Page 1       TOP OF DOC
41–991 CC






MARCH 12, 1997

Printed for the use of the Committee on International Relations


BENJAMIN A. GILMAN, New York, Chairman
 Page 2       PREV PAGE       TOP OF DOC

HENRY J. HYDE, Illinois
CASS BALLENGER, North Carolina
EDWARD R. ROYCE, California
JAY KIM, California
TOM CAMPBELL, California
JON FOX, Pennsylvania
LINDSEY GRAHAM, South Carolina
ROY BLUNT, Missouri
 Page 3       PREV PAGE       TOP OF DOC
SAM GEJDENSON, Connecticut
TOM LANTOS, California
PAT DANNER, Missouri
WALTER CAPPS, California
BRAD SHERMAN, California
BOB CLEMENT, Tennessee

RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff
MARK GAGE, Professional Staff Member
 Page 4       PREV PAGE       TOP OF DOC
PARKER H. BRENT, Staff Associate


    The Honorable James F. Collins, Ambassador-at-Large for the Newly Independent States


    Prepared statement of Ambassador James Collins
    Responses to questions submitted to the U.S. Department of State


House of Representatives,
Committee on International Relations,
Washington, DC.
    The committee met, pursuant to notice, at 11:23 a.m., at 2170 Rayburn House Office Building, Washington, DC, Hon. Benjamin Gilman (chairman of the committee) presiding.
    Chairman GILMAN. The committee will come to order. And I want to welcome our witness this morning, Ambassador James Collins, our Ambassador-at-Large for the Newly Independent States of the Former Soviet Union.
 Page 5       PREV PAGE       TOP OF DOC
    Good morning, Mr. Ambassador, and we welcome you to the committee.
    Ambassador COLLINS. Good morning, Mr. Chairman.
    Chairman GILMAN. Members are returning from voting and may be a little delayed in getting here.
    We are very pleased that you were able to arrange your schedule to be with us here this morning.
    We have asked Ambassador Collins to testify this morning on the status of our relations with Russia. Post-Soviet Russia has presented major challenges for American foreign policy over the last 5 years.
    The first challenge has been to support stability in Russia, which is a country that has inherited and continues to maintain a large arsenal of weapons of mass destruction as it moves through a very difficult transition period.
    The second major challenge has been to enlist Russia's support for American policy priorities, including the prevention of proliferation of dangerous technology and weapons, and the containment of rogue regimes around the world.
    The third challenge has been to ensure Russia's respect for the sovereignty of its neighbors; other former Soviet Republics, such as Ukraine and Georgia, particularly given the large amounts of American aid now being provided to help those States.
    Our foreign policy must be successful with regard to all of these challenges. If it is not, American interests will be undermined, not only throughout much of Europe and Asia, but possibly on a global scale.
    Congress has provided considerable aid to Russia, aid that has been supplemented by large-scale international loans, considerable debt relief, and major aid programs by our allies. Our Nation has also taken a number of steps that support Russia's standing in Europe and in the international community, including, among other things, supporting Russia's association with the G–7 group of nations, including Russian forces in the NATO-led peacekeeping force in Bosnia, including Russia in NATO's Partnership For Peace Program, and helping Russia to qualify to join the World Trade Organization.
 Page 6       PREV PAGE       TOP OF DOC
    Our Nation has also helped persuade Russia's neighbors—Ukraine, Kazakhstan, and Belarus—to become non-nuclear States and turn over their Soviet warheads to Russia.
    My point in reviewing what our Nation has done to be helpful to Russia is to underline why there is a strong disappointment among many of the Members of Congress that our policy toward Russia does not seem to be serving American interests as well as it should. Russia still insists on selling reactors to Iran. There are too many allegations that Russia is developing chemical weapons and selling dangerous technology around the world.
    Russia and China now state that they have a strategic partnership, at the very time that China is strongly pressuring Taiwan. Russia continues to press for bases and troops on the territory of Ukraine and other neighboring States.
    Rather than continue on with this list, I will close my remarks with an invitation to our witness this morning to please try to respond to our concerns, and tell us why the Congress should see our relations with Russia as moving in a positive direction.
    But before we proceed with the testimony, I would like to recognize any of our other members who wish to make an opening statement. Mr. Bereuter.
    Mr. BEREUTER. Mr. Chairman, I just want to welcome the witness. I look forward to his testimony.
    Chairman GILMAN. Thank you, Mr. Bereuter. Ambassador Collins, please proceed. If you would summarize your statement, we will insert the full statement in the record, without objection.
    Ambassador COLLINS. Mr. Chairman, thank you very much. I have some opening remarks, and I would ask, if I may, that the full statement that I have provided the committee be entered into the record.
 Page 7       PREV PAGE       TOP OF DOC
    This is a particularly good moment for our discussion, I think. President Clinton will meet President Yeltsin next week in Helsinki. Those talks will address the most critical parts of our agenda with the Russian Federation.
    As we prepare for that meeting, the thoughts of this committee and its members are important to us, and I look forward to hearing them during the course of the morning.
    Mr. Chairman, the Clinton administration has approached the development of U.S.-Russian relations on the fundamental assumption that the cold war is over, and that the United States has a vital interest in the positive transformation of Russia and the other Newly Independent States (NIS). Our policy toward this region is, and needs to be, objective, interest-based, part of an American vision and policy that addresses and engages all the NIS.
    The end of the Soviet Union and its replacement by 12 new nations has provided, and continues to provide, us both great opportunities and corresponding risks. The opportunity is clear; nothing less than turning former cold war adversaries into full members of the family of democratic nations, nations with whom we can cooperate and compete to advance shared interests and manage differences in a constructive, civilized, and respectful manner. That is the key to making sure that no major threat to the safety of Americans or to our national security again arises from this area, and that American interests and values can be protected and promoted in cooperation with these new nations as we start a new century.
    Mr. Chairman, there are five enduring American interests that I think guide our policy toward Russia, as toward the other NIS.
    First, we seek to reduce the cold war nuclear arsenal and other weapons of mass destruction, and to ensure effective control of their components.
    Second, we are encouraging and helping Russia and the other 11 countries to democratize and develop market economies.
    Third, we seek the integration of these young nations into international political and economic institutions, and the development of a durable security structure for an undivided and democratic Europe.
 Page 8       PREV PAGE       TOP OF DOC
    Fourth, we are promoting the development of stable, cooperative relations among the NIS, based on principles of equality, independence, security, and the development of comprehensive, open ties with the international community.
    Finally, we seek to advance the interests of American business, investment and trade throughout this region. We are confident in this that America's private sector is government's strong partner in encouraging and supporting positive change and that our developing cooperation will mean jobs and opportunities for American workers and American business.
    This is a broad, complex agenda. Fortunately, none of the American interests I have outlined inherently, in my view, contradicts the interests of Russia or the other NIS. Even so, as you might expect with a list of particulars this long, we have experienced both success and disappointment.
    The successes of cooperation with Russia have demonstrated the magnitude of the opportunity we have to work together for mutual benefit; extending the Nuclear Non-Proliferation Treaty, peaceful Russian troop withdrawal from the Baltic States, advances toward democratization and marketization of Russian society, and the promise of a consolidated peace in Bosnia.
    Yet, there have also been disappointments. Russia has made substantial progress in taming inflation and in privatizing the industrial economy; but corruption continues to obstruct development of a normal and robust commercial environment in Russia, and the weakness of legal and law enforcement institutions have spawned a disturbing and dangerous rise in crime. The absence of effective action to revise the Russian tax system and resulting fiscal problems reflect the need for Russian leaders and lawmakers to exert decisive leadership and will to take the steps that will improve the climate for investment and lead to growth.
    Points of difference with Russia over aspects of foreign and security policy are also a reality. President Clinton has made it a cardinal priority of our government to promote a democratic, undivided Europe as we enter the next century. We have supported developing the role of the Organization for Security and Cooperation in Europe, the European Union, the OECD, and other structures that contribute to this process. For the most part, we have had Russian cooperation in this effort. But on one important matter—NATO enlargement—we continue to differ.
 Page 9       PREV PAGE       TOP OF DOC
    Enlargement is a critical part of the Alliance's efforts to adapt NATO to address the challenge of Europe's security in the next century. Another critical element in that effort is developing a new Russian relationship with the new NATO. As Secretary Albright said in Moscow, ''It is no longer a situation of us versus Russia or Russia versus us; it is a question of Russia and NATO cooperating to build a new Europe.'' We will continue to work with Russia on this, without artificial deadlines and in the conviction that a stable NATO-Russia relationship will promote mutual security. Similarly, where we have other differences, such as over Russia's nuclear cooperation with Iran, arms sales that can prove destabilizing, or critical environmental or trade issues, we will be unsparing in active diplomacy and other efforts to gain outcomes that preserve U.S. interests and protect our security.
    While our policy is set for the long haul, it requires constant tending. And the meeting next week in Helsinki between President Clinton and President Yeltsin comes at a critical moment. The meeting is an opportunity to shape and revitalize the capacity for Russian-American cooperation and this will be a key goal. At the same time, the two Presidents must address difficult and sensitive issues of national interest and security on the eve of historic events in Europe and decisions each of our nations will be making concerning future defense and security policies.
    With a NATO summit on enlargement of the Alliance set for July, we would like the outcome of Helsinki to be a stronger relationship with Moscow that will set a positive course of cooperation for the next century.
    Over the past 5 years we have actively and successfully increased the scope of cooperation with a new Russia. And we have energetically managed the differences where Russian and American policies diverge. It is in the long-term interests of the American people that positive engagement continue and that our government show steadiness of purpose and objectivity in defining and pursuing U.S. goals. The ability of our government to act effectively depends on adequate resources to pursue our policy goals and the support of Congress for the programs and diplomacy that will achieve them.
 Page 10       PREV PAGE       TOP OF DOC
    Whether promoting cooperation or managing differences, we have found no alternative, however, to active interaction with Moscow. That is not surprising. As global powers, the United States and Russia are destined to work with one another. The success of Russia's domestic reform and international integration are the best guarantees that future relations with Moscow will be characterized by cooperation and pursuit of shared goals.
    Thank you, Mr. Chairman. I would welcome your questions.
    [The prepared statement of Ambassador Collins appears in the appendix.]
    Chairman GILMAN. Thank you. Mr. Ambassador, officials of the Russian and Chinese Governments have been describing their two countries' relations as constituting a strategic partnership. Most recently, Russia has sold to China guided missile destroyers with high-speed anti-ship missiles that might conceivably threaten our own Navy in the Pacific one day.
    Some observers have contended that this sale alone will accelerate China's naval military technology 10 years beyond that which it currently possesses.
    There have also been news reports alleging that Russia is selling to China advanced ballistic missile technology, and technology that will allow China to better enrich uranium for nuclear warheads.
    Should we be concerned about this growing relationship between Russia and China? Is Russia using such sales and relations with China in general to seek to gain leverage over our policy elsewhere in the world, such as in Eastern Europe and the region of the former Soviet Union?
    Ambassador COLLINS. Mr. Chairman, I think, as a general point, we have every interest in closely following and closely monitoring and closely working on any sales of weaponry to any party by the Russian Federation that could prove destabilizing or threatening to interests of America's friends and allies.
 Page 11       PREV PAGE       TOP OF DOC
    Moreover, we do follow this carefully, and we do actively work to try to limit such sales or transfers and such activities.
    The second point I would make, however, is that we believe it is in the interests of the United States that Russia and China have good relations. I think the opposite would be extremely dangerous to our interests, and could undermine them.
    The reality is that peace in Asia, in part, is certainly dependent on a stable Russian-Chinese relationship. That relationship, of course, should not be at the expense of the security of others, and should not threaten others. And we would not see any such collusion, if you will, in such activities as anything but inimical to U.S. interests.
    Now, with respect to particular sales, we have engaged the Russian Government at a senior level in discussions about transfers of weapons of this kind. They know our views and our concerns. And I think we at this point are not in a position to say that we have persuaded the Russians in all cases of our position, but we will keep talking with them about this.
    And I think, as a final point, what we do find is that senior Russian officials with whom I have spoken and others have spoken recently also see no benefit or no interest of Russia served by destabilizing the peace in Asia.
    Chairman GILMAN. Mr. Ambassador, what will our government do at this point to persuade Russia to cease its nuclear reactor sales to Iran?
    Ambassador COLLINS. To Iran?
    Chairman GILMAN. Yes.
    Ambassador COLLINS. Mr. Chairman, as you know, we have had a dialog with the government of Russia on this issue for some time. We oppose the sale of the power reactors to Iran. We have made clear our opposition more broadly to nuclear cooperation of any kind with Iran.
 Page 12       PREV PAGE       TOP OF DOC
    Where we are today, after substantial dialog with the government of the Russian Federation on this issue, going back more than 2 years, is that Russia has, as President Yeltsin announced in, I believe it was May 1995, agreed that the scope of cooperation in the nuclear area with Iran would be limited to the sale of these reactors, and that it would not include such programs which we would consider highly dangerous, such as the provision of Iranian enrichment technology.
    We continue to speak with them about terminating this sale. They continue to insist that they can control it so that it does not present a risk of proliferation, or will not assist the weapons program of Iran. We disagree with them. We believe that the sale should be ended.
    We will continue to work with them to try to persuade them to do that.
    Chairman GILMAN. Well, I hope we are successful in your persuasive techniques.
    Mr. Ambassador, a recent article in Defense News alleges that our Nation has been informed by Israeli officials that Russian entities are selling technology to Iran that will allow it to develop extended-range SCUD missiles; SCUD ballistic missiles capable of targeting Saudi Arabia and Israel. If that is true, would not such a sale be a violation of Russian President Yeltsin's commitment in September, 1994 to end all arms sales to Iran after current contracts run out in the year 1999? Would not such a sale to Iran be a violation of the Iran-Iraq Arms Non-Proliferation Act of 1992?
    Ambassador COLLINS. Mr. Chairman, I understand as well from reports we received that this was a subject of some discussion in Moscow recently, during talks between Mr. Primakov and Prime Minister Netanyahu, who has expressed his concerns about these issues. And that Minister Primakov assured him that Russia was providing no missiles to Iran.
    Second, the Russian Government is a party to the Missile Technology Control Regime. We expect them to abide by its provisions. We do not, at this time, I think, have persuasive evidence or facts that would indicate that they are not abiding by this regime.
 Page 13       PREV PAGE       TOP OF DOC
    Were they to fail to do so, it would be a very serious matter for us, and it would be treated with the utmost gravity.
    Chairman GILMAN. I would hope that you would look into that article, and see if there is any basis to its allegations.
    Ambassador COLLINS. We will, Mr. Chairman. In fact, we have been following all reports of potential missile cooperation with Iran with great care and great seriousness.
    Chairman GILMAN. Thank you, Mr. Ambassador. Ranking minority member, Mr. Hamilton.
    Mr. HAMILTON. Good morning, Mr. Ambassador.
    Ambassador COLLINS. Good morning, sir.
    Mr. HAMILTON. I read the article in The Washington Post this morning about NATO expansion, and I would like you to comment on that, if you would. They make two points, among others, with regard to the cost for the enlargement of NATO.
    The first was that, quoting a senior U.S. official—not sure who that is——
    Ambassador COLLINS. There are a lot of them, sir.
    Mr. HAMILTON. There are a lot of them, that is right. There was a strong political imperative to low-ball the figures. Everybody realized the main priority was to keep costs down to reassure Congress, as well as the Russians.
    A second imperative was to place a hefty share of the planned enlargement expenses on the backs of current and future allies in Europe, a move that is likely to provoke stormy disputes across the Atlantic in the months to come.
    OK, what about these enlargement costs? And what about those two points? We are going to have to pay an estimated $2 billion out of $27–$35 billion from 2000–2009, I guess, is the estimate. We have had other estimates, non-official estimates, that, of course, are much, much higher than that. The Post article says that you are coming in with these low-ball figures in order to assure the Congress, and you're going to try to push off a lot of the costs on our NATO allies.
 Page 14       PREV PAGE       TOP OF DOC
    Let me ask you this. Is this estimate, in your judgment, a tough, hard-headed, realistic, honest estimate?
    Ambassador COLLINS. Mr. Chairman, I did not take part in the details of the preparation of the report that has been made available to the Congress. But I have worked with a number of people on aspects of it.
    And I would say to you that it is my judgment, having talked with people and having heard the arguments, that this was a best effort to try to provide a realistic and honest assessment of what is involved for this nation, in terms of its costs and so forth, of the enlargement process, as best it can be addressed, and as best it can be assessed today.
    I do not agree with the assertions in the article that this is some great conspiracy either to dump our costs on the Europeans or to somehow mislead the people in this institution. I think everyone that I have worked with in the administration on this understands that that is self-defeating. And while our knowledge may be imperfect and we may well find aspects of this that we have not anticipated at this point, I do not attribute that to motives that are in any way other than honorable.
    Mr. HAMILTON. We apparently are making some agreements with regard to enlargement. One is we are not going to place any nuclear weapons on the territories of the new members. We apparently are not talking about stationing U.S. or other Western troops in those countries, and only limited improvements in the infrastructure. Is that all correct?
    Ambassador COLLINS. What is going on right now is a discussion, first of all within NATO. And I would like to say that it is not in the form of an agreement, Mr. Hamilton.
    It is a decision within NATO about what to do and what is appropriate to do with the nuclear weapons in the first case. This was not something that was agreed with Russia or with any other nation; it was agreed within the alliance, among the members of the alliance. It is a unilateral statement of the way the alliance sees its needs, its intentions, and its plans at this time.
 Page 15       PREV PAGE       TOP OF DOC
    And so that is a fact. It is a publicly accepted decision made clear at the last meeting of NATO Ministers in December.
    It is on the table, in short. This is a policy of the alliance.
    Second, with respect——
    Mr. HAMILTON. The policy is NATO has agreed to put no nuclear weapons in the territories of the new members?
    Ambassador COLLINS. The statement is that there is no plan, no intention, and no need to do so.
    Mr. HAMILTON. And the agreement is what, with respect to NATO infrastructure of these countries?
    Ambassador COLLINS. Well, first of all, there is no agreement at this time. There is discussion. First there has been discussion within NATO about what the needs of NATO will be for conventional forces, and I guess that is the best way to put this.
    Mr. HAMILTON. Do you anticipate any U.S. forces being stationed in the new NATO countries?
    Ambassador COLLINS. The issue of stationing will be determined really within the context of the NATO alliance. New members will be full members of the alliance.
    If that means that there would be a requirement to have some American troops in some capacity at times in those countries, that would presumably be consistent with NATO policy.
    Mr. HAMILTON. Do you foresee stationing U.S. or present NATO-member troops in these new countries?
    Ambassador COLLINS. I think at this point no one is talking about or thinking about any major stationing of combat units in those countries.
    Mr. HAMILTON. Of course, NATO has traditionally defended itself by putting large numbers of U.S. and allied troops and weapons and nuclear weapons into their NATO-run bases. What you are telling me now is that in these new countries that will be coming into NATO, we will not be defending those countries in the same sense that we have defended NATO countries in the past.
 Page 16       PREV PAGE       TOP OF DOC
    Ambassador COLLINS. No, sir. What I am suggesting—and here I would defer, in part, to my military colleagues' expertise. But the reality is that there is a new approach to NATO's defense doctrine, and in the way it broaches its mission. It emphasizes less the stationing of major forces. We have withdrawn almost two-thirds of our stationed forces from Europe, for example. And what it focuses on instead is the development of the capacity to have mobile forces that can move in as necessary to discharge the mission that they may be assigned by NATO.
    In short, this is not, in many respects, the NATO of the cold war, where we were all lined up with tanks hub to hub and artillery hub to hub, looking at the Russians across the divided German border. It is a very different situation in a very different environment.
    Mr. HAMILTON. Now, with regard to the allocation of costs, I have seen the figure. We would be picking up at least 6 percent, or maybe as high as 15 percent, I think, of the costs of enlargement. And we would expect the European members of NATO to pick up 50 percent? Is that correct?
    Ambassador COLLINS. Mr. Chairman, I would, if I may, like to take that question and provide an answer. I frankly do not have direct responsibility for this, and I do not want to provide an answer to this inaccurately.
    Mr. HAMILTON. How would you describe the threat to NATO?
    Ambassador COLLINS. It seems to me clear today that the threat to NATO or to the NATO family really emerges not from the traditional one which we knew for most of the last half of this century, but rather from conditions in Europe which can produce crises such as we saw in Bosnia, which can pose the danger of the spread of instability. It, I think, is not based on a threat to the east or the south or wherever. It is based on the idea that NATO, as a collective defense organization, needs to be structured today to meet threats to the interests of the alliance, and that today does not appear to come from the sort of traditional geographic bloc to the east that is no longer there. And with which, in great part, we are now cooperating.
 Page 17       PREV PAGE       TOP OF DOC
    Mr. HAMILTON. You do not anticipate any invasion?
    Ambassador COLLINS. I do not.
    Mr. HAMILTON. Well, I would like to explore with you a lot of things but I do not have time. I appreciate the Chairman's tolerance here, and we will go on. I may stick around for some other questions.
    Mr. BEREUTER. Thank you, Mr. Hamilton, that should be possible.
    Ambassador Collins, just following up very briefly on some of the things pursued by Mr. Hamilton, I think I heard you say—and I believe it is the intent of the administration—the level of defense provided to new members of NATO will not be downgraded. It is just that the means of defense will be different, relying more on a mobile force. Is that correct?
    Ambassador COLLINS. Yes, sir, that is correct. And I would say it is not just new members. I think NATO as a whole, for all of its defense, is going to rely more on this kind of arrangement than in the past.
    Mr. BEREUTER. Yes, I think that is right. It is clearly their doctrine.
    I do think that one of the reasons we have such wide variations in estimates about the cost of adding new members is that people start with different assumptions. There are some people that start with the assumption that we are going to have to have the same investment in infrastructure and military capabilities in those new countries added to NATO as we do in the existing 16, or the European 14. And I think that is an inconsistent assumption; inconsistent with administration and NATO policy. And therefore, you might find lower levels to be much more realistic.
    I do think you need to make it very, very clear exactly what the assumptions are behind the defense expenditure estimates that you provide, if I may offer that advice.
 Page 18       PREV PAGE       TOP OF DOC
    Ambassador COLLINS. I will certainly carry that back, sir.
    Mr. BEREUTER. Moving ahead, I would like to say that I think that the attitude in the Congress, in a bipartisan way, on Russian-American relations is souring; that there is a dramatic increase in concern that the resources we are devoting to the former Soviet Union States, and specifically to Russia, are not being well spent, and will be difficult to sustain the level of commitment that the President has asked us for in the past.
    I want to say, too, that the estimates about the amount of capital flight from Russia, even if you accept the more conservative ones, are staggeringly high. At least $60 billion in Russian capital flight, is suggested by some, fled to countries and foreign banks. And I think it is probably higher than that.
    Experts we listen to say the level of corruption is high and endemic, right up to the top. If you visit Cyprus, you understand, for example, that tremendous amount of resources and assets of Russia are being sent through Cyprus banks and elsewhere.
    And so, I would guess I would ask you this question, to follow up those comments. What is the Russian Government doing, concretely, to end such capital flight, and to break up the hold of criminal conduct on the affairs of State and on the business activities of the Russian economy? What is it doing to break up the privatized monopolies that seem to be the source of much of the capital flight?
    Ambassador COLLINS. Mr. Chairman, I certainly do not argue at all with the fact that what we face in Russia today is, in some sense, an economy on the edge of a decision which it has not made for some time; that it needs to make.
    That economy is essentially one which has achieved a degree of macroeconomic stabilization. I mean, I think we all agree inflation is down and a few other things.
    What it has not done is create the conditions and the environment which will attract investment. Capital flight is sort of the opposite of investment, in my view. It is the decision that you are better off putting your money elsewhere than investing in Russia.
 Page 19       PREV PAGE       TOP OF DOC
    We have, I think, had a long dialog with the government of Russia—including the Vice President, the Prime Minister, the President, his counterpart, as well as many others—about the need for Russia, as I suggested, to take decisive action to change the climate, and to change the conditions for the economy. That is the only way we are going to reverse capital flight; it is the only way they are going to attract foreign investment.
    I recently met with a group of DUMA deputies here. And I talked with them about some of the specific things that we believe they need to do. They need to reform the tax code so that it makes sense. They need to create property laws that are clear and enforceable. They need to work much more on dealing with issues of crime and corruption.
    And I said to them that it was no use complaining about the absence of investment until they got something right, and that they would know when they got it right, because the investment would begin to come, and the capital flight would begin to cease.
    Now, President Yeltsin recently gave a speech, with which you may be familiar, I think on the 6th. He made it very clear that this problem is one which he insists must be addressed by the government. He has asked for the resignation of the entire government, save the Prime Minister and Mr. Chubais. And he has, in pretty much every way I think you can read the speech, indicated that he expects the new team to do something about this.
    If it happens, we would welcome it. It is certainly the kind of thing we support, and it is the kind of thing we have been encouraging. And we hope that we will see some serious work.
    Mr. BEREUTER. Thank you, Ambassador. I am familiar with this major shake-up, and President Yeltsin has his hands full.
    I am going to start another line of questioning, and then I will have to leave the Chair shortly and we will take a recess. I would like to visit with you about the Russian oil and gas monopolies, and their impact on Central Asian Republics and on the Ukraine and Russia.
 Page 20       PREV PAGE       TOP OF DOC
    Does the State Department see any incidents or patterns of manipulation by Russia of the existing oil and gas export pipelines out of Kazakhstan, Turkmenistan, or Azerbaijan, the possible goal of pressuring those States to acquiesce the basing of troops on their territory, or to gain their greater participation in the Russian-dominated commonwealth of independent State organization?
    Ambassador COLLINS. Let me make one point about troops on other countries' soil, if I may, to begin.
    I think one of the objective realities that we need to keep in mind as we look at this question is that the trend of Russian presence in the other States of the former Soviet Union is all in one direction: it is down. The withdrawal of forces, broadly speaking, has been a steady trend.
    Now, they are not all out. And there are some cases in which they have base agreements. But on the whole, there has been a dramatic reduction in the military presence of the Russian Federation abroad, over the last 5 years.
    With respect to oil, gas, the energy sector, and its role in how Russia is working vis-a-vis its neighbors, I think the answer is that certainly there are those who see energy as a source of leverage; but at the same time, what we see is action which suggests a willingness on the part of those who are disposing of, if you will, the resources of the Russian energy sector to work in cooperation with consortia and these countries to develop those resources.
    So it is not a clear picture. Examples. I know that there are concerns that I have heard, certainly from my Ukrainian friends at times, that they are being pressured through the use of the lever of the energy sector. Two points about that.
    The Russian pipeline people are upgrading the level of the pipelines going through the Ukraine, so they clearly intend to use them further. They are looking at alternative pipelines as well, but I think the simple demand and so forth is going to require more pipelines.
 Page 21       PREV PAGE       TOP OF DOC
    With respect to Ukraine, there is one reality, however. And that is that the Ukraine's dependence, because of its slow process of reform of its economy on Russian energy sources, creates dependency. And until they address that effectively, I think that is a problem.
    With respect to Caspian energy, one final point. I think there are certainly many views about Caspian development in Russia. Some would like to sort of reserve, if you will, to Russia a place of privacy. But others in the oil and gas industry itself are members of consortia that are today working with American companies to develop, for instance, the Azerbaijani fields or the fields in Kazakhstan. So companies like Lukoil and GAZPROM are signing agreements with our companies to develop these resources, at the same time as there are voices who say we do not like the Americans monkeying around in our backyard.
    Mr. BEREUTER. If I could take a diversion slightly, since you brought up the subject of Russian troop withdrawal. And if you could respond just very briefly before I have to leave here.
    Do you anticipate, do you see any signs that Russian troops will soon leave the part of Moldova across the east across the river?
    Ambassador COLLINS. We have, from the very outset of this issue, made very clear our support for the government of Moldova's right and its position on its determination that it does not wish to have foreign bases in Moldova. And so we strongly support their efforts to come to an agreement with the Russians and implement it on the withdrawal of the so-called 14th Army, or what is now I think called the military group.
    There has been some very limited activity to withdraw some of that force, to destroy some of its most outdated weaponry.
    Mr. BEREUTER. Are we asking them, Ambassador, to leave? Or are we making any——
    Ambassador COLLINS. We are supporting the Moldovan Government in their efforts to negotiate a withdrawal agreement, or the details of it. We are also supporting the OSCE mission there that is trying to work to reconcile the parts of Moldova and contribute to that process.
 Page 22       PREV PAGE       TOP OF DOC
    Mr. BEREUTER. Ambassador Collins, we are going to take a 2- to 5-minute recess here. If Mr. Campbell returns first before Chairman Gilman, he will take over the Chair. And the first Democrat member to be called upon is Mr. Sherman.
    So we will take a 2- to 5-minute recess.
    Ambassador COLLINS. Thank you, sir.
    Mr. CAMPBELL [Presiding]. The committee will resume. Ambassador Collins, I have not had the privilege to hear your testimony because of the scheduling this morning, but my colleagues have. And I am informed that we are at that point in our proceedings where the questions are to commence. I wish to be sure that is right, and if there is anything additional that you wish to say, I would give you the opportunity to do so now before we go to the questions.
    Ambassador COLLINS. No, that is fine, Mr. Campbell. I think we have done a fair amount of work on questions, and I would like to continue, if that is all right.
    Mr. CAMPBELL. Very well, then. I proceed to the questions that I had, and as my colleagues join us they can ask on their own.
    The first one is a fundamental one regarding the likely turn of the U.S.-Russian relations in view of today's developments concerning the shake-up in the Cabinet, and in terms of yesterday's or last weekend's developments of appointing Mr. Chubais as Deputy Premier.
    I wonder if you might take just a moment and prognosticate for us how you see those developments, positively or negatively.
    Ambassador COLLINS. Well, first, I would set them in the context of Mr. Yeltsin's active return to take on the Presidency following his recovery. And I think that is, if I were to give you the sort of most important point of the last few weeks, that is it. That he has clearly returned and been able, after his recovery now, to resume fully the duties of the Presidency.
 Page 23       PREV PAGE       TOP OF DOC
    I think we have seen, then, certain things flowing from that. I think it is probably fair to say that there was a great deal of undone work in some sense that only the President could do that has been hanging fire, in my view, for some months. And that we are beginning to see the beginning of President Yeltsin working to address those issues.
    I think it is very instructive to read carefully his speech of the 6th. I think he outlined there a very ambitious and a very determined set of policies and goals which he tasked his new government to get on with. And the bureaucratic manifestation of that I think is what we are seeing now, or the political manifestation. He has asked his Prime Minister and Mr. Chubais, his former Chief of Staff, now first Deputy Prime Minister, to form a new government.
    We do not know yet who will be in that government. I talked with our embassy this morning, and they tell me that rumors are certainly being turned out at an industrial-strength capacity in Moscow, but that there is very little hard information about just who will be coming in.
    What we hope is that it will be a team of people led by the Prime Minister and Mr. Chubais who will really get on with some of the extremely important decisions that Russia has to make at some point, and we think sooner rather than later is far preferable, to move the economy from sort of this almost stagnated stabilization to the changes that are going to create the environment for them to begin to grow and attract investment.
    Do I think they will do it? I wish I had a better crystal ball. I am always a bit of an optimist, and I know Mr. Chubais pretty well, and I know the Prime Minister pretty well. I think they want to see it happen. But there are going to be entrenched interests and tough fights ahead to bring about serious change.
    They have a legislative branch. Mr. Yeltsin has called on them to get on with some of the activities they have to do.
    It will not be easy, because this is the next step in attacking the old system and changing the way Russians will have to do business. And I think, you know, we should do everything we can to support the right decisions, but be very conscious of the limits and the problems that are going to be there.
 Page 24       PREV PAGE       TOP OF DOC
    Mr. CAMPBELL. Just one follow-up. What I had in mind in asking the question about the recent developments, though, is the shake-up of the Cabinet consistent with the consolidation of power in Chubais? Or is it more consistent with an attempt at a balanced representation in the Cabinet?
    Ambassador COLLINS. Well, I think we are going to have to wait to see who is in the new Cabinet. You know, you can hear any version of that song you want in Moscow today.
    Mr. CAMPBELL. OK, fair enough. Thank you. One other question that I have. The references have been made several times, and I have a clipping where the President was recently quoted as speaking of a new partnership with democratic Russia, a desire for a new partnership. I do not know if that was in an intentional phrase of a characterization of our relationships.
    But my colleagues may have asked the question on NATO. I would just like you to address, if you could, as the spokesman for the administration what you might perceive the elements of that new partnership would be. And because I was not here for that, with your indulgence, if you did, I hear both sides on the NATO question. We have many visitors here from countries that are seeking entrance into NATO, and we have visitors from the DUMA.
    I am not sure how much to credit the argument that the Russian people and the Russian political leaders will take offense at the expansion of NATO that we ought to be concerned about, or whether that must be said for domestic Russian consumption.
    So would you be kind enough in the remaining moments to speak to the question of what you might say the administration has in mind for the new partnership? And then the specific application on the NATO issue.
    Ambassador COLLINS. I think what we are looking for in, if you will, I guess, this second term of President Clinton and President Yeltsin is to consolidate and broaden the base of our ability and institutional structures to permit work on an agenda which I did try to outline in my statement, which has these five basic components that I think are important.
 Page 25       PREV PAGE       TOP OF DOC
    It is working the nuclear weapons and the weapons of mass destruction issue. It is the capacity to do that, and do it with growing confidence that we are making progress on it, and prevent proliferation, which I think is the next problem. I mean, the weaponry itself tends to be the problem of the last war.
    We want to engage economically, and see a turn in Russia to the ability of that nation to become what I have called competitive and compatible, so that it will be a good trading partner, a good place to invest, and we will be working with them in those regards.
    And we want to work with them on, broadly speaking, the management, if you will, of foreign policy and security issues globally. Certainly much attention is being paid to NATO, you know. I hear about it every time, as you do.
    My own sense here for the NATO issue is the following. The Russians do not like NATO enlargement. You can go, I think, and ask any Russian, ''Do you think NATO enlargement is good for Russia,'' and the answer will be, ''No.''
    That said, I also believe that that is not the only question involved in NATO enlargement. And I do not think we should be mistaken in our own judgments to think that that is the only question involved. It is not.
    The question I wrestle with as someone with responsibility in this area is how are we going to work with Russia to manage our differences over NATO enlargement. And I think that, frankly, we are going to see is doable. I believe that Russia has an interest in establishing a new relationship with a new NATO. We are talking with them about that. That dialog is going to continue for some time, and is going to have many different aspects.
    Our President and President Yeltsin will certainly spend a lot of time on this in Helsinki. And I think we are hoping that the outcome will be a sort of recommitment by President Yeltsin to his interest in defining at least the opening phases of that arrangement with NATO. And it will then develop, we hope, into one in which there is a compatible and cooperative relationship between what, as I said, is a new post-cold war NATO and a new Russia.
 Page 26       PREV PAGE       TOP OF DOC
    Mr. CAMPBELL. I want to thank you, Mr. Ambassador. Just a quick comment on that. I have seen evidence The Washington Post reported that the average Russian does not seem to worry so much about NATO growth. But we have also heard the contrary indication. But just for your knowledge of February 7 report in The Washington Post suggests polling data from Russia suggests that the average Russian does not. I do not know whether that is true or not, and if you had any contrary information I would be interested in knowing it. But I surely do agree with you, that is not controlling for us. It is, however, instructive for us.
    Ambassador COLLINS. Yes. Well, I think, Mr. Campbell, one general point would be that the preoccupation of the average Russian citizen with the foreign policy of his country probably is not all that much different from the average American's preoccupation of that.
    Mr. CAMPBELL. At our home we speak of little else.
    Mr. CAMPBELL. My time has expired, and I recognize the gentleman from California, Mr. Sherman.
    Mr. SHERMAN. Thank you, Mr. Chairman. I believe that Belarus, Ukraine, and Kazakhstan have all agreed to eliminate nuclear weapons and weapons of mass destruction from their territory. Have they complied with those agreements?
    Ambassador COLLINS. Yes, sir, to the best of our knowledge they have. And they have all joined as the Non-Proliferation Treaty, as non-nuclear weapon States.
    Mr. SHERMAN. So their transfer of those weapons back to Russia, or the destruction of those weapons, is now complete?
    Ambassador COLLINS. That is correct.
    Mr. SHERMAN. Now, I sit also on the Budget Committee, and I can count on one hand the number of things that we are increasing a little bit, let alone increasing by two and a half times. And yet the administration does want us to increase aid to Russia by over a factor of two and a half. And I realize an important part of that, or backdrop for it, is the expansion of NATO.
 Page 27       PREV PAGE       TOP OF DOC
    But I think of greater interest, perhaps, at least equal interest to our security, is a subject that has already been brought up. And that is, the transfer of weapons and technology from Russia to unfriendly States.
    First, there have been reports that Russia is transferring missile technology to Iran, particularly SS–4 technology. But to what degree are you certain that that has or has not occurred?
    Ambassador COLLINS. We discussed this, Mr. Sherman. And I noted that Russia is, first of all, an adherent to the missile technology control regime, that prevents, that prohibits the transfer of technologies of this kind.
    We follow this very closely. I think we do not have in our possession conclusive information or evidence that such transfers have taken place. Were they to take place, it would be an extremely serious matter. And it would be taken very seriously.
    Mr. SHERMAN. Excuse me. When you say you do not have conclusive evidence that they have taken place, are you implying that you have some evidence that these transfers have taken place?
    Ambassador COLLINS. We have seen reports that there are efforts to transfer, and we follow them closely. And they, frankly, arise with considerable frequency. We try to check all of them out as best we can. And what I am basically trying to say to you is that we have not had them prove out.
    Mr. SHERMAN. Would the administration object to a rider on this foreign aid bill, requiring a Presidential certification that Russia has adhered to the missile technology control regime; that it has not transferred any non-nuclear State weapons of mass destruction, weapon-grades material, or related technology? And a particular certification that none of the foregoing have been transferred to Iran.
    Ambassador COLLINS. I would take that question. First, mainly because you are asking me whether this, on its face, is a problem.
 Page 28       PREV PAGE       TOP OF DOC
    I do not know the answer. Given the fact that there is other legislation already on the books which I believe addresses a number of the aspects of this, that require us to submit certain reports and certain certifications already, I would just as soon not duplicate if we can avoid it.
    But I would take the question, and I will get back to you with an administration view.
    Mr. SHERMAN. Yes. I mean, we are not asking for duplicative effort, to the extent you are already issuing a report. If duplication consists of literally taking it down to Kinko's, I have got an account there. It will not be expensive.
    But I would think that before we turn to the taxpayers and ask them for this kind of increase, that we make it contingent upon findings on missile technology and technology of weapons of mass destruction, and nuclear materials themselves. So I hope you will get back to me on that.
    Ambassador COLLINS. I will do so.
    Mr. SHERMAN. And that concludes my questions.
    Mr. CAMPBELL. Thank you, Mr. Sherman. The gentleman from South Carolina, Mr. Graham.
    Mr. GRAHAM. Thank you, sir. We will just keep this line of questioning going, if it is OK. I thank you for coming, Mr. Ambassador.
    We talked before the hearing started about plutonium disposition, and I am very interested, like the gentleman just spoke, concerning our efforts to negotiate with the Russian Government a plutonium disposition plan. I do not know if this is in your area of expertise or not, but could you give us a bit of an overview of where we are in terms of plutonium disposition?
    I understand we have about 50 metric tons of weapons-grade plutonium as a result of downsizing our nuclear deterrent force, and the Russians have somewhere maybe in the hundred metric tons. What efforts are being engaged in now to dispose of that plutonium?
 Page 29       PREV PAGE       TOP OF DOC
    Ambassador COLLINS. Mr. Graham, we and the Russians have an extensive program of cooperation on plutonium disposition. It began in 1994, when President Clinton and President Yeltsin tasked the experts to study the options for disposing of plutonium, of fissile materials. And that report was issued in September of last year.
    It has helped form the basis of subsequent decision by the leaders of the so-called P–8—that is, the G–7 Presidents plus President Yeltsin—for their consideration of this question.
    We are developing with the Russians a series of projects involving mixed-oxide fuel fabrication. Then I get a variety of technical guidance here concerning immobilization and pit conversion, which is getting pretty much beyond me.
    These are pretty much, at this point, in the R and D phase, the study phase.
    Mr. GRAHAM. Excuse me. Is any of the money that we are appropriating for aid or the increase going to implement any of these programs regarding plutonium?
    Ambassador COLLINS. For 1997, the Department of Energy is putting approximately $10 million into these projects. We are also active on the multilateral side. There was, in April last year, as you may recall, a summit in Moscow. The eight heads of government asked again the experts from their governments to look at, again, further practical options for disposing of plutonium that is declared excess to defense needs.
    In 1996, in October, an experts' conference and a subsequent meeting of the experts' group on non-proliferation from the eight countries identified two approaches, which I think we discussed earlier, consistent with those identified by the Department of Energy.
    Mr. GRAHAM. Right.
    Ambassador COLLINS. These meetings and these efforts have raised the level of interest among all the eight countries, in our view, in finding a cooperative and long-term solution to the problem of surplus plutonium. We hope that this will continue; that we can sort of reconfirm and rededicate this effort when we meet, when the eight leaders meet in Denver in June. That is certainly something that we will be seeking to put on the agenda.
 Page 30       PREV PAGE       TOP OF DOC
    Mr. GRAHAM. Do we feel fairly certain that, not only the warheads and the nuclear weapon delivery systems have been centralized as far as security, do we feel the same level of certainty regarding the excess weapons-grade plutonium? And if it is beyond your expertise, just——
    Ambassador COLLINS. No, but as a basic principle, we believe that the weapons and things that are within the purview of the Ministry of Defense continue to be essentially under effective control and strong control. We are much more concerned about those things which are in the civilian sector: the fissile material that is out in other areas.
    And it is also a part of the programs that we have been funding and working with the Russians to develop to focus on creating better conditions of security and accountability for all of that fissile material that is outside of the military establishment.
    We have had some pretty good work done, I believe, jointly with the Russians. They have as much of an interest, frankly, as we do in this. And I think we are satisfied that we are making pretty good progress now in that field.
    Mr. GRAHAM. One final question; it is kind of a different question totally. In regards of efforts to bring democracy to Russia, I believe about the plurality of the DUMA is now Communist candidates, Communist representatives. Is that correct?
    Ambassador COLLINS. Well, or their allies.
    Mr. GRAHAM. OK. And we talked before that it was a disjointed organization in our coalition in terms of different philosophies. Given the economic conditions that exist today in Russia, do you believe that a Communist party ticket has been enhanced in terms of their electability? Or do you believe that their electability has gone down, based on our efforts? Has their stock gone up, or has their stock gone down?
    Ambassador COLLINS. Well, I guess one has to look at the results of elections. If I look at the Presidential election last summer, which I happen to believe was an open and free and fair election—it was certainly hotly contested—the Russian people made a pretty clear choice. And the choice they made was, warts and all, if you will, for the process that they started after 1991, and to keep it going under the leadership of the man who has guided it. And they turned down the opportunity to select the past.
 Page 31       PREV PAGE       TOP OF DOC
    Mr. GRAHAM. But from July to the present, given another election in the foreseeable future, do you think the conditions from July to the present have enhanced the Communist candidate, or have made their likelihood of success even——
    Ambassador COLLINS. I guess everything I have seen in polling—and I think this is all very speculative—everything I have seen in polling does not show that there has been much change, really. And I do think that what is critical to remember is that it is one thing to listen to all of the political pundits and so forth. It is quite another when we come up, as we have in a few occasions in the past, to the Russian people making a choice.
    When they have had a choice to make, they have, I think, voted their interest. And they made pretty clear where that interest lay.
    Mr. GRAHAM. Thank you.
    Mr. CAMPBELL. We are ready for a second round now. And the first questions should be from our distinguished ranking member, the gentleman from Indiana, if you wish, Mr. Hamilton.
    Mr. HAMILTON. Thank you very much, Mr. Chairman. We were talking about NATO enlargement, and you had said how that had dominated discussions. And I guess the Russians are, as you indicated, opposed to it.
    But in a very real sense, the security of Russia depends very heavily upon what they do about a lot of domestic problems: taxes, tax reform, corruption, economic reform, and those things.
    What I would like you to do is give me a quick run-down of where you think Russia stands with regard to these issues of economic reform on which they seem to have stalled. The growth of the Russian economy has not occurred.
    Second, the tax question. The government has trouble collecting taxes, apparently. And I understand they have had a new tax code drafted; that it is pending. Maybe you could bring me up to date on the status of that.
 Page 32       PREV PAGE       TOP OF DOC
    And then, of course, the whole corruption issue, which of course I think you will agree is very serious. If you talk to American businessmen, who are trying to do business over there, corruption just dominates their thinking.
    So tell me where you think Russia is on some of these key internal problems today.
    Ambassador COLLINS. First, Mr. Chairman, I think you describe quite correctly the fact that, in some sense, we started a reform process in quite dramatic ways in late 1991, early 1992. Privatization moved quickly. You have, if you will, the monetization of the economy.
    I think we need to keep in mind that it has been just 5 years since it was illegal to own private property in that society. And we have come a very long way in establishing what I would say is a macroeconomic base of some stability, and a basic restructuring of destroying the old State control over all the resources and all economic authority, to create something of a base line of market relationships.
    I would say we got to that point about a year ago. And we have had since, in some ways, a good deal of stagnation in movement. Part of that because it was a political year. I think one of the realities in Moscow is there are real politics now in the Russian Federation. And dealing with tax issues or changing property rights, these are not things that necessarily appeal to the legislature seeking reelection.
    Similarly, you had a Presidential election in which these were hotly contested issues. So in some ways we have had stagnation. And then, frankly, we had an election of a new President, but really a situation in which the President, for reasons of health, was not able to discharge fully the obligations and responsibilities of the office. And that, in turn, has led, I think, to a period of drift.
    Now, where we are today, it seems to me, on these specific issues is at a moment of anticipation. President Yeltsin has given a very determined speech outlining an ambitious and strong program. He has, in essence, dismissed his Cabinet, leaving it to a Prime Minister and a new Deputy Prime Minister, Mr. Chubais, who are both, I think, card-carrying members of reform, and who understand fully the importance of getting on with reform.
 Page 33       PREV PAGE       TOP OF DOC
    They have been tasked with forming a new government and a new team to get on with passing the tax code, moving the next steps on things like production-sharing agreements to get investment in the energy sector. To move on a lot of the market economic reforms that are fundamentally stalled.
    Whether they will be able to do that, and whether that team is going to emerge from this process, my crystal ball just does not give me the answer. What I can say is that there is no question that unless they do address these questions, we are going to see continuing drift. And we will not get to the kinds of goals that President Yeltsin has told our President are paramount for him, which is to attract investment and begin the process of economic growth.
    Mr. HAMILTON. As you analyze things there in this moment of anticipation, how do you come down? Are you optimistic that they will be able to deal with these problems?
    Ambassador COLLINS. I am always a bit optimistic, Mr. Hamilton. I think the two people that they have put in charge there of the government, as I said, have a history of working effectively to promote reform.
    Mr. HAMILTON. You think they will begin to move, then, on major problems.
    Ambassador COLLINS. I certainly hope so. I certainly hope. But I think they will face major forces who will try to stall and protect vested interests.
    Mr. HAMILTON. Now, before my time expires here, we have a summit meeting coming up in a week or so.
    Ambassador COLLINS. The 19th and 20th, sir.
    Mr. HAMILTON. The 19th and 20th. And what kind of an outcome would constitute a successful summit?
    Ambassador COLLINS. The agenda for the summit really, sir, we think is focused in three areas. The first is, perhaps the simplest is, a discussion of economics. It is, in a sense, a rededication to working together to see Russia become what—I have a code word for it—a sort of competitive, compatible, and cooperative economy. One that, in fact, will move in the direction that we discussed here. And we will give them assurances of our support and cooperation in doing so.
 Page 34       PREV PAGE       TOP OF DOC
    Mr. HAMILTON. Competitive, cooperative, and what?
    Ambassador COLLINS. And compatible. That is, that they can meet the responsibilities of things like membership in the World Trade Organization.
    Mr. HAMILTON. And the IMF?
    Ambassador COLLINS. And the IMF, and the Paris Club, and others.
    The second issue that is going to be on the agenda is the future of strategic arms reductions. We have there still not got ratification on Start II by the Russian DUMA. We are going to be talking with President Yeltsin about what it will take to get that done, and urge him to do it. And we will also be talking about whether or not we can come to a sort of sense or guidelines on further reductions, in a further agreement.
    And third, the issue of European security—NATO and so forth—is going to be a major item on the agenda. I think what we are hoping for from that, obviously we cannot make decisions for NATO unilaterally. This is something that has to be done by the Alliance.
    But what we are hoping to do is to have our President and President Yeltsin come to an understanding that will permit us to help NATO negotiate some kind of a formal arrangement with Russia in the coming few months. This has been called variously a charter or things of that kind. It will try to embody a new relationship between what we like to call a new Russia and a new NATO.
    Mr. HAMILTON. If I may, one other question. The Russians now accept the fact of NATO expansion, do they not?
    Ambassador COLLINS. That is my judgment, yes, sir.
    Mr. HAMILTON. And now it is a question of the consultative counsel and the political document, and the charter and all of that. Do you expect all of that to be put into place by the Madrid meeting?
 Page 35       PREV PAGE       TOP OF DOC
    Ambassador COLLINS. We would hope it can be put in place. But I would say also we have made clear to the Russians that Madrid for us is not a deadline. If it does not get done by Madrid, we will keep at it. Because we think, frankly, it is in the interests of both the Russian Federation and NATO, and, by the way, all the other States in Europe, that NATO and Russia find a more predictable and a more stable relationship for the future.
    Mr. BEREUTER. Thank you, Mr. Hamilton. Ambassador, I would like to return to this line of questioning that I had on the Russian oil and gas monopolies.
    GAZPROM and Lukoil now seem to have as a priority, the rapid construction of export pipelines that circumvent the Ukraine, which of course badly needs the tariff revenues that are in each of those pipelines that cross its territory from Russia. But they, I guess you could say, are refusing to accept Russian demands to allow Russian military bases to exist on their country, on their country's territory.
    Are these two monopolies benefiting from financing provided by our export-import bank or by the World Bank, or other international financial institutions, for the constructions of pipelines that circumvent the Ukraine?
    And let me ask another question that is related. What is the administration concretely doing to overcome Russian efforts to prevent oil and gas pipelines from exiting the Central Asian and the Caucus Regions using non-Russian territories, such as routes through Georgia, Armenia, or Turkey?
    Maybe I ought to ask one more question just to close the gap here. Are they benefiting from the Export/Import Bank (Eximbank) resources in other ways, if they are not benefiting directly in terms of pipeline finance around the Ukraine?
    Ambassador COLLINS. Let me start with a basic premise. I am not sure, first of all, that it is clear that GAZPROM is trying to circumvent Ukraine. They are working on, as my understanding, modernizing some of the lines they already have there. They are looking at other lines, some down through the Caucasus.
 Page 36       PREV PAGE       TOP OF DOC
    The basic issue is exporting their gas into new markets or developing in expanding markets. Whether they choose to go through Ukraine or through other areas, I think we are not sure has been decided yet.
    Our position with them—and not only on this issue, but on Central Asia, on the Caucasus, on all of these basic issues—has been that we would support projects, and we will work with projects which are economically based and economically viable and make sense. That is what our companies do. Our companies, in the first instance, look to make a profit. And they, therefore, look for economically viable projects.
    They have been exploring and are involved, for instance, with Lukoil in the consortium in Azerbaijan to develop pipelines. One of the pipelines that will be developed by that consortium is the one that will go the so-called western route for early oil.
    Mr. BEREUTER. Mr. Collins, I have a limited amount of time, and you are not getting to my question about whether they are using or benefiting from Eximbank finance.
    Ambassador COLLINS. I will have to take that question, but I think the answer is we are working to support multiple pipelines, multiple routes for the export and development of these resources. If they are viable economically and are economically based, we consider them worth support.
    I will check on whether or not they are. But I do not necessarily accept the premise that they are doing this to pressure Ukraine.
    Mr. BEREUTER. Do you believe that the executive branch can use the Eximbank for foreign policy purposes?
    Ambassador COLLINS. I think the Eximbank is supposed to be used, and it is my judgment it should be used, to support American economic and trade interests.
    Mr. BEREUTER. Finally, I have one more question, then I will turn to Mr. Campbell for his concluding questions. It relates to Nagorno-Karabakh. The United States has apparently joined Russia and France as co-chairs of the OSCE efforts there, called the Minsk Group, which is seeking a peaceful resolution to the conflict in Nagorno-Karabakh and Azerbaijan.
 Page 37       PREV PAGE       TOP OF DOC
    What do you see the United States, Russia, and France doing in the next few months to arrive at a common strategy to resolve that conflict? And how long will the United States remain its chair if nothing substantial is accomplished by the Minsk Group within a year or so?
    Ambassador COLLINS. Well, sir, the term of office is 1 year. So in some sense, that is, at least initially, a bounding time.
    We have had one meeting of the Minsk Group co-chairs in Denmark. There will be another in the middle of this month. The effort is going to be to review, take stock, in a sense, of where we are on the issue of settlement; what are the issues of agreement; and what are the issues of disagreement. And we will work to come to a common strategy among the three to try to pursue these with the parties concerned.
    Now, we, I hope, will be able to come to agreement on essentially two approaches here. One is to impress upon the parties in this conflict that we are united as three, and that we are intent on trying to help them get negotiated the problems that remain.
    Second is that I hope that we will be able to suggest, from our collective work, options for resolving the issues that remain stuck.
    In the end, the success or failure of this is not going to depend on the three. It is going to depend on the parties to the conflict. And there I have to express grave caution about whether or not we will be successful. But it is an important thing to get resolved, and it affects our major interests in the Caucasus.
    Mr. BEREUTER. Ambassador Collins, I hope that you will convey this Member's concern, and I think a concern of many Members of Congress, that if there is a peacekeeping force there, that it not be commanded by a Russian; and that Russian forces not have a dominant part of the force involved in the peacekeeping operations. But that it instead be a commander, and the majority, at least, of troops from neutral countries, not involving any of the Minsk Group and not involving the Russians in a substantial, dominant role.
 Page 38       PREV PAGE       TOP OF DOC
    Ambassador COLLINS. Thank you, sir.
    Mr. BEREUTER. Thank you. Mr. Campbell.
    Mr. CAMPBELL. Thank you, Chairman Bereuter. Mr. Ambassador, one question lingers from the discussion on the strategic arms situation.
    I am informed through The New York Times, an article on the 22nd of November last year, that Russia's last operable photo satellite burned up on reentry on September 28. And I am quoting, ''Since then Russian and Western experts say the Russian military has lacked up-to-date imagery of such potential flash points as Afghanistan and the Russia-China border.''
    And the question I would have is, this would indicate a launch-on warning as a practicality as what Russia must have, instead of a launch-on-launch.
    Can you validate that report for me? And can you validate the conclusion that I draw from it?
    Ambassador COLLINS. If, with your indulgence, Mr. Campbell, I will take that question, and I will get you a written answer.
    Mr. CAMPBELL. OK, thanks.
    Ambassador COLLINS. I just do not have the facts at my fingertips.
    Mr. CAMPBELL. Perfectly swell, perfectly fine answer. I have only one other inquiry. And that is—actually two, quickly.
    In the prepared material I am informed that Russia may be continuing to produce a chemical weapon. And if you are answering questions in writing, I wonder if you might also get back to me regarding a particular lethal chemical nerve gas called A–232. Unless you have encyclopedic knowledge and can answer that one off the top of your head.
    Ambassador COLLINS. I would just as soon, if I can, provide you that, as well.
 Page 39       PREV PAGE       TOP OF DOC
    Mr. CAMPBELL. I will be happy. And the last inquiry, perhaps, that you might be able to speak to today, deals with the NATO question on which we have spent so much time.
    I am troubled about the possibility that along with the subtle understanding that NATO is going to go ahead, is that we have communicated a moratorium, as well. Whether or not that is right policy we can debate, but I am concerned if we have communicated to Russia a moratorium along the following two lines. And I would just like what response you can give on the record on this.
    The first would be that, all right, this first batch will not be followed by any others for 10 years.
    And the other moratorium concept there that I have heard, or hands-off concept that I have heard described, is very troubling: the so-called sphere of influence one. President Clinton has clearly stated that we do not recognize the sphere of influence. But the Baltics are petitioning. They would like to be considered for NATO. And I know that the geography is different, and that might lead to a situation where we would say no to the Baltics.
    I would be very reassured if you could give me an answer on the record today that we have no such moratorium policy, and no such never-for-the-Baltics policy. But you might be able to amplify and tell me what is our policy in those areas.
    Thank you.
    Ambassador COLLINS. Well, I can categorically give you an assurance that there is no agreement policy or deal on a moratorium of any kind.
    I can also give you a categoric assurance that there are no lines being drawn about who is eligible, who is not eligible. These are simply not accurate reports. And they, I am sure, are going to continue, and we will live with them. But we will be as categoric as we can. And I think our actions will speak for our position.
 Page 40       PREV PAGE       TOP OF DOC
    I would like to make one general comment about the issue of NATO and NATO-Russia. I think we sometimes tend to forget that this is not about NATO-Russia; this is about Europe.
    I have spent a great deal of time over the last several months going to Moscow, it is true. But I have also been to Kiev, and I have been to the Caucasus, and I have been to many of the capitals of Western Europe, and I have been to some in eastern Europe, and I have been to the Baltics. All of these States have a stake and a say in how this is going to come out.
    No one here is going to dictate to anyone because it is just not possible. NATO works on the basis of consensus of its members. All of its members are involved in the process of defining a future relationship with Russia, with new members, with new non-members, with people who are aspirants to be members.
    The objective here that all of us in NATO share, certainly without any question, is to increase the security of all. That is the point of this exercise. If we get it right, that will be the result. And if we get it wrong, we are going to live with a very difficult situation.
    And so many of these concerns and worries and so forth about whether Russia and NATO will get it right, I think overdramatize and underestimate the stake of many other countries in exactly what is going on for it.
    Getting the NATO-Russia relationship right is very important to all of them. But it is by no means the only issue that we are going to be dealing with in this process.
    Thank you very much.
    Mr. BEREUTER. Thank you very much, Mr. Campbell and Mr. Ambassador.
    I noticed the comments the gentleman made about the Baltics, and I certainly share his concerns there. And it reminded me that on the 9th, Jim Hoagland, writing in The Post, was expressing his warning that the nuts-and-bolts negotiations with the Russians in Helsinki could be used to drive a wedge between Europe and the United States, something we have been concerned about for a long time, and seems to have been a long-term goal of the Soviets and probably the Russians. And the concern that the President might accept some kind of code language which the Russians would interpret as meaning that the Baltics would never become a part of NATO.
 Page 41       PREV PAGE       TOP OF DOC
    I know that is not the President's objective, but maybe a cautionary note from this editorialist, an agreement with this editorialist might be appropriate.
    Ambassador Collins, thank you very much for your testimony, and for spending this time with us this morning. We appreciate it very much.
    Ambassador COLLINS. OK. Thank you, sir. Thank you, Mr. Campbell.
    Mr. BEREUTER. This hearing is adjourned.
    [Whereupon, at 12:56 p.m., the committee was adjourned.]