Testimony

Testimonies given by Atlantic Council staff or affiliates before Congressional committees.

  • Singh Testifies Before Senate Banking Committee on Sanctions


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  • Christopher Porter Testifies Before the House Committee on Homeland Security on Cybersecurity of America's Aviation Sector

    Statement of Christopher Porter
    Nonresident Senior Fellow, Cyber Statecraft Initiative, Atlantic Council
    Chief Intelligence Strategist, Fireeye, Inc.

    Committee on House Homeland Security
    Subcommittee on Cybersecurity and Infrastructure Protection
    Subcommittee on Transportation and Protective Security

    September 6, 2018

    Thank you Chairman Ratcliffe, Ranking Member Richmond, Chairman
    Katko, and Ranking Member Coleman for convening this joint
    hearing today. We appreciate the opportunity to share FireEye`s
    perspective on threats to the aviation sector and provide an
    overview of how the private sector is helping to secure the
    sector.

    My name is Christopher Porter, and I`m the Chief Intelligence
    Strategist for cybersecurity company FireEye and a Nonresident
    Senior Fellow at the Atlantic Council. At FireEye I manage our
    ``Intelligence for Executives`` program for senior corporate and
    government clients across the globe. Our strategic intelligence
    products reach more than 4,000 customers in 67 countries. Prior
    to joining FireEye in 2016, I served for nearly nine years at the
    Central Intelligence Agency, including an assignment as the cyber
    threat intelligence briefer to White House National Security
    Council staff, several years in counterterrorism operations, and
    warzone service.

    In addition to the 300-plus security professionals responding to
    computer intrusions, FireEye has over 200 cyber-threat analysts
    on staff in 18 countries, speaking 30 different languages, to
    help us predict threats and better understand the adversary -
    often by considering the political and cultural environment of
    the threat actors. We have an enormous catalog of threat
    intelligence, and it continues to grow everyday alongside the
    continually increasing attacks on organizations around the world.

    FireEye is supporting the aviation sector here at home. We`re
    protecting the Transportation Security Administration with both
    email and web inspection, managed by the Department of Homeland
    Security`s Enterprise Security Operations Center. As TSA
    continues to stand up its intelligence capabilities, we are
    providing support through their subscription to our intelligence
    reporting.

    The Federal Aviation Administration also makes great use of our
    intelligence reporting and they`re using our malware analysis
    tool to help prevent and detect future cyber attacks. I want to
    share with you today FireEye`s perspective responding to breaches
    in the aviation sector and from the intelligence we have
    collected on what might be coming next.

    I am sure it will come as no surprise to you that the aviation
    sector is one of the most targeted for cyberattack. Safe,
    reliable air transport is vital for everything from national
    defense to global commerce to personal freedom. Malicious actors
    seeking to undermine America`s strength in aviation through
    cyberattacks and theft include foreign governments, terrorists,
    organized crime, and other non-state actors.

    I want to start by discussing the most common cyber threat facing
    the aviation industry: cyberespionage. Foreign governments
    routinely seek to steal industrial secrets from manufacturers,
    researchers, designers, and operators of both military aircraft
    and cutting edge civilian planes. China, Russia, and more
    recently Iran have all targeted the U.S. or its close allies for
    theft of aviation secrets via computer network operations.

    All three countries also routinely target ticketing and traveler
    data, shipping schedules and manifests, and partner industries
    such as railways and hotels as they gather counterintelligence
    data on suspicious travelers and intelligence on VIPs they wish
    to track.

    There are two aspects of cyberespionage targeting the aviation
    sector overall that I want to emphasize: first, that because of
    its pervasive nature, the best defense against cyberespionage is
    rapid, detailed information sharing with context. Our company
    pushes alerts to customers in real-time, and industry groups
    share information between peers because, as we have learned, a
    threat to one is often a threat to all. The US Government also
    shares threat information, although it is generally classified
    and available only to cleared vendors; there is room for
    improvement in government information sharing with uncleared
    industry partners. Most importantly, the timeliness of
    information within industry and between the private sector and US
    Government must improve. In my line of work, if we can`t provide
    context and additional information in 24-48 hours of an attack,
    we have not met customer expectations.

    The second thing to know about cyberespionage though is that,
    because it is routine, it should not be viewed as destabilizing.
    Media reporting on cyber incidents is often focused on the worst-
    case scenario in ways that are sometimes unjustified and
    needlessly alarm the public or inflame opinion against a foreign
    adversary. Every major cyber power, including the United States,
    has an interest in knowing about the potential defense technology
    developments of both its friends and potential threats, and the
    US aviation sector is not unique in being targeted in this way.

    When cyberespionage operators get a foothold on a system, they
    can often use that access for stealing information or to launch a
    disabling or destructive attack using the same technology. But
    they rarely choose to do so, and in the US there are significant
    redundancies in place to ensure safety. A crashed IT system does
    not mean a crashed plane, and it`s important for the public to
    keep that in mind.

    So while cyberespionage on its own does not pose an urgent threat
    to life, I am concerned that continued theft of trade secrets
    poses a long-term threat to American economic health.

    Aviation is one of our nation`s leading export industries, and
    China in particular is harnessing all aspects of national power
    to displace the U.S. as a military and economic power in Asia and
    worldwide. Chinese theft of U.S. intellectual property for
    commercial purposes has almost entirely dropped off since a
    September 2015 agreement between President Xi of China and
    President Obama, but because aviation research and development is
    so closely tied to national defense this particular sector of the
    American economy never stopped being targeted.

    Chinese hackers pursue fewer targets in the United States than
    they did before the Xi-Obama Agreement, but they have just as
    many hackers who are more skilled and better resourced than ever,
    meaning that industries that do continue to be threatened face a
    greater threat than ever before that technologies the U.S. spends
    billions developing will be stolen and adopted by economic
    competitors and military rivals in China.

    Cybercriminals likewise pose an economic threat to the aviation
    sector and its customers. For years we have seen airlines and
    third-party ticket sellers exploited so that illicit tickets
    could be resold for profit in underground fora. Because airlines
    are trusted by their customers with a wide variety of sensitive
    personal data, they are also frequently targeted by
    cybercriminals looking to gather data to enable other types of
    fraud. In the last two years, our devices have detected a sharp
    increase in the use of ransomware to temporarily disable airline
    ticketing and support operations air travel is a time-sensitive
    business, and cybercriminals know that they can extort quick
    payment from airlines that are unable to move passengers until
    their systems are decrypted.

    Finally, in addition to threats to the aviation sector`s
    proprietary information, customer records, and systems that
    support flight operations, there are cyber threats intended to
    use aviation`s prominent place in our lives as a means of
    creating psychological damage or political pressure. Airports in
    Europe, the Middle East, Southeast Asia, and here at home have
    had their websites defaced or disrupted, mostly by non-state
    actors seeking to draw attention to a particular political cause.

    The primary victim in these situations are members of the public
    who may wrongly fear that a loved one is at risk or grow in their
    distrust of flying, even though the affected systems may be
    public-relations focused and support no flight operations at all.
    The fear these operations cause is particularly pronounced when
    those outages are caused by groups affiliated with terrorists. In
    other cases, these virtual sit-ins that affect a company`s
    website have, in limited cases, delayed takeoffs for airlines
    that also relied on those computers to make or distribute flight
    plans, though even these attacks did not have a direct effect on
    flight safety.

    It is important that officials and airlines representatives
    communicating with the public during such events differentiate
    between taking down systems that cause inconvenience from those
    that directly support flight operations and passenger safety.

    Conclusion

    Thank you again for the opportunity to participate in today`s
    discussion. And thank you for your leadership improving
    cybersecurity in the aviation sector. I look forward to working
    with you to strengthen the partnership between the public and
    private sectors and to share best practices to thwart future
    cyber attacks. I`m happy to answer any questions from the
    Committee.


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  • Fried Testifies Before the Senate Banking Committee on "Russia Sanctions: Current Effectiveness and Potential for Next Steps"


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  • Sloan Testifies Before the Senate Foreign Relations Committee on NATO

    Stanley R. Sloan
    Visiting Scholar, Middlebury College
    Nonresident Senior Fellow, Scowcroft Center for Strategy and Security
    Atlantic Council of the United States
    Senate Foreign Relations Committee
    Hearing:
    September 5, 2018

    Thank you, Chairman Corker, Ranking Member Menendez, and members of the Committee, for calling today’s hearing. I am happy to have the opportunity to talk about the value of the North Atlantic Treaty Organization to the United States.

    Twenty years ago, as a Senior Specialist with the Congressional Research Service, I worked closely with this committee and the Senate NATO Observer Group during consideration of the first round of post-Cold War NATO enlargement.

    It is my pleasure to return to discuss the alliance that, in my opinion, remains so important to American security.

    I will take this opportunity today briefly to fill in a little of the historical background to the questions you are addressing, to say a few words about NATO as a “political” alliance, and then about the value of U.S. membership in, and leadership of, the alliance.

    Over the course of seven decades, U.S. leadership of the alliance has been based on joint management of the “transatlantic bargain” by the Congress, particularly the Senate, and successive presidential administrations. From the very beginning, the Congressional partner regularly raised questions about the persistent burden-sharing issue. This questioning began with the initial debate in the Senate on whether it should give its advice and consent to the Treaty. The administration of President Harry Truman reassured Senators that the European allies would contribute to their own defense and that the United States would not end up carrying a disproportionate share of the burden.

    As the European states recovered from the devastation of World War II, some Senators argued that the Europeans had become capable of defending themselves. Montana’s Senator Mike Mansfield promoted resolutions from the mid-1960s into the early 1970s that sought to force administrations to begin withdrawing U.S. forces from Europe. He was opposed by several administrations which argued that the American NATO commitment was essential to counter the Soviet threat.

    Since 1949, both Republican and Democratic administrations sought ways to get the Europeans to relieve the United States of some of its NATO burdens. The Congress did most of the complaining while successive presidents of both parties urged allies to do more but largely defended the alliance and its costs as necessary for U.S. national interests.

    In this area, President Trump has reversed institutional roles with his burden-sharing complaints and his threats to abandon key commitments in the 1949 Treaty. The Congress and the Department of Defense, in response, have largely assumed the roles of NATO-defender, while still lobbying for better European contributions.

    One thing remains clear to me: NATO is both a political and military alliance. I can’t tell you how many times I have heard someone erroneously claim that NATO is “just a military alliance.”

    NATO is a civil alliance with a strong military structure and capability that facilitate military cooperation aimed at deterring attacks against member states and defending them if necessary. Until President Trump, all American presidents have remained committed to the North Atlantic Treaty’s Article 5 collective defense provision.  Article 5 does not say exactly what member states must do when another member is attacked. That is left for the sovereign decision of each state, whose decision-making independence is guaranteed by the treaty.

    Article 5 does commit each member nation to regard an attack on another member as an attack on itself, and to take “such action as it deems necessary, including the use of armed force to restore and maintain the security of the North Atlantic area.” Allied military deployments, training, exercises, plans and weapons acquisitions are designed to endow this commitment with hard military reality, particularly for an adversary. NATO's Defence Planning Process is a historically unique mechanism to share and coordinate plans and acquisitions.

    Moreover, the credibility of Article 5 depends not just on military strength, but critically on national political will to use it – will that must be communicated effectively to both adversaries and allied citizens.

    Article 5 does not exist in a vacuum. The overall political relationships among member states affect its credibility. The recent NATO summit communique emphasized the importance of cohesion, unity, and shared goals. But our NATO allies believe today that the most powerful and influential among them – the United States – is damaging political trust within the alliance, seriously weakening NATO credibility in deterrence to adversaries and reassurance to citizens.

    I doubt this is what any member of this committee wishes to happen.

    The preamble of the treaty makes it clear that the purpose is not just to defend territory, but also to defend values – this is where the “political” part comes in. The treaty enumerates those values as “the principles of democracy, individual liberty and the rule of law.” In recent years, the United States and its allies have added “human rights” to the list. The defense of these values by NATO nations puts political backbone into the liberal international order.

    The alliance has not always succeeded on the value side. Undemocratic governments have, from time to time, gained power in NATO countries. They were tolerated for geostrategic reasons. But they were the rare exceptions.

    Today, many countries on both sides of the Atlantic are facing decisions about what kind of democracy they want. Is it liberal democracy, based on the North Atlantic Treaty preamble’s value statement?  Or is it what has been called “electoral democracy,” in which governments are elected but power is increasingly centralized?  Or are they headed toward “electoral authoritarianism,” in which elections take place but the rule of law and individual liberties, like freedom of speech and the press, are strictly controlled by central authority.

    Decisions by NATO member states, including our own, concerning which path to choose will have at least as much impact on the viability of the alliance as will decisions regarding levels of defense spending. In fact, authoritarian populists like those currently on the rise in the West don't particularly like NATO and tend not to support engaging in collective action to provide public goods.

    Moreover, elected officials in sovereign, democratic allied states usually seek to get the best security for their populations at the most reasonable price. This means that alliances among sovereign states will always face questions concerning an equitable balance of costs and benefits among the members. This reality caused constant friction between the United States and its allies throughout the Cold War.

    The burden-sharing issue was built into the transatlantic bargain, emerging in many ways from the foundation provided by contrasting U.S. and European geographic realities, historical experiences, and military capabilities. The original concept of the alliance was that the United States and Europe would be more or less equal partners and would therefore share equitably the costs of alliance programs.

    The seeds for a perpetual burden-sharing problem were planted when the original transatlantic bargain was reshaped in 1954 following the failure of the European Defense Community. The revision of the original bargain meant that the alliance would become heavily dependent both on U.S. nuclear weapons and on the presence of U.S. military forces in Europe to make those weapons credible in deterrence as well as to fortify non-nuclear defense in Europe.

    The U.S. burden-sharing complaint took many forms and was translated into a great variety of policy approaches between 1954 and the end of the Cold War. In the early 1950s, the allies arranged common funding of NATO infrastructure costs, such as running NATO civilian and military headquarters and building and maintaining fuel pipelines, communication systems, and so on. Each ally was allocated a share of the infrastructure costs, according to an “ability to pay” formula.

    As European nations recovered from World War II and experienced economic growth, the U.S. share of infrastructure expenses was progressively reduced. However, such expenses were not the main cost of alliance efforts. The large expenses were the monies spent by nations to build, maintain, and operate their military forces. In this category, the United States always outpaced its European allies.

    The administration of President John F. Kennedy in the early 1960s sought a greater European contribution to Western defense. Its policy optimistically advocated an Atlantic partnership with “twin pillars” featuring shared responsibilities between the United States and an eventually united Europe. The Kennedy presidency also witnessed the beginning of the financial arrangements between the United States and West Germany designed to “offset” the costs of stationing U.S. forces in that country. These agreements were renewed and expanded in the administrations of Lyndon B. Johnson and Richard M. Nixon to include German purchases of U.S. Treasury bonds and, in the 1970s, the repair of barracks used by U.S. forces in Germany.

    The U.S. experience in Vietnam, French withdrawal from NATO’s integrated military structure in 1966, and U.S. economic problems all diminished support in the Congress for U.S. overseas troop commitments in general and led the Johnson administration to press the Europeans to increase their defense efforts.

    This period saw a strong congressional movement, led by Senator Mike Mansfield, to cut U.S. forces in Europe. Senator Mansfield introduced the first of the “Mansfield Resolutions” on August 31, 1966. The Senate was asked to resolve that “a substantial reduction of United States forces permanently stationed in Europe can be made without adversely affecting either our resolve or ability to meet our commitment under the North Atlantic Treaty.”

    Senator Mansfield reintroduced the resolution in 1967, 1969, and 1970, when the resolution obtained the signatures of 50 co-sponsors. However, U.S. presidents, Republican and Democrat alike, consistently opposed such efforts, and these resolutions and similar efforts through 1974 failed to win final passage. The Nixon administration, after unsuccessfully attempting to get the Europeans to increase “offset” payments, took a new tack. The Europeans objected to the prospect of American troops becoming little more than mercenaries in Europe and argued that the U.S. troop presence was, after all, in America’s as well as Europe’s interests. Nixon shifted to a focus on getting allies to improve their own military capabilities rather than paying the United States to sustain its own. The so-called Nixon Doctrine, applied globally, suggested that the United States would continue its efforts to support allies militarily if they made reasonable efforts to help themselves.

    Congress continued to focus on offset requirements, passing legislation such as the 1974 Jackson-Nunn Amendment requiring that the European allies offset the balance-of-payments deficit incurred by the United States from the 1974 costs of stationing U.S. forces in Europe. However, a combination of events in the mid-1970s decreased congressional pressure for unilateral U.S. troop reductions in Europe.

    The East–West talks on mutual force reductions that opened in Vienna, Austria, in 1973 were intended to produce negotiated troop cuts, and U.S. administrations argued that U.S. unilateral withdrawals would undercut the NATO negotiating position. Congress turned toward efforts to encourage the Europeans to make better use of their defense spending, and President Jimmy Carter, in 1977, proposed a new “long-term defense program” for NATO in the spirit of the Nixon Doctrine, setting the goal of increasing defense expenditures in real terms 3 percent above inflation for the life of the program.

    In 1980, Congress, frustrated by allied failures to meet the 3 percent goal, required preparation of annual “allied commitments reports” to keep track of allied contributions to security requirements. Throughout the 1980s, Congress developed several approaches linking the continued U.S. troop presence in Europe to improved allied defense efforts. However, the burden-sharing issue was never “resolved.” In fact, the growing U.S. concern with Soviet activities in the Third World put even more focus on the fact that the Europeans did little militarily to help the United States deal with this perceived threat to Western interests.

    In sum, throughout the Cold War, the United States felt strongly that the Europeans needed to “do more.”

    Although some Europeans agreed that their countries should increase their relative share of the Western defense burden, the prevalent feeling was that many American criticisms of their defense efforts were unwarranted.

    Perhaps ironically, the biggest burden-sharing issue at the end of the Cold War was how the allies should work together to deal with non-collective defense security threats arising beyond NATO’s borders, an issue that had always been a source of division among the allies. That would become one of the biggest challenges for the allies in the 1990s.

    At least in the first decade after the end of the Cold War, the United States and all its allies looked for a peace “dividend” by reducing defense expenditures, taking the opportunity to shift resources to other priorities.

    Following the 9/11 attacks, the allies, for the first time in NATO’s history, invoked Article 5, the North Atlantic Treaty’s collective defense provision. The allies followed up the Article 5 actions by contributing thousands of troops to the War in Afghanistan, agreeing to establish a NATO command there, and suffering the loss of more than 1,000 military personnel.

    In 2014, the Russian annexation of the Crimea and support for separatists in the Donbas region of Ukraine produced a dramatic change in threat perceptions and, consequently, defense spending commitments. The allies agreed at the Wales summit that September to increase defense spending to the level of 2% of Gross Domestic Product by the year 2024. The recent 2018 summit in Brussels added further defense improvement plans to fortify the response to the Russian threat as well as to international terrorism.

    That’s a summary of the history. Now, here is my summary of the benefits our country receives from NATO membership:

    ·         The alliance reaffirms the legitimacy of the American political system, as the North Atlantic Treaty rests explicitly on our key values: democracy, individual liberty and the rule of law.

    ·         It brings together like-minded nations that, for the most part, share our political values and are willing to work with us to defend them.

    ·         The shared interests and values underlying the alliance provide a strong coalition for dealing with international security issues.

    ·         The U.S. role in the world is strengthened by the fact that those countries outside the transatlantic alliance realize that the United States has a coalition in waiting that, under most circumstances, will support us.

    ·         Members of NATO provided their support when they invoked NATO’s collective defense clause in response to the 9/11 attacks. They followed up the Article 5 actions by contributing thousands of troops to the War in Afghanistan.

    ·         The NATO consultative framework, Integrated Command Structure, day-to-day defense cooperation and NATO's Defence Planning Process facilitate fighting together when necessary.

    ·         The NATO commitments provide a foundation of common trust that can serve as a stable starting point for managing disagreements when they occur.

    ·         NATO nations provide vitally important base facilities for American army, navy, marine and air force capabilities for operations beyond Europe in the Middle East and Africa.

    ·         A unified NATO presents a strong front to deter aggression by adversaries, particularly Russia in today’s world.

    ·         In theory, a unified Europe should be able to defend itself. But in the real world, political/military unification of Europe is not likely in the foreseeable future and transatlantic security therefore will continue to depend heavily on effective U.S. cooperation with Canada and the European allies in NATO.

    ·         The desire for membership in NATO has led many European countries to reform their political and economic systems, resolve differences with their neighbors, and meet other conditions for NATO membership. This stabilizes international relations and supports the spread of democracy.

    ·         NATO has provided a framework for active security cooperation with countries that do not meet geographic or other requirements for membership, or do not choose to join. The Partnership for Peace program expands American influence and strengthens our national security.

    ·         No practical alternative to NATO that would serve U.S. interests as well has so far been developed and defended convincingly

    In 1984, on sabbatical from the Congressional Research Service, I wrote a book entitled NATO’s Future: Toward a New Transatlantic Bargain. The new bargain that I proposed was a more equal alliance in terms of both contributions and influence. It addressed the burden sharing issue quite directly by calling on the Europeans to strengthen the alliance by coordinating more effectively their defense efforts. I cautioned at that time that such improved cooperation would have to take place within, not outside, the broad framework of the transatlantic relationship

    A lot has changed since then, and I am less optimistic than I was then about what might be possible among the Europeans, and what kind of leadership the United States would provide.

    I see no chance that the members of the European Union will decide to create a full political union anytime in the foreseeable future. In my judgment, this would be required before anything like a European army or fully unified European militaries could come into being.

    Our allies are making progress toward improving their cooperation. The European Security and Defense Policy, the Permanent Structured Cooperation (PESCO) and the new European Defense Fund (EDF) are already helping promote better military cooperation among the allies.

    Our president’s questioning of American commitments to the alliance has led Europeans reasonably to wonder if they can rely on the United States in the future. If they decide that they can’t, their cooperation could move toward greater autonomy from the United States, outside of NATO and ineffectively coordinated with the alliance.

    Such a development would amount to a total failure of U.S. policy that has supported a strong Western alliance for seven decades. The Europeans may do more, but the questions about the U.S. commitment may lead them to assumptions that would damage what NATO calls “the transatlantic link.”

                As with previous generations on both sides of the Atlantic, current generations of leaders need to choose whether we will continue to sustain and improve the transatlantic alliance of democracies, of which NATO is the most important pillar. Will we choose to defend democracy, individual liberty and rule of law, or will we risk a much darker future?

    This committee, and the Senate as a whole, have long played critical and positive parts in sustaining NATO and its benefits for the United States. You now are challenged once again to choose which role you will play in charting the future of America’s membership in this vitally important North Atlantic Treaty Organization.

    Thank you, Mr. Chairman, for the opportunity to appear before the committee today.

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  • Wilson Testifies Before the US Helsinki Commission on "Russia's Occupation of Georgia and the Erosion of the International Order"

    Russia's Occupation of Georgia and the Erosion of the International Order

    Testimony before
    The Commission on Security and Cooperation in Europe

    U.S. Helsinki Commission

    Damon M. Wilson
    Executive Vice President
    Atlantic Council

    Location: Dirksen Senate Office Building, Room 124

    Time: 11:00 A.M.
    Date: Tuesday, July 17, 2018

    View the full testimony here


    WILSON: Chairman Wicker, Co-Chairman Smith, Ranking Member Cardin, Ranking Member Hastings, and distinguished Commissioners:

    On April 3, 2008, at NATO’s Bucharest Summit, just over 10 years ago, the consensus among allies on how to build a Europe whole and free fell apart. I was serving as Senior Director for European Affairs at the National Security Council at the time, and had a front row seat for what turned out to be a summit nearly as unscripted as the one we just witnessed in Brussels. 

    In Bucharest, NATO leaders failed to agree to offer Membership Action Plans (MAP) to Georgia and Ukraine to help them prepare to become allies. Rather, in the wake of inconclusive diplomacy to reach an agreement, particularly between Washington and Berlin, Central European leaders stepped into the breach, to push NATO to agree that Georgia and Ukraine, “will become members of NATO.” Seemingly, leaders decided that NATO membership for Georgia and Ukraine would be a question of when, not whether.

    Yet, today, ten years on from Bucharest and the subsequent Russian invasions of Georgia and Ukraine, we run the risk of our rhetoric not keeping pace with reality. We have agreed a vision, but we do not now have a strategy to get there. As a consequence, many allies have lost faith in the vison and we run the risk of accepting an unstable grey zone of insecurity in Europe’s East.

    This is in part because Russia under Vladimir Putin has evolved from embracing the possibility of partnership with the West to advancing a reality of confrontation with NATO, the United States, and especially Russia’s neighbors. 

    In the wake of the Bucharest summit, recognizing the potential vulnerability of Georgia and Ukraine, US diplomacy went into overdrive. We launched the US-Georgia and US-Ukraine Charters on Strategic Partnership to bolster bilateral ties. Secretary of State Condoleezza Rice led an effort to intensify the moribund diplomatic talks on Russia’s occupied territories and visited Tbilisi to advance diplomacy and caution against conflict. Yet Russia continued to pursue a dual policy of “creeping annexation” – that is, taking steps that tightened its grip on the territories of Abkhazia and the Tskhinvali region of South Ossetia – even as it obfuscated and undermined the diplomatic tracks intended to seek compromise and resolution.

    We felt the full consequences in August 2008 as Russian forces attacked and then invaded Georgia, coming within mere miles of Tbilisi. 

    The Bucharest Summit and this subsequent invasion ended our strategy of advancing a Europe whole and free. This vision had proven wildly successful ever since President George W. Bush’s 1989 address in Mainz, Germany laying out this concept. Our success rested on three mutually-reinforcing pillars:

    · Building a strategic partnership with Russia, first through the Permanent Joint Council and then the NATO-Russia Council;

    · Enabling former adversaries to become allies through NATO enlargement, with four successive post-Cold War rounds; and

    · Facilitating a deepening of European integration as the European Community became the European Union, adopted the Euro, and followed NATO with its own enlargement. 

    These advances happened in a parallel, cyclical fashion. Each step making the next step viable. It was at Bucharest and the subsequent invasion of Georgia when Putin acted to disrupt this process. Indeed, as early as February 2007 at the Munich Security Conference, Putin stunned Western audiences by speaking clearly about his rejection of the order in Europe and began to reposition the West as an adversary of Russia. His resolve to oppose the West weakened the resolve of the Alliance to advance the West at Bucharest.

    Since 2008, we have witnessed a revanchist Kremlin, intent on undoing the gains of the post-Cold War period, reshaping the international order that allowed Europe to remain peaceful and prosperous, and ensuring the domination of its neighbors. 

    The strategic environment has now changed dramatically and sufficiently that our approach to Georgia and Ukraine should change as well. 

    The first significant shift among allies is that they all now recognize the challenge posed by a revanchist Russia. The annexation of Crimea, the invasion of eastern Ukraine, and the continued fighting has driven home among all our allies the nature of the threat that European security and the international order faces if left unchecked. This is why last week’s NATO summit continued to adopt strong defense and deterrence measures.

    This new understanding opens the way for the Alliance to adopt a new approach to Europe’s East to correct the mistakes of Bucharest and to ensure that we have a strategy so that our rhetoric becomes reality. 

    This process has already begun. At the just-concluded NATO Summit, allied leaders invited the government in Skopje to begin accession negotiations, paving the way for the Republic of North Macedonia to become NATO’s 30th member upon finalizing the name deal between Skopje and Athens. It was in Bucharest where NATO failed to extend this invitation, opening a decade of stagnation that led to a crisis in the Western Balkan nation. Last week’s decision, overcomes that failure.

    We can do the same with Georgia and eventually Ukraine. 

    We witnessed in this Brussels Summit that despite transatlantic tensions and division, there was consensus on enlargement. This is significant because this consensus allowed NATO to meet the Bucharest commitment to extend an invitation as soon as Athens and Skopje reached a deal on the name issue. This decision also ensures we will eliminate any security vacuum in the Western Balkans.

    We witnessed what a decade of indecision produced in the Western Balkans: democratic erosion and economic stagnation within the country, combined with stepped-up Russian influence.

    Enlargement is a stabilizing factor. Enlargement advances US interests as it welcomes nations to our alliance which are willing to assume the responsibility of becoming an ally, while also ensuring that the new ally is immunized from Russia’s efforts to destabilize it. 

    We have witnessed the same formula in the Baltic states. Once considered too controversial to consider as NATO members, enlargement brought stability and security to the nations, giving them confidence to develop predictable, normal relations with Russia. While the region is tense today given Russia’s aggressive intimidation tactics, imagine what Northeast Europe would look like if the Baltic states were not in NATO. Our crisis in Europe’s East would not be confined to Ukraine’s East. 

    This logic applies to Georgia today.

    The Russia-pedaled paradigm that enlargement is provocative is wrong. Leaving nations, whose people aspire to join the alliance, in limbo over time is provocative as it tempts Russia to extend its influence – its sphere of influence – either through sowing chaos to ensure weak states or occupation and domination to ensure obedient neighbors.

    As history has shown, this Russian strategy is not a recipe for stability, but for perpetual instability and potential conflict. Even the most cynical grand bargain consigning Georgia and Ukraine to Russia’s sphere of influence would not be durable as it denies the aspirations and agency of the people of the nations themselves. They have a say in their future. Witness the Rose Revolution and subsequent democratic transitions in Georgia. Witness the Maidan and continued resistance to occupation in the east. 

    It is easy to argue that we are in a period of tension with Putin’s Russia today, so why make things worse by considering enlargement to Georgia and eventually Ukraine?

    To put today’s dilemma facing us in perspective consider the 1950s. Europe was only beginning to recover from the devastation of World War II. Greece was emerging from a brutal civil war that ended in 1949. Turkey remained weak and vulnerable to Soviet probing as Joseph Stalin sought more reliable access to the Mediterranean. Indeed, Russia sought to topple the government in Ankara during the Turkish Straits Crisis. Furthermore, these two nations – much like France and Germany in Western Europe – had been historic adversaries in Southeast Europe.

    Furthermore, the Truman administration was facing a world in which the Soviets had attained the atomic bomb, the West was witnessing a Soviet advance in Europe and globally, and war was waging on the Korean peninsula. Yet President Truman stepped in decisively – first bilaterally and then through NATO – to anchor Greece and Turkey together in the West. Rapidly, US diplomacy overcame an obvious flashpoint and anchored a region bordering the Soviet Union in NATO. Imagine what would have happened in this region during the Cold War without Greece and Turkey as allies. 

    Jump forward to today. It is the absence of security for Georgia and Ukraine that has tempted Russia to occupy and annex their territory. Russia aims to keep these neighbors at best in a permanent grey zone, and at worst under its domination. 

    Article 10 of the Washington Treaty makes clear that allies by unanimous agreement may invite any European state “in a position to further the principles of this Treaty and to contribute to the security of the North Atlantic area.”

    Georgians and Ukrainians have done more than most to fight to defend the principles of the Alliance. They are also prepared to be serious contributors. Both spend well over 2 percent of their GDP on defense. Georgia is among the most significant troop contributors to NATO and other international missions. Ukraine has the most battled-tested forces of any European nation. And both are already acting as allies, joining NATO and the European Union on major policy decisions.  

    Yet NATO has handcuffed itself by abiding by the principles developed in its 1995 Study on Enlargement and its adoption of the MAP process in 1999. The study on enlargement sets expectations that nations aspiring to membership will resolve any territorial disputes before entering the alliance. Allies adopted the MAP process to help nations take the practical steps to better prepare to become members. 

    NATO needs to reexamine these policies. These policies were crafted in different – that is, benign – geopolitical circumstances. They made great sense then. Today, however, NATO’s own policies only incentivize Russia to hold on to occupied territories as long-term insurance to prevent NATO or for that matter EU enlargement.

    Similarly, in today’s environment, MAP only serves to signal to Russia that the Alliance is getting more serious about membership, without yet being serious about membership. A MAP decision in many respects begins a countdown clock which may put pressure on Moscow to act to disrupt the neighbor’s accession process before it accedes, much like we witnessed in Montenegro with the October 2016 Russian-backed attempted coup in the run-up to its accession to NATO. 

    To avoid this dynamic, NATO needs to reexamine and update its Open Door policy for today’s new circumstances. Doing so should be coupled with NATO efforts to maintain dialogue with Russia and to provide and seek greater transparency.

    Allies should make clear that their commitment that there is no third-party veto over enlargement decision means that Russian occupation will not serve as an obstacle to membership. Allies should also recognize that a Membership Action Plan is not a requirement for membership. Rather instruments like the NATO-Georgia Commission and its Annual National Plans provide even more rigor in helping Georgia prepare. Indeed, NATO Secretary General Jens Stoltenberg said in December 2016, “Georgia has all the practical tools to become a member of NATO.”

    Yes, this is tricky, but it is doable. Historians of NATO know well the debates on how, when, and where NATO’s security guarantee in Article 5 would apply – an attack on one will be considered as an attack on all. In 1955, West Germany became part of NATO without the Germans relinquishing their commitment to eventual unification. France argued successfully for Article 5 to include Algeria, a decision the North Atlantic Council had to later reverse. Belgium argued unsuccessfully to apply the treaty to its holdings in the Belgian Congo. Today, Spain governs territory on mainland Africa, the cities of Ceuta and Melilla in Morocco, but there is no expectation that this territory is part of the Alliance’s defense plans. 

    In the case of Georgia and eventually Ukraine, the North Atlantic Council can make clear that the Washington Treaty does not apply to the occupied territories, but without relinquishing Allied commitment to the nations’ territorial integrity and without Tbilisi or Kyiv giving up their claims of sovereignty. 

    There is a benefit to acting decisively. Such a strategy can only advance with American leadership. Much like the Truman administration, a serious US bilateral commitment to Greece and Turkey assured the other allies of our commitment and made the NATO decision, while a momentous one, not a controversial one.

    Today, Europe finds itself again at the center of global geological competition. The circumstances require that we not be ambivalent. Deterrence is about the psychology and the perception of your adversary, as much as about military capabilities and plans. The premise of our defense of the Baltic states is deterrence, backed up by planning and now some modest forces. The same can apply for Georgia. 

    The post-World War II formula for US strategy in Europe was that NATO security guarantees would allow for stronger political cooperation among former adversaries and provide a framework of confidence for economic growth and integration. That formula worked dramatically well, and it remains valid.

    My ideas seem counterintuitive at a time of transatlantic divisions and heightened tension with Russia. Yet a big transatlantic project could help anchor the alliance. This strategy would also anchor Turkey more firmly within the West. It would provide Russia a more predictable set of neighbors. It would remove grey zones that tempt a revanchist Kremlin. Precisely because of geopolitical tension, the elimination of grey zones of insecurity can help ensure durable peace in Europe’s East.

    At the Atlantic Council, we believe that we must work alongside our allies and partners to secure the future while recognizing our failure – witness Ukraine, witness Syria – will open the door to less benevolent forces or violent chaos.

    This maxim applies more than ever today in how to think about Georgia and its future relationship with NATO. 

    Permitting these nations’ aspirations to be held hostage by Russian occupation and intimidation is a recipe for instability and conflict in Europe. We cannot allow these nations, known as captive nations for much of the 20th century, to become known as hostage nations in the 21st century. Rather, we should recognize that they stand on the frontline of freedom and anchor them within our NATO alliance to ensure peace in Europe’s East.

    Thank you. 

    END.

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  • Ariel Cohen Testifies Before the House Committee on the Judiciary on H.R.5904 The “No Oil Producing and Exporting Cartels Act”

    Statement of Ariel Cohen, PhD,
    Nonresident Senior Fellow
    Atlantic Council`s Global Energy Center

    Committee on House Judiciary
    Subcommittee on Regulatory Reform, Commercial and Antitrust Law

    May 18, 2018

    Chairman Goodlatte, ranking member Nadler, and honorable members
    of the subcommittee, thank you for inviting me here today. My
    name is Ariel Cohen1, and I am a Non-Resident Senior Fellow at
    the Atlantic Council. The views expressed here are mine alone,
    and I am grateful for the opportunity to express my assessment of
    OPEC and the destabilizing effects of that organization`s multi-
    decade oil market manipulation on global security.

    The monopolization of strategic resources by powerful entities is
    a phenomenon as old as trade itself. From China`s infamous Salt
    Commission in 758 AD to U.S. Steel at the turn of the 20th
    century, history is replete with cautionary tales of distorted
    commodity markets and their deleterious effects on populations.
    More than mere market failures, however, the concentrated control
    of basic necessities is a threat to our very way of life. Oil
    today, much like salt in ancient China or steel in 1900, is a
    strategic resource with no large-scale substitute yet - until
    electric propulsion and fuel choice replaces the current
    dependence on gasoline and diesel fuel. Given that oil is the
    lifeblood of the international trade system, the United States
    and the global community at large can no longer afford to leave
    this critical market vulnerable to manipulation.

    OPEC and its allies and partners, which now include Russia - the
    world`s largest crude oil producer - pose a significant threat to
    international order. Accounting for over 40 percent of global oil
    supply and nearly 80 percent of the world`s proven reserves, the
    oil cartel and its allies wield an unprecedented - and
    unacceptable - capability to determine energy market outcomes.
    Although OPEC is not a monopoly in the pure economic theory sense
    - there are indeed multiple sellers of oil across the globe - it
    is an oligopoly and a market maker: it meets the economic
    definition of a monopoly power -- an entity with sufficient
    leverage to influence the price, output, and investment of
    industry.

    OPEC member countries use this quasi-monopolistic power to quash
    competition and provide the cash flow of their respective
    governments - many of whom are direct geopolitical competitors of
    the United States. OPEC members` and its allies spend tens of
    billions of dollars on a yearly basis to support terror, like
    Iran, or build a formidable nuclear arsenal aimed at the United
    States, as Russia does. Far from the guarantor of oil price
    stability it claims to be, OPEC is a collusive entity which sows
    uncertainty in the global oil markets, undermines U.S. energy
    security, and emboldens our enemies. I therefore come to you in
    direct support of (HR/NOPEC) legislation.

    In the second half of 2014 oil prices crashed - the result of
    weak global economic growth and an influx of supply from U.S.
    shale. The world looked to OPEC to correct the massive downturn,
    which saw prices slide from over $110 per barrel in June of that
    year to $50 by January 2015. Rather than pulling back supply to
    increase prices, OPEC opted to maintain production levels in an
    effort to snuff out North America`s fledgling Shale industry. The
    results were disastrous: Prices fell to below $30/bbl by January
    2016. Investment in the energy sector collapsed, spilling over
    into other commodities and roiling the global banking sector.
    While low oil prices are in many ways beneficial to the U.S.
    economy, the rapidity of the price drop amplified by OPEC and its
    allies to protect market share against American competition
    deepened the global recession.

    Today we are subject to a more familiar and possibly more
    dangerous form of OPEC market manipulation: coordinated supply
    cuts. They did it in 1973 and 1979 in the two Arab Embargos: the
    first time after the Yom Kippur War in the Middle East, and the
    second time after the fall of the Shah. Since OPEC and Russia
    reached their decision to restrict output in late 2016, the price
    of Brent crude has almost doubled, from $40/bbl to just under
    $80/bbl today. OPEC cuts have eliminated 1.8 million barrels per
    day from circulation - two percent of global supply - amidst
    shrinking worldwide stockpiles and growing demand. Production-cut
    compliance within the OPEC & eleven non-member state alliance -
    informally known as the Vienna Group -- stand at an astonishing
    163 percent, with all but two member countries meeting their
    quota obligations, a testament to the organization`s resolve.
    Last month Russia reported its first period of 100 percent
    compliance, reaching its agreed cuts of 300,000 barrels per day.
    OPEC and its allies are expected to further extend supply
    restrictions when they meet in Vienna later this year.

    Artificially high oil prices threaten U.S. energy security. The
    United States remains the world`s leading consumer of oil -
    accounting for twenty percent of the world`s daily demand - and
    relies heavily on energy imports to meet its needs. Oil price
    spikes like those orchestrated by the OPEC cartel harm the many
    American industries which rely on petroleum products for
    feedstock - such as the plastics and fertilizers, as well as the
    automotive and airline sector.

    Higher gasoline prices mean American consumers are left with
    lower disposable income which they could otherwise use to invest
    or pay down debt. Former Chairmen of the Federal Reserve Janet
    Yellen described the negative consequences of high oil prices in
    2011:

    and . . .tends to have a dampening effect on consumer spending.
    ...Staff analysis at the Federal Reserve Board indicates that
    a[n]...increase in retail gasoline prices. . .reduces household
    disposable income... and hence tends to exert a significant drag
    on consumer spending.``

    Beyond the economic harm inflicted on American industry and
    consumers, high oil prices pose grave risks to international
    security. Some of this country`s most dangerous geopolitical
    competitors are de facto petro-states - meaning that they rely
    disproportionately on oil and gas revenue to meet their fiscal
    responsibilities. High energy prices grant these petrostates
    increased flexibility to pursue destructive foreign and domestic
    policy agendas.

    The Russian Federation is a textbook case of how strong oil
    prices can engender aggressive foreign policy action. June of
    2008 saw Brent crude reach its all-time high of $160/bbl. Just
    two months later, Russia launched its invasion of Georgia,
    killing hundreds, and putting NATO on its highest state of
    military readiness since the Yugoslav war. This was more than a
    coincidence (follow up sentence?). The oil price drop which
    followed shortly thereafter - bringing oil to under $50/bbl by
    December - also dampened Russian aggressiveness. Five years of
    relative calm ended in 2013 when oil broke and maintained a price
    point above $100. The Euromaidan revolution exploded shortly
    thereafter. In March of 2014 Russia annexed Crimea and entered
    eastern Ukraine Brent crude prices stood near the decade`s peak
    of $107/bbl.

    Russia`s costly commitments in eastern Ukraine and the Crimea are
    now compounded by further military expenditures in Syria, where
    Putin has pledged his support of President Bashar-al-Assad. While
    Russia has run a budget deficit since 2012 - a function of low
    oil prices and consistent annual increase in military spending as
    a percentage of GDP (climbing from 3.7 percent of GDP in 2012 to
    5.4 percent in 2016 according to WB) Russia may face its first
    budgetary surplus at the end of this fiscal year. Oil and gas
    income, which account for some 40 percent of Russia`s federal
    budget revenue, stood at USD 8.5 billion in 2017. This year,
    thanks to OPEC and Russia`s sustained production cuts, the
    Russian Ministry of Finance is anticipating a five-fold increase
    in petro revenues - nearly USD 45 billion. The Russian Economy
    grew 1.3 % year-on-year in Q1 of 2018, representing its 6th
    straight quarter of growth after two years of recession.

    With the defense sector the primary beneficiary of Russian
    deficit spending over the past decade, there is little doubt that
    this new, influx of oil and gas revenue generated by the
    Kremlin`s agreement with OPEC will support Russia`s ongoing
    nuclear and conventional military build-up, confrontation with
    the West, and world-wide propaganda activities, spearheaded by RT
    multilingual TV broadcasting.

    Oil and gas exports also fuel continuous occupation of parts of
    Ukraine in violation of international law, aggressive behavior in
    Central and Eastern Europe, Eurasia and the Middle East,
    specifically in Syria, where the Assad regime repeatedly used
    chemical weapons. These Russian policies put continuous pressure
    on the U.S. and its allies, from the Baltic Sea to the
    Mediterranean. Finally, domestic crackdown on human rights, such
    as freedom of assembly, which ignore Russia`s constitutional
    guarantees, the build-up of a massive domestic militaries police
    force (the National Guard), are all funded by the oil and gas
    bonanza.

    Iran is yet another beneficiary of The Vienna Group`s artificial
    oil price inflation. The Islamic Republic is a well-documented
    exporter of terrorism. It armed, equipped, trained, financed, or
    gave haven to organizations such as Hamas, Hezbollah, Houthi
    rebels, and even Al-Qa`ida, and now boast the medium range
    ballistic missile capability to complement its nuclear weapons
    program. Not only the Islamic Republic is capable of targeting
    U.S. forces in the Middle East, our Gulf Cooperation Council
    allies, and Israel. Parts of Europe are also in the range of the
    Iranian missile arsenal.

    Teheran is engaged in a host of destabilizing conflicts across
    the Middle East - from Syria to Yemen to Lebanon and Iraq -
    depends on oil and gas revenues to meet 30 percent of its fiscal
    needs. Iranian crackdown against the domestic opposition resulted
    in 58 dead, 8,000 arrested, and numerous but unknown number
    tortured.

    Yet, after the JCPOA $150 billion bonanza, came the oil exports
    fiesta. Between March and December of 2017, hydrocarbon revenue
    for the Iranian regime yielded USD 13 billion, during which
    exports hovered at around 2.2 million bpd. Even with the Trump
    Administration`s recent announcement to revoke sanctions relief
    under JCPOA, Iran continues to ramp up production: last month the
    Islamic Republic exported 2.7 million bpd, with every 100,000
    barrels equating to USD 8 million in today`s prices. Though the
    latest U.S. restrictions will certainly hinder Iranian oil
    exports, it is unlikely that we will see a return to 2012 levels
    (1.5 mmbd) when the Obama Administrations sanctions first went
    into effect.

    Without adequate buy-in from the international community, U.S.
    imposed sanctions on Iran`s hydrocarbon sector are expected to
    result in a 20 percent cut in oil exports - between 400,000 and
    500,000 barrels a day. With oil prices at their highest point in
    over 3.5 years, sanction pressure may not be sufficient to
    hamstring Iran`s oil production and exports, and thus not
    sufficient to deter the Republic`s destabilizing policies across
    the region

    To conclude, the United States can no longer allow OPEC and its
    allies to operate with immunity from sensible anti-trust
    legislation. The consequences of one group controlling 40 percent
    of the world`s oil production and 80 percent of proven reserves
    are too menacing to ignore. Thank you.

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  • General Breedlove Testifies Before the House Committee on Armed Services on Recommendations for U.S. National Security

    Statement of General Philip M. Breedlove USAF (Ret)
    Board Director, Atlantic Council
    Committee on House Armed Services

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  • Chris Brummer Testifies before the House Committee on Financial Services on Cryptocurrencies and ICO markets

    Statement of Chris Brummer
    Nonresident Senior Fellow, Global Business and Economics, Atlantic Council

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  • David Livingston Testifies before the House Committee on Natural Resources on Liquid Natural Gas and US Geopolitics

     
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  • Itani Testifies Before House Foreign Affairs Committee on "Syria: Which Way Forward?"


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