying to last year's NATO PA policy recommendations, former NATO Secretary General Lord Robertson stressed, "Full compliance with the NPT is a matter of primary concern to the Alliance".

B. THE ROLE OF THE IAEA AND THE ADDITIONAL PROTOCOL

14. The IAEA is the world's nuclear inspectorate and the verification authority of Article III of the NPT, with more than four decades of experience. Founded in 1957, the Agency with its safeguards system has provided an invaluable instrument against nuclear proliferation. Its inspectors work to verify that nuclear material and activities are not diverted from peaceful use to military or other unknown purposes. They inspect nuclear and related facilities under safeguards agreements with more than 140 states that have committed themselves not to possess nuclear weapons. Additionally, the IAEA assists the international community in specific cases of verifying the dismantlement of nuclear capabilities.

15. Until the 1990s, the IAEA system focused mainly on declared nuclear activities and material. But the discovery, following the 1991 Gulf War, that Iraq had developed a clandestine nuclear weapons programme despite a comprehensive safeguards agreement between Baghdad and the Agency, forced the IAEA to focus its system increasingly on possible undeclared material and activities. Findings following the 2003 Iraq war confirmed that IAEA inspections were extremely successful at eliminating Iraq's nuclear programme before 1998. In fact, the Agency had destroyed most, if not all, of the nuclear infrastructure in Iraq pursuant to UN SC resolution 687. The work in Iraq helped the IAEA develop the experience and professional skills to reinforce its verification and inspection capabilities, as the cases of North Korea and Iran have demonstrated.

16. In 1997, the IAEA Board of Governors approved the model Additional Protocol to the Safeguards Agreement, which conferred upon the Agency the legal authority to perform more robust verification functions in the countries that agreed to sign it. Under the Additional Protocol, states must provide the IAEA with an expanded declaration containing information on all aspects of their nuclear activities. They are also required to grant the Agency broader rights of access to their facilities and allow it to use the most advanced technologies. As of March 2004, only 81 IAEA member states have signed the Additional Protocol.

17. The IAEA performs inspections at hundreds of nuclear facilities around the world as its mandate has dramatically increased in the past decade. Despite these growing inspection responsibilities, the Agency's budget has not increased in real terms for more than 15 years. In 2003, the Board of Governors approved a plan to increase the budget by $25 million over the 2004-2007 period. Roughly 60% of this increase was in the first year, and over 75% of the total is for safeguards.

C. THE COMPREHENSIVE NUCLEAR-TEST-BAN TREATY

18. The CTBT is the most intrusive, and potentially the most effective, tool in nuclear non-proliferation today, as it prohibits the detonation of a nuclear device and has established an extensive network of monitoring and verification posts to ensure the immediate detection of such detonations. The UN General Assembly adopted it in 1996, and as of March 2004, 171 states had signed, 110 of which had ratified it. The CTBT will enter into force 180 days after it has been ratified by the 44 states listed in its Annexe 2, all of which formally participated in the 1996 session of the Conference on Disarmament, and possess either nuclear power or research reactors. Of the Annexe 2 states, 32 have ratified, including three NWS (France, Russia and the United Kingdom), and only three (India, North Korea and Pakistan) have not signed. The United States has signed but not ratified the CTBT, it has however maintained a moratorium on all nuclear testing since 1992 and has continued funding the CTBT monitoring and verification system. According to a note prepared by the US Department of State, the United States "does not intend to become a party to the CTBT", but it "will continue to work, as appropriate, with working groups of the CTBT Organization Preparatory Commission (CTBTO PrepCom) and with its Provisional Technical Secretariat only on the International Monitoring System (IMS) and IMS-related activities".

19. The treaty established a Provisional Technical Secretariat for the CTBT Organization, responsible for setting up the verification system and the International Data Centre that collects, processes and transmits to members the raw information received from the monitoring system. This system will consist of 321 monitoring stations (about half of which are already in place) and 16 laboratories located in 90 countries, using four verification technologies: seismic, infrasound, hydroacoustic (employed to monitor the underground, underwater and atmosphere environments, respectively) and radionuclide (detect radioactive debris from atmospheric explosions or vented by underground or underwater nuclear explosions). In the event that a suspected nuclear explosion is detected either by one of the stations of the monitoring system or by national technical means, any state party can request an on-site inspection.

20. Continuing uncertainty about the timing of the treaty's entry into force recently brought some erosion of international support for the CTBT. This seems to stem from both the concerns of some states about the rising costs of the monitoring system and the lack of ratification by the United States together with news that Washington authorised studies on the possible development of new or modified types of nuclear weapons, and cut the lead-time for conducting nuclear tests from three years to 18 months.

D. THE NUCLEAR SUPPLIERS GROUP

21. The Nuclear Suppliers Group (NSG) was formed in 1974 after India's first nuclear test, which signalled that nuclear technology meant for peaceful purposes could be misused. A 40-member voluntary organisation, the NSG adopted a set of export-control guidelines and information exchange procedures to track developments in nuclear proliferation. Its members, which include all NATO and EU countries as well as Russia, have to be part of the NPT regime and possess a legally based domestic export control system coherent with NSG guidelines.

22. A first set of NSG guidelines governs the export of items that are especially designed for nuclear use, such as nuclear material, nuclear reactors and equipment, plant and equipment for the reprocessing, enrichment, and conversion of nuclear material. The second set of guidelines governs the export of nuclear-related dual-use items and technologies. NSG guidelines are published and listed by the IAEA for its members. NSG participating states have recently made efforts to strengthen the global non-proliferation regime by engaging discussions with countries outside the group, such as China, Egypt, Indonesia, Iran, Malaysia, and Mexico, as well as with India, Israel and Pakistan. Beijing had expressed the intention of joining the NSG by May 2004.

E. THE G8 GLOBAL PARTNERSHIP AND THE PROLIFERATION SECURITY INITIATIVE

23. After the end of the Cold War, a number of practical disarmament and threat reduction measures have been launched by NATO countries, including initiatives to provide financial and technical assistance to eliminate or safeguard weapons and military capabilities located in the countries of the former Soviet Union. The most extensive of these measures are those carried out under the US-sponsored Cooperative Threat Reduction (CTR) programme, which deals not only with nuclear, but with chemical and biological weapons in Russia and the Newly Independent States (NIS). A 2003 report by the US General Accounting Office (GAO) indicated that several governmental agencies, notably the Departments of Defence and of Energy, had invested from 1991 to 2003 US$ 6.3 billion in measures to eliminate weapons or safeguard the Russian nuclear complex as well as other WMD programmes and facilities. The same GAO report, however, underlined a number of areas in which the Russian government could demonstrate a more transparent and cooperative attitude. Other initiatives have been complementing US programmes, notably the Non-Proliferation and Disarmament Co-operation Initiative (NDCI) co-sponsored by the European Union, the United States, and Canada, with substantial support from Norway and Japan.

24. All these efforts will now be part of the G-8 Global Partnership Against the Spread of Weapons of Mass Destruction, launched in 2002 and pledging to provide up to US$20 billion over the next decade against the spread of weapons and materials of mass destruction. According to the Global Partnership Annual Report, presented in Sea Island, Georgia (United States), in June 2004, "The national pledges of G8 members include commitments of up to: Canada - Can$1 billion; France - € 750 million; Germany - $1.5 billion; Japan - $200 million; Italy - € 1 billion; United Kingdom - $750 million; United States - $10 billion. The European Union has pledged €1 billion and Russia $2 billion". The report also indicated that G-8 "members have emphasized that additional progress on implementation of current projects in Russia, with corresponding expenditure of funds, is necessary before parliaments will approve increased pledges. Some countries have also emphasized the importance of increased Russian funding". Moreover, six new countries joined the Global Partnership in 2003 - Finland, the Netherlands, Norway, Poland, Sweden and Switzerland - and have committed about $200 million to specific projects. In 2004, Australia, Belgium, the Czech Republic, Denmark, Ireland, South Korea and New Zealand also joined the Global Partnership.

25. The G-8 countries, as part of their overall Action Plan on Non-proliferation also expressed strong support for the Proliferation Security Initiative (PSI), launched in May 2003 by the United States to interdict shipments of WMD material and smuggled goods originating from, or destined for, states of "proliferation concern". Its scope and aims are set out in the Statement of Interdiction Principles of September 2003, which makes clear that action under the PSI umbrella will be "consistent with national legal authorities and relevant international law and frameworks". PSI was initially taken forward by a core group of 11 states, but now more than 60 countries have expressed political support for it.

26. In August 2004, Russian Defence Minister Sergei Ivanov declared publicly that Russia and NATO could begin cooperate to improve security at nuclear facilities. It is likely he said that we will reach a point when we start exchanging technologies for safe storage of nuclear weapons and dealing with the effects of accidents involving them. In the context of the NATO Russia Council, a Nuclear Experts Group has already been working for a few months on co-operation between NATO and Russia in three distinct but associated areas: nuclear terminology, strategy and doctrine, and nuclear weapon safety and security. The group has developed a joint glossary of nuclear-related definitions and terminology; it also consults on NATO, Allied and Russian Federation nuclear strategies and military doctrines; and it exchanges information on safety and security provisions for nuclear weapons storage and transportation. More recently, it was also agreed that the last topic could include nuclear-related national and NATO field demonstrations or exercises.

27. Our Committee has for many years sought to raise the attention of governments and legislators on the security of Russian nuclear weapons and facilities. In 2001, the STC General Report specifically addressed the issue of "Safeguarding the Nuclear Complex in Russia and the Newly Independent States". In October 2001, during the Annual Session in Ottawa, Canada, the entire Assembly endorsed an STC resolution urging member governments and parliaments of the North Atlantic Alliance, among other things, to assist Russia in sealing all its warheads as part of a reliable accounting system, as well as upgrading the protection measures of 123 nuclear weapon storages; to launch additional initiatives and finance existing programmes to help Russia dismantle out of service nuclear submarines; to encourage European NATO Allies and the European Union to step up their diplomatic, financial and technical contribution to securing fissile material, combating illicit traffic, assisting scientists and technical personnel; and to improve international sharing of intelligence regarding nuclear material smuggling and terrorist groups interested in WMD.

28. In August 2004, during a NATO PA seminar in Spitzbergen, co-organised by the Norwegian parliament, members were briefed on the extensive assistance being provided to Russia in order to clean up and secure its nuclear facilities. Among the critical elements in this area, discussions highlighted a lack of coordination among various initiatives and donors, which results in duplication of effort and inefficiency. Participants therefore agreed with the proposal put forward by Assembly Vice-President Pierre Lellouche that the NATO PA should highlight this issue. In his closing remarks, your Rapporteur, in his capacity as STC Chairman, undertook to develop a proposal on how the Assembly could address this issue.

III. RECENT NUCLEAR PROLIFERATION CASES

A. NORTH KOREA

29. Of all the recent cases of nuclear proliferation that we will examine, North Korea's, for the extension and sophistication of its programmes as well as the nature of its regime, is undoubtedly the more threatening and difficult to address. North Korea's nuclear programme can be divided into four distinct phases. During the initial phase (1959-1980), Pyongyang's efforts focused on basic training and research, mainly with Soviet assistance. The second phase (1980-1994) covered the growth and eventual suspension of North Korea's plutonium production programme. The country built a series of industrial-scale nuclear facilities but denied their existence until 1992 when it finally concluded an agreement with the IAEA permitting full inspections. North Korea's subsequent refusal to cooperate with the IAEA led to the 1993-1994 nuclear crisis, and to the 1994 US-North Korea Agreed Framework, which froze the country's plutonium production facilities and placed them under IAEA monitoring. The third phase (1994-2002) covered the period of the nuclear freeze when the country's known plutonium stocks (some 25-30 kg in spent-fuel rods) were subject to IAEA monitoring. The final phase (2002 to present) - which was described in detail in the 2003 General Report of the Science and Technology Committee [155 STC 03 E] - has witnessed revival of the country's plutonium production facilities and claims it has extracted all the plutonium from the spent-fuel rods.

30. During US Assistant Secretary of State James Kelly's visit to North Korea in October 2002, North Korean officials reportedly acknowledged the existence of a secret uranium enrichment programme. Subsequently, North Korea declared the 1994 Agreed Framework void and ordered the IAEA to terminate its inspections by the end of the year. Pyongyang restarted its 5 millions of watts of electrical output (MWe) reactor in Yongbyon in January 2003 and announced that it would withdraw from the NPT, effective 10 April 2003. Some countries, such as the United Kingdom, believe that North Korea's withdrawal from the NPT was invalid, since it has failed to comply with the requirements for withdrawal set out in Article X of the treaty. North Korea subsequently declared it had reprocessed all the stored spent fuel, which could yield 25-30 kilograms of plutonium a year. In contrast to Pyongyang's uranium enrichment capability, which is years from completion by all accounts, its plutonium production has been a constant source of concern since the early 1990s.

31. Although US officials have been unable to confirm Pyongyang's declarations, on 8 January 2004, an unofficial US delegation visited the 5MWe reactor in Yongbyon. The visit confirmed that the reactor was operating normally and could produce roughly 6 kilograms of plutonium a year. It also confirmed that 8,000 spent-fuel rods removed from the reactor in 1994 were no longer in a cooling pond, where they had been subject to IAEA safeguards, and that most if not all of the storage containers has been emptied. The delegation was unable to confirm that samples of material were, as described, plutonium metal and oxylate, although they appeared consistent with these claims.

32. As indicated in last year's report, the trilateral talks between North Korea, the United States and China held on 24-25 April 2003 failed to find a solution to the crisis. The US delegation, headed by Assistant Secretary Kelly, reiterated the US position that North Korea must disarm "completely, irreversibly, and verifiably" before receiving any political or economic benefits. China finally orchestrated a compromise, in which North Korea agreed to accept Six Party Talks (North Korea, United States, China, Japan, South Korea, Russia). The first round was held in Beijing on 27-29 August and failed to reach agreement on a draft communiqué. Beijing issued a statement that all parties agreed to resolve the nuclear dispute and to hold another round of Six Party Talks. North Korea continued to insist that it would disarm in gradual stages with benefits at every stage while the US argued that there would be no aid to North Korea until it pledged to move past a freeze and actually dismantle every part of its nuclear programme in a manner that could be verified. Moreover, North Korea continued to view the Six Party Talks as a political cover for intensive bilateral talks with the US, while Washington remained resistant to serious bilateral negotiations with Pyongyang.

33. The second round of Six Party Talks began in Beijing on 25 February 2004. Before the meeting, the US administration, supported by Japan, demanded that North Korea agree to dismantle all its nuclear weapons and development programme as a prerequisite for any assistance. The United States and Japan were willing to consider the North Korean proposal, backed by China and partly South Korea, to freeze its nuclear weapons programme in the context of Pyongyang's agreement to a complete, verifiable and irreversible dismantlement of its nuclear programme. Despite the offer, North Korea scaled back its freeze proposal, and the meeting wound down with little progress. The major advance in the talks came with the proposal from South Korea to provide energy assistance to Pyongyang, so long as the freeze was a major step forward to a complete, verifiable and irreversible dismantlement of North Korea's nuclear programme. China and Russia agreed to join South Korea in providing such assistance. All sides had pledged to meet in smaller working groups soon and to hold another formal session before the end of June.

34. During the third round of Six Party Talks, held in Beijing on 23-26 June 2004, the United States presented a new proposal developed in coordination with South Korea and Japan. Under such proposal, Pyongyang would, as a first step, commit to dismantle all of its nuclear programmes. The parties would then reach agreement on a detailed implementation plan requiring the supervised dismantlement and elimination of all nuclear-related facilities and materials; the removal of all nuclear weapons components, centrifuge and other nuclear parts, fissile material and fuel rods; and a long-term monitoring programme. Only when North Korea will carry out such commitments the other parties would, according to the US proposal, take some corresponding steps. These would include providing North Korea with heavy fuel oil and begin studies to meet the country's energy requirements by non-nuclear programmes; offering provisional multilateral security assurances; and begin discussions on steps necessary to lift economic sanctions on Pyongyang. The North Korean proposal insisted on its goal of rewards following a freeze of all nuclear weapons related activities. Despite the more constructive tone set by this third round of the talks, the parties could not reach an agreement. Speaking in front of the US Senate Foreign Relations Committee on 15 July 2004, Assistant Secretary Kelly declared that the United States "will continue to seek answers through the Six-Party process". A fourth round of talks was scheduled by the end of September.

35. During his briefing on 15 July, Assistant Secretary Kelly also declared that North Korea "speaks of an existing 'nuclear deterrent' but has refrained from stating publicly that it has 'nuclear weapons'". However, Pakistani scientist Dr. A.Q. Khan, who admitted selling nuclear technology to Pyongyang, declared in April that during a trip to North Korea five years ago he was shown by government officials what he described as three nuclear devices. Dr. Khan's declarations have not so far been confirmed by any other sources.

36. On 9 September, a huge explosion in an area in North Korea near the border with China attracted much attention internationally and sparked suspicions that it might be linked to a nuclear test. Only three days later, Pyongyang's government said the blast was in fact the deliberate demolition of a mountain as part of a huge, hydroelectric project. Meanwhile, US Secretary of State Colin Powell declared on 12 September that the explosion was "not any kind of nuclear event", but confirmed that "there is activity going on at a potential nuclear test site", adding that the United States was "monitoring this".

37. To further complicate the difficult situation in the Korean peninsula, in September 2004 South Korea admitted to the IAEA that several years ago its scientists had covertly produced very small quantities of highly enriched uranium by using lasers. This immediately brought a reaction from the North Koreans, who accused the United States of applying "double standards" by putting pressure on Pyongyang because of its nuclear programme while ignoring secret nuclear experiments conducted by South Korea. Pyongyang's state news agency also declared that North Korea "can never dismantle its nuclear deterrent force" and that "the resumption of the talks can no longer be discussed unless the US drops its hostile policy".

1. North Korea's Proliferation Activities

38. North Korea possesses an extremely advanced ballistic missile programme having tested and deployed missiles with ranges up to 1,000 kilometres and conducted a single test of a longer-range missile, which if fully developed, could reach Alaska or even the West Coast of the United States. Moreover, Pyongyang has supplied missile-related materials and technical expertise to Egypt, Iran, Libya, Pakistan, and Syria. From 1987 to 1996, Pyongyang exported about 370 missiles to the Middle East, allegedly earning around $1 billion.

39. The story of the nuclear-for-missile trade between Pakistan and North Korea, going back to the early 1990s, is particularly disquieting. In the 1980s, Pakistan did not have a diversified industrial infrastructure, sufficient scientific and engineering manpower, or a large civilian satellite launch vehicle programme that could be used as a base to develop ballistic missiles. From 1987 onwards, US-led multinational arms control efforts placed additional obstacles. In 1989 Pakistan signed a deal with China to purchase 34 solid-fuelled M-11 ballistic missiles. But given Beijing's reluctance to sell longer-range missiles in the early 1990s and M-11's relatively limited range, Islamabad diversified its suppliers. Pakistani officials visited North Korea to view a No-dong prototype in 1992, and in May 1993 Pakistani scientists attended the No-dong test-launch. When Pakistani Prime Minister Benazir Bhutto visited Pyongyang in 1993, analysts speculated that a missile deal featured on her agenda. The missile co-operation became public when Pakistan tested a No-dong (re-named Ghauri) in April 1998. In all, Pakistan has allegedly acquired 15 to 25 liquid-fuelled No-dong missiles from North Korea.

40. In the summer of 2002, US intelligence analysts concluded that Pakistan was the source of North Korea's uranium enrichment technology given the exchange of scientific personnel and some highly questionable shipments to North Korea delivered by Pakistani aircraft. Islamabad refuted the allegations, and on 26 October 2002, US Secretary of State Colin Powell said that President Musharraf had given him "four hundred percent assurance that there is no such interchange taking place now", but they did not, he added later, "talk about the past". Subsequently, the United States imposed sanctions on Pakistani nuclear facilities in March 2003 for their role in helping North Korea obtain crucial missile equipment. In January 2004, revelations by Dr. Abdul Qadeer Khan, the father of the Pakistani nuclear bomb, confirmed that Pakistan had provided North Korea with many of the designs for gas centrifuges and much of the scientific expertise and machinery it needed to produce highly enriched uranium. Predictably, North Korea dismissed Dr. Khan's confession as a "whopping lie" spun by the United States.

B. IRAN

41. Iran's pursuit of nuclear weapons has long been suspected. It was widely known that construction of the Bushehr reactor had been underway for decades, and that Iran had designed its extensive, mostly indigenous missile programme to carry nuclear payloads. But until recently, it was assumed that Bushehr was the principal component of Iran's rudimentary programme. Over the past 18 months, the revelations of a sophisticated clandestine nuclear programme have brought Iran to the forefront of the international debate on non-proliferation.

42. Iran perceives itself as an isolated nation. Years of ideological and territorial clashes with its neighbours, a lengthy war with Iraq, economic sanctions, and international discredit due to its support to certain terrorist organisations have embedded a deep distrust of other nations and a penchant for self-reliance in Iran. But geopolitical security concerns take a back seat to the "prestige factor". Iran believes that having nuclear weapons would level the political and economic playing field and guarantee the benefits and respect of being a nuclear power, especially when dealing with the West. On the domestic front, some experts speculate that the conservative regime hopes to capitalise on the national pride that would ensue from the development of a bomb.

43. Over the years, Iran has sought the assistance of numerous countries to provide it with the equipment and knowledge to build a nuclear programme. Germany was the first benefactor in initiating, before the Islamist revolution of 1979, the construction of the light water reactor at Bushehr, which Russia took charge of in 1995. Pakistan provided plans for centrifuge production, and the Pakistani scientist Dr. Khan recently admitted to selling Iran uranium enrichment equipment. International pressure on Iran has pushed Tehran to admit to purchasing nuclear components from black market suppliers; a Malaysian police report claims that Iran was the recipient of centrifuge parts from Dr. Khan's network as far back as 1994. Along with anti-ship missiles and chemical weapons, from 1990-1995 China furnished Iran with three zero-power research reactors, one 30 kWt (thousands of watts of thermal output) reactor and two cauldrons. North Korea has been Iran's main supplier of conventional arms and missiles. Drawing on its right to civilian nuclear technology, Tehran has slowly acquired nuclear know-how and dual-use equipment piece by piece for decades. Though it has been an avid customer of nuclear technology and knowledge, there is little evidence that Iran has sold or traded nuclear-weapon materials.

44. For years, the extent of the Iranian programme and the ambiguity of its civil or military purpose were under speculation. Suspicions were confirmed in late 2002 when an expatriate Iranian opposition group, the National Council for Resistance, provided detailed evidence of the existence of a heavy water production plant and revealed plans to construct a natural uranium research reactor at Arak and a gas centrifuge plant at Natanz. These sites were subsequently confirmed by a June 2003 IAEA report. The same opposition group has since exposed several more facilities including an enrichment R&D facility at the Kalaye Electric Company in Tehran, a pilot plant for laser enrichment at Lashkar Ab'ad, and a fuel-fabrication facility at Ardekan.

45. Throughout 2003, Tehran and the international community were engaged in a continuous cat-and-mouse game. A series of IAEA inspections revealed an extensive nuclear programme, including clandestine efforts in uranium enrichment (centrifuge production, atomic vapour laser isotope separation and molecular laser isotope separation) and separation of plutonium. They also exposed foreign suppliers of nuclear equipment, such as Dr. Khan's network and other black market intermediaries. With this evidence in hand, European leaders warned Tehran that its NPT violations would be reported to the UN SC unless an addendum to the NPT was signed. After much deliberation, the Additional Protocol, permitting more intrusive inspections, requiring a reluctant Tehran to declare more of its research and development activities, and suspending Iran's uranium enrichment activities, was signed in December 2003. Though Iran has repeatedly stated it has no ambitions to build a nuclear weapon, the piecemeal manner in which it has disclosed its programme has generated international suspicion.

46. As an NPT signatory since 1968, Iran is permitted to have a nuclear programme for civilian use. But the fact that much of the centrifuge production is taking place on military-industrial facilities and the sophistication of its uranium enrichment activities are cause for alarm. There are two main reasons for concern. The first is that Iran insists on developing the entire nuclear fuel cycle in spite of the fact that it does not need to produce its own fuel as Russia has offered to supply it, provided that Iran returns spent fuel rods for reprocessing. This would save Iran enormous costs as well as draw approval from the international community. The second concern is the extent of uranium enrichment Iran has engaged in. Uranium need only be enriched at or below 7% for use in a civilian plant, yet there have been traces at much higher levels found at a number of facilities - including levels at weapons grade. Iranian officials claim the particles are residual contamination from imported centrifuge parts, a claim the IAEA has not been able to substantiate and for which Iran has failed to provide a plausible explanation.

47. The IAEA has taken a nuanced approach in negotiating with Iran. The United States has called for the IAEA to formally state that Iran has not complied with its NPT safeguards obligations. Were the IAEA to find Iran in violation of the treaty, it would be required to refer the issue to the UN SC. A recent IAEA Board resolution, for instance, called for Libya's NPT violations to be reported to the Council for "information purposes". Should it be discovered that Iran continues to evade full disclosure of its nuclear programme, Libya's referral could set a precedent for international response to Iran's NPT breaches, and the Council could consider condemnation and eventual sanctions. Some Board members warn against pressing Iran too hard for fear that Tehran could simply stop cooperating with the UN, or worse withdraw from the NPT, as it happened with North Korea. Official statements continue to demonstrate the difficulties of handling this diplomatic challenge. On 2 March, Dr. ElBaradei praised Iran for its co-operation with inspectors, but admitted that the revelation of previously undisclosed elements of the Iranian nuclear programme retarded the development of confidence building between the two sides. Talks hit their lowest point after the IAEA Board of Governors adopted on 13 March a strong resolution condemning Iran's failure to disclose and explain its possession of P-2 centrifuges (a Pakistani model), certain R&D initiatives and the traces of enriched uranium. In response to what it called the "insulting tone" of the resolution, Tehran delayed scheduled IAEA inspections for over two weeks. Iran then announced it would readmit inspectors on 27 March. For some, this delay in inspections gives weight to concerns that Iran is trying to buy time by dragging its feet to build a bomb quickly. In the meantime, Iran continued to deny it had a nuclear-weapon programme and stated that it had no intention of building one.

48. On 18 June the IAEA Board adopted another resolution calling in very explicit terms on Iran to accelerate its cooperation with the Agency in order to solve the outstanding questions related to the country's nuclear programme. Dr. ElBaradei declared during a press conference on the same day that "two issues are essential to our work": the first one being that of "contamination and particularly the issue of 36% enrichment", the second one being that of the P-2 components. UN inspectors have worked over the summer to compile a report presented by Dr. ElBaradei to the IAEA Board on 13 September. According to the new report, it appears that the "HEU contamination may not have resulted from enrichment" activities by Iran. In fact, according to Jane's Defence Weekly, a sample of 54% enriched uranium found at one Iranian facility has apparently come from Pakistani equipment; while a separate sample of 36% enriched uranium reportedly derived from Russian equipment that Moscow had supplied to China, which in turn had passed it on to Pakistan, and Dr. Khan later sold to Iran. The Agency has also "gained better understanding" of Iran's use of the P-2 centrifuges. However, "this will require additional information on the part of Iran, and further cooperation by other states, as well as by companies and individuals that were involved in the illicit procurement network".

49. Following Dr. ElBaradei's report, on 18 September the IAEA Board of Governors adopted a resolution strongly urging Iran to provide further information and explanations on its nuclear programme. The Board also considered "necessary" that Iran "immediately suspend all enrichment-related activities" in order to promote confidence. In its next meeting, scheduled on 25 November, the Board, following a new report by Dr. ElBaradei, would "decide whether or not further steps are appropriate". On 19 September, Iran rejected the call to freeze its uranium enrichment programmes and threatened to stop implementing the Additional Protocol if its case was sent to the UN Security Council.

50. In mid-November 2004, an agreement between Iran and France, Germany and Britain was finally signed. As a result of the deal, Iran agreed to suspend all its uranium enrichment activities in return for negotiations on possible rewards, including economic benefits, political and security cooperation with Europe and assistance in its nuclear technology. Iran also agreed to suspend its enrichment activities until the signing of a long-term agreement but clearly expressed its unwillingness to definitely abandon enrichment programs. Negotiations on a permanent settlement are scheduled to start by early 2005. The 2004 deal did not include Iran's plutonium reprocessing programme. However, Iran is deemed to be a decade away from the completion of the Arak 40-megawatt heavy water reactor that will produce plutonium that can also be used as fuel for nuclear weapons.

51. On November 29, the IAEA Board of Governors adopted resolution 2004/90 on the Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, which contains a substantial acknowledgement of Iran's recent cooperative efforts culminated in the agreement with the three European countries. It also underlines the voluntary and non-legally-binding nature of Iran's suspension of enrichment activities. In the document there is no mention of a possible IAEA's referral to the UN Security Council for Iran's past violation of the NPT Safeguards Agreement.

C. PAKISTAN

52. Pakistan's nuclear weapons programme was established by Zulfiqar Ali Bhutto, Minister for Fuel, Power and Natural Resources who later became President and Prime Minister, in 1972, shortly after the loss of East Pakistan in the 1971 war with India. India's 1974 testing of a nuclear 'device' gave Pakistan's nuclear programme new momentum. Through the late 1970s, Pakistan's programme acquired sensitive uranium enrichment technology and expertise.

53. In 1975, the arrival of Dr. Abdul Qadeer Khan considerably advanced these efforts. Dr. Khan is a European-trained metallurgist who brought with him knowledge of gas centrifuge technologies that he had acquired through his position at a classified uranium enrichment plant in the Netherlands. He also reportedly brought with him stolen uranium enrichment technologies from Europe. Dr. Khan was put in charge of building, equipping, and operating Pakistan's Kahuta Research Laboratory (KRL), established in 1976. Under Khan's direction, Pakistan employed an extensive clandestine network in order to obtain the necessary materials and technology for its developing uranium enrichment capabilities. China helped Pakistan by providing nuclear-related materials, scientific expertise, and technical assistance. In 1985, Pakistan crossed the threshold of weapons-grade uranium production: it is thought to have produced enough fissile material for a nuclear weapon by 1986 and acquired the ability to carry out a nuclear explosion by 1987. On 28 May 1998, Pakistan announced that it had successfully conducted five nuclear tests. Pakistan has not signed the NPT or the Comprehensive Nuclear-Test-Ban Treaty, nor does it abide by a no-first-use doctrine, as evidenced by President Pervez Musharraf's statements in May 2002.

54. Pakistan is believed to have produced 580-800 kilograms of highly enriched uranium, enough to produce 30 to 50 nuclear weapons. Such devices are thought to be stored in component form, with the fissile core separated from the non-nuclear explosives, but they are ready to be assembled in a matter of hours or days. Pakistan also has missiles with ranges from 280 to 2,000 kilometres that could carry nuclear warheads.

55. Following interrogations ordered by Pakistani authorities, Dr. Khan admitted that during the last 15 years he had provided Iran, North Korea, and Libya with the designs and technology to produce fuel for nuclear weapons. He also submitted a plea for clemency, and on 5 February 2004, received a much-publicised pardon by President Musharraf. Dr. Khan said he shared the technology to divert attention from Pakistan's nuclear programme and to aid the Muslim cause. The revelations and the investigations came after Iranian and Libyan officials had told the IAEA in November 2003 and January 2004 respectively about Pakistan's aid in developing their nuclear programmes. In October 2003, according to a Pakistani insider, Pakistan and Saudi Arabia concluded a secret agreement on nuclear co-operation that would provide the Saudis with nuclear-weapon technology in exchange for cheap oil. Both governments denied the allegations.

56. It is difficult to establish the level of involvement in nuclear proliferation of successive Pakistani governments, given the secrecy surrounding the country's nuclear decision-making procedures. On the one hand, Pakistan's nuclear programme has been closely supervised by the military since 1977. Some analysts have suggested that civilian governments prior to 1999 may not have been aware of the activities of the nuclear and military bureaucracies. Moreover, the suggestion that Dr. Khan and the KRL worked out a deal with North Korea, Iran, and Libya independent of government seems implausible because of supervision of nuclear scientists by the national command authority, detailed evaluations by the military preceding the acquisition of missiles, and the improbability of making such a momentous decision by a small group of civilians. On the other hand, it has been argued that North Korea could have recruited Pakistani nuclear scientists without knowledge or approval by the government as they did in the early 1990s with Russian missile scientists. On balance, it seems plausible that the Pakistani military and KRL would have been complicit in selling uranium enrichment technology to North Korea.

57. Dr. Khan firstly told investigators that any sharing of nuclear technology with Iran had the approval of Gen. Mirza Aslam Beg, the commander of Pakistan's army from 1988 to 1991. Gen. Beg however denied the allegations. Later, in his public confession, Dr. Khan took full responsibility and insisted there had been no official involvement. Opposition parties, political and military experts, and relatives of detained officials questioned Pakistan's assertion that Dr. Khan had shared nuclear technology without the knowledge of his superiors. Benazir Bhutto, who served twice as Prime Minster before being ousted in 1996, said, "It is difficult to accept that the scientists could have violated government policy on their own. Those who violated the policy are now hiding behind the scientists". Similarly, Chaudhry Nisar, leader of an opposition group, said, "The government is trying to wash their hands off by sacrificing people who made the bomb for the country". The two main secular opposition parties, Pakistan's People Party and the Pakistan Muslim League Nawaz, called for a parliamentary inquiry.

58. Official comments revealed that Pakistan had internal information about Dr. Khan's activities far in advance of his admission. But as Gen. Musharraf admitted, "It was extremely sensitive. One couldn't outright start investigating [Dr. Khan] as if he's any common criminal". Moreover, Dr. Khan was allowed to keep his wealth as a result of a pardon granted by Gen. Musharraf. Feroz Khan, former director of arms control in the Pakistani military, justified the government's decision by writing that Dr. Khan, besides being considered a national hero, "knows much about Pakistan's security structure and nuclear plans and still has much to tell", therefore "his pardon was conditional on continued co-operation in unravelling the clandestine network he helped build".

59. Gen. Musharraf recently stated that Islamabad would not allow UN weapons inspectors to monitor the country's nuclear weapons or civil nuclear facilities following Dr. Khan's confession. He also added that Pakistan would not halt its nuclear weapons programme. On 9 March 2004, Pakistan test-fired its Saheen II missile with a reported range of 2,000 kilometres and capable of carrying conventional as well as nuclear warheads.

D. LIBYA

60. Libya's recent decision to halt and dismantle its weapons of mass destruction programmes has put the country at the centre of the current non-proliferation debate. Libya's decision has also reinvigorated the notion of global non-proliferation - whereas the past few years have been fraught with the feeling that stopping the spread of WMD was hopeless, Libya's coming clean could significantly change the future of non-proliferation policy. The Libya case also demonstrates that non-proliferation policy, which has been a mix of treaties, international pressure and sanctions has ultimately been effective.

61. Libyan aspirations for a nuclear programme came to light in the 1970s when Libyan officials unsuccessfully attempted to purchase nuclear weapons from China. After this first attempt, Libya ratified in 1975 its accession to the NPT while simultaneously developing a relationship with Pakistani nuclear experts. Throughout the 1970s and 1980s, Libyan students were sent abroad to study nuclear science, foreign nuclear experts were imported to advise on uranium prospecting and enrichment, and numerous nations were approached with requests for equipment and supplies.

62. The Soviet Union was the most helpful, providing Tripoli with a small, 10 millions of watts of thermal output (MWt) light-water nuclear research reactor in Tajura and sending Soviet experts to staff a research centre. The reactor began operating in 1979 and the following year Tripoli concluded a formal safeguard agreement with IAEA. In the 1990s, a Russian company signed an $8 million contract to overhaul the Tajura research centre which, apart from the 10 MWt reactor, consisted of a "critical facility" - which likely included a critical assembly, neutron generator complex, a Tokamak fusion reactor, a radiochemical facility (to support isotope production facilities), a nuclear metallurgy laboratory, and a device for measuring material stress.

63. It was known that Libya provided Pakistan with financial assistance and yellowcake (a powdery mixture of uranium oxides resulting from uranium extraction used in the production of nuclear fuel) in exchange for Pakistani weaponry. However, recently released information showed that Pakistani scientists provided large amounts of know-how, centrifuges and other nuclear components within the past decade. Libya is believed to have financed Pakistani nuclear programmes in the 1970s in exchange for full access to nuclear technology, but it is unclear how much the Pakistanis disclosed. Dr. Khan was a central figure in recent Libyan acquisitions, and some in the Pakistani military were directly involved, to the extent that some shipments were made on Pakistani military aircraft.

64. Because requests for direct nuclear assistance had been refused by China and Russia, in the 1990s Libya relied heavily on the growing and complex nuclear black market to acquire equipment and plans - some of which were blueprints for a nuclear warhead. Most likely the major role the black market played was in the purchase of gas centrifuge components. Parts and equipment were ordered from several companies in Malaysia, the most prominent of which was Scomi Precision Engineering. Companies in Germany and Japan have also been implicated. But questions remain on other eventual suppliers, and the role of Pakistan and Dr. Khan. Some also suspect that Libya collaborated with Iraq on its centrifuge programmes.

65. The Libyans had been having secret meetings with American and British officials since March 2003. In October, negotiations intensified after a shipment of centrifuge parts destined to Libya was intercepted in the Mediterranean. Talks culminated in December 2003 when Libyan officials announced their intention to dismantle all their WMD programmes under the supervision and verification of international observers. By mid-January, Libya further demonstrated its resolve by accepting implementation of the NPT Additional Protocol (which it signed in March 2004), the Chemical Weapons Convention (CWC) and the CTBT.

66. IAEA Inspectors have been examining Libyan facilities since late December 2003. IAEA Director General Dr. ElBaradei has made several visits since and has repeatedly praised Libya for its co-operation and willingness to grant access to weapons sites. It is too early to assess the sophistication of the Libyan programme: thousands of documents still need to be reviewed and IAEA experts have not yet completed their inspections of Libyan nuclear facilities. So far, officials have expressed surprise at how extensive the Libyan nuclear programme was. But there is also evidence that international sanctions hindered acquisition efforts as the programmes were still lacking in parts and technical expertise. One example given is how key parts of the weapons design blueprints were too large to be delivered by Libya's ageing Scud-C missiles.

67. Based on the information available, Libya had not reached the point of self-sufficiency in its nuclear programme though it certainly was in the latter stages of its development. Inspectors are still working to gauge Libya's enrichment capability. In the 1980s, it is estimated that Libya acquired more than 450 tonnes of yellowcake uranium from Niger, which could have been used as the base material for uranium enrichment. Tripoli was also purchasing through black market intermediaries the components to build a large uranium enrichment plant. In the 1980s, Libya obtained from the Soviet Union highly enriched uranium fuel for its research reactor in Tajura, and unirradiated fuel elements containing some 17 kilograms of HEU were returned to Russia in March 2004 with US and IAEA assistance.

68. In presenting the IAEA Annual Report to the Board of Governors on 14 June 2004, Dr. ElBaradei asserted that Libya has "proactively cooperated with the Agency by providing information and prompt access to all locations requested". He highlighted, however, that for the Agency's assessment to be complete, Tripoli should provide information on some remaining issues, such as "confirmation of the origin of the uranium hexafluoride (UF6) Libya received in 2000 and 2001; verification of Libya's planned capabilities for UF6 production; and understanding the source of high enriched and low enriched uranium contamination on gas centrifuge equipment".

69. In his report to the September Board of Governors, Dr ElBaradei noted that the assessment to date was that Libya´s declarations on its uranium conversion programme, enrichment programme and other past nuclear related activities appear to be consistent with the information available to and verified by the Agency. However, some questions related to the acquisition of material and technology - including the origin of uranium contamination on some equipment - still needed further investigation in order to verify the completeness and correctness of Libya's declarations of its nuclear programme.

E. THE NUCLEAR WEAPONS BLACK MARKET

70. Since Libya's renunciation of WMD and request for assistance in dismantling its nuclear weapons programme, bits and pieces of information have uncovered what is likely a decades-long existence of a sophisticated worldwide nuclear black market. For the past few decades, non-proliferation policy has been focused on the dismantlement of existing nuclear weapons, especially those in Russia and the Newly Independent States (NIS), as well as on small amounts of radioactive/nuclear material stolen by employees in nuclear facilities and often sold to and by organised crime gangs. State-to-state proliferation is being increasingly monitored - particularly Pakistan, Iran and North Korea - and to avoid international reprimand and sanctions, these nations have looked to an extensive network of individuals and private companies to obtain nuclear equipment and know-how.

71. Such networks of intermediaries and "brokers" thrive on the poor oversight, weak export controls, and faulty intelligence that have set the stage for a renaissance in global nuclear proliferation. This recently uncovered black market is mostly peddling pieces, often dual-use, to build enrichment facilities. Apparently, the most lucrative part of the industry is the sale of enrichment components as most nuclear weapons aspirants aim to produce their own HEU and not depend on an illicit source that could disappear at a moment's notice. These components are manufactured by companies that are already manufacturing similar machinery for the industry. The most publicised example has been that of a Malaysian company that was contracted to make centrifuge parts. Company officials thought they were producing parts for the oil and gas industry. Transfers of the materials were made by front companies already involved in other lucrative businesses, often unrelated to the energy industry.

72. The first glimpses of this black market appeared in late 2003 when names of individual suppliers were found in Ira, , nian documents providing nuclear weapons plans. Several more central figures were exposed in early 2004 after Libya's renunciation of nuclear weapons and its handover of documents to US and British investigators. To date, the most prominent individual involved has been the Pakistani scientist Dr. Khan. A glance at his past provides an example of the type of individuals likely to be active in the nuclear trafficking network. Dr. Khan received advanced degrees in nuclear-related fields from several European universities, and was then hired as a consultant to a Dutch company that produced weapons-grade uranium. The Netherlands Security Service did not thoroughly investigate his background, and he was given a "familiarisation" brief, which provided him with project design plans and the contact information of supplying firms. Security precautions within the company were lax: in 1979 Dutch officials became aware of Dr. Khan's theft of sensitive information four years after Dr. Khan had fled the country. It should be noted that Dr. Khan's main motivation for supplying nuclear materials appears to be financial gain; ideology and "defying the West" were not primary factors. In the case of Libya, investigators reported that the Libyan government paid Dr. Khan $50 million for the blueprints, materials and components to build a uranium enrichment facility.

73. Corporations and front companies also played a large role in Libyan and Iranian acquisition efforts. Several companies - spanning the United States, Europe, Southeast Asia, and a number of Gulf countries - either produced or provided equipment for centrifuges and weapons delivery vehicles. The companies frequently worked in the electronics or computer industries and provided dual-use equipment such as high-speed switches, oscilloscopes, magnetometers, telemetry systems and airplane guidance systems (to be used for missiles). Investigations have revealed that the majority of these companies were likely unaware of their role in the nuclear proliferation network, and front companies suspected of aiding in illicit operations have been successful at covering their tracks by destroying incriminating documents, claiming unawareness or vanishing entirely.

74. Dr. ElBaradei has likened this underground network to a global Wal-Mart and has outlined its extensive nature. "When you see things being designed in one country, manufactured in two or three others, shipped to a fourth, redirected to a fifth, that means there's lots of offices all over the world". He nonetheless declared that IAEA has now a good understanding of Dr. Khan's network and of how it operated, and that the Agency has discovered many of the network's players and suppliers. But questions remain. Moreover, there are fears that other, similar smuggling networks might emerge to fill the void left by Dr. Khan's. Given the fact that the technology has become relatively easy to acquire for ostensibly legitimate purposes because of its dual-use, criminal or terrorist groups might be able to duplicate a nuclear black market.

75. Yet from all the evidence of a thriving nuclear trafficking network, states remain the greatest proliferators. There is frequently a link between a nation's military and a private individual involved in underground trafficking. It was clear that Pakistani government officials at best stood aside while Dr. Khan ordered double the amount of nuclear supplies for the Pakistani military and then sold off the excess to other nations. Furthermore, governments continue to be the entities capable of purchasing expensive and extensive systems and equipment. Government compliance is also evident when cargo ships carrying this material must declare their contents and are granted permission to unload at the recipient port.

IV. STRENGTHENING NUCLEAR NON-PROLIFERATION

76. The events in North Korea, Iran, Pakistan and Libya have made it clear that the non-proliferation regime is under stress. The current security environment is not only different from that of the late 1960s, when the NPT was negotiated and signed, but also from the immediate post-Cold War situation. Firstly, information and expertise on how to build a nuclear weapon is far more accessible in our globally networked world. Secondly, we are now faced not simply with the challenge of state proliferation, but with some form of "privatisation" of such threat, as the existence of a nuclear black market clearly demonstrates. We might not wait long until that same black market, which has so far provided states with the material and technologies to build a nuclear device, also supplies transnational terrorist groups.

77. Three sets of proposals to strengthen nuclear non-proliferation policies have been put forward in recent months, one by US President George W. Bush, another by UK Foreign Secretary Jack Straw, and a third by IAEA Director General Dr. Mohamed ElBaradei. All plans seem to converge on a few significant elements and have provoked a healthy debate among experts and policymakers. Your Rapporteur believes that they constitute a solid basis for negotiating and putting in place a strengthened nuclear non-proliferation regime.

A. PRESIDENT BUSH PROPOSALS

78. Since September 11, non-proliferation has been a top-tier issue for US policymakers, and the Bush Administration has developed a more muscular policy - as can be gleaned from the 2002 National Strategy to Combat Weapons of Mass Destruction (NSCW). According to this document, current US policy is based on the three pillars of non-proliferation, counter-proliferation and consequence management. In a speech at the National Defense University on 11 February 2004, President Bush outlined a strategy to strengthen international rules governing the spread of nuclear technology. Such strategy would include seven specific steps:

- 1. Strengthening the 2003 Proliferation Security Initiative (PSI), a multilateral scheme to interdict illicit shipments of WMD material. President Bush called for "greater co-operation" not only in the areas of intelligence, military services but also in law enforcement, through involvement with agencies such as Interpol to intercept illicit weapons shipments;

- 2. Criminalizing proliferation activities: the UN SC should pass a new resolution "requiring all states to criminalize proliferation, enact strict export controls, and secure all sensitive materials within their borders";

- 3. Expanding G-8 assistance to secure weapons and materials: the G-8 Global Partnership to support co-operative non-proliferation projects in Russia and NIS should be expanded and include countries such as Iraq and Libya;

- 4. Refusing to sell enrichment and reprocessing equipment and technologies to any state that does not already possess full-scale, functioning enrichment and reprocessing plants. The 40 nations of the Nuclear Suppliers Group should nonetheless ensure that states have access to fuel for civilian reactors at reasonable cost;

- 5. Promoting the Additional Protocol: states should adhere to the IAEA Additional Protocol and by 2005 only states that have signed it should be allowed to import equipment for their civilian nuclear programmes;

- 6. Creating a special committee of the IAEA Board of Governors "which will focus intensively on safeguards and verification";

- 7. Excluding countries under investigation for non-proliferation violations from the IAEA Board: President Bush stressed that allowing potential proliferators to serve on the Board "creates an unacceptable barrier to effective action";

79. All allies welcomed President Bush's set of proposals as a significant step forward in international non-proliferation efforts. Some experts, however, voiced scepticism that all the points would be welcomed by IAEA members, particularly because non-nuclear-weapon states have little to gain from a partial revoke of the NPT "nuclear bargain". Also, President Bush did not mention any steps on the part of the United States or other nuclear-weapons states to fulfil their obligations under Article VI of the NPT.

B. SECRETARY STRAW PROPOSALS

80. On 25 February 2004, British Foreign Secretary Jack Straw set out in a written statement to the House of Commons his country's proposals for strengthening the nuclear non-proliferation regime. These include:

- 1. States, which fail to comply with their safeguards obligations, should forfeit the right to develop the nuclear fuel cycle, particularly enrichment and reprocessing capabilities - civil nuclear power stations could still operate with fuel supplied by countries honouring their safeguards obligations. The fuel would be subject to IAEA monitoring while in the receiving country, and would be returned to the country of supply when spent.

- 2. Ratification and implementation of the Additional Protocol should be regarded as a condition for the supply of the most sensitive nuclear materials.

- 3. Enhance the PSI by, among other measures, securing an amendment to the Convention on the Suppression of Unlawful Acts at Sea, which will make it an internationally recognised offence to transport WMD on commercial vessels.

C. DR. ELBARADEI PROPOSALS

81. The IAEA Director General first outlined his proposal to strengthen the nuclear non-proliferation regime in a speech in front of the UN General Assembly on 2 November 2003. He stressed the need for the international community to "work hard to achieve the universality of the regime" and to "be more assertive in resolving the root causes of global insecurity", such as longstanding conflicts in the Middle East, South Asia and the Korean Peninsula. Dr. ElBaradei indicated that "we must work together to develop and establish a system of collective security that does not depend on nuclear weapons, and accelerate the process of nuclear disarmament". In order to control access to weapon-usable material, he outlined a new approach, which he further developed in a number of articles and interviews. This approach would include:

- 1. Tightening controls over the export of nuclear material: in agreeing with President Bush, Dr. ElBaradei, insisted that it was necessary to universalise the export control system, criminalize the acts of people who assist in proliferation, remove loopholes, and enact binding, treaty-based controls, while "preserving the rights of all states to peaceful nuclear technology".

- 2. Empowering IAEA inspectors: the Agency should have the right to conduct broader inspections - such as those performed recently in Libya and Iran - in every member country.

- 3. Suppressing Article X point 1 of the NPT: no country should be allowed to withdraw from the treaty. "Any nation invoking this escape," pointed out Dr. ElBaradei, "is almost certainly a threat to international peace and security". Therefore, withdrawal should prompt an immediate review by the UN SC.

- 4. Bringing part of the nuclear fuel cycle under multinational control: sensitive parts of this cycle, such as the production of new fuel, the processing of weapons-usable material and the disposal of spent fuel and radioactive waste, "would be less vulnerable to proliferation if brought under international control". Appropriate checks and balances should be enacted to maintain market competitiveness and ensure a constant, affordable supply to legitimate recipients.

- 5. Negotiating a Fissile Material Cut-off Treaty: such an agreement, stalled in the Conference on Disarmament for eight years, but advocated by all NATO members, would put an end to the production of fissible material for weapons. Strengthening security measures for material that already exists - especially in Russia and the NIS - should continue to be a priority for the international community.

- 6. Encouraging the five nuclear-weapon states to reduce their arsenals. As Dr. ElBaradei stressed, "the very existence of nuclear weapons gives rise to the pursuit of them". Nuclear-weapon states have "unequivocally" committed themselves to move toward "verifiable and irreversible" nuclear disarmament. However, following some progress in the late 1980s and early 1990s, disarmament "had nearly ground to a halt by the end of the century, with nearly 30,000 warheads still in existence". Also the CTBT, a major part in disarmament commitments, must be brought into force.

82. The last point appears particularly controversial and difficult to implement. Despite remarkable nuclear weapons reductions in the 1990s, Russia and the United States maintain by far the two largest nuclear arsenals in the world. The 2002 Moscow Treaty requires each country to "reduce and limit" their strategic nuclear warheads to between 1,700 and 2,200 by 31 December 2012 (approximately two-thirds below current levels). Although this treaty is "commendable", as Dr. ElBaradei indicated, unfortunately it is not "verifiable and irreversible", and it does not address non-operational warheads. Moreover, both Washington and Moscow have recently demonstrated a renewed interest in their nuclear weapons.

83. The United States, which long ago ceased producing fissile material for nuclear weapons, recently authorised studies by the National Nuclear Security Administration (NNSA) and the National Academy of Science on the possible development of earth-penetrating nuclear weapons. In May 2003, Congress approved a series of provisions sought by the administration that could facilitate the development of new nuclear weapons. Legislators lifted a ten-year-old ban on research into smaller nuclear weapons, and backed initiatives cutting the lead-time for conducting nuclear tests from three years to 18 months. The US government insisted that it had no plans for such tests and that no new nuclear weapons were under development. The request to decrease the lead-time for conducting nuclear tests, according to the US State Department, is related to the possibility of having to test an existing design for stockpile reliability.

84. However, the Bush administration requested $27.6 million in the 2005 fiscal year to research a robust nuclear earth penetrator (RNEP); $9 million for other advanced concepts, including plans for research into a weapon of five kilotons or less of explosive force; and $30 million to shorten the time needed to prepare a site in Nevada for the production of more modern "plutonium pits", essential for the eventual testing of new nuclear weapons. The feasibility study for the RNEP was projected to cost $45 million between FY 2003 and FY 2005, but in March 2004 the NNSA submitted a revised budget plan extending the projection to FY 2009 and requesting a five-year total of $485 million. Such request, according to a Congressional Research Service report, "seems to cast serious doubt on assertions that RNEP is only a study". The lack of a revised Nuclear Stockpile Plan along with continued debate over the RNEP development has brought about Congressional restrictions: $4 million of the $6 allotted for advanced concepts has been fenced by Congress and will be released for use once the Administration provides plans for the nuclear stockpile in accordance with the Moscow Treaty. Though research on low-yield nuclear weapons has been permitted, R&D may not proceed to the engineering development phase without prior Congressional approval.

85. On 20 November 2004, the US Congress approved the FY2005 budget eliminating all funding to continue research into the RNEP and to prepare the site for the "plutonium pits". The $9 million requested by the Bush administration to study ideas for new low-yield weapons have been re-directed by Congress into studies of "current technologies to make existing warheads more robust and easier to maintain without more testing".

86. Despite signing the Moscow Treaty in 2002, Russia is worried about Washington's plans to develop a RNEP. Also, President Vladimir Putin has made nuclear deterrence a central element of its national security policy. While Russia committed to building a modern conventional force, in practice most R&D and procurement funds are being channelled into nuclear projects. Both the Strategic Nuclear Forces (RVSN) and the Navy have recently enjoyed the levels of funding last seen during the Cold War. The RVSN is replacing its third-generation Intercontinental Ballistic Missiles (ICBMs) with highly accurate silo-based Topol-M SS-27 missiles. It already fields four Topol-M regiments, with a total of 34 missiles, and is due to receive six more missiles in 2004. Russia has also decided to retain on alert and to upgrade two existing multiple warhead ICBM systems: the silo-based SS-18 Satan and mobile SS-24 Scalpel. The Navy is developing its next-generation Bulava submarine-launched ballistic missile (SLBM) based on Topol-M technology. It has also revived a project to build three new Borey class nuclear-powered SLBM submarines (SSBNs), each equipped with twelve Bulava missiles.

87. Of the other three nuclear-weapon states, China is the only one that has announced its desire to develop new generations of both tactical and strategic nuclear weapons. According to the US Department of Defense, Beijing has the infrastructure to triple its stockpile (currently around 400 tactical and strategic warheads) without significant new investment. Once an exporter of nuclear technology, China has, since the early 1990s, improved its export controls and pledged to halt exports of nuclear technology to non-safeguarded facilities.

88. Both France and the United Kingdom have reduced their small nuclear arsenals and ceased production of plutonium and highly enriched uranium in the 1990s. Paris dismantled in 1996 its Plateau d'Albion land-based ballistic missile system. The United Kingdom, following the Strategic Defence Review of 1998, removed from service all air-delivered nuclear weapons, leaving the SSBNs as the United Kingdom's only nuclear deterrent. The Review mandated that only one submarine be on patrol at a time, with its missiles detargeted and with a reduced number of warheads.

V. CONCLUSION

89. The recent, grave developments in nuclear proliferation have brought this problem at the forefront of international security concerns. In particular, the discovery of a global nuclear black market has significantly raised public awareness about the risks of proliferation to new states and possibly terrorist groups, and stimulated a debate about strengthening global non-proliferation efforts. Your Rapporteur believes that revisiting and hardening the nuclear non-proliferation regime must be the centrepiece of all international strategies against the proliferation of nuclear materials and technologies. The proposals by President Bush, Secretary Straw, and Dr. ElBaradei have offered new ideas and stimulated discussions among policymakers.

90. On 28 April 2004 the UN Security Council adopted resolution 1540 on non-proliferation of WMD. During the Sub-Committee visit to the United Nations in New York last May, UN officials and the ambassadors of 3 permanent members of the Security Council, France, the United Kingdom and the United States, unanimously highlighted the adoption of such resolution as a major breakthrough in the UN non-proliferation strategy. The resolution will compel member countries to make it a crime "to manufacture, acquire, possess, develop, transport, transfer or use nuclear, chemical or biological weapons and their means of delivery, in particular for terrorist purposes". Moreover, countries should "establish domestic controls to prevent the proliferation of nuclear, chemical, or biological weapons and their means of delivery". The Security Council has also established a special committee to implement the resolution, which will report on the steps countries have taken within six months from the adoption of the resolution. This resolution puts into practice President Bush's proposal to criminalize proliferation activities (point 2 of his proposition).

91. Your Rapporteur intends to endorse most of the elements of the authoritative proposals outlined above, together with the suggestions that some of the Science and Technology Committee members have kindly submitted, and put forward our own set of policy recommendations to strengthen nuclear non-proliferation:

- 1. Tightening controls over the export of nuclear material: as highlighted by both President Bush and Dr. ElBaradei, it is necessary to universalise the export control system, remove loopholes, and enact binding, treaty-based controls, while "preserving the rights of all states to peaceful nuclear technology". States participating in the Nuclear Suppliers Group should increase their efforts to engage discussions with countries outside the group, and in particular with China, India, Iran, Israel and Pakistan.

- 2. Strengthening the Proliferation Security Initiative (PSI): President Bush is right to call for "greater co-operation" not only in the areas of intelligence, military services but also in law enforcement, through involvement with agencies such as Interpol to intercept illicit weapons shipments and thwart any nuclear weapons black market. Your Rapporteur would like to endorse also Secretary Straw's proposal to amend the Convention on the Suppression of Unlawful Acts at Sea, and make it an internationally recognised offence to transport WMD on commercial vessels.

- 3. Negotiating a Fissile Material Cut-off Treaty: a global agreement to cut off the production of highly enriched uranium and plutonium for weapons purposes, a measure advocated by all NATO members, is an urgent step that the international community should take. Also the Convention on the Physical Protection of Nuclear Material should be expanded. Innovative technologies could help strengthen the protection, control and accounting of nuclear weapons and nuclear material at their sources. This Convention should be amended and expanded to cover nuclear material used in civilian programmes, storage and transport, and civil nuclear facilities.

- 4. Expanding assistance to secure weapons, materials and technical expertise: the G-8 Global Partnership and all other initiatives to support co-operative non-proliferation projects in Russia and NIS should be expanded and better coordinated. The Russian government should adopt a more transparent and cooperative attitude in order to facilitate foreign aid programmes. In addition, the international community should develop programmes to deal with countries where WMD programmes have been eliminated, such as Iraq and Libya, but also, as suggested in last year's general report, convince India and Pakistan to accept assistance in protecting their nuclear material. This Committee will address these issues in 2005. In addition, we believe that NATO has naturally a role to play in the context of the NATO Russia Council, but also within the activities of the Nuclear Policy Directorate and the WMD Centre.

- 5. Promoting the Additional Protocol: all states should adhere to the IAEA Additional Protocol and by the end of 2005 only states that have signed it should be allowed to import equipment for their civilian nuclear programmes. In addition, as Secretary Straw suggested, states, which fail to comply with their safeguards obligations, should forfeit the right to develop the nuclear fuel cycle, particularly enrichment and reprocessing capabilities - civil nuclear power stations could still operate with fuel supplied by countries honouring their safeguards obligations. The fuel would be subject to IAEA monitoring while in the receiving country, and would be returned to the country of supply when spent. The 40 nations of the Nuclear Suppliers Group should nonetheless ensure that states have access to fuel for civilian reactors at reasonable cost.

- 6. Reform the IAEA Board of Governors: Creating a special Board committee, which will focus intensively on safeguards and verification, is certainly a very useful suggestion. It would also be correct that countries under investigation for non-technical violations of their nuclear safeguards obligations should not participate in decisions of the IAEA Board of Governors regarding their own cases.

- 7. Empowering IAEA inspectors: Your Rapporteur agrees with President Bush that the Agency should have the right to conduct broader inspections - such as those performed recently in Libya and Iran - in every member country.

92. The international community needs to focus its attention on the two most serious cases of nuclear proliferation in recent years, North Korea and Iran. All NATO and partner countries should engage, in every appropriate forum, to avoid that either country acquire nuclear weapons. Your Rapporteur therefore suggests:

- 8. Continue to engage North Korea in the Six Party Talks: The international community should make all efforts to convince Pyongyang to resume the Six Party Talks as soon as possible. The recent US proposal illustrated by Assistant Secretary Kelly to Congress constitutes a new important element and that the United States should take the lead during the next round of talks and convince all parties to agree on such a proposal.

- 9. Clarify all outstanding issues related to Iran's nuclear programme: Iran should comply with the IAEA Board of Governors' resolution of 29 November 2004. Ideally, Tehran should be prevented from developing a full nuclear fuel cycle, particularly enrichment and reprocessing capabilities. Iranian civil nuclear power stations could operate with fuel supplied by other countries having signed the IAEA Additional Protocol. In discussions with Tehran, however, negotiations should be favoured over excessively aggressive tones, which could harden Iranian positions. An Iranian withdrawal from the NPT should be avoided.

93. A number of measures might serve the purpose of strengthening the NPT. Some of them are certainly controversial or may appear, at this stage, too improbable. Nonetheless, your Rapporteur believes that the international community must also demonstrate a little more boldness and creativity to advance the cause of nuclear non-proliferation, resolve impasses and close loopholes. For these reasons, your Rapporteur would like to suggest:

- 10. Suppress Article X point 1 of the NPT: Your Rapporteur agrees with Dr. ElBaradei that no country should be allowed to withdraw from the treaty. If such an amendment to the NPT proves too difficult, any withdrawal should prompt an immediate review by the UN Security Council.

- 11. Consider a separate agreement with India, Israel and Pakistan: India, Israel and Pakistan cannot realistically be expected to give up their nuclear weapons and accept to join the NPT as non-nuclear weapon states. But changing the NPT text will destroy the credibility of the treaty itself: it would mean officially rewarding nuclear proliferators. One answer, as two international experts (an Israeli and an American) have recently proposed, would be a separate, freestanding agreement or protocol that might allow the three countries to retain their programmes but hamper further development. Such an agreement (or agreements), signed separately by the five nuclear weapons states with India, Israel and Pakistan, should also require full cooperation with the IAEA (including signature of the Additional Protocol), signature and ratification of the CTBT, and a phased elimination of fissile material production. Your Rapporteur, in proposing such a solution, would like to make clear that a similar policy would not be acceptable toward NPT member states that have violated or abused the treaty, such as North Korea and Iran.

- 12. Encourage the five nuclear-weapon states to further reduce their arsenals and refrain from researching, developing or deploying new nuclear weapons. Nuclear-weapon states have "unequivocally" committed themselves to move toward "verifiable and irreversible" nuclear disarmament. France, Russia, the United Kingdom and the United States have all substantially reduced their arsenals and are fully committed to the NPT goals. However, researching or developing new nuclear weapons, even low yield devices, can be considered a violation of such commitments. Your Rapporteur would like to urge China to refrain from developing new nuclear weapons. At the same time, this Committee should make any effort to discourage the United States to continue its research into the development of a robust nuclear earth penetrator or any other new nuclear devices.

- 13. Consider the withdrawal of tactical nuclear weapons from Europe. At the Washington Summit, in April 1999, Alliance leaders committed NATO to consider "options for confidence and security building measures, verification, non-proliferation, arms control and disarmament, in the light of overall strategic developments and the reduced salience of nuclear weapons". In this regard, in December 2000, NATO ministers approved a set of recommendations, which the North Atlantic Council is following up on. In particular, NATO seeks to promote greater openness and transparency on nuclear weapons with Russia. Thousands of sub-strategic, or tactical, nuclear weapons are not monitored or controlled by any formal agreement, but only by a regime of unilateral, parallel reductions signed in 1991 by Presidents Bush and Gorbachev. According to recent estimates, more than 3,300 warheads are still deployed on the Russian soil. Despite massive reductions of US nuclear forces in Europe after the end of the Cold War, about 150 gravity bombs associated with dual-capable aircraft are still deployed by the United States in seven European NATO countries. Given the fact that NATO and Russia share an interest in eliminating or securing such relics of the Cold War, which do not add substantially to the security of Europe, Allied countries should begin discussing the issue of tactical nuclear weapons in the context of the NATO-Russia Council and eventually table a proposal on a phased and verifiable withdrawal of tactical nuclear weapons from Europe. Such discussions would have several advantages: (a) increase confidence building between NATO and Russia; (b) send a positive signal about the real commitment to disarmament of nuclear weapons states; and (c) begin to address the "proliferation problem", as US Secretary of State Colin Powell defined it, of thousands of nuclear devices, scattered on the Russian territory and sometimes poorly protected.

* The Rapporteur would like to thank Meghan Bradley and Filippo Gamba for their assistance in preparing this Report.

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