LOTTMAN:  By what title would you like to be referred to?

SUCHAN:  I’m the Director of the Office of Export Control and Conventional Arms Non-Proliferation Policy at the Bureau of Politico-Military Affairs.

LOTTMAN:  What are the major considerations or criteria that go into policy decisions on arms transfers?

SUCHAN:  Our decisions on arms transfers are based on a presidential-level policy.  It’s PDD, that is Presidential Decision Directive 34.  It goes back to February 1995.  And in this document, a copy of which we can give you, it lays out the criteria that we are to use in assessing whether an arms transfer is in the US national interest.  And there are a large variety of criteria that are indicated there.  But among the things that are listed is whether an arms transfer is in any way a threat to US military technological capabilities, whether the other country is in a position to protect any US technology that is transferred to them.  The sort of things that are most important as far as State Department consideration of an arms transfer will be its consistency with national security and foreign policy objectives of the United States, the impact on regional stability, and also we take into account such matters as the terrorism, human rights policies of the state concerned.

LOTTMAN:  How exactly is terrorism taken into account?

SUCHAN:  Well, among other things, we don’t transfer anything to the countries that are state sponsors of terrorism.

LOTTMAN:  OK.  In Chicago, you talked about the importance of arms transfers, I guess from a diplomatic perspective.  Especially relative to other forms of diplomacy which aren’t getting the funding they used to, so…

SUCHAN:  Well, the point that I was making is that security relationships continue to be a very very important part of American diplomacy.  And in the past there a variety of tools that we had, as far as underpinning a security relationship with other countries.  And a number of these have declined or essentially gone away since the Cold War.  Among those factors had been, for example, overseas military presence.  The number of troops that we’ve got stationed overseas, and the number of ships that are making port calls and so forth have greatly diminished since the end of the Cold War.  

In addition, there was an awful lot of military assistance that we used to do.  Right now, we provide something like about 3-1/2 billion in military assistance each year.  But more than 95% of that goes to two countries, Israel and Egypt.  What’s left over for the rest of the world, really, is very very small amount of money.  So, those sorts of things that used to be really important to establishing a security relationship with other countries are now relatively diminished, compared to what things were say about ten years ago. 

As a result, and nobody ever intended arms transfers to perform this role, but as a result, arms transfer and a military supply relationship has become relatively more important in our bilateral and regional security relationships.  

LOTTMAN:  The topline for security assistance in the budget is down to somewhere around $6 billion…

SUCHAN:  That includes such things as Ecopnomic Support Fund which is really economic assistance.

LOTTMAN:  Right.  Yeah.  I understand that that’s come down quite a bit since the end of the Cold War.  In your opinion, has that had an impact on the overall volume of arms transfers?

SUCHAN:  Well, the overall volume of arms transfers has gone down remarkably over the last ten years.  I don’t think that US financing of such things has been a contributing factor.  Much more important has been the fact that with the end of the Cold War, countries generally do feel more secure than they had in the past and as a result, they aren’t buying what they used to buy, and military budgets worldwide have diminished.  This is a good result of the end of the Cold War. 

In addition, countries that had large Cold War military establishments do not need all of the equipment that they had anymore, so there has been an increase in sort of a second-hand market for a whole lot of military equipment.  So a lot of things are transferred to other countries that had been in operating inventories of countries that no longer have the same Cold War defense needs.  

LOTTMAN:  So in other words, the demand for new transfers has gone down…

SUCHAN:  Remarkably.

LOTTMAN:  Is that trend, projecting out, does it continue or has it leveled off, or…

SUCHAN:  I think it’s rather leveling off now.  The impact of the shedding of Cold War inventories is pretty much behind us now.  That said, there isn’t the demand for large militaries in most countries, the way there had been 15 or 20 years ago.

LOTTMAN:  OK, getting into the financing, the financial situation, the military debt situation of the recipient country, where does that come in in the decision making over granting or not granting the license for a sale?

SUCHAN:  These are very important factors in our decision as to whether to support an arms transfer for another country.  It’s going to be not only its ability to pay for the system, but also to continue to support it once it enters a country’s inventory. 

When I was responsible for the arms transfer office, I got a call once from an arms broker who purported to represent the government of Bangladesh, and said to me that he was representing them for the purpose of buying the 27 F-16s that had been sitting at Davis Mt. AFB because the Pakistani government had bought them and we never allowed them to be delivered because of Pressler Amendment sanctions.  I told the gentleman that we needed to have a formal approach from the Bangladeshi government before we would take any kind of formal action and provide any formal response.

But we huddled and within minutes came to the conclusion that even if there were a formal request, and there never was one, even if there were a formal request, we wouldn’t support it.  F-16s themselves probably could have been had very cheap, but all of the related expenses-buying the weapons that go on it, the kind of communications and avionics systems that would be necessary to support it and keep it operating well would have been an immense strain on Bangladeshi financial resources and as a result we came to the conclusion that if we were asked, this was something we weren’t going to support.

LOTTMAN:  OK.  Talking a little bit about the accumulated military debt.  I heard a figure recently of $14 billion as being sort of a grand total, whereas a couple years ago, I was hearing $16 billion, so apparently it’s come down somehow.  Do you have any insight into that discrepancy?

SUCHAN:  I’m afraid not.

LOTTMAN:  OK.  Is a country’s accumulated military debt to the United States considered when they propose a new arms transfer.

SUCHAN:  Certainly.  Well, as I said, two different kinds of systems here.  For government-to-government sales, where somebody’s actually buying a weapons system from the United States government, this is called FMS or Foreign Military Sales.  In these cases, the purchasing government makes a large payment up front, at the time that it concludes the deal with the United States government.  And deliveries and costs are then drawn down from this amount which is then replenished on the basis of a set schedule.  We’ve never been in a situation where the country has actually defaulted on a debt and cost the US taxpayer money through Foreign Military Sales. 

There have been occasions where during the course of a program, change in an economic circumstance has meant that they haven’t been able to follow through on a program to completion.  Most obvious example is Thailand during the Asian Financial crisis, and they were unable to go ahead with the F-18 buy.  So the United States worked with the Thai government, first to see if there was any way that the deal itself could be salvaged, and when it became clear that it wasn’t, we worked with them on restructuring the debt, repaying what could be repaid, and as a result, the US Marine Corps ended up with a bunch of F-18s.

LOTTMAN:  When a military debt of another country is forgiven, written off, restructured, is that more of a diplomatic decision rather than just a matter of, well, let’s make the books match up somehow?

SUCHAN:  (to agency colleague) Has there ever been a case of this writing off?  The US government, well, the FMF, that’s all grant assistance.  So it just doesn’t work out that way on government to government sales.  And I don’t think that we have ever come to the rescue of a US firm that has conducted a commercial sale of military assistance.

LOTTMAN:  OK, when we loan another country money to purchase military equipment…

SUCHAN:  Foreign Military Financing is now exclusively a grant program, and was always predominantly a grant program.  

LOTTMAN:  OK.  All right.  Offsets and coproduction agreements.  What are the determining factors as to whether those kinds of things get green-lighted.  Is it the same as the overall policy?

SUCHAN:  The United States government doesn’t give green lights to offset agreements.  The US government role is always to be at arms’ length with regards to any offset agreement that an American company might conclude with a foreign government in the context of an arms sale.  So, for example, again, Lockheed Martin is selling an F-16 to a country, and Lockheed Martin decides to agree to an offset agreement.  Whether it’s in the context of an FMS or a commercial sale, that’s something that the company itself has to work out.  But the US government does have a role in reporting on and reviewing offset agreements, but it’s not part of the purchase itself as far as the US government is concerned.

LOTTMAN:  So when any agreement is, when a license is granted, that’s never an endorsement of that aspect of the transaction?

SUCHAN:  No.

LOTTMAN:  OK.  

SUCHAN:  In the discussions in Chicago and elsewhere, there was a lot of discussion about the human rights aspect of the arms transfer policy.  I just wanna emphasize that human rights is one of the criteria that we do take seriously in our policy.  That there are 23 countries that are actually proscribed by the International Traffic in Arms Registrations, the ITAR, which sets out the procedures for our arms transfer policy.  23 countries which, from the get-go, there is just the blanket prohibition on selling anything that’s on the US munitions list, or importing anything that’s on the US munitions list from those countries.  And on that list of 23, you’ll find most of the major human rights problems in the world.  That’s where you find China, Iran, Iraq, and so forth.  They are countries that are proscribed from even receiving US military equipment.  

LOTTMAN:  That seminar, that event, mostly dealt with the human side or the human-rights side of the arms trade, arms transfers, however you want to refer to it.  By contrast, I’m looking at the financial side.  Without asking you to say again what you just said, how does that compare in terms of the level of seriousness, as far as the risk that’s taken on when an arms transfer is contracted?

SUCHAN:  It’s taken very seriously, and let me give you one example.  The bangladesh.  There have been other cases.  There was a country in Africa that wanted to buy a very modest piece of equipment-a Coast Guard buoy tender.  OK?  But we did a survey and found that they didn’t have the port facilities to support it, to get the kind of port facilities to support it would have cost an awful lot of money, so even though the used buoy tender would have been extremely inexpensive for the country, we decided not to do it, because they either were not gonna do it right, or they were going to have to spend an inordinate amount of money in order to be able to do it right.  

In another case, another country wanted to buy a Perry-class frigate.  Again, a used Perry-class frigate that the United States Navy decided it didn’t want any more.  But again, we took a look at it.  They didn’t have the size of the Navy, or a Navy with the sort of training and infrastructure, in order to support this kind of ship correctly.  So again, on that basis alone, it would have cost them so much to have gotten up to the capability where they could actually operate this ship, maintain it for the next twenty years or so of useful sea life that it might have, would have been an inordinate economic investment on their part.

We do turn down arms transfers on that basis.

LOTTMAN:  OK, yeah, their human rights record, or whether they sponsor terrorism, seems to be sort of a wide view of that government’s political situation, how they behave themselves on the world stage.  Is there a similarly broad view applied economically?  In some ways the two are related I think, because human rights abusers, undemocratic regimes seem in some ways to be inherently unstable economically and therefore also not a good risk financially.  Is there a similar kind of ‘macro’ view of a country’s economic…

SUCHAN:  We take it seriously within the United States government.  And what’s more, the Congress takes it seriously as well.  Something to bear in mind as well is that every major arms sale that we do, has to be notified to Congress.   And Congress is in a position to put a hold on, they are in a position to vote it down.  It hardly ever happens. 

But what happens far too often from the point of view of the executive branch is that things get held.  A Senator, a Congressman decides he doesn’t like the looks of it, he puts a hold on the arms transfer.  And the executive branch routinely observes these holds, respects these holds, and although something doesn’t come to a vote up or down in the Congress, the arms transfer finds itself not happening. 

And the Congress also takes very seriously the ability of a country to pay, and when we look at something, we say, does this make sense from a national security standpoint, from the point of view of the United States, and the recipient government.  Lots of times countries are attempting to procure a weapons system for which there isn’t a good national security rationale, at least from our point of view.  And we take this seriously.  We turn down arms transfers on that basis. 

But even sometimes even if the executive branch is willing to support something, members of Congress will say, what makes you think that Bazongastan should have that kind of weapons system?  Can they pay for it?  What’s going to be the impact on Bazongastan’s neighbors if you transfer that weapons system?  And we end up answering an awful lot of very tough questions from the Congress. 

Every year we submit what is called the Javits report which is all of the arms transfers which we envision could happen over the next year.  And not everything that we end up notifying to Congress is necessarily going to be on the Javits report, but when it’s not, we get asked a whole bunch of questions.  “Why didn’t you tell us this in January, that you were going to be selling this to Bazongastan?”

LOTTMAN:  When Congress puts a hold on something, is there any sort of negotiation that goes on between the branches, try to resolve that?

SUCHAN:  The ostensible purpose for a hold is to acquire additional information.  To ask questions of the administration as to why does this arms transfer make sense.  And so certainly when a Congressman puts a hold on an arms transfer, 15 people from the State Department and the Defense Department, and probably 100 people from the firm, go up there and explain why this is good for US national security, and good for the country that’s going to receive it, and sometimes the Congressman’s concerns are answered, and sometimes it’s not, in which case, the hold stays in place.  There’s no other country that has a parliament that is as intimately involved in the arms transfer process as the Congress is in the US arms transfer process.

There’s a required notification period in the Arms Export Control Act, where something has to sit before both houses of Congress, but an actual vote to deny an arms transfer is exceedingly rare.  The obstacle invariably is the notification and hold process.

LOTTMAN:  Are there things that, once they’re on hold, they just stay on hold and are never heard from again?

SUCHAN:  It has happened.