[Senate Prints 112-25]
[From the U.S. Government Publishing Office]




112th Congress 
 1st Session                COMMITTEE PRINT                     S. Prt.
                                                                 112-25
_______________________________________________________________________
 
                      ENHANCING NON-PROLIFERATION
                          PARTNERSHIPS IN THE
                            BLACK SEA REGION

                               __________

                        A MINORITY STAFF REPORT

                      PREPARED FOR THE USE OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                      One Hundred Twelfth Congress

                             First Session

                           September 27, 2011

                                     





                  U.S. GOVERNMENT PRINTING OFFICE
68-115                    WASHINGTON : 2011
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                COMMITTEE ON FOREIGN RELATIONS          

            JOHN F. KERRY, Massachusetts, Chairman          
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
             Frank G. Lowenstein, Staff Director          
       Kenneth A. Myers, Jr., Republican Staff Director          

                             (ii)          




                            C O N T E N T S

                              ----------                              
                                                                   Page
  Letter of Transmittal..........................................     v
  Introduction...................................................     1
  Background.....................................................     3
    Ukraine......................................................     3
    Moldova......................................................     5
  Recommendations................................................     7

                                 (iii)


                         LETTER OF TRANSMITTAL

                              ----------                              

                              United States Senate,
                            Committee on Foreign Relations,
                                Washington, DC, September 27, 2011.
    Dear Colleagues: In July 2011, I directed my Senate Foreign 
Relations Committee professional staff for European affairs to 
travel to the Black Sea region to assess the recent seizure of 
weapons grade highly-enriched uranium-235 (HEU) in Moldova and 
U.S. assistance programs to counter the threat of loose nuclear 
material. The Defense Threat Reduction Agency Project Officer 
for Ukraine joined the delegation.
    The Government of Moldova should be commended for 
interrupting an extremely troubling illicit sale of fissile 
material. The 9 kg of HEU on offer would have fetched $30 
million on the black market and contributed significantly to 
the 25 kg of HEU necessary to fashion a small nuclear weapon. 
The sellers also claimed to possess plutonium, an even more 
disturbing proliferation material. The interrupted sale was the 
19th publicly known interdiction of fissile material since 
1993. Destined for criminal or terrorist elements in North 
Africa, this interdiction demonstrates that the threat of loose 
nuclear material remains a central U.S. national security 
challenge and that the creation of layered U.S. defenses 
overseas against nuclear threats through the Nunn-Lugar 
Cooperative Threat Reduction Program and other U.S. assistance 
programs remains unfinished. Several apparent links to the 
Russian Federation suggest that continued cooperation to 
strengthen its nuclear security, law enforcement, and export 
control policies, laws, and culture remains an urgent priority.
    The United States should intensify Nunn-Lugar WMD 
Proliferation Prevention Program (WMD-PPP) work with Moldova in 
light of two attempted sales over the last year of material 
purported by the sellers to be HEU. Our partners in Ukraine 
should be encouraged to also eliminate the bureaucratic delays 
that may hinder new phases of highly successful WMD-PPP 
programs, as well as the prompt removal of all HEU from 
Ukraine. Even as our non-proliferation work continues with 
these partners, the United States must also continue to 
highlight troubling developments in the realm of civil rights, 
political prosecutions, and the rule of law.
    This staff report examines current non-proliferation 
programs in the northern Black Sea region and offers tangible 
recommendations to the United States and our partners for 
enhancing this cooperation. I welcome any comments you may 
have.
            Sincerely,
                                          Richard G. Lugar,
                                                    Ranking Member.

                                  (v)



    ENHANCING NON-PROLIFERATION PARTNERSHIPS IN THE BLACK SEA REGION

                              ----------                              

    At the direction of Senator Richard G. Lugar, Ranking 
Republican Member on the Senate Foreign Relations Committee 
(SFRC), a delegation of minority SFRC professional staff and 
Defense Threat Reduction Agency (DTRA) personnel\1\ traveled to 
the Black Sea region to assess non-proliferation cooperation in 
light of several recent interdictions of uranium on the black 
market. The delegation visited Ukraine (Kyiv, the Chernobyl 
Exclusion Zone, and Odessa) and Chisinau, Moldova. The purpose 
of the trip was to:
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    \1\ This report does not reflect the views of the Department of 
Defense and was prepared solely by Senate Foreign Relations Committee 
staff.

   Examine two recent seizures of uranium in Moldova, one of 
        which was highly-enriched and usable in a nuclear 
        weapon;
   Assess ongoing efforts to combat and interdict illicit WMD 
        materials and components;
   Discuss prospects for enhancing non-proliferation 
        partnerships in a region still plagued by porous 
        borders and large amounts of fissile material.

                              Introduction

     On June 27, 2011, Moldovan officials arrested six persons 
in Chisinau purporting to possess 9 kilograms of highly-
enriched uranium-235 (HEU), material for a nuclear weapon or 
dirty bomb, in an attempted sale for =23 million ($30 million). 
Plutonium, an even more troubling proliferation material, was 
also on offer. During the arrest, a vial containing 4.4 grams 
of highly-enriched uranium-235 (HEU) oxide was purchased in a 
fake sale for =420,000 ($600,000) in a sting operation 
organized by officers from the Moldovan Ministry of Internal 
Affairs, some of whom had coincidentally received routine 
counterproliferation training in the United States only weeks 
earlier. The sellers sought ``non-Western'' buyers; one 
potential buyer, currently being sought, has been identified as 
a resident of a country of North Africa. Should the existence 
of a legitimate buyer (or middleman) from a region with a 
history of terror cells be confirmed, then the case would be 
substantially more alarming than other recent fissile material 
interdictions, where official agents were the sole potential 
buyers.\2\
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    \2\ See, e.g., Lawrence Scott Sheets, ``A Smuggler's Story,'' The 
Atlantic, April 2008.
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    Outside experts believe that the HEU oxide may have been 
enriched at certain sites in Russia. The HEU transited through 
Transnistria, the Russian-backed breakaway enclave of Moldova 
with weak law enforcement and border security controls, and 
several persons central to the sale were Transnistrian 
residents. One theory is that the HEU arrived there by air from 
Russia and was transported across the porous administrative 
boundary line into Moldova proper. In addition to the North 
African, Moldovan authorities are seeking one Russian national, 
who was the alleged ringleader and fled from Transnistria to 
Russia, where he and other cohorts are suspected by officials 
to currently reside. Russian authorities have received official 
notification of the arrests.
    This operation is the second interdiction in Moldova of 
uranium purported to be highly-enriched in the past year\3\ and 
the 19th unclassified seizure of weapons grade plutonium or 
uranium worldwide since 1993.\4\ Most experts agree that HEU 
would be a terrorist organization's preferred bomb-making 
material due to its widespread availability in more than 30 
countries. The United States, Russia, and Kazakhstan each 
reportedly possess more than 10,000 kg of HEU, whereas an HEU 
bomb requires only 25 kg of HEU. A recent joint U.S.-Russia 
Nuclear Terrorism Threat Assessment concluded that the most 
plausible scenario for a terrorist-acquired nuclear weapon is 
through ``theft or black-market purchase of previously stolen 
nuclear material.''\5\
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    \3\ In August 2010, sellers purporting to be in possession of 
highly-enriched uranium were also arrested by Moldovan law enforcement, 
but the resulting seizure turned out to be 7 kg of uranium-238 worth 
approximately $11 million, which, though not fissile itself, can be 
used to create fissile plutonium and has other weapons applications.
    \4\ International Atomic Energy Agency, ``Illicit Trafficking 
Database (ITDB) Fact Sheet.'' Some documents also cite 21 known cases 
of weapons grade plutonium or uranium trafficking. Former Soviet and 
Warsaw Pact nations have been the location of 10 of these unclassified 
HEU and plutonium seizures.
    \5\ Harvard University, Belfer Center for Science and International 
Affairs, & Institute for U.S. and Canadian Studies ``The U.S.-Russia 
Joint Threat Assessment on Nuclear Terrorism,'' May 2011.
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    These developments underscore that the threat posed to the 
United States of America by loose nuclear material endures to 
this day. U.S. efforts to create layered defenses, including at 
known fissile material storage sites overseas, at foreign 
customs and border inspection posts, and within the U.S. 
homeland, should continue. As one Moldovan law enforcement 
official noted, ``Because the United States is often the end 
target of such illicit sales, we are happy to work with the 
United States on these issues.''
    But too often, bureaucratic delays in both the United 
States and partner nations have hampered this cooperation. In 
Ukraine, despite generous U.S. commitments to pay for the 
removal of HEU fuel, replace the fuel with low enriched uranium 
fuel, and pay for the construction of a neutron source facility 
in Kharkiv, some in Ukraine's leadership have allowed tortuous 
bureaucratic processes to dely implementation, including a 
last-minute failure of the Ukrainian delegation to sign the 
final bilateral HEU agreement in Vilnius with the U.S. 
Secretary of State in July 2011. With respect to Moldova, 
delays within the U.S. Department of Defense have inhibited 
instructions to the Nunn-Lugar Program and DTRA implementers to 
begin border security analysis.
    Cooperation on non-proliferation should not constitute a 
substitute for high-level engagement in public institution-
building and support for civil society, which remain acute 
challenges in many countries in Eurasia, particularly Russia 
and Ukraine.\6\ Still, non-proliferation cooperation that 
advances the security of both the United States and our 
partners and allies continues to create important stability in 
our bilateral and regional relationships, particularly in 
nations of the former Soviet Union where significant quantities 
of WMD materials exist near porous borders.
---------------------------------------------------------------------------
    \6\ See, e.g., Freedom House, ``Sounding the Alarm: Protecting 
Democracy in Ukraine,'' April 2011.
---------------------------------------------------------------------------
    This report assesses current non-proliferation cooperation 
in the northern Black Sea region and recommends avenues for 
enhancing these partnerships.

                               Background


                                ukraine


    In light of its 2,800 mile border, including a vast Black 
Sea coastline, Ukraine faces significant border security 
challenges. These challenges are exacerbated by its lengthy 
border with Russia, which dedicates few resources to 
controlling this border.\7\ Much of Ukraine's border with 
Russia and Belarus has also not yet been demarcated. Ukraine's 
border concerns are further complicated on its western edge, 
where Moldova's breakaway region of Transnistria provides weak 
border controls and limited law enforcement, allowing for 
increased ease of trade in illicit materials. In 2010, 
Ukrainian border security officials reported a 10 percent 
increase in interdictions of illicit drugs, radioactive 
materials, and weapons compared to 2009 levels.
---------------------------------------------------------------------------
    \7\ Some Russian officials still insist that Ukraine remains merely 
a frontier of greater Russia.
---------------------------------------------------------------------------
    The United States has dedicated significant resources to 
non-proliferation and border security priorities in Ukraine 
since its independence. In 1992, the Nunn-Lugar Cooperative 
Threat Reduction Program began work to dismantle Ukraine's 
entire nuclear weapons arsenal, allowing it to enter the 
Nuclear Non-Proliferation Treaty as a non-nuclear weapon state. 
Subsequently, Nunn-Lugar has established deep relationships 
with many Ukrainian ministries in the areas of biothreat 
reduction, strategic delivery system disassembly, border 
security, and others.
    One continuous threat of WMD material diversion has been 
stocks of HEU still held at many military and civilian sites in 
the former Soviet Union. In Ukraine, the U.S. Department of 
Energy has been implementing a preliminary agreement to pay for 
the removal of all Ukrainian stocks of HEU and replace the fuel 
with low enriched uranium. Ukraine has begun removal of HEU 
stocks from the Kyiv Institute for Nuclear Research, the 
Sevastopol National University for Nuclear Energy and Industry, 
and the Kharkiv Institute of Physics and Technologies. 
Separately, the United States has committed $20 million for the 
construction of a neutron source facility near Kharkiv, Ukraine 
to be completed in 2014, which has medical, scientific 
research, and energy applications. A memorandum of 
understanding on the project was scheduled for signature in 
Vilnius in July 2011 between the U.S. Secretary of State and 
her Ukrainian counterpart. According to officials familiar with 
the situation, the Ukrainian Foreign Minister was unable to 
sign the MOU because its language did not reflect a previous 
decision of the National Security and Defense Council (NSDC), 
which called for the removal of the HEU upon the completion of 
the neutron source facility in 2014. However, the original 
agreement called for final HEU removal in time for the spring 
2012 Seoul Nuclear Security Summit, and the Government of 
Ukraine is seeking to modify the previous NSDC decision, as 
well as a U.S. guarantee that the neutron source facility will 
subsequently be completed.
    Today, several U.S. border security and WMD material 
interdiction programs are active in Ukraine. The Export Control 
and Related Border Security (EXBS) program has an approximately 
$1 million budget for Ukraine that focuses on building human 
capital through training and imparting best practices expertise 
to the Ukrainian border security and customs services, as well 
as modest equipment procurements such as x-ray scanners, 
spectrometers, and dosimeters. EXBS has also assisted Ukrainian 
agencies to investigate and prosecute trade in illegal WMD-
related and dual-use items. The Department of Energy's Second 
Line of Defense program has provided portal monitors at key 
points of entry to detect radioactive material (including items 
contaminated by the Chernobyl nuclear disaster), one ton of 
which was interdicted in 2010.
    With by far the largest budget for border security, the 
Nunn-Lugar WMD Proliferation Prevention Program (WMD-PPP) 
provides equipment for the Ukrainian border service, focusing 
on four geographical zones: the Chernobyl Exclusion Zone (CEZ), 
major ports on the Black Sea coast, the Russian Federation 
border, and the vulnerable border with Moldova.
    Staff visited the CEZ boundary area, which forms an 
approximately 14 mile ring around the stricken reactor at 
Pripyat and abuts the Ukrainian-Belarusian border. In light of 
the heavily restricted access to the CEZ itself, the Ukrainian 
border guard service patrols the boundary as if it were an 
international boundary and must contend with elevated radiation 
levels. With U.S. assistance, the Ukrainian border guard 
service interdicts smugglers of radioactive material, such as 
scrap metal, and serves as a line of defense against illicit 
trafficking of other toxic elements. In particular, the Nunn-
Lugar WMD-PPP program has provided personal radiation detection 
equipment, all-terrain vehicles, shelters, patrol boats, and 
mobile infrared cameras to build night and all-season patrol 
capability.
    At the major maritime ports of Odessa and at the Kerch 
Strait where the Sea of Azov and the Black Sea adjoin, the WMD-
PPP program has provided training and equipment to customs 
units, as well as maritime radars and ship refurbishment to 
assist with detection and vessel boarding.
    In light of the recent seizures of uranium in Moldova, the 
Ukrainian-Moldovan border has been identified as an acute 
proliferation challenge, particularly in the border regions 
controlled by de facto separatist authorities in Moldova's 
region of Transnistria, who heavily profit from illicit trade 
and kickbacks.\8\ Nunn-Lugar efforts have augmented the 
Ukrainian border service capacity in command and control, 
communications and surveillance at the most heavily trafficked 
point of entry as a test bed that can be expanded to other 
border areas. Assistance has included radars, ground sensors, 
and an infrared camera package to cover the ``green'' border 
between official points of entry, as well as Department of 
Energy portal radioactivity detectors. Since 2005, 10 
interdictions of radioactive material have occurred and 587 
illicit weapons shipments have been interrupted at the 
Ukrainian-Moldovan border. Although several border disputes 
between Moldova and Ukraine have hampered cooperation for a 
number of years, the most serious dispute over the Palanca 
border crossing was recently solved; two additional disputes 
will require diplomatic attention to enhance future Moldovan-
Ukrainian cooperation.
---------------------------------------------------------------------------
    \8\ Notably, the son of Transnistria's ``president'' Igor Smirnov 
heads the enclave's customs service.
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                                moldova


    The U.S.-Moldovan non-proliferation relationship dates back 
to the mid-1990s, when Nunn-Lugar Cooperative Threat Reduction 
funds were used to purchase 21 Moldovan MiG fighter jets, 14 of 
which were nuclear capable MiG-29Cs, reportedly in order to 
preempt a sale of the jets to Iran,\9\ which was seeking an 
air-based WMD delivery system. The agreement also led to the 
purchase of 500 air-to-air missiles.
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    \9\ Arms Control Today, ``U.S. Buys Moldovan Aircraft to Prevent 
Acquisition by Iran," October 1997.
---------------------------------------------------------------------------
    For much of the past decade, U.S. cooperation on border 
security with Moldova has been limited due to its relatively 
small size and competing budget priorities. The U.S. EXBS 
program had no budget for Moldova in 2008 and 2009 but 
reengaged in 2010 to focus on export control and investigation 
training. In fact, three Moldovan law enforcement officials who 
participated in the June 2011 HEU interdiction received U.S. 
counter-proliferation training in the United States in April 
2011.
    In light of the recent HEU seizure, as well as other WMD 
material seizures over the past decade having transited 
Moldova, this limited U.S. assistance does not appear to have 
matched the threat. The chief vulnerability remains the 
breakaway enclave of Transnistria, which is renowned as an 
organizing base for smuggling illicit materials, including the 
June 2011 HEU sale that included several residents of the 
enclave. International assistance to Moldovan authorities has 
been centered on the European Union Border Assistance Mission 
(EUBAM), which provides EU best practices training and limited 
equipment to Ukrainian border officials to control goods 
exiting and entering Transnistria. Nonetheless, as explained 
further below, this assistance package inevitably leaves major 
border control gaps given that flights into Transnistria cannot 
be monitored (one theory behind the June 2011 HEU interdiction 
is that it arrived in Transnistria by air) and that Moldovan 
authorities, for conflict resolution purposes, are constrained 
in controlling for persons and goods entering Moldova proper 
from the breakaway region.
    However, the United States is poised to increase non-
proliferation assistance to Moldova following the July 2011 
signature of the Nuclear Smuggling Outreach Initiative (NSOI), 
which serves as the umbrella agreement for enhanced non-
proliferation cooperation and will result in a full assessment 
of Moldovan border security and customs needs.\10\ The 
Department of Energy has also signed a Second Line of Defense 
agreement, which may lead to radioactivity-related equipment 
and training.
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    \10\ The United States has NSOI agreements with 30 countries 
worldwide based on nuclear smuggling threat assessments established 
through interagency processes.
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    A principal challenge will be developing controls for 
Moldova's internal boundary line with Transnistria. Moldova is 
unlikely to be granted an EU visa-free regime without such 
controls over the flow of goods and persons from the 
Transnistrian enclave. On the other hand, establishment of more 
permanent controls for persons and goods creates greater 
political separation between Transnistria and Moldova proper, 
advancing the separatists' aims and hindering reintegration. In 
light of the recent HEU seizure, creative solutions may have to 
be explored.
    The separatist issue has also complicated Moldova's control 
over much of its easternmost international border with Ukraine, 
which coincides with the Transnistrian-controlled boundary. 
Early last decade, a joint Ukrainian-Moldovan border post 
arrangement was devised on the Ukrainian side of the border so 
that Moldovan border guards and customs could control goods and 
persons entering and exiting sovereign Moldovan territory 
without being present on Transnistrian-administered territory. 
However, this arrangement faltered reportedly due to Ukrainian 
sovereignty concerns and, instead, EUBAM was initiated to 
ensure an international, as opposed to Moldovan, presence co-
located with Ukrainian border guards (even though EUBAM plays 
an advisory role and does not participate in any monitoring 
itself). In light of the recent Ukrainian-Moldovan agreement 
over the most tense border dispute at Palanca, a co-located 
Moldovan presence with Ukrainian border and customs officials 
could be revisited.
    In expanding U.S. non-proliferation assistance with 
Moldova, many lessons can be learned from similar programs that 
have been underway in Ukraine for several years. First, initial 
assistance should be focused on assessing human capital in the 
customs and border security services to ensure that local 
officials have the absorptive capacity to operate and sustain 
higher technology assistance. Second, once baseline training 
and absorptive capacity is determined, modest technological 
solutions, including mobile surveillance assets at test bed 
locations, could be pursued at high vulnerability areas. Third, 
training capacity built by EXBS and Nunn-Lugar programs in 
Ukraine at Cherkasy, Khmelnitsky, and Kharkiv could become 
regional centers used to train Moldovan officials and avoid 
duplicating assistance.

                            Recommendations

The United States should:
   Work with the Russian Federation in apprehending those 
        persons reportedly involved in the recent HEU sale in 
        Moldova who are suspected of having fled to Russia; and 
        to redouble efforts in identifying security shortfalls 
        at Russian nuclear facilities.
   Immediately provide tasking to the Defense Threat Reduction 
        Agency to utilize the Nunn-Lugar WMD Proliferation 
        Prevention Program to conduct a border walk in Moldova 
        to identify customs and border security needs and 
        vulnerabilities while the Office of the Secretary of 
        Defense simultaneously pursues the necessary assistance 
        agreements.
   Apply lessons learned from non-proliferation cooperation in 
        Ukraine over the past years to Moldova, including focus 
        on test bed projects and provision of technology only 
        to the extent that it can be absorbed and maintained by 
        local officials.
   Ensure sufficient funding for the U.S. International 
        Counterproliferation Program (ICP) and EXBS training 
        programs, the latter of which several Moldovan 
        officials involved in the June 2011 HEU interdiction 
        attended in April 2011.
Ukraine should:
   Arrange for the memorandum of understanding on HEU removal 
        to be promptly signed with the United States on the 
        margins of the United Nations General Assembly meeting 
        in September 2011 so that removal of the HEU can 
        promptly occur.
   Continue to dedicate resources towards sustainment and 
        maintenance of the technology provided through Nunn-
        Lugar WMD-PPP border security programs.
   Revisit the arrangement attempted a decade ago to allow 
        Moldovan customs and border officials to co-locate with 
        Ukrainian officials at Ukrainian border posts near 
        Transnistrian-administered territory to foster Moldovan 
        sovereignty over its international borders.
   Reject an agreement sought by de facto Transnistrian 
        officials that would allow rail traffic to enter 
        Ukraine without being checked by Moldovan customs 
        officials, as currently required.
   Offer to Moldova the possibility of turning Ukrainian 
        border security training centers at Cherkasy, 
        Khmelnitsky, and Kharkiv into regional training 
        centers, where Moldovan officials can receive training.
   Dedicate attention to solving the two outstanding border 
        disputes with Moldova to ensure that border security 
        cooperation is not hampered.
Moldova should:
   Prioritize the creation of a counter-smuggling team with 
        international assistance, similar to those created in 
        other nations such as Georgia.
   Consider creative solutions for the Ministry of Internal 
        Affairs to patrol high vulnerability zones, such as use 
        of mobile surveillance assets and checkpoints. This 
        system can be augmented with all terrain vehicles, 
        watercraft, and night vision.
   Dedicate attention to solving the two outstanding border 
        disputes with Ukraine to ensure that border security 
        cooperation is not hampered.
   Pursue high-level criminal cases against corruption given 
        that not a single corruption prosecution has recently 
        taken place in Moldova.