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The Australia Group
It's Role and Impact as a Nonproliferation Regime

by James I. Seevaratnam
Director, Chemical and Biological Controls Division,
Office of Nonproliferation Controls and Treaty Compliance,
U.S. Department of Commerce

I am pleased to have the opportunity to talk to you about the Australia Group.

I will briefly review the history, purpose and objectives as well as the composition of the Australia Group, outline its operational aspects, and describe its role in stemming proliferation of chemical and biological weapons. I will note some of its limitations, the challenges it faces, and indicate some directions for the future. Specifically, I will describe the U.S. experience.

The objective of the Australia Group is: "To ensure, through harmonization of national licensing measures and information exchange, that exports of certain chemicals, biological agents, and dual-use chemical and biological manufacturing facilities and equipment from participating countries, do not contribute to the spread of chemical or biological weapons," which I shall refer to as "CBW".

In 1984, in response to reports received by the United Nations of the use of chemical weapons by Iraq in its war with Iran (in violation of the Geneva Protocol of 1925 banning the use of chemical weapons), and evidence that Iraq had obtained the materials for its CW program from the international chemical industry, a number of governments placed licensing measures on the export of certain chemicals used in the manufacture of chemical weapons. The lack of uniformity in their scope and application however, led to attempts by Iraq and others to circumvent these informal and ad hoc controls. In 1985, on an Australian Government initiative, the countries which had introduced licensing for chemical exports met in Brussels to examine the possibility of harmonizing the individual measures taken, and for enhancing cooperation amongst them on this issue. All of the participating countries, subsequently called the Australia Group, noting the benefit in continuing the process, now meet annually in Paris.

The number of participants in the Australia Group has grown to thirty-three, and includes the industrialized nations of Europe and North America, as well as South Korea, Japan, Argentina, New Zealand, and, of course, Australia. Bulgaria, which joined in 2001, is the most recent participant in the Group. The European Union is represented by its 16 members and by the European Commission at all Australia Group sessions.

All Australia Group participants are parties to the Chemical Weapons Convention (CWC) and the Biological Weapons Convention (BWC). The prime objective of the Australia Group is to support the goals of these Conventions.

By the end of the 1980s there was increasing evidence of the diversion of dual-use materials to biological weapons (BW) programs. In response, the Group took steps to address the problem by the addition, in 1990, of biological controls, and in the following year (1991), of controls on the equipment used to manufacture chemical and biological weapons. The Group's control list is a "living document" and reflects changes in technologies, threats and policies.

After the terrorist attacks of September 11, 2001, the Group expanded its formal focus to include CBW terrorism and strengthened its efforts and commitment to the prevention of CBW proliferation. Up to that time the regime's objectives were directed at stemming the proliferation of Weapons of Mass Destruction (WMD) by states. The Group's annual meetings since September 2001, however, have put an important focus on efforts to impede CBW terrorism by amending parameters of items on the control list, and including dual-use commodities and technologies that are not currently controlled but could be used by non-state actors. For example, before the 9-11 terrorist attacks, the AG controls on fermenters were applicable only to the export of those with capacities of 100 liters or more that would typically be used by major industrial or state players. Now, in the aftermath of the attacks, the controls will extend to fermenters at 20 liters - a substantially lower threshold capacity.

OPERATIONAL ASPECTS AND THE U.S. EXPERIENCE

The process by which a participant nation imposes AG restrictions on chemical or biological agents and associated equipment and technologies that pose proliferation risk, is protracted. The Australia Group, being a multilateral regime, operates on a consensus basis. Participant nations' proposals submitted to the AG Chair for additions or revisions to the control list, are subject to review by the entire group, and require unanimous endorsement by all 34 participants before adoption as an AG control. Consequently, it is not unusual for a proposal, once submitted by a partner-nation, to take two to three years of AG deliberations at the policy and technical levels before adoption.

As an illustration, if the Chemical and Biological Controls Division at the U.S. Department of Commerce considers it necessary to control a specific chemical, a proposal would be drafted, and initially circulated within the Department of Commerce and the Materials Technical Advisory Committee (MTAC) for review and comment. The MTAC is, as its name implies, an advisory body constituted solely of industry representatives and is mandated by the U.S. Congress to assist the Department in formulating controls. After review at these levels, the revised Commerce proposal is subject to the U.S. government's inter-agency vetting process. Comments from the Departments of State, Defense, and other concerned agencies in the security sphere are incorporated as appropriate before submission as a U.S. government proposal to the AG Chair by the U.S. State Department's Bureau of Nonproliferation.

The Australia Group Chair forwards the U.S. proposal to all AG partners for review and discussion at the AG Technical Experts Meeting (TEM) that is held annually as an integral part of the AG Plenary sessions. If consensus is reached at the TEM, it is forwarded to the plenary session for adoption by the entire Group. If no agreement is reached at the TEM the proposal is discussed at follow-on intersessional working group meetings with the intent of resolving differences in the position of parties that have expressed concerns with the proposal as presented. Outstanding issues are resolved and the revised text is adopted for inclusion in the AG control list. (Flow chart showing administrative and procedural steps in the submission and adoption of proposals) The negotiation stages of a proposal are conducted at the classified level, because the nonproliferation considerations that drive discussion are based on intelligence.

AG plenary decisions provide to each of its partner-states the rationale to impose controls on an AG controlled item in accordance with their national laws, a provision that they would not readily have in the absence of multilateral AG agreement. Moreover, unilateral export controls are less effective than multilateral export controls. AG represents political commitments by each of the partners, and each partner nation is committed to take whatever domestic actions are necessary to enact all adopted measures in its national export control system (Appendix). Each partner-nation, however, exercises national discretion, namely its sovereign right, in implementing AG-adopted proposals consistent with the AG guidelines. The U.S., for instance, based on its assessment of proliferation risks, may choose to control the export of an AG-controlled commodity to destinations different from those of other partners, and impose licensing requirements that are either more or less stringent than another partner has chosen to impose.

Many of the AG partner nations have robust chemical and biological industries whose industrial base needs to be protected. A delicate balance has to be established in negotiations between advancing the group's non-proliferation objectives and preserving each nation's industry.

Export control decisions adopted at the AG are incorporated into the U.S. Government's Export Administration Regulations, the Commerce Control List, and the Commerce Country Chart, and are announced in the Federal Register. (Appendix) This is accomplished before the AG convenes at the next annual plenary session. The U.S. maintains a national list of "countries of concern" and this is also published in these documents. The AG, however, does not maintain a list of countries of proliferation concern. In its deliberations, the AG focuses on programs, chemicals, biological agents and equipment, technologies and end-users of concern, not countries of concern.

AG partners have programs in place for bi- and multi-lateral outreach between member states and non-member states that help promote greater understanding of, and adherence to, regime controls by non-member states. These activities, and those of the AG chair promote transparency in the administration of regime controls, understanding of controls and methodologies (namely implementation and enforcement procedures), and help set an international standard for controlling exports of sensitive chemicals, biological agents and associated equipment and technology. At the Department of Commerce, a "Nonproliferation Export Control Cooperation Team" tasked with conducting outreach programs reports to the Under Secretary, Bureau of Industry and Security on its activities.

SOME RECENT U.S. CONTRIBUTIONS TO THE REGIME

Recently, the U.S. has made significant contributions to the control regime. All of the following are U.S. proposals adopted by the Australia Group at its June 2002 Plenary meeting:

While the U.S recognizes the Australia Group's accomplishments and contributions to CBW nonproliferation, some policy and procedural limitations inherent to multilateral regimes tend to impede to a degree, the achieving of objectives in a timely manner. For instance, the Group's decisions can only be adopted by consensus. The requirement for unanimity of all partners as a prerequisite for adoption of policy, technical, and membership issues, permits any one of the 34 partners to block the will of the others. While the need for consensus is central to protecting all partners' interests, it can delay the advancement of some significant issues.

I note two additional AG policy limitations: 1) individual partner-nations may use national discretion to identify specific countries of concern, and 2) each partner-nation has unilateral flexibility to determine licensing requirements that apply to export of an AG-controlled commodity. The U.S. would prefer a mutually agreed multilateral approach in identifying countries of concern, and a unified stance on applicable licensing requirements. In the opinion of the U.S., such an approach would greatly simplify and fortify AG control measures.

Finally, let me comment on a demonstrably false limitation: Some non-member countries claim that AG controls block legitimate trade. Statistics prove this to be untrue (Licensing statistics for denials i.e., less than O.5 % denials; statistics for unlicensed exports).

CHALLENGES

The Australia Group faces several challenges. It is currently taking action to address them. For instance, many of the commodities and technologies that were initially not considered to pose a proliferation threat if acquired by non-state actors are now being reviewed in light of the events of September 11. For example: certain micro-organisms listed in an informal AG watch list for potential utility in CBW programs shortly will be included in the AG control list as biological agents that could be sought and used by terrorists.

Also, I would note that many non-AG countries have developed an indigenous production capability for AG controlled commodities, and are now significant exporters of these items. China and India, for example, have a robust export market in chemical precursors and equipment. Both countries are parties to the Chemical Weapons and Biological Weapons Conventions. At the U.S. Government's urging both have promulgated export controls that either totally or in some measure mirror the AG controls.

Another challenge stems from the increased globalization of the chemical and related industries, a phenomenon that has sharply increased the sourcing of AG controlled commodities, thus presenting greater opportunities for a proliferator or terrorist to "shop around" for AG controlled commodities when they are not available from the AG.

Australia Group partners recognize the shortcomings that the Group needs to squarely face if it is to move forward with its objectives. They are consequently taking a more active role through outreach efforts, the review of potential loopholes in its control lists, as well as diplomatic and political channels to narrow the gaps and achieve a more sound nonproliferation CBW regime than now exists.

LOOKING FORWARD TO THE FUTURE

In its recommendations for executive action, the Government Accounting Office of the US Government (Appendix) recommended that the four non?proliferation regimes improve information sharing by: (1) establishing clearly defined standards for reporting export denials on a more complete and timely manner; (2) by sharing greater and more detailed information on approved exports of sensitive items to non-regime members; and (3) by adopting automated information sharing systems to facilitate more timely information exchange. While presenting significant technical, economic, and policy challenges, in my view these three GAO recommendations in the area of information sharing deserve serious consideration; transparency and effectiveness of the group would be greatly enhanced if sufficient collective action is devoted to finding a way to resolving the attendant practical problems.

The European Commission (EC) has played an increasingly active role in AG deliberations in recent years. The 16 EU members and the European Commission tend to contribute to deliberations and to vote as a unified block. In my view, this has often hampered the colloquy and hindered resolution of issues that impact on the Group's objectives. Nonproliferation goals should and must take precedence over a parochial stance and for my part, I do believe that more open dialogue between partners will achieve this goal.

Finally, there have been calls for greater non-participant involvement in regime meetings. While the AG recognizes the value that this could bring, such participation would pose significant problems, particularly in sharing of classified information. To bridge this gap the AG and the US continue, through their vigorous outreach programs, to bring non-members into the group's thinking, practices and procedures on all issues that fall outside the area of classified discussions, namely its operational aspects, promulgation, implementation and enforcement of controls.

CONCLUSION

I hope that in this short time here I have been able to provide useful information about the role, functioning, and importance of the Australia Group. For the United States, the AG has become the principal means by which it fosters international cooperation in countering the proliferation of chemical and biological agents. The AG was born in the mid?1980s just as this threat was becoming apparent, and in the intervening eighteen years it has grown in size, scope, and importance.

The four multilateral regimes, namely the Australia Group, the Missile Technology Control Regime, the Nuclear Suppliers Group, and the Wassenaar Arrangement, have set international standards for limiting exports of sensitive items, and have helped stem proliferation in particular countries of concern. Licensing requirements imposed by the Missile Technology Control Regime have made the acquisition of delivery mechanisms required by proliferators for the dissemination of chemical and biological weapons less likely. The Australia Group's actions have contributed to raising a proliferator's cost of attaining a CBW capability by cutting off sources of supply, thereby making CBW production increasingly unaffordable and relatively unattainable for an increasing number of state and non-state actors.

Since the attacks on the United States of September 11, 2001, which alerted the world to the specter of war and terror by state and non-state actors employing chemical and biological agents, world nations are fortunate to have a well functioning, established entity like the Australia Group. Never has its mandate for the prevention of the proliferation of chemical and biological weapons been more important or helpful to the U.S. and other nations.

It has been my pleasure to describe how it functions, and inform you of its achievements and the important role it plays. I thank you very much for your time and attention.